News StoriesExcerpts of Key News Stories in Major Media
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They do not seem the most likely classical music patrons: Northrop Grumman, General Dynamics, Boeing and Lockheed Martin. But together, these defense contractors are donating hundreds of thousands of dollars to the symphony orchestra in Johnstown, Pa., underwriting performances of Mozart and Wagner in this struggling former steel town. A defense lobbying firm, the PMA Group, even sprang for a champagne reception at the symphony’s opera festival last month. Company representatives say they are being generous corporate citizens. But the orchestra is also a beloved charity of Representative John P. Murtha, Democrat of Pennsylvania, whose Congressional committee hands out lucrative defense contracts, and whose wife, Joyce, is a major booster of the symphony. For the first time, corporations and their lobbyists are being required to disclose donations they make to the favorite causes of House and Senate members, and a review of thousands of pages of records shows the extent — and lavishness — of this once hidden practice. During the first six months of 2008, lobbyists, corporations and interest groups gave approximately $13 million to charities and nonprofit organizations in honor of more than 200 members of the House and Senate. The donations came from firms with numerous interests before the Congress, such as Wal-Mart, the Ford Motor Company, Kraft Foods and Pfizer, and were received by charities ... as well as local groups controlled by members of Congress or those close to them.
Note: For revelations of corporate corruption from major media sources, click here.
A state file containing reports of physical and sexual abuse of foster children, based on interviews with some of the children and including one instance reminiscent of slave auctions, has been turned over to the Executive Board of the Nebraska Legislature. One of the reports in the file ... is an account by [a] victim who described parties at various places, including Omaha and cities to which she was flown on the East Coast ... including one in which the ... teen-ager was made to stand nude at a party while she was offered at auction to the highest bidder. "I don't know if they can prove it," the source said, "but if one-tenth of what that girl is saying is true, I'd sure hate to have her talking about me." The foster care agency's submission of the file is among the latest developments in a case that began surfacing Nov. 4, when the Government's National Credit Union Administration shut down the Franklin Community Federal Credit Union in Omaha. The agency ... subsequently filed suit against Lawrence E. King Jr., Franklin Community's manager and treasurer, charging him with diverting millions of dollars of the institution's money to his own purposes. In all, the agency says, Franklin Community is missing $38 million. Mr. King has not been accused of personally engaging in child sexual abuse. But a number of widening Federal and state investigations into the credit union's collapse are aimed in part at determining whether any of the money he is accused of embezzling was ever used to transport children or to pay them for sex.
Note: This article reveals only a small part of what is known about a sophisticated pedophile ring that reaches to the highest levels of government. For more on the suppressed Franklin Scandal, don't miss the excellent, reliable resources and the powerful Discovery Channel documentary available here. Note also the Christmas date of this article. You might be surprised at how often the press discloses the most deeply revealing information on key cover-ups on holidays, when few read the paper.
Congressional investigators yesterday demanded that the nation's nine largest banks prove they are not using an emergency infusion of $125 billion in taxpayer funds to lavish their executives with wealthy bonuses. "I question the appropriateness of depleting the capital that taxpayers just injected into the banks through the payment of billions of dollars in bonuses, especially after one of the financial industry's worst years on record," [Rep. Henry A. Waxman (D-Calif.), chairman of the House Committee on Oversight and Government Reform,] wrote in a letter to the banks. Lawmakers across the political spectrum want to ensure that the government's bailout program results in increased lending, not bigger paydays for executives. But a new study suggests that financiers are still bullish about their bonuses. More than two-thirds of Wall Street professionals are expecting a bonus this year, and 36 percent are anticipating a larger bonus than last year, according to a survey by eFinancialCareers, a career networking company. "Some experts have suggested that a significant percentage of this compensation could come in year-end bonuses and that the size of the bonuses will be significantly enhanced as a result of the infusion of taxpayer funds," Waxman said. In his letter to the banks, Waxman asked them to provide detailed data on compensation packages since 2006, as well as the projected salaries and bonuses for the rest of the year. The request was sent to Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, J.P. Morgan Chase, Merrill Lynch, Morgan Stanley, State Street, and Wells Fargo.
Note: For extensive coverage of continuing revelations about the Wall Street bailout, click here.
Under fire from Democrats and Republicans alike, the White House ... defended giving billions of bailout dollars to banks that plan to reward shareholders and executives -- or even buy other banks. Allowing banks to engage in such normal business activities actually could help loosen lending and revive the sagging economy, said Ed Lazear, chairman of the Council of Economic Advisers. He said the administration would not impose any conditions on banks beyond those required when Congress created the bailout program, which authorized the government to buy stock in financial institutions. Lazear was put before the cameras in the White House briefing room amid a rising chorus of complaints from lawmakers about the latitude that banks will have when they receive bailout money from Washington. That bailout was originally sold by the administration as a plan for the government to purchase toxic mortgage-based assets from financial institutions, to get them off their books and inspire the resumption of normal lending. After passage, though, the administration decided the better course would be to devote $250 billion into buying ownership stakes in banks. With taxpayers' money flowing into their vaults, banks are going ahead with paying dividends to shareholders, giving bonuses to top executives and acquiring competitors. Lawmakers are asking why banks with the money to do those things need taxpayer-funded help. The rescue legislation included some limits on executive compensation, considered weak by many. And while it does not allow institutions receiving the money to increase dividends, it does not prevent them from paying those dividends.
Note: For extensive coverage of continuing revelations about the Wall Street bailout, click here.
Financial giants getting injections of federal cash owed their executives more than $40 billion for past years' pay and pensions as of the end of 2007, a Wall Street Journal analysis shows. The government is seeking to rein in executive pay at banks getting federal money. But overlooked in these efforts is the total size of debts that financial firms receiving taxpayer assistance previously incurred to their executives, which at some firms exceed what they owe in pensions to their entire work forces. The sums are mostly for special executive pensions and deferred compensation, including bonuses, for prior years. Some examples: $11.8 billion at Goldman Sachs Group Inc., $8.5 billion at J.P. Morgan Chase & Co., and $10 billion to $12 billion at Morgan Stanley. Few firms report the size of these debts to their executives. In most cases, the Journal calculated them by extrapolating from figures that the firms do have to disclose. Most firms haven't set aside cash or stock for these IOUs. They are a drag on current earnings and when the executives depart, employers have to pay them out of corporate coffers. [Such] liabilities grew especially high in the financial industry, with its tradition of lavish pay. The liabilities are an essentially hidden obligation. Even when the debts to their executives total in the billions, most companies lump them into "other liabilities"; only a few then identify amounts attributable to deferred pay.
Note: For extensive coverage of continuing revelations about the Wall Street bailout, click here.
A number of financial experts now fear that the federal government's $143 billion attempt to rescue troubled insurance giant American International Group may not work, and some argue that company shareholders and taxpayers would have been better served by a bankruptcy filing. The Treasury Department leapt to keep AIG from going bankrupt on Sept. 16, and in the past seven weeks, AIG has drawn down $90 billion in federal bailout loans. But some key AIG players argue that bankruptcy would have offered more structure and greater protections during a time of intense market volatility. Echoing some other experts, Ann Rutledge, a credit derivatives expert, ... said she ... fears that the government is papering over the problem with a quick fix that was not well planned. "What we see now are a lot of games by the government to keep these institutions going with a lot of cash," she said. "This is to fill holes in companies' balance sheets, and they're trying to hold at bay the charges that our financial system is insolvent." As AIG has rapidly eaten through the loan money, the Fed has twice expanded its original $85 billion bailout -- which itself was the largest government bailout of a private company in U.S. history. Earlier last month, the Fed ... gave AIG $38 billion more in credit for securities lending to try to keep the firm from drawing down its first Fed loan too quickly. Then on Thursday, the Fed agreed to let AIG borrow $20 billion from a larger commercial paper bailout fund it had set up days earlier for all institutions that lend money to each other. If the company had filed for Chapter 11 bankruptcy protection, AIG could have frozen the crippling collateral calls.
Note: For extensive coverage of continuing revelations about the Wall Street bailout, click here.
As a senior mortgage underwriter, Keysha Cooper was proud of her ability to spot fraud and other problems in a loan application. But as a senior mortgage underwriter at Washington Mutual during the late, great mortgage boom, Ms. Cooper says she found herself in a vise. Brokers squeezed her from one side, her superiors from the other, she says, and both pressured her to approve loans, no matter what. “At WaMu it wasn’t about the quality of the loans; it was about the numbers,” Ms. Cooper says. “They didn’t care if we were giving loans to people that didn’t qualify. Instead, it was how many loans did you guys close and fund?” When underwriters refused to approve dubious loans, they were punished, she says. In February 2007 ... the pressure became intense. WaMu executives told employees they were not making enough loans and had to get their numbers up, she says. “They started giving loan officers free trips if they closed so many loans, fly them to Hawaii for a month,” Ms. Cooper recalls. “One of my account reps went to Jamaica for a month because he closed $3.5 million in loans that month. If a loan came from a top loan officer, they didn’t care what the situation was, you had to make that loan work,” she says. One loan file was filled with so many discrepancies that she felt certain it involved mortgage fraud. She turned the loan down, she says, only to be scolded by her supervisor. Ms. Cooper says that her bosses placed her on probation for 30 days for refusing to approve the loan and that her team manager signed off on the loan.
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Attorney General Michael Mukasey has taken personal trips on government jets almost every weekend since he took office less than a year ago at a cost to taxpayers of more than $155,800, Justice Department and Federal Aviation Administration travel records show. Mukasey took so many trips to his home in New York on FAA, FBI or Drug Enforcement Administration planes that he was outside Washington a third or more of February, May, July, August and September. From November 2007 to September 2008, he traveled to New York 45 times, according to the records, which were released in late October in response to open records requests that McClatchy filed nine months ago. Mukasey traveled with his wife on 17 of the trips, and eight of them were with four or five other relatives. Mukasey reimbursed the government a total of $15,246 for all of his trips, based on round-trip coach fares, as he's required to do by government travel regulations. However, the cost of operating the Gulfstream G5s, Cessna Citations and de Havilland Dash 8-100s that Mukasey uses is tens of thousands of dollars more. For example, the attorney general reimbursed the Justice Department $128.80 for a round-trip ticket to New York. The actual cost to the government, according to the department: $4,021.32. Mukasey's personal trips appear to outpace those of other officials who are required to travel on government jets. During the same time period, Defense Secretary Robert Gates took fewer than six personal trips, and he also reimbursed the government at coach fares.
Note: For revealing reports on government corruption from major media sources, click here.
As the list of ailing companies seeking government help grows, it is anybody's guess where the Treasury Department's largesse will stop. The $700 billion bailout bill is so vague that virtually any U.S. company could be eligible for government help. While the capital infusions announced this month will be directed only to banks, Treasury spokeswoman Brookly McLaughlin confirmed that the law allows the department to create other rescue programs "open to a broader set of financial institutions." As the bill is written, "financial institutions" don't have to be banks or financial entities. In theory, any company could declare itself a financial institution and ask the Treasury Department to grant it temporary aid if its rescue is deemed "necessary to promote financial market stability." "Talk about the barn doors being left open - it's like they left off the walls and roof, too," said Bert Ely, an independent banking consultant. He suggested that under the bill, an airline could transfer future revenue streams into a subsidiary and ask the government to buy shares in that new "financial institution." Representatives of the auto, insurance and other industries are already seeking government help, indicating they think they qualify because of their financing units. Airlines and home builders are lobbying for government help to prop them up through the economic downturn - either under the bailout bill or some other legislation. And if insurance and auto lobbyists succeed in their efforts to tap the bailout money, experts said other industries will probably follow.
Note: For extensive coverage of continuing revelations about the Wall Street bailout, click here.
The Food and Drug Administration ignored scientific evidence and used flawed methods when it determined that a chemical widely used in baby bottles and in the lining of cans is not harmful, a scientific advisory panel has found. In a highly critical report ... the panel of scientists from government and academia said the FDA did not take into consideration scores of studies that have linked bisphenol A (BPA) to prostate cancer, diabetes and other health problems in animals when it completed a draft risk assessment of the chemical last month. The panel said the FDA didn't use enough infant formula samples and didn't adequately account for variations among the samples. Taking those studies into consideration, the panel concluded, the FDA's margin of safety is "inadequate". The panel is part of the Science Board, a committee of advisers to the FDA commissioner, and was set up to review the FDA's risk assessment of BPA. Many of the studies that the panel said the FDA ignored were reviewed by the National Toxicology Program, which concluded in September that it had "some concern" that BPA can affect brain and behavioral development in infants and small children. Officials at FDA, which regulates the chemical's use in plastic food containers, bottles, tableware and the plastic linings of food cans, accepted some of the criticism in the report. "FDA agrees that due to the uncertainties raised in some studies relating to the potential effects of low doses of bisphenol-A that additional research would be valuable," said spokeswoman Judy Leon. The agency has commissioned new research on BPA.
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The Air Force is investigating a top official in the Guantánamo war crimes trials following complaints that he inappropriately sought to influence the prosecution of cases. Defense lawyers and human rights groups have accused Air Force Brig. Gen. Thomas Hartmann, who supervised the prosecution of enemy combatants at Guantánamo Bay until he was reassigned last month, of lacking neutrality and pushing for premature prosecutions to rally public support for the tribunals. Air Force Maj. David Frakt, a military defense lawyer who has represented several Guantánamo detainees, said the probe was launched after he and others alerted authorities about possible ethical violations by Hartmann. Frakt said that he informed his superiors in July of concerns regarding Hartmann's "unprofessional conduct" and "lack of candor," and that the investigation could result in professional sanctions and might give some detainees grounds to challenge actions that Hartmann took in cases against them. Hartmann was removed as legal adviser for the Guantánamo trials in September. He continues to oversee the tribunals in his new post, but is not directly involved with prosecutors. Military judges have already barred him from participating in three Guantánamo trials, saying he lacked impartiality and aligned himself too closely with prosecutors. The investigation is proof that serious questions remain about the tribunals' fairness, said Jennifer Daskal, a lawyer for Human Rights Watch, which has lobbied on behalf of the detainees. "The Department of Defense has absolutely refused to clean house."
Note: For many disturbing reports on threats to civil liberties from major media sources, click here.
Ask nearly any physicist if it’s possible for a hydrogen atom to enter a lower energy state than the ground, or resting, state they hold in nature, and you’re likely to get an unequivocal “no”. But a tiny company in New Jersey called Blacklight Power has been disputing that assumption for over a decade, and of late, making gad-fly claims that its founder says will overturn the accepted scientific order. Blacklight’s claims have a special significance: If they’re true, there’s a source of cheap, clean energy that can be easily tapped anywhere in the world. Blacklight is now saying that it has physical proof of its energy generator, verified by an independent university lab. Its “hydrino” theory isn’t put forth by a single crackpot; instead, the company employs a good handful of high-level scientists who would presumably rebel if the idea was totally false. It has also taken over $60 million in venture funding. Despite a hearty rejection by the scientific mainstream, and being ignored for years on end, its founder, Randell Mills, has plugged on. Now an engineering team at Rowan University ...has come forward with results from its own tests of the Blacklight process. Tests conducted in sealed chambers, and measured with a device called a calorimeter, show a heat reaction from a substance provided by Blacklight far beyond anything anticipated. “We’ve been able to regularly reproduce these results and we believe any research lab could do the same,” Peter Jansson, the faculty member heading the experiments, [said].
Note: For several videos demonstrating this amazing new energy source, click here. For reports from professors and engineers who have validated this exciting technology, click here.
Jules Dervaes and three of his adult children live on one-fifth of an acre in Pasadena, Calif., a block away from a multilane highway. On this tiny sliver of land, they manage to be mostly self-sufficient. “This is our form of protest,” says Dervaes, who is 60, “and this is our form of survival.” The family harvests 6,000 pounds and more than 350 separate varieties of fruits, vegetables and edible flowers annually. They brew the biodiesel fuel that powers the family car. Solar panels on their roof reduce energy bills to as little as $12 a month. Goats, chickens, ducks and two rescued cats are in residence. Red wiggler worms turn the kitchen and garden waste into compost, which is then recycled back into the garden. Dervaes’s father worked for Standard Oil, but his son took a markedly different path. Dervaes moved into his current Pasadena home in 1985 — temporarily, he thought. As the years passed and his hopes of relocating to the country were delayed, he “decided that he wanted to see how much we could grow here,” says his 33-year-old daughter, Anais. The family generates cash for their limited expenses by selling produce to local restaurants. Though Dervaes and his children are accustomed to the neighbors’ strange looks at their crowded lot, the local chefs don’t seem to share the skepticism. “They’ll call me in the morning and pick the amount that I need for that night,” says Jim McCardy, who owns Marstons, a restaurant in Pasadena. “The flavor is just incredible.”
Note: A full-length documentary is being made of this wonderful family. To watch an engaging two-minute trailer, click here. See their highly popular website at http://www.pathtofreedom.com.
A man who received a heart transplant 12 years ago and later married the donor's widow died the same way the donor did, authorities said: of a self-inflicted gunshot wound. No foul play was suspected in 69-year-old Sonny Graham's death at his Vidalia, Ga., home, investigators said. He was found Tuesday in a utility building in his backyard with a single shotgun wound to the throat. Graham, who was director of the Heritage golf tournament at Sea Pines from 1979 to 1983, was on the verge of congestive heart failure in 1995 when he got a call that a heart was available in Charleston. That heart was from Terry Cottle, 33, who had shot himself. Grateful for his new heart, Graham began writing letters to the donor's family to thank them. In January 1997, Graham met his donor's widow, Cheryl Cottle, then 28, in Charleston. "I felt like I had known her for years," Graham told The (Hilton Head) Island Packet for a story in 2006. "I couldn't keep my eyes off her. I just stared." In 2001, Graham bought a home for Cottle and her four children in Vidalia. Three years later, they were married. From their previous marriages, the couple had six children and six grandchildren scattered across South Carolina and Georgia. Sonny Graham's friends said he would be remembered for his willingness to help people. "Any time someone had a problem, the first reaction was, 'Call Sonny Graham,' " said Bill Carson, Graham's friend for more than 40 years. "It didn't matter whether you had a flat tire on the side of the road or your washing machine didn't work. He didn't even have to know you to help you."
Note: For further intriguing reports from reliable sources which illuminate the nature of reality, click here.
“Chase recently received $25 billion in federal funding. What effect will that have on the business side and will it change our strategic lending policy?” It was Oct. 17, just four days after JPMorgan Chase’s chief executive, Jamie Dimon, agreed to take a $25 billion capital injection courtesy of the United States government, when a JPMorgan employee asked that question [during] an employee-only conference call. The JPMorgan executive who was moderating the employee conference call didn’t hesitate to answer. “What we ... think it will help us do is perhaps be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way.” Read that answer as many times as you want — you are not going to find a single word in there about making loans to help the American economy. On the contrary: It is starting to appear as if one of Treasury’s key rationales for the recapitalization program — namely, that it will cause banks to start lending again — is a fig leaf, Treasury’s version of the weapons of mass destruction. In fact, Treasury wants banks to acquire each other and is using its power to inject capital to force a new and wrenching round of bank consolidation. Treasury would even funnel some of the bailout money to help banks buy other banks. And, in an almost unnoticed move, it recently put in place a new tax break, worth billions to the banking industry, that has only one purpose: to encourage bank mergers. As a tax expert, Robert Willens, put it: “It couldn’t be clearer if they had taken out an ad.”
Note: Was the real purpose of the "bailout" to strengthen the biggest banks by enabling them to gobble up the smaller ones at the public's expense? No wonder the legislation was rushed through without discussion! For lots more highly revealing reports on the Wall Street bailout, click here.
In a step that could accelerate a shakeout of the nation’s banks, the Treasury Department hopes to spur a new round of mergers by steering some of the money in its $250 billion rescue package to banks that are willing to buy weaker rivals, according to government officials. As the Treasury embarks on its unprecedented recapitalization, it is becoming clear that the government wants not only to stabilize the industry, but also to reshape it. Two senior officials said the selection criteria would include banks that need more capital to finance acquisitions. “Treasury doesn’t want to prop up weak banks,” said an official who spoke on condition of anonymity, because of the sensitivity of the matter. “One purpose of this plan is to drive consolidation.” With bankers traumatized by the credit crisis and the loss of investor confidence, officials said, there are plenty of banks open to selling themselves. The hurdle is a lack of well-capitalized buyers. Stable national players like Bank of America, JPMorgan Chase, and Wells Fargo are already digesting acquisitions. A second group of so-called super-regional banks are well positioned to take over their competitors, officials said, but have been reluctant to undertake or unable to complete deals. By offering capital at a favorable rate, the government may encourage them to expand.
Note: So the U.S. government is using billions of taxpayer dollars to support megamergers which create less competition and more monopolistic conditions. Hmmmm. Is that what the taxpayers really want? For lots more highly revealing reports on the Wall Street bailout, click here.
The Treasury Department is dramatically expanding the scope of its bailout of the financial system with a plan to take ownership stakes in the nation's insurance companies, signaling new concerns about a sector of the economy whose troubles until now have been overshadowed by the banking industry, government and industry sources said. Insurers, including The Hartford, Prudential and MetLife, have pushed the Bush administration to include them in the plan. Many firms have taken losses from mortgage-related securities and other investments and are struggling to replenish their coffers. The new initiative underscores the growing range of problems that Treasury is scrambling to address with the $700 billion allocated by Congress this month. The shape of the plan has changed repeatedly since Treasury Secretary Henry M. Paulson Jr. introduced it last month as an effort to rescue banks by buying their troubled mortgage-related assets. That original mandate has now been pushed aside by a plan to take equity stakes in banks and insurance companies, and other businesses are lobbying to be included. The government has been forced to expand the plan partly because the federal guarantees previously given some institutions, such as banks, have put other companies and financial sectors at a disadvantage, making them less attractive to uneasy investors. The cost of saving the country's largest insurer continues to rise. Senior managers at troubled insurance giant American International Group warned the Federal Reserve yesterday that the company would probably need more taxpayer money than the $123 billion in rescue loans the government has provided.
Note: For lots more highly revealing reports on the Wall Street bailout, click here.
Gordon Brown and other European leaders are secretly preparing an unprecedented campaign to spread GM crops and foods in Britain and throughout the continent, confidential documents obtained by The Independent on Sunday reveal. The documents –- minutes of a series of private meetings of representatives of 27 governments –- disclose plans to "speed up" the introduction of the modified crops and foods and to "deal with" public resistance to them. The secret meetings were convened by Jose Manuel Barroso, the pro-GM President of the Commission, and chaired by his head of cabinet, Joao Vale de Almeida. The prime ministers of each of the EU's 27 member states were asked to nominate a special representative. Neither the membership of the group, nor its objectives, nor the outcomes of its meetings have been made public. But The IoS has obtained confidential documents, including an attendance list and the conclusions of the two meetings held so far – on 17 July and just two weeks ago on 10 October – written by the chairman. The list shows that President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany sent close aides. Britain was represented by Sonia Phippard, director for food and farming at the Department of Environment, Food and Rural Affairs. The conclusions reveal the discussions were mainly preoccupied with how to speed up the introduction of GM crops and food and how to persuade the public to accept them. The documents also make clear that Mr Barroso is going beyond mere exhortation by trying to get prime ministers to overrule their own agriculture and environment ministers in favour of GM.
Note: For an excellent summary of the many health risks posed by genetically modified foods, click here.
Despite the Wall Street meltdown, the nation's biggest banks are preparing to pay their workers as much as last year or more, including bonuses tied to personal and company performance. So far this year, nine of the largest U.S. banks, including some that have cut thousands of jobs, have seen total costs for salaries, benefits and bonuses grow by an average of 3 percent from a year ago, according to an Associated Press review. "Taxpayers have lost their life savings, and now they are being asked to bail out corporations," New York Attorney General Andrew Cuomo said of the AP findings. "It's adding insult to injury to continue to pay outsized bonuses and exorbitant compensation." That there is a rise in pay, or at least not a pronounced dropoff, from 2007 is surprising because many of the same companies were doing some of their best business ever, at least in the first half of last year. In 2008, each quarter has been weaker than the last. "There are, of course, expectations that the payouts should be going down," David Schmidt, a senior compensation consultant at James F. Reda & Associates. "But we haven't seen that show up yet." Some banks are setting aside large amounts. At Citigroup, which has cut 23,000 jobs this year amid the crisis, pay expenses for the first nine months of this year came to $25.9 billion, 4 percent more than the same period last year. Typically, about 60 percent of Wall Street pay goes to salary and benefits, while about 40 percent goes to end-of-the-year cash and stock bonuses that hinge on performance, both for the individual and the company.
Note: For lots more on the Wall Street bailout, click here.
Executives and employees at the major credit ratings agencies were often aware of problems in the AAA grades awarded to thousands of mortgage-related securities whose downgrades helped plunge the nation into a financial meltdown. The companies — Standard & Poor, Moody’s and Fitch, Inc. — made enormous profits as they evaluated a ballooning number of mortgage-backed bonds, many of which were given top marks as long as housing prices went up. “The story of the credit rating agencies is a story of colossal failure,” said Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee. The California Democrat said, “Millions of investors rely on them for independent, objective assessments. The rating agencies broke this bond of trust, and federal regulators ignored the warning signs and did nothing to protect the public. The result is that our entire financial system is now at risk.” The companies are important because their high assessments assured investors that their money should be safe. The inflated ratings awarded to securities backed up by subprime loans led investors to buy them in enormous numbers. But now, most of these securities have been downgraded and the market for them has largely evaporated, contributing to the current crisis. The panel also heard former ratings agency executives say there’s an inherent conflict of interest in the industry because they’re paid by bond issuers instead of investors who trust their ratings to make smart investments.
Note: For many reports on corporate corruption from reliable sources, click here.
Important Note: Explore our full index to revealing excerpts of key major media news stories on several dozen engaging topics. And don't miss amazing excerpts from 20 of the most revealing news articles ever published.