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Government Corruption News Articles
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Note: Explore our full index to revealing excerpts of key major media news articles on dozens of engaging topics. And read excerpts from 20 of the most revealing news articles ever published.


Ensnared by Error on Growing U.S. Watch List
2010-04-07, New York Times
http://www.nytimes.com/2010/04/07/us/07watch.html

Every year, thousands of people find themselves caught up in the government’s terrorist screening process. Some are legitimate targets of concern, others are victims of errors in judgment or simple mistaken identity. Either way, their numbers are likely to rise as the Obama administration recalibrates the standards for identifying potential terrorists. On Friday, the administration altered rules for identifying which passengers flying to the United States should face extra scrutiny at the gate. And it is reviewing ways to make it easier to place suspects on the watch list. “The entire federal government is leaning very far forward on putting people on lists,” Russell E. Travers, a deputy director of the National Counterterrorism Center, said at a recent Senate hearing. Before the attempted attack on Christmas, Mr. Travers said, “I never had anybody tell me that the list was too small.” Now, he added, “It’s getting bigger, and it will get even bigger.” Even as the universe of those identified as a risk expands, the decision-making involved remains so secretive that people cannot be told whether they are on the watch list, why they may be on it or even whether they have been removed. Civil liberties advocates say [the secrecy] can hide mistakes and keep people wrongly singled out from seeking redress.

Note: For lots more on government threats to civil liberties, click here.


Fury as EU approves GM potato
2010-03-04, The Independent (One of the UK's leading newspapers)
http://www.independent.co.uk/environment/green-living/fury-as-eu-approves-gm-...

The introduction of a genetically modified potato in Europe risks the development of human diseases that fail to respond to antibiotics, it [has been claimed]. German chemical giant BASF this week won approval from the European Commission for commercial growing of a starchy potato with a gene that could resist antibiotics – useful in the fight against illnesses such as tuberculosis. Farms in Germany, Sweden, the Netherlands and the Czech Republic may plant the potato for industrial use, with part of the tuber fed to cattle, according to BASF, which fought a 13-year battle to win approval for Amflora. But other EU member states, including Italy and Austria and anti-GM campaigners angrily attacked the move, claiming it could result in a health disaster. During the regulatory tussle over the potato, the EU's pharmaceutical regulator had expressed concern about its potential to interfere with the efficacy of antibiotics on infections that develop multiple resistance to other antibiotics, a growing problem in human and veterinary medicine. Drug resistance is part of the explanation for the resurgence of TB, which infects eight million people worldwide every year.

Note: For an excellent summary of the threats to health from genetically-modified foods, click here.


What Microsoft knows and keeps about you
2010-02-25, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/blogs/ybenjamin/detail??blogid=150&entry_id=57956

It's time to reflect on the immense powers Americans have ceded to the government and [the] potential for abuse by federal, state and local authorities. The global Internet and telecommunications infrastructure provides massive information on almost ... every person on the planet. One power truly stands out --- the all-encompassing reach and technological capabilities of the US National Security Agency. If you want to be secure, don't use a phone, a computer, credit card or any other technologically linked system because it guarantees that Big Brother will find you. Big Brother is not just the government. Most consumer "spying" comes from subpoenas and requests from non-terrorist-related federal, state, local agency requests and non-governmental private litigation and discovery. Simply put, a subpoena issued by a court in support of private litigation and discovery may have the same impact on an individual as the full force of the NSA. What information is typically requested from a company by say a plaintiff's lawyer during some discovery phase? Well, it's everything. In fact, it's generally a fishing expedition for every log file, every uploaded video, photo, chat session and anything else they can get their hands on.

Note: For lots more from major media sources on the continuing development of a global society under Big Brother's constant gaze, click here.


No ducking land mine treaty, Mr. President
2009-12-06, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/12/05/ED451AT7MU.DTL

This country hasn't used land mines in nearly 20 years. It no longer makes the indiscriminate killers nor provides them to allies. Why then is President Obama - off to Oslo this week to collect a Nobel Peace Prize - refusing to sign an international treaty to ban the shrapnel-spewing buried bombs? His refusal is ... shameful. The devices, which maim and kill for years after a conflict ends, caused more than 5,000 casualties last year in the world's poorest places such as Cambodia, Angola and Central America. Obama's stance puts him in line with Presidents George W. Bush and Bill Clinton, who both ducked a chance to put this country in line with more than 150 nations that have signed the treaty. Other notable non-signers: China, Russia, India, Pakistan and Cuba. Is this the company we want to keep? Sticking with land mines is a puzzler. The United States has a reported stockpile of 10 million devices, though it hasn't deployed any since the 1991 Gulf War. By signing the agreement, the Pentagon would hardly be giving up a mainstay weapon. It's time for Obama to go in a new direction. He should sign, not equivocate, on a treaty that Washington has avoided for over a decade. Here's a thought while typing up your Peace Prize acceptance speech, Mr. President: It's time to ban land mines.

Note: The refusal to sign the worldwide landmine ban treaty seems to be a puzzler, until you realize the US government is protecting the rights to profit of US arms corporations. For a retired Marine general's analysis of the profiteering that is the principal purpose for war, "War is a Racket,"click here.


Rise in soldier suicides leaves Pentagon looking for answers
2009-11-19, Times of London
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6922396.ece

American soldiers are committing suicide in the greatest numbers since official records began in 1980, with the US Army at a loss to explain the phenomenon since a third of the dead have never been deployed in combat. Suicides in the army alone have passed last year’s record of 140 — 141 in 2009 so far. The upward trend has defied efforts to improve access to appropriate counselling for veterans returning from combat tours in Iraq and Afghanistan. The figure for the first ten months of the year excludes 71 suicides among troops taken off active duty in 2009, and 42 in the US Marine Corps. Roughly a third of this year’s suicides have been by soldiers taking their own lives in war zones, a third by returning soldiers and a third by those based permanently in the US or awaiting deployment overseas. Many military suicides can be traced in part to an inability to process the guilt of having killed in battle.

Note: For lots more from major media sources on the horrific effects of modern war on both combatants and civilians, click here. And for the writings of a top general on why this is happening, click here.


Drugmakers' Payments Draw Heat
2009-11-04, BusinessWeek magazine
http://www.businessweek.com/bwdaily/dnflash/content/nov2009/db2009114_700374.htm

A $112 million settlement involving alleged drug kickbacks that the Justice Dept. announced with the nation's largest nursing home pharmacy and a generic drug manufacturer on Nov. 3 is part of a wide-ranging investigation of suspected Medicaid fraud by the pharmaceutical industry. Critics say the continuing probe, which involves ... major drugmakers, highlights what they describe as an industry practice of paying money to outfits that provide drugs to consumers, in return for preferential treatment. Because those alleged payoffs have the effect of compromising patient care and driving up costs for government and private health insurers, cases like the settlement unsealed with Omnicare (OCR) in Covington, Ky., and IVAX Pharmaceuticals in Weston, Fla., could bolster opposition to the controversial deal the Obama Administration reached with the pharmaceutical industry to win its support for health-reform legislation. Many Democrats say the Administration should have asked for much bigger cost savings from drugmakers. Patrick Burns, a spokesman for Taxpayers Against Fraud, a nonprofit Washington group that promotes whistleblower suits, says the Justice Dept. is backed up with pharmaceutical fraud cases. Since drugmakers offer so many similar products, he contends, they rely on kickbacks to give their products a market edge. "In the pharmaceutical industry, the business isn't selling the best drug, it's the best scheme of kickbacks to the prescriber."

Note: For lots more from reliable sources on corporate corruption, click here.


Key drug facts left off labels, experts say
2009-10-21, MSNBC/Associated Press
http://www.msnbc.msn.com/id/33419377/ns/health-more_health_news

Did you know that Lunesta will help you fall asleep just 15 minutes faster? Or that a higher dose of the osteoporosis drug Zometa could damage a cancer patient’s kidneys and raise their risk of death? Chances are you didn’t, and neither did your doctor. Much of what the Food and Drug Administration knows about a drug’s safety and effectiveness is not included on the label, say two drug safety experts who are calling on the agency to make that information more accessible. In ... the New England Journal of Medicine, researchers ... argue that drug labels don’t reflect the nuanced decisions the FDA makes when deciding to approve a drug. The editorial from Drs. Lisa Schwartz and Steven Woloshin recommends easy-to-read fact boxes to help patients weigh the benefits and risks of medications. If drug labels sometimes exaggerate benefits and play down drug risks, the authors say there’s a very good reason: they are written by drugmakers. While FDA must approve the final labeling, the actual language is drafted by the manufacturer, with input from FDA scientists. The labeling is based on results from company studies, which generally compare results for patients taking the drug versus those taking placebo. If FDA decides the drug’s ability to treat or prevent a disease outweighs its side effects, the agency is obligated to approve it. But Schwartz and Woloshin point out that benefits may be slim and potential harms may not be fully understood. “The take home point is that just because a drug is approved doesn’t mean it works very well,” said Schwartz, in an interview with the Associated Press. “You really need to know more to see whether it’s worth the cost.” Schwartz and Woloshin say FDA labeling frequently fails to provide a full picture of a drug’s effects.

Note: For a powerful summary of corruption in the pharmaceutical industry, click here.


U.S. Deficit Rises to $1.4 Trillion; Biggest Since 1945
2009-10-17, New York Times
http://www.nytimes.com/2009/10/17/us/17deficit.html

The Obama administration [has said] that the federal budget deficit for the fiscal year that just ended was $1.4 trillion, nearly a trillion dollars greater than the year before and the largest shortfall relative to the size of the economy since 1945. The shortfall for the fiscal year 2009, which ended Sept. 30, translates to 10 percent of the economy, according to a joint statement from the Treasury secretary, Timothy F. Geithner, and the director of the Office of Management and Budget, Peter R. Orszag. For the 2008 fiscal year, the deficit of $459 billion was 3.2 percent of the economy, as measured by the gross domestic product. At 10 percent of the gross domestic product, the 2009 deficit is the highest since the end of World War II, when it was 21.5 percent. The overall national debt, which is the accumulation of annual deficits, is nearly $12 trillion, and projected deficits for the next decade will add an estimated $9 trillion more. Administration officials say two-thirds of that is due to Bush administration policies.

Note: The current debt of $12 trillion equals $40,000 for every man, woman, and child in the U.S. Most of the increased deficit is due to the government bailout of the biggest Wall Street banks and investment houses. For lots more on the realities of the Wall Street bailout, click here.


U.S. FDIC chief: 'too big to fail' must end for all
2009-10-04, International Business Times/Reuters News
http://www.ibtimes.com/articles/20091004/too-big-to-fail-must-end-for-all-fdi...

The head of the U.S. Federal Deposit Insurance Corp. said on Sunday that she wanted to end the "too big to fail" doctrine and shrink the shadow banking system that operates outside the reach of regulators. FDIC Chairman Sheila Bair ... said a U.S. proposal to create the authority to shut down failing systemically important financial firms may need to be extended to insurers and hedge funds. "We need to end 'too big to fail' and this needs to be an overarching policy that applies to everyone," Bair said. Bair said she believed that bank holding companies with subsidiaries that are shut down by regulators also should be made to pay the price of failure by being subject to the same wind-down process. "I believe that the new regime should apply to all bank holding companies that are more than just shells and their affiliates regardless or not whether they are considered to be systemic risks," she said, adding that including only systemically important firms in the shut-down regime could reinforce the 'too big to fail' doctrine. Financial firms subject to systemic risk shutdown authority should likely also be required to publish "living wills" -- details on how an orderly wind-down would play out -- on their websites to provide more clarity to shareholders and customers. And by applying the resolution authority more broadly outside of normal regulated bank holding companies, it would help shrink the shadow banking system by discouraging regulatory arbitrage under which financial firms shop for the most lenient supervisors. "If you tighten regulation of the banks even more without dealing with the shadow sector you could make the problem even worse," she said.

Note: For a comprehensive overview of the realities underlying the government's bailout of the biggest financial institutions, click here.


C.I.A. Abuse Cases Detailed in Report on Detainees
2009-08-25, New York Times
http://www.nytimes.com/2009/08/25/us/politics/25detain.html

Attorney General Eric H. Holder Jr. named a veteran federal prosecutor on Monday to examine abuse of prisoners held by the Central Intelligence Agency, after the Justice Department released a long-secret report showing interrogators choked a prisoner repeatedly and threatened to kill another detainee’s children. Mr. Holder chose John H. Durham, a prosecutor from Connecticut who has been investigating the C.I.A.’s destruction of interrogation videotapes, to determine whether a full criminal investigation of the conduct of agency employees or contractors was warranted. The attorney general said his decision to order an inquiry was based in part on the recommendation of the Justice Department’s ethics office, which called for a new review of several interrogation cases. He said he was also influenced by a 2004 report by the C.I.A. inspector general at the time, John L. Helgerson, on the agency’s interrogations. The report was released Monday under a court order in a Freedom of Information Act lawsuit. Although large portions of the 109-page report are blacked out, it gives new details about a variety of abuses inside the C.I.A.’s overseas prisons, including suggestions about sexually assaulting members of a detainee’s family, staging mock executions, intimidation with a handgun and power drill, and blowing cigar and cigarette smoke into prisoners’ faces to make them vomit. The inspector general’s review raised broad questions about the legality, political acceptability and effectiveness of the harshest of the C.I.A.’s methods, including some not authorized by the Justice Department and others that were approved, like the near-drowning technique of waterboarding.

Note: And what do you think might have been in the blacked out portions of the report? For lots more on the use of illegal methods by the CIA and US military in their prosecution of the "war on terror," click here.


Americans tiring of war in Afghanistan
2009-08-21, San Francisco Chronicle/Associated Press
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/08/20/MNFU19BG53.DTL

The violence-scarred elections in Afghanistan provided a stage for the Taliban to show war-weary Americans and Afghans that it has rebounded and can strike - even after eight years of war. For President Obama's policies, the timing couldn't be worse. With memories of the Sept. 11 terrorist attacks dimming, Americans are tiring of the conflict. New polling shows a majority - 51 percent - of those surveyed now believe the war is not worth the fight, an increase of 6 percentage points in a month. Obama's answer to the mounting skepticism is to say that, in a way, the war has just begun. The final push to wipe out [the] Taliban ... is not 8 years old but really got started when he took office and ordered 17,000 more troops into Afghanistan. In short order, he also installed a new commander and persuaded Pakistan to join the United States in what on Thursday he called a pincer movement to squeeze the enemy astride the common border.

Note: As shown over and over again, presidents and politicians of both major political parties in the U.S. support the war machine in order to get the war chest they need to be elected or re-elected. Obama is no exception. For lots more on this, click here.


UFO 'appeared above jazz stage at Glastonbury'
2009-08-18, CNN News
http://edition.cnn.com/2009/WORLD/europe/08/17/ufo.sightings/index.html

An alien with a lemon-shaped head and a jazz-themed encounter with a UFO at the Glastonbury Festival are among hundreds of UFO sightings detailed in the latest batch of documents released Monday by the UK's Ministry of Defence. Fourteen files, containing over 4,000 pages of UFO sightings from 1981 to 1996, have now been placed on Britain's National Archives database and are publicly available online. The sightings range from lights in the sky to close contact with aliens, and the files contain detailed analysis on some of the UK's most popular cases -- a number of which remain officially unexplained. The files ... shed new light on Britain's own 'Roswell', the Rendlesham Forest sightings of December 1980 in which American air force men saw a series of mysterious lights in the trees at the perimeter of an air base used by the U.S. Air Force. The then government of Margaret Thatcher was quick to dismiss the incident, but a letter from a former chief of defense staff in 1985 warned that the affair could prove a 'banana skin' for the Ministry of Defence. "The case has puzzling and disquieting features which have never been satisfactorily explained ... which continue to preoccupy informed sections of the public," said the letter. This latest release of documents represents the fourth set of UFO files released since 2008 as part of a three-year project in conjunction with the National Archives.

Note: For a powerful two-page summary of evidence for UFOs presented by highly respected and credible former government and military personnel from many countries, click here. For excellent information on the Rendlesham Forest case, click here.


Only a Hint of Roosevelt in Financial Overhaul
2009-06-18, New York Times
http://www.nytimes.com/2009/06/18/business/18nocera.html

Three quarters of a century ago, President Franklin Roosevelt earned the undying enmity of Wall Street when he used his enormous popularity to push through a series of radical regulatory reforms that completely changed the norms of the financial industry. Wall Street hated the reforms, of course, but Roosevelt didn’t care. Wall Street and the financial industry had engaged in practices they shouldn’t have, and had helped lead the country into the Great Depression. Those practices had to be stopped. To the president, that’s all that mattered. On Wednesday, President Obama unveiled what he described as “a sweeping overhaul of the financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression.” In terms of the sheer number of proposals, outlined in an 88-page document the administration released on Tuesday, that is undoubtedly true. But in terms of the scope and breadth of the Obama plan — and more important, in terms of its overall effect on Wall Street’s modus operandi — it’s not even close to what Roosevelt accomplished during the Great Depression. Rather, the Obama plan is little more than an attempt to stick some new regulatory fingers into a very leaky financial dam rather than rebuild the dam itself. Everywhere you look in the plan, you see the same thing: additional regulation on the margin, but nothing that amounts to a true overhaul. The plan places enormous trust in the judgment of the Federal Reserve — trust that critics say has not really been borne out by its actions during the Internet and housing bubbles. Firms will have to put up a little more capital, and deal with a little more oversight, but once the financial crisis is over, it will, in all likelihood, be back to business as usual.

Note: To watch the Inspector General of the Federal Reserve testify to Congress that she knows pracitcally nothing of trillions of dollars that are unaccounted for, click here. For many revealing reports from reliable sources on the hidden realities of the continuing taxpayer bailout of the biggest financial corporations, click here.


Inventory Uncovers 9,200 More Pathogens
2009-06-18, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2009/06/17/AR20090617032...

An inventory of potentially deadly pathogens at Fort Detrick's infectious disease laboratory found more than 9,000 vials that had not been accounted for, Army officials said yesterday, raising concerns that officials wouldn't know whether dangerous toxins were missing. After four months of searching about 335 freezers and refrigerators at the U.S. Army Medical Research Institute of Infectious Diseases in Frederick, investigators found 9,220 samples that hadn't been included in a database of about 66,000 items listed as of February, said Col. Mark Kortepeter, the institute's deputy commander. The vials contained some dangerous pathogens, among them the Ebola virus, anthrax bacteria and botulinum toxin, and less lethal agents such as Venezuelan equine encephalitis virus and the bacterium that causes tularemia. Most of them, forgotten inside freezer drawers, hadn't been used in years or even decades. Officials said some serum samples from hemorrhagic fever patients dated to the Korean War. The overstock and the previous inaccuracy of the database raised the possibility that someone could have taken a sample outside the lab with no way for officials to know something was missing. The institute has been under pressure to tighten security in the wake of the 2001 anthrax attacks, which killed five people and sickened 17. FBI investigators say they think the anthrax strain used in the attacks originated at the Army lab, and its prime suspect, Bruce E. Ivins, researched anthrax there. Ivins committed suicide last year during an investigation into his activities.

Note: Fort Detrick is the home of the government lab which is suspected to be involved with the creation of many previously unknown lethal viruses and germs. For lots more, see the excellent work of Dr. Leonard Horowitz at this link and this one.


Military tribunals not the same as U.S. courts
2009-05-23, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/05/23/MN9Q17OTTB.DTL

President Obama says his proposed reforms to the military commissions his predecessor established to try suspected terrorists will bring the tribunals "in line with the rule of law." But it isn't the same law that applies in U.S. courts. Pentagon officials appoint the judges and can remove them. Military commanders choose the jurors, who can convict defendants by non-unanimous votes, except in death penalty cases. The military can monitor defense lawyers' conversations with their clients. Prosecutors can also present evidence that would never pass muster in civilian courts. Confessions made under physical or mental pressure could be admissible, despite Obama's disavowal of torture and coercion. There's no ban on evidence from illegal searches. And defendants may be convicted on the basis of hearsay - a second hand report of an out-of-court accusation by another person, perhaps a fellow suspect, whom the defense never gets to see or question. Civil-liberties advocates and legal organizations defending prisoners who may be tried before the commissions say the system is an invitation to abuse and differs little from the tribunals established by President George W. Bush. "The system is designed to ensure the outcome they want ... convictions in every case," said Ben Wizner, an American Civil Liberties Union attorney who has attended proceedings for prisoners at the U.S. naval base at Guantanamo Bay, Cuba. "This suggests that the much-heralded improvements to the Bush military commission system are largely cosmetic."

Note: For lots more on the "war on terror" from reliable sources, click here.


The Torture Debate: The Missing Voices
2009-05-07, New York Times
http://www.nytimes.com/2009/05/07/opinion/07thu1.html

Last month’s release of memos prepared by the Bush Justice Department and the disclosure of a report by the International Committee of the Red Cross on the brutal treatment of detainees expanded public knowledge of an ignominious chapter in the nation’s history. But these and other related disclosures do not provide a complete record of the government’s abuse of detainees. One missing element is the words of those prisoners subjected to waterboarding and other brutality. Those voices remain muffled by a combination of Bush-era resistance to a reasonable Freedom of Information Act request by the American Civil Liberties Union, and the gag order imposed on lawyers representing Guantánamo detainees. For two years, the A.C.L.U. has been seeking complete transcripts of the hearings at Guantánamo for 14 men who were previously in C.I.A. custody, including Abu Zubaydah, who has been described as an operative of Al Qaeda and was waterboarded at least 83 times. But the publicly released version of these transcripts deleted all detainee statements about their ordeals. The Bush team’s national security claim always had the odor of a cover-up. The interrogation program it was protecting has been discontinued, and crucial details are known. It is unsupportable to blank out grim details. The same considerations apply to the protective order that prohibits lawyers for Guantánamo detainees from speaking publicly about their clients’ treatment unless they receive the government’s permission or the information otherwise becomes public. Disclosure of the torture memos and the Red Cross report gives detainee lawyers more leeway, but they should not have to parse their words under a threat of prosecution.

Note: For many reports from major media sources detailing the disturbing government threats to civil liberties, click here.


Judge rejects bid to derail wiretap challenge
2009-04-18, San Francisco Chronicle (San Francisco's leading newspaper)
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/04/17/MN6O174O7E.DTL

A San Francisco federal judge rejected on Friday the Obama administration's attempt to derail a challenge to former President George W. Bush's electronic surveillance program by withholding a critical wiretap document. President Obama's Justice Department had appeared to defy a previous order by Chief U.S. District Judge Vaughn Walker to allow lawyers for an Islamic organization to see the classified document, which reportedly showed that the group had been wiretapped. The document, which the government accidentally sent to the Al-Haramain Islamic Foundation, could establish its right to sue over the legality of the program. Justice Department lawyers told Walker in February that he had no power to enforce his order, and indicated they would remove the document from his files if he planned to disclose it to Al-Haramain's lawyers. But after a federal appeals court denied the department's request to intervene, Walker told the government Friday to cooperate. "The United States should now comply with the court's orders," the judge said. He told lawyers for the administration and Al-Haramain to work out a protective order by May 8 that would maintain the document's secrecy after it had been shown to the Islamic group's lawyers. If the two sides can't agree, Walker said, he will issue his own protective order "under which this case may resume forward progress." The case is one of two before Walker challenging the constitutionality of the program that Bush secretly authorized in 2001 to intercept phone calls and e-mails between Americans and suspected foreign terrorists without seeking a court warrant, as required by a 1978 law.

Note: For more reports on government secrecy from reliable sources, click here.


Inquiry Asks Why A.I.G. Paid Banks
2009-03-27, New York Times
http://www.nytimes.com/2009/03/27/business/27cuomo.html?partner=rss&emc=rss&p...

Members of Congress and the New York State attorney general demanded detailed information Thursday on how tens of billions of taxpayer dollars flowed through the American International Group during its crisis last fall and ended up in the coffers of several dozen big banks, shielding them from losses. The new inquiries shine a spotlight on a question that is exponentially bigger, in dollars, than the $165 million in bonuses that A.I.G. paid out this month, but which has been overshadowed until now by the uproar over the bonuses. “We would like to know if the A.I.G. counterparty payments, as made, were in the best interests of the taxpayers who provided the funding,” said Representative Elijah E. Cummings, Democrat of Maryland, in a letter to Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program. The banks and investment firms that ended up with A.I.G.’s bailout money last fall were, in many cases, counterparties to derivatives contracts it had sold, known as credit-default swaps, which guaranteed the value of assets in their investment portfolios. They included Wall Street firms, like Goldman Sachs, JPMorgan Chase and Merrill Lynch, that have successfully resisted efforts to regulate credit derivatives in the past. In several hearings this month, members of Congress said they believed the derivatives had often been used to speculate, not to manage risk. They have expressed outrage that A.I.G.’s trading partners got 100 cents on the dollar for their money-losing trades when ordinary Americans paying for the bailout have suffered big losses in their 401(k) accounts and other investments.

Note: For many revealing reports on the realities behind the Wall Street bailouts, click here.


IRS defends drop in audits of millionaires
2009-03-22, MSNBC/Associated Press
http://www.msnbc.msn.com/id/29831158

The Internal Revenue Service is not living up to its pledge to crack down on wealthy tax cheats, an IRS watchdog group says, citing a drop in audits of millionaires last year. Those with incomes of $1 million and above had a 5.6 percent chance of getting audited in fiscal year 2008, which ended last September, down from 6.8 percent the previous year, according to IRS figures. The actual number of millionaires audited fell from 23,200 to 21,874; the number of millionaires filing tax returns grew from 339,138 to 392,776. "In the face of growing federal deficits and public calls to lower the tax gap — the amount of taxes due but not reported and paid — the drop in millionaire audits is surprising," said the Syracuse University-based Transactional Records Access Clearinghouse in a report Monday. It said the significant drop in audits of richer Americans contrasted with IRS statements last year that it was making strong progress in enforcement, especially of those with incomes of more than $1 million. The TRAC report said focus on high earner returns is critical because of the huge rewards. Among those millionaire audit cases where additional taxes were recommended, the average was $198,000 after face-to-face audits and $137,000 for audits done through correspondence. In total, the IRS collected $56.4 billion in enforcement revenues last year, down from $59.2 billion in 2007 and the first decline in collections in a decade.

Note: The highly important statistic only mentioned in passing here is "the number of millionaires filing tax returns grew from 339,138 to 392,776." That's an over-15% increase in the number of millionaires in one year, while most everyone else seems to be losing money. Hmmmm. Makes you wonder.


Bailout Oversight Lacking, GAO Says
2008-12-03, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2008/12/02/AR20081202022...

The Bush administration has failed to adequately oversee its $700 billion bailout program and must move rapidly to guarantee that banks are complying with the plan's limits on conflicts of interest and lavish executive compensation, congressional investigators said yesterday. The new report by the Government Accountability Office, the nonpartisan investigative arm of Congress, said the Treasury Department has yet to impose necessary safeguards or decide how to determine whether the program is achieving its goals. The auditors said it was too soon for them to tell whether the bailout was working. "The rapid pace of implementation and evolving nature of the program have hampered efforts to put a comprehensive system of internal control in place," the report said. "Until such a system is fully developed and implemented, there is heightened risk that the interests of the government and taxpayers may not be adequately protected and that the program objectives may not be achieved in an efficient and effective manner." So far, the rescue package has provided at least $150 billion in capital infusions to 52 financial institutions, the auditors said. They added that no applications for funding were denied by the Treasury. The congressional auditors urged Treasury officials to determine how each bank receiving bailout money is using the money and whether they are using it in a way consistent with the intent of the law. Several congressional leaders have criticized financial firms for hoarding the money instead of using it to lend to borrowers.

Note: For many revealing reports on the Wall Street bailout from reliable sources, click here.


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