Bryan
Fischer, the director of Issues Analysis for the fundamentalist
American Family Association (AFA), said on Tuesday that people who used
welfare and other government services needed to “kiss the ground”
beneath the richest 1 percent of Americans.
On his April 15 broadcast, Fischer opined that President Barack Obama
was using the Internal Revenue (IRS) service to “go after the 1
percent.”
“The top 1 percent are funding 30 percent of the government!” the
radio host explained. “So, rather than the poor, the low income and the
middle class being resentful of these people, they should be kissing the
ground on which they walk!”
“Who’s
paying for the EBT cards? Who’s paying for food stamps? Who’s paying
for the women and infant children program? Who’s paying for subsidized
housing? Who’s paying for Medicaid? It is the top 1 percent,” he
continued.
“So, they ought to be given ticker-tape parades once a week in all of
our major cities to thank them for funding welfare for everybody.”
Fischer went on to say that it was a “myth” that Americans had a
right to so-called “entitlements” or earned government benefits.
“Every bit of this is the involuntary transfer of wealth,” he
remarked. “That makes us a socialist country. This is Marxism on
display.”
Watch the video below from AFA, broadcast April 15, 2014.
Tuesday, GreenWorldbroke
the story of a recent pattern of stock sales by top executives at
Entergy, the nation’s second-largest operator of nuclear power stations.
The CEO, CFO, Chief Accounting Officer, and Senior VPs for Government
Affairs and Human Resources have all sold large amounts of their stock
in Entergy, with CEO Leo Denault unloading over 55% of his shares in
December and CAO Alyson Mount selling 46% of hers on April 9.
CFO Andrew Marsh and SVP for Government Affairs Kimberly Despeaux
each sold over 20% of their Entergy stock in February. The insiders’
apparent lack of confidence in the corporation’s prospects contradicts a
rosy 1st Quarter earnings report, also released yesterday, reporting
higher than expected returns following an unexpectedly cold winter with
unusual energy price spikes.
Over the last year, several investment firms have reported on major
problems confronting Entergy’s nuclear power business, due to a
long-term decline in energy prices that puts nuclear generators at a
competitive disadvantage. Several reactors could close due to their poor
economics over the next few years, including a majority of Entergy’s
nuclear fleet. This winter’s price spikes do not necessarily change the
long-term outlook for the nuclear industry, as utility and energy market
regulators respond to mitigate those problems. The stock sales from
Entergy executives indicate insiders may have even less confidence than
industry analysts in the company’s prospects. And since Entergy’s
nuclear business is the most significant known problem for the
corporation, the executives’ moves raise questions about whether
investors should expect larger problems or major announcements this
year.
The article, written by Tim Judson, Acting Executive Director of Nuclear Information and Resource Service, is available here.
“This is typical of the kind of reporting and analysis GreenWorld was designed to provide,” said Michael Mariotte, editor of GreenWorld and President of NIRS. “The mission of GreenWorld is
to chronicle the transition–now in its beginning stages–to a
nuclear-free, carbon-free energy system, and to provide news, analysis
and occasional random musings on issues affecting nuclear power and
clean energy worldwide.”
NIRS/WISE is the information and networking center for people and
organizations concerned about nuclear power, radioactive waste,
radiation, and sustainable energy issues.
Today’s AM fix was USD 1,299.00, EUR 938.58 &
GBP 773.03 per ounce. Yesterday’s AM fix was USD 1,311.50, EUR
950.43 & GBP 784.06 per ounce.
Gold dropped $23.80 or 1.79% yesterday, closing
at $1,302.90/oz. Silver lost $0.37 or 1.85% yesterday to $19.62/oz.
Gold
in U.S. Dollars – April 15 to April 16, 2014 – (Thomson Reuters)
Gold was pinned at $1,300 an ounce, well off
Monday’s high at $1,330.90. The sharp sudden price fall yesterday
in early afternoon trade in London (see chart) was attributed to more
peculiar computer-driven concentrated selling of huge tranches of
gold futures contracts on the COMEX, which then saw heavy stop-loss
orders placed by momentum traders.
Data from Nanex shows that gold futures
contracts with a notional value of nearly $500 million dollars were
sold in minutes. This, not surprisingly, hammered gold futures down
over $12 and led to the futures exchange having to halt gold trading
for 10 seconds. This sudden price fall resulted in gold falling below
its 200-day moving average (DMA) and to selling by momentum traders
piling in and shorting gold.
Meanwhile, holdings in the SPDR gold fund rose
by 0.6 tons to reach 806.82 following a three-week downtrend in
holdings. Assets rose by 1.8 tons on Monday to 806.22 tons, the first
inflow the fund has seen since March 24th.
Gold
in Euros – Jan, 2009 to April 16, 2014 – (Thomson Reuters)
Gold’s losses were kept in check by fears of
further escalation of tension in Ukraine. Our warning yesterday of
conflict and a civil war in Ukraine was echoed by Putin and Medvedev
overnight.
Ukrainian forces began a military crackdown
against what are being called pro-Russian separatists in the eastern
regions of the country. The so-called ”anti-terrorist” operation
is the new government’s response to people, some armed, taking
control of administrative and police buildings in the East.
The local parliaments of the Donetsk and
Lugansk regions elected the creation of independent, sovereign
states, and called for referendums on ceding from Ukraine, much like
the events in the Crimea.
Ukrainian troops retook state buildings from
ethnic Russians in the eastern Donetsk region yesterday. White House
spokesman Jay Carney said while the U.S. is considering military
assistance to Ukraine, lethal aid isn’t an option at this time.
Thursday will see 4 way talks in Geneva,
hosting senior representatives from Ukraine, Russia, the EU and U.S.
It is hard to see how progress will be made given that economic
sanctions remain and look set to intensify.
Yesterday, these not inconsequential
geopolitical risks and robust physical demand internationally could
not overcome the speculative selling and possible high frequency
trading (HFT) manipulation on the COMEX.
BAIL-INS
APPROVED BY EU PARLIAMENT YESTERDAY – DEPOSITS OVER €100,000
VULNERABLE
Yesterday the EU Parliament adopted three key
texts outlining common rules on how to restructure and resolve
failing banks.
The laws make up what has become more commonly
known as Europe’s banking union and include the creation of a
Single Resolution Mechanism and a €55 billion Single Resolution
Fund for banks in difficulty. The law was approved by the parliament
with 570 votes in favour and 88 against.
Importantly and little commented on is the fact
that they also include the Bank Restructuring and Resolution
Directive, which seeks to shift the burden of bank failure from
taxpayers to creditors – both bond holders and depositors.
Another key piece of legislation approved
yesterday was the Directive on Deposit Guarantee Schemes, which says
that bank deposits up to €100,000 will remain protected from any
loss that a bank may incur. This means that deposits over €100,000
are now vulnerable to bail-ins and deposit confiscation.
Now shareholders and creditors including
depositors over the €100,000 level will be the first to face losses
from a bank failure.
“Bail in will be the main way to solve the
problems,” said Swedish MEP Gunnar Hökmark. “Bank resolution
will be funded by creditors via bail ins and will also by resolution
funds which will be funded by banks for banks.”
“Bail-in” enshrined in the two laws, means
that the bank’s owners – the shareholders, and creditors – the
bondholders and depositors, will be first in line to absorb losses
banks will incur, before outside sources of finance may be called
upon.
A new
report from Natixis, the asset management and investment
banking division of Groupe BPCE, the second largest bank in France
and one of the largest megabanks in the world with over $1.4 trillion
in assets, predicts what daredevil voices at the maligned margin of
financial analysis have worried about for a while: the likelihood
another financial panic.
It
will be caused ironically by the very mechanisms that are still used
to “fix” the last financial crisis: money-printing and
asset-purchases by major central banks around the world that
unleashed a global flood of liquidity, month after month, for over
five years.
Most of this practically unimaginable mountain
of moolah that has landed in the laps of banks, institutional
investors, hedge funds, private equity firms, and other speculators
has not been used to boost lending to the private sector in OECD
countries, the report confirmed, and thus has not contributed to the
recovery of the real economy in those countries. Instead, it has been
poured into financial assets and has artificially goosed their
valuations.
This money sloshing through the system and the
persistence of zero-interest-rate policies have driven desperate
investors ever further out into “all risky asset classes,”
including emerging assets, junk-rated corporate credit, Eurozone
peripheral debt, and equities. That buying pressure has inflated
their valuations even further. And in the emerging markets, it led to
an appreciation of exchange rates.
After
the May 2013 revelation that the Fed was thinking about tapering its
asset purchases, previously considered QE Infinity, there
was a whiff of panic. Capital began to flee emerging economies, and
their asset prices and exchange rates swooned. But now, the hot money
is pouring back into emerging assets, once again inflating valuations
and exchange rates.
Investors are holding their noses and closing
their eyes, and they’re buying even the crappiest debt of
peripheral Eurozone countries, motivated by the ECB’s 2012 pledge
to do “whatever it takes” to keep the Eurozone together. So an
international feeding frenzy broke out over the bonds that the Greek
government sold last week, only a couple of years after prior
bondholders had been treated to a terrible haircut. Valuations were
so excessive that the paper, larded with risks and supported by an
economy in shambles, yielded less than an FDIC insured one-year CD
did before the crisis.
At the same time, starting in 2012, “we saw
large buying flows of corporate bonds.” Credit spreads tightened
and risk premiums evaporated. With unlimited new and nearly free
money available to junk-rated companies that would otherwise have
trouble servicing their debt, default rates have been low. But
default rates explode when the tide turns, as it did during the
financial crisis, and this is going to happen again:
And investors have been plowing money into
equities and whipping many indices around the world from one high to
the next, “despite the geopolitical risks and the uncertainties
lingering over growth.”
This is exactly what the Fed and other central
banks have explicitly wanted to achieve with their staggered and
well-coordinated waves of QE. They’ve separated markets from
reality. They’ve eliminated gravity. They’ve created that
infamous wealth effect. As a result, “investors are ignoring the
risks weighing on the different asset classes”:
External deficits and “virtual stagnation”
of industrial production in the large emerging countries
Credit spreads that no longer cover the
average risk of corporate default over the maturity of a bond
Still rising public debt ratios in the
peripheral Eurozone countries
Soaring non-performing loans at banks in
peripheral Eurozone countries; a horror picture belying any official
protestations of a banking recovery:
And then the report added gingerly, not wanting
to be held responsible for having created a stock-market panic on its
own: “If share prices continue to rise, the valuation of equities
will become abnormally high in relation to past levels….”
“We can see where this is heading,” the
report said. Namely toward a situation where the prevailing
“abundance of liquidity” and near-zero returns on risk-free
assets are driving investors into emerging assets, corporate credit,
Eurozone peripherals, and equities. And then “all risky asset
classes will become overvalued.”
And what are investors going to do, once they
open their eyes and figure this out?
The report by the second largest megabank in
France, one of the largest in the world, the epitome of mainstream
finance, comes to the same conclusion that those intrepid but
maligned voices on the margin of financial analysis have offered for
a while: “There are grounds to fear an episode of widespread panic
among investors,” who would try to dump all risky assets at the
same time, with buyers running for the exits too, “as we saw in
2008 and 2009.”
Fasten your seatbelts, they’re saying.
“Biotech
Stocks’ Rout Perplexes Analysts” the WSJ headlined the
phenomenon, as analysts continue to hype this stuff to small
investors. But hedge funds are dumping stocks, and private equity
firms are dumping their LBOs. That’s the Smart Money. They’re
getting out. Read….“It’s
not a bubble,” Retail Investors Are Told As The Smart Money
Bails Out
While
the West weighs up putting more spanners in the works with sanctions,
Russia and China are getting on with business. The two are looking at a
deal that could see gas pumped into the world’s most-populated nation
for the next 3 decades. Asia Times correspondent Pepe Escobar told RT
that Beijing’s stance on the global political arena is bearing fruit.
Why Bernanke’s ‘open mouth’ operations beat policy moves
NYU’s Taleb Says Debt Raises Risk of `Catastrophe’
“I think there are some groups of stocks that are highly vulnerable
because they’re in cuckoo land in terms of valuations,” Faber said.
“They have no earnings. They’re valued at price-to-sales.
Berkshire Hathaway, in which Buffett owns 27 percent, according to a
recent proxy filing, has more than $26 billion invested in eight
financial companies that have received bailout money. The TARP at one
point had nearly $100 billion invested in these companies and, according
to new data released by Thomson Reuters, FDIC backs more than $130
billion of their debt.
ARON MATÉ:
Today we dedicate much of the hour to a conversation with award-winning
journalist Matt Taibbi, who you may know from his reporting on
financial crimes. Well, now Taibbi is back with an explosive new book
that asks why these crimes have gone unpunished as an unequal justice
system targets the most vulnerable. The gap between what the poorest
make and what the wealthiest bring home has reached levels not seen
since the Great Depression, and the drug war has fueled the mass
incarceration of the poor and people of color.
AMY GOODMAN: Earlier this month,
attorney James Kidney, who was retiring from the Securities and Exchange
Commission, gave a widely reported speech at his retirement party. He
said that his bosses were too, quote, "tentative and fearful" to hold
Wall Street accountable for the 2008 economic meltdown. Kidney, who
joined the SEC in 1986, had tried and failed to bring charges against
more executives in the agency’s 2010 case against Goldman Sachs. He said
the SEC has become, quote, "an agency that polices the broken windows
on the street level and rarely goes to the penthouse floors. ... Tough
enforcement, risky enforcement, is subject to extensive negotiation and
weakening," he said.
Well, for more, we turn to our guest, Matt Taibbi,
award-winning journalist, formerly with Rolling Stone magazine, now with
First Look Media. His new book is called The Divide: American Injustice
in the Age of the Wealth Gap.
Matt, we welcome you back to Democracy Now! It’s a remarkable, important, certainly needed book—
MATT TAIBBI: Oh, thank you.
AMY GOODMAN: —in this day and age. Talk about the thesis. What is the divide?
MATT TAIBBI: Well, this book grew out
of my experience covering Wall Street. I’ve obviously been doing it
since the crash in 2008. And over and over again, I would cover these
very complex and often very socially destructive capers committed by
white-collar criminals. And the punchline to all of the stories were
basically the same: Nobody would get indicted; nobody went to jail. And
after a while, I started to become interested specifically in that
phenomenon. Why was there no enforcement of any of this? And around the
time of the Occupy protest, I decided to write this book, and then I
shifted my focus to try to learn a lot more for myself about who does go
to jail in this country, because I thought you really can’t make this
comparison accurately until you learn about both sides of the equation,
because it’s actually much more grotesque to consider the
non-enforcement of white-collar criminals when you do consider how
incredibly aggressive law enforcement is with regard to everybody else.
AARON MATÉ: Now, you spent time with
the—with the poor and vulnerable and people of color, who have been
targeted by this system. There was one case of a man in New York, who
lives in Bed-Stuy, standing outside of his home—
MATT TAIBBI: Right.
AARON MATÉ: —who was arrested. Can you take it from there?
MATT TAIBBI: Yeah, sure. I was
actually in a—I was in a law office in Brooklyn, and I was actually
waiting to speak to a lawyer about another case, when I met this
35-year-old African-American man, a bus driver. And I asked him what he
was there for, and he told me that he had been arrested for,
quote-unquote, "obstructing pedestrian traffic." And I thought he was
kidding. You know, I didn’t know what that meant. And I asked him to
show me his summons, and he pulled out a little—little piece of pink
paper, and there it was. It was written, you know, "obstructing
pedestrian traffic," which it turns out it meant that he was standing in
front of his own house at 1:00 in the morning, and the police just
didn’t like the way he looked and arrested him.
And this is part of the disorderly conduct statute
here in New York, but this is one of these offenses that people get
roped in for. It’s part of what a city councilman in another city called
an "epidemic of false arrests," basically these new stats-based police
strategies. The whole idea is to rope in as many people as you can, see
how many of them have guns or warrants, and then basically throw back
the innocent ones. But the problem is they don’t throw back everybody.
They end up sweeping up a lot of innocent people and charging them with
really pointless crimes.
AARON MATÉ: There’s a very comic
scene where then he goes to court, and he has a hard time convincing his
public defender why he doesn’t want to pay a fine for standing in front
of his home.
MATT TAIBBI: Yeah, and this is
something that I encountered over and over and over again, is that
people who were charged with these minor sort of harassing offenses,
they—when the state discovers that the case against them is not very
good, they start offering deals to the accused. And when people protest
that "I’m not going to plead, because I didn’t do anything wrong," they
keep offering better and better and better deals. And no one can
understand why they won’t plead guilty, because, in reality, most people
do. They will end up taking—
AMY GOODMAN: Like all the bankers plead guilty.
MATT TAIBBI: Right, yeah, exactly. Of
course, it’s completely the opposite situation on the other side of the
coin. But in the case of Andrew, the guy who was arrested for
obstructing pedestrian traffic, he literally could not convince his own
lawyer that he was innocent. And it took a long, long time before they
got the judge to ask the policeman on duty if there was actually anybody
else on the street to obstruct. And it wasn’t until that moment that
they dismissed the case, and it just took that long.
AMY GOODMAN: So let’s talk about the
other side. And I want to go to Attorney General Eric Holder, his
remarks before the Senate Judiciary Committee last May in which he
suggests that some banks are just too big to jail.
ATTORNEY GENERAL ERIC HOLDER: I am
concerned that the size of some of these institutions becomes so large
that it does become difficult for us to—to prosecute them when we are
hit with indications that if you do prosecute, if you do bring a
criminal charge, it will have a negative impact on the national economy,
perhaps even the world economy. And I think that is a function of the
fact that some of these institutions have become too large. Again, I’m
not talking about HSBC; this is just a more general comment. I think it
has an inhibiting influence, impact, on our ability to bring resolutions
that I think would be more appropriate.
AMY GOODMAN: That was Attorney
General Eric Holder testifying before Congress. His remarks were widely
criticized. This is Federal Judge Jed Rakoff speaking last November at
the University of Pennsylvania Law School.
JUDGE JED RAKOFF: To a federal judge, who
takes an oath to apply the law equally to rich and poor, this excuse,
sometimes labeled the too-big-to-jail excuse, is, frankly, disturbing
for what it says about the department’s apparent disregard for equality
under the law.
AMY GOODMAN: That’s Federal Judge Jed
Rakoff. Matt Taibbi, if you could respond? And then talk about the
history of Eric Holder, where he came from.
MATT TAIBBI: Well, first of all, this
idea that some companies are too big to jail, it makes some sense in
the abstract. In a vacuum, of course it makes sense. If you have a
company, a storied company that may have existed for a hundred, 150
years, that employs tens or maybe even 100,000 people, you may not want
to criminally charge that company willy-nilly and wreck the company and
cause lots of people to lose their jobs.
But there are two problems with that line of thinking
if you use it over and over and over again. One is that there’s no
reason you can’t proceed against individuals in those companies. It’s
understandable to maybe not charge the company, but in the case of a
company like HSBC, which admitted to laundering $850 million for a pair
of Central and South American drug cartels, somebody has to go to jail
in that case. If you’re going to put people in jail for having a joint
in their pocket or for slinging dime bags on the corner in a city
street, you cannot let people who laundered $800 million for the worst
drug offenders in the world walk.
AMY GOODMAN: Wait, this can’t be a parenthetical. Explain what you’re talking about with HSBC.
MATT TAIBBI: So, HSBC, again, this is
one of the world’s largest banks. It’s Europe’s largest bank. And a few
years ago, they got caught, swept up for a variety of offenses,
money-laundering offenses. But one of them involved admitting that they
had laundered $850 million for a pair—for two drug cartels, one in
Mexico and one in South America, and including the notorious Sinaloa
drug cartel in Mexico that is suspected in thousands of murders.
And in that case, they paid a fine; they paid a $1.9
billion fine. And some of the executives had to defer their bonuses for a
period of five years—not give them up, defer them. But there were no
individual consequences for any of the executives. Nobody had to pull
money out of their own pockets for permanently. And nobody did a single
day in jail in that case.
And that, to me, was an incredibly striking case. I
ran that very day to the courthouse here in New York, and I asked around
to the public defenders, you know, "What’s the dumbest drug case you
had today?" And I found somebody who had been thrown in Rikers for 47
days for having a joint in his pocket. So—
AMY GOODMAN: And that’s—is that even illegal?
MATT TAIBBI: No, in New York City,
actually, it’s not illegal to carry a joint around in your pocket. It
was decriminalized way back in the late '70s. But with part of the now
past stop-and-frisk, what they do is they would stop you, and then they
would search you and force you to empty your pockets. When you empty
your pockets, now it's no longer concealed, and now it’s illegal again.
So they had—in that year, they had 50,000 marijuana arrests, even though
marijuana—having marijuana was technically decriminalized at the time.
So, my point was: Here’s somebody at the bottom, he’s a
consumer of the illegal narcotics business, and he’s going to jail, and
then you have these people who are at the very top of the illegal
narcotics business, and they’re getting a complete walk. And that’s just
totally unacceptable.
AARON MATÉ: But back to this doctrine
that you can’t punish an entire company for the misdeeds of a few
because you might hurt the economy, you might hurt shareholders, you
know, some of which are pension holders and—pension funds and so forth,
how do you get from hurting a—how do you equate hurting an entire
company to just not jailing a couple of executives?
MATT TAIBBI: Well, that’s the whole
point. They’ve conflated the two things. Originally—so, this—to answer
the second part of your original question, "Where does this come from?
Where does this doctrine come from?" way back in 1999, when Eric Holder
was a deputy attorney general in the—in Clinton’s administration, he
wrote a memo that has now come to be known as "the Holder Memo." And in
it, he outlined a number of things. Actually, it was originally
considered a get-tough-on-corporate-crime memo, because it gave
prosecutors a number of new tools with which they could go after
corporate criminals. But at the bottom of it, there was this thing that
he laid out called the "collateral consequences doctrine." And what
"collateral consequences" meant was that if you’re a prosecutor and
you’re targeting one of these big corporate offenders and you’re worried
that you may affect innocent victims, that shareholders or innocent
executives may lose their jobs, you may consider other alternatives,
other remedies besides criminal prosecutions—in other words, fines,
nonprosecution agreements, deferred prosecution agreements. And again,
at the time, it was a completely sensible thing to lay out. Of course it
makes sense to not always destroy a company if you can avoid it. But
what they’ve done is they’ve conflated that sometimes-sensible policy
with a policy of not going after any individuals for any crimes. And
that’s just totally unacceptable.
AARON MATÉ: Is it not the case that some of these cases are just too complex to explain to a jury?
MATT TAIBBI: Yes. And that—well, they
are complex, and juries do have a difficult time with them, but they’re
not impossible to explain to a jury. I mean, I attended a trial
involving bid rigging in the municipal bond markets where they obtained
convictions. Now, that case couldn’t have been more complicated. That
was as hard as a case gets. And I actually watched some of the jurors
fighting off sleep in the early days of the trial. That’s how difficult
it was. And in that case, amusingly, one of the attorneys for the banks
got up initially, and he tried to defend his client’s behavior by
saying, you know, "When you call up a—if your washing machine breaks and
you call the repairman and he tells you how much it costs, you just
have to trust him what the price is because you don’t understand how to
fix your washing machine, and we do." In other words, this stuff is so
complex, you just have to take our word for it that we didn’t commit a
crime. And—but that excuse, I think that’s a weak excuse that
prosecutors give out. It’s a cop-out for not taking on, you know,
difficult cases. Rich or poor, black or white, if somebody has broken
the law, you should want to go after wrongdoers no matter who they are,
and the fact that it’s a difficult crime to prove should just be more of
a challenge for you.
AMY GOODMAN: I want to turn to
remarks by Lanny Breuer in 2012 about prosecuting large companies. At
the time, he was the assistant attorney general. He spoke before the New
York City Bar Association.
LANNY BREUER: I personally feel that it’s
my duty to consider whether individual employees, with no responsibility
for or knowledge of misconduct committed by others in the same company,
are going to lose their livelihood if we indict the corporation. In
large multinational companies, the jobs of tens of thousands of
employees can literally be at stake. And in some cases, the health of an
industry or the markets are a very real factor. Those are the kinds of
considerations in white-collar cases that literally keep me up at night,
and which must, must play a role in responsible enforcement.
AMY GOODMAN: That’s Lanny Breuer in 2012, who was like number two in the Justice Department.
MATT TAIBBI: He was the head of the Criminal Division, so he’s basically the top cop in America at the time.
AMY GOODMAN: He was at the Justice
Department; of course, Eric Holder is the attorney general—both from the
same company. Respond to what he said, and then talk about Covington
& Burling.
MATT TAIBBI: Well, first of all,
his—that whole thing about the innocent white-collar employees perhaps
losing their livelihoods keeping him up at night, I want to know what
his response is to, you know, the idea that maybe a single mother on
welfare is going to lose her kids because she’s going to lose custody in
an $800 welfare fraud case. You know, I saw so many of these cases that
it was—that is was just overwhelming to me. Those are the kinds of
things that would keep me up at night if I were the attorney general,
thinking about the consequences that ordinary people feel—suffer when
they are caught up in the criminal justice system.
People—for instance, again, going back to welfare
fraud, your relatives can lose their Section 8 housing. So, you know, if
you’re—again, if you’re on welfare and you get caught in a fraud case,
that may just involve checking the wrong box or having somebody, one of
your neighbors, say that you have a boyfriend living in your house, when
you really don’t, your mother or your grandmother can lose their
housing because of something like that. That would be the stuff that
would keep me up at night. I mean, I wouldn’t be worried about
millionaire and billionaire executives, you know, who are working at
these banks, if I were Lanny Breuer. So that tells you a lot about the
priorities of somebody like him.
AMY GOODMAN: And talk about Lanny Breuer, Eric Holder, where they come from, where they go back to.
MATT TAIBBI: So they both came from a
law firm called Covington & Burling, which in the 2000s represented
basically every single one of the too-big-to-fail banks. They were also
involved in the setting up of the electronic mortgage registry, so they
played an enormous role in the subprime mortgage crisis.
But here’s the key thing about the presence of these
two people at the head of the attorney—of the Justice Department.
Prosecutors, by and large—and I interviewed a lot of prosecutors for
this book—they basically all have the same personality, the old-school
prosecutors. They’re just—if you think of somebody like Eliot Spitzer,
they’re all like bulldogs. They just want to get their—you know, get
their target; by hook or crook, it doesn’t really matter. They have this
ferocious aspect to their personalities. And it’s an admirable quality
in a prosecutor. They’re all kind of the same, in a certain way. Cops
are the same way. But in the 2000s, that kind of person started to be
replaced in the regulatory system by a new kind of figure who tended to
come from the corporate defense community. And their attitude was not,
you know, get their target at all costs; it was more: "Let’s bring a
bunch of people in a room and hammer out a solution where all the sides
are going to end up walking out happy." And that’s why we end up with
settlements, like the $13 billion Chase settlement last year or the $1.9
billion HSBC settlement, instead of prosecutions.
MATT TAIBBI: They did, yeah, and a
host of other banks that also were involved in nonprosecutions during
this time. So, I mean, it’s—you have a whole bunch of people sort of at
the top of the regulatory agencies, whether it’s Justice, the SEC, the
CFTC, maybe the Enforcement Division of the SEC, who all came from these
big banks or from law firms that represented these big banks. And it’s a
very incestuous community. And just like you talked about with James
Kidney, the SEC official who left, as a result of this kind of
merry-go-round of people who all work for the same companies—and they’re
going to go to government for a while, then they’re going to go back to
the corporate defense community after they leave and make millions of
dollars—they’re very, very reluctant to be aggressive against these
companies, because it’s their—culturally, they’re the same people as
their targets, whereas there isn’t that same simpatico with the very
poor. And I think that’s a very—it’s an important distinction to make,
and people don’t understand it.
AARON MATÉ: You also suggest that Holder and Breuer are perhaps overly concerned with their conviction rate—
MATT TAIBBI: Oh, yeah.
AARON MATÉ: —and that’s why they don’t go after these banks.
MATT TAIBBI: Again, that’s something I
heard over and over again from people within the Justice Department,
that once those two came in, the edict came down from above that we were
only going to go after cases where we were absolutely sure we were
going to win. Now, you can never guarantee a victory in any criminal
case, and oftentimes the cases are difficult to prove or the evidence
may not be 100 percent there, but the state has a moral obligation to
proceed with investigations and, in many cases, criminal cases against
people who are guilty. You know, the fact that it’s difficult shouldn’t
be a limiting factor. And that’s why you saw—instead of cases against
these big banks, you saw ridiculously large amounts of resources devoted
to things like prosecuting Barry Bonds or Roger Clemens, you know,
cases where there are like only a couple of pieces of evidence and it
was hard to screw up. And yet, you know, they didn’t always succeed even
in those cases. So, it was a terrible, terrible thing for the Justice
Department during that period.
AMY GOODMAN: We’re going to break,
then come back to this conversation. The award-winning journalist Matt
Taibbi is with us, formerly with Rolling Stone magazine. His new book is
called The Divide: American Injustice in the Age of the Wealth Gap.
When the government does go after banks, what banks do they go after?
We’ll talk about that in a minute.
AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman, with Aaron Maté.
AARON MATÉ: Well, we are speaking
with Matt Taibbi, the award-winning journalist formerly with Rolling
Stone magazine, now with First Look Media. His book is The Divide:
American Injustice in the Age of the Wealth Gap. Now, turning to the
banks—or the bank that was prosecuted, Abacus Bank, last May it became
the first bank to be indicted in Manhattan in over two decades.
Manhattan District Attorney Cyrus Vance Jr. announced the indictment.
CYRUS VANCE JR.: Today we are announcing
the indictment or guilty pleas of 19 individuals on charges including
mortgage fraud, securities fraud and conspiracy, as well as the
indictment of Abacus Federal Savings Bank, a federally chartered bank
that has been catering to the Chinese immigrant community since 1984.
Now, these defendants—the bank and former employees and managers from
its loan department—are charged with engaging in a systematic scheme to
falsify and fabricate loan applications to the Federal National Mortgage
Association, commonly known as Fannie Mae, so that borrowers who would
otherwise not legally qualify for Fannie Mae’s mortgages could obtain
them unlawfully. This is a large-scale mortgage fraud case that we
estimate to include hundreds of millions of dollars’ worth of falsified
loan applications. If we have learned anything from the recent mortgage
crisis, it’s that at some point these schemes unravel, and taxpayers can
be left holding the bag. Financial institutions, in short, have to obey
the law and follow the rules. Our financial system is predicated on
this basic concept.
AARON MATÉ: That’s Manhattan DA Cyrus
Vance Jr. Matt Taibbi, you were at this trial. You heard Prosecutor
Vance there suggesting some link here to the financial crisis, but that
wasn’t the case.
MATT TAIBBI: So, this is—I mean, it’s
almost humorous. It’s not humorous for the bank involved, obviously.
But here he is holding this grand press conference. They actually had a
chain gang, where they chained 19 of the defendants together and hauled
them into court for this—for this exercise.
AMY GOODMAN: All working for Abacus?
MATT TAIBBI: All working for Abacus.
And these are working-class Chinese immigrants, basically. The
highest-ranking official in this entire case made $90,000 a year. Many
of them didn’t speak English. This is a small bank wedged between two
noodle shops in Chinatown. And this was the target they chose to go
against as a symbol of the financial crisis? In the chain gang incident,
actually, three of the—three of the defendants had actually already
been arraigned, but they asked them to volunteer to come down to the
courthouse for the photo op that day, brought them in, chained them up
to the rest of the defendants so they could be re-arraigned for the
benefit of the cameras.
But the point of this whole thing is that Abacus
Federal Savings Bank, which is a small, community, minority bank in
Manhattan, this was the sole target of any reprisal by the federal—by
the government in the wake of the financial crisis. And they’re a
stone’s throw from all these gigantic skyscrapers, you know, housing all
of these other major banks that committed crimes that were hundreds of
times worse than Abacus was even accused of. And it was such a visually
striking contrast for me that that’s where I wanted to start the book,
because here you have this bank being arraigned in downtown Manhattan,
and they looked northward towards Chinatown for their target as opposed
to, you know, a few blocks south, where they could have found—you know,
walked in any direction and found an appropriate target.
AMY GOODMAN: Contrast that with Jamie
Dimon testifying before—what was it—the Senate Judiciary Committee, the
head of JPMorgan Chase. And talk about what his bank was fined for and
what he ultimately—what happened to him.
MATT TAIBBI: So, Jamie Dimon is the
CEO of JPMorgan Chase, and they—last year that bank paid $20 billion in
fines, which is an extraordinary number. Think about it. I think it
beats by a factor of five the record for the largest amount of
regulatory fines in a single year, which was previously held by BP for
their Deepwater Horizon incident. They were accused of an extraordinary
array of things, everything from being Bernie Madoff’s banker and not
raising red flags early enough, to manipulating energy prices in
Michigan and California, to failing to disclose to investors the extent
of losses in the London Whale episode, to abuses during the subprime
mortgage period by some of their subsidiaries. The list of things goes
on and on and on and on. And—
AMY GOODMAN: I mean, if this were translated into common criminal law—
MATT TAIBBI: Right.
AMY GOODMAN: —this is—this is sort of replacing hundreds of years in prison for many different people.
MATT TAIBBI: Oh, yeah, absolutely. I
mean, I made the point in another case—there was another case involving a
company called General Reinsurance where a bunch of executives were
charged with a $750 million stock fraud, that that amount of fraud that
year was more than the total value of all the cars stolen in the
American Northeast that same year. So you think about everybody who’s
doing time for a stolen car that year, and, you know, these guys
ultimately got off on a technicality.
So, again, going back to Chase, they paid $20 billion
in fines. And what the government always says in response to the
question of why aren’t these guys in jail, they always say, "Well, we
don’t have enough evidence. These cases are hard to make." But my
question is, over and over again, they somehow seem to have enough
leverage to get billions of dollars of fines out of these companies, but
not enough leverage to get even a day in jail for any of their
executives? It doesn’t add up. Logically, it’s a total non sequitur.
There’s no way you can have a company paying that much money and not
have somebody guilty of a crime. It’s just—it’s not possible.
AARON MATÉ: And Jamie Dimon, of course, gets a 74 percent raise.
MATT TAIBBI: Yeah, exactly. I mean,
that’s the punchline to this whole thing, right? I mean, if you were,
you know, the head of any other business—Alex Pareene of Salon.com made
this point, that if he were running a restaurant and he got the biggest
fine in the history of restaurants, there is no way that he would be
kept in, kept on the job as the head of the company. But he was not only
not fired, not only not prosecuted, but he was kept in the job, and he
got a 74 percent raise. And they essentially paid for $20 billion fines
by laying off 7,500 lower-level workers that year, and so that’s where
the pain came from.
AMY GOODMAN: Let’s go to Richard
Fuld, the final chair and chief executive officer of Lehman Brothers. In
2008, he spoke before the House of Representatives Oversight Committee
and was grilled about his own exorbitant earnings as the bank went
under. This is Committee Chair Henry Waxman questioning Fuld.
REP. HENRY WAXMAN: You’ve been able to
pocket close to half-a-million dollars. And my question to you is, a lot
of people ask: Is that fair for the CEO of a company that’s now
bankrupt to have made that kind of money? It’s just unimaginable to so
many people.
RICHARD FULD: I would say to you
the 500 number is not accurate. I would say to you that although it’s
still a large number, I think, for the years that you’re talking about
here, I believe my cash compensation was close to $60 million, which you
have indicated here. And I believe the amount that I took out of the
company over and above that was, I believe, a little bit less than $250
million.
AMY GOODMAN: Your response to the last head of Lehman Brothers talking about his salary?
MATT TAIBBI: Well, first of all,
there was a whistleblower within Lehman Brothers who wrote to the SEC
before Lehman Brothers collapsed, talking about how Fuld had actually
earned a significantly larger amount of money than he represented there
in Congress. It’s quite possible that if the SEC had followed up on some
of those complaints by that whistleblower, that they might have
uncovered some of the corruption at Lehman Brothers ahead of time and
maybe, possibly even headed off that disaster.
But what’s interesting—what’s symbolic about Richard
Fuld is that here’s a guy who nearly blew up the planet by, you know,
loading up his company with deadly leverage and making a string of
irresponsible decisions to over-invest in subprime mortgages, and the
collapse of the company resulted in all of us having to pay these
enormous bailouts. But Fuld walked away with, by his count, $300
million, maybe $350 [million], but by the count of some others, more
closer to half-a-billion dollars, and he kept the money. And that is a
consistent theme of the financial crisis. Not only were these guys not
prosecuted, they got to keep all of their money, all of the ill-gotten
gains that they made during these periods.
AMY GOODMAN: You call that chapter "The Greatest Bank Robbery You Never Heard Of."
MATT TAIBBI: Right, yeah. No, there
was something that happened at Lehman Brothers at the end of the—you
know, when the company went out of business. It was—there was
essentially a merger with the British bank, Barclays, and there was an
incredibly interesting episode where a series of Lehman insiders agreed
to take upwards of $300 million in compensation—in future compensation
from Barclays, before they did the process of valuating the company for
sale to Barclays. I know that sounds complicated, but basically they
took jobs at Barclays, and then they basically marked down the price of
Barclays so that the Lehman creditors got less money in the end. So, if
you were—if you lost money in the Lehman debacle, you can probably lay
some of the blame at the feet of those executives.
AARON MATÉ: And it was so shady that didn’t most of this happen in the middle of the night?
MATT TAIBBI: Yeah, actually, they
made—they struck many of the deals with these Lehman insiders before
dawn on the day of the last board meeting. Literally before dawn, you
had emails going back and forth between some of these Lehman Brothers
executives saying, "Well, how much did you get? You know, I got $15
million," and, you know, etc., etc.
AMY GOODMAN: You know, the way the
media covers, and the prosecutors go after or don’t, these institutions,
it’s all from the perspective of those who would be or should be
charged. When it comes to people on the street, it’s always from the
perspective of the victim.
MATT TAIBBI: Right.
AMY GOODMAN: Which, by the way, it should be.
MATT TAIBBI: Right.
AMY GOODMAN: I mean, if someone is raped or murdered, you should hear their story, their name—
MATT TAIBBI: Absolutely.
AMY GOODMAN: —and a person should be held responsible. But in this case, you never hear about the victims.
MATT TAIBBI: That’s right.
AMY GOODMAN: Instead, you are identifying with those who are charged. They say they have families; they’re really a wonderful person.
MATT TAIBBI: Right.
AMY GOODMAN: Talk about the victims of these crimes that JPMorgan Chase was fined for.
MATT TAIBBI: Well, I mean, we’re all
victims of these crimes. I mean, that’s the difficult thing about this
new era of financial corruption is that, you know, these crimes are
executed on such a massive scale that we can all be victimized and
basically not know it. If you think about something like the Libor
scandal, right, where the world’s biggest banks got together and
colluded to monkey around with world interest rates, well, that crime
affected anybody who held a variable rate investment of any kind. So if
you have a floating rate credit card or a floating mortgage, or if
you’re a town that has swaps, you may be paying more, you may be paying
less. It doesn’t know—you don’t know, but they’ve been affecting the
amounts of your holdings. There have recently been charges that some of
the banks have been monkeying around with the prices of things like
metals, like aluminum and tin and zinc and copper. So if you go to buy a
can of soda, you may be paying more than you would have otherwise.
In the subprime mortgage crisis, typically the victims
were people who held pensions, because what would happen often was the
banks would create these gigantic masses of essentially phony subprime
loans. They would disguise them as AAA-rated investments. Then they
would sell them to an institutional investor like a pension fund. So
you’re some, you know, working stiff, a toll booth operator in
Minnesota. You’ve got a state pension. And you wake up one morning, and
30 percent of your pension fund is gone. Well, you’re a victim of this
stuff.
But it’s very hard to trace that back to these people.
And it’s hard—and journalists don’t want to do the work of identifying
who the victims are in these scandals, because it’s too complicated. And
that’s why you often see these crimes described from the point of view
of the perpetrator and not from the victim, because we’re all the
victims. These crimes are ethereal. They’re existential. They’re on such
a gigantic scope that it’s difficult for us to get a—wrap our heads
around. And that’s a—so that’s a very good question to ask.
AARON MATÉ: You mentioned earlier
people who are targeted for welfare fraud. In one case, you went to San
Diego and profiled a woman who was targeted by this program P100—
MATT TAIBBI: Right.
AARON MATÉ: —a very invasive action in her home. Can you talk to us about that case?
MATT TAIBBI: Yeah, they have this
program in San Diego where if you apply for welfare, the state gets to
pre-emptively search your house to make sure that you’re not lying
about, for instance, having a boyfriend. You know, so you’re a single
mom. You go to the welfare office. You need financial assistance. You
represent on the form that you’re not cohabiting with anybody. And just
to check, they tell you to go sit tight in your house. And I’ve heard
stories of people who waited, literally sitting in their house for a
week, not knowing when the inspector is going to come, because if you’re
not there when they come, you don’t get your welfare.
So, the person comes finally. It’s not a social
worker. It’s very often a law enforcement official. They go in, and they
search your house. I talked to a number of women who have recounted the
experience of having their underwear drawers rifled through. You know,
one woman talked about an inspector sticking his pencil end into the
underwear drawer and picking out a pair of sexy panties and saying, you
know, "Who do you need these for? If you don’t have a boyfriend, what’s
this for?" And this is the kind of thing that people have to go through.
And I understand that, to many middle Americans, you
know, welfare recipients are not—are perhaps not the most sympathetic
people. But it’s very striking that, for instance, the recipients of
bailouts, we don’t have the right to go in and check their books, but
somebody who applies for federal assistance to feed their kids, we have
the right to go through their underwear drawer. And I thought that was a
striking comparison.
AMY GOODMAN: Matt, the cover of The
Divide, of your book, American Injustice in the Age of the Wealth Gap,
is very striking. And you have this artwork throughout your book.
Explain who did this.
MATT TAIBBI: So this is Molly
Crabapple. She’s a great artist. I met her during the Occupy protests.
We had—we have a mutual friend, and Molly had done these amazing posters
for the Occupy protests that were—that were based—some of them were
based on my work, because there was a vampire squid theme to some of
them.
AMY GOODMAN: Explain vampire squid.
MATT TAIBBI: Well, I had referred to
Goldman Sachs as a great vampire squid wrapped around the face of
humanity. So she had done these series of posters that were like, you
know, "starve the vampire squid," "stop the vampire squid." So we got
together, and she was—she ended up becoming sort of famous as like the
semi-official artist of Occupy. And we decided to work together on this
project. And what’s so perfect about her is that she really specializes
in doing these kind of grotesque, horrifying, Boschian portraits of
dysfunction, you know, like the cover. It actually looks quite beautiful
from a distance, but if you look at it closely, it’s this horrifying
image of people being ground up in this mindless justice machine. So
it’s beautiful stuff, and Molly should get—she gets all the credit in
the world, I think. They’re incredible images.
AARON MATÉ: At sentencing hearings,
you have sometimes family members and friends coming to plead to the
judge for leniency. And you sort of contrast this in your book. You have
one scene where you have executives bringing in hundreds of people.
MATT TAIBBI: Mm-hmm.
AARON MATÉ: Can you compare what happens there to what happens to people on the bottom?
MATT TAIBBI: So this is interesting.
Again, this is that same Gen Re case I talked about, the $750 million
stock fraud where these guys all got off. And what was so interesting
about that is—so, if you go to court, the judges almost never are from
the same neighborhoods as the accused. But when you do have a case where
it’s, you know, somebody from the suburbs who lives in Connecticut and
the judge is also somebody who’s from the suburbs and lives in
Connecticut, and he has members of the local PTA come out and say that,
you know, "This guy is somebody who wouldn’t even jaywalk. You know,
he’s a God-fearing person. Yes, maybe he might have committed a $750
million stock fraud, but he’s a very decent person," they will very
frequently—like, bail is never an issue for this kind of defendant,
which is very, very important. You know, these—and beyond that, in that
particular case, after they were convicted, all of these defendants were
allowed to remain free pending appeal, which removed all of the
leverage the state might have had to roll up these defendants up into
higher targets, whereas that’s exactly the opposite of what happens to
poor defendants, who are frequently thrown in jail. Their, you know,
bail is set at a level that’s higher than they can afford. And then,
while you’re in jail waiting for trial, you start to do the math, and
you realize that you could stay in jail longer in bail than you would do
if you were sentenced. And that’s one of the reasons why people plead
out, even when they’re innocent, because the math just works in the
state’s favor. They have all these tricks they can use to keep you in
jail longer than you’re supposed to be.
AMY GOODMAN: Who was tougher on corporate America, President Obama or President Bush?
MATT TAIBBI: Oh, Bush, hands down.
And this is an important point to make, because if you go back to the
early 2000s, think about all these high-profile cases: Adelphia, Enron,
Tyco, WorldCom, Arthur Andersen. All of these companies were swept up by
the Bush Justice Department. And what’s interesting about this is that
you can see a progression. If you go back to the savings and loan crisis
in the late '80s, which was an enormous fraud problem, but it paled in
comparison to the subprime mortgage crisis, we put about 800 people in
jail during—in the aftermath of that crisis. You fast-forward 10 or 15
years to the accounting scandals, like Enron and Alelphia and Tyco, we
went after the heads of some of those companies. It wasn't as vigorous
as the S&L prosecutions, but we at least did it. At least George
Bush recognized the symbolic importance of showing ordinary Americans
that justice is blind, right?
Fast-forward again to the next big crisis, and how
many people have we got—have we actually put in jail? Zero. And this was
a crisis that was much huger in scope than the S&L crisis or the
accounting crisis. I mean, it wiped out 40 percent of the world’s
wealth, and nobody went to jail, so that we’re now in a place where we
don’t even recognize the importance of keeping up appearances when it
comes to making things look equal.
AMY GOODMAN: Can you end with the story of Patrick? And we just have a minute.
MATT TAIBBI: Sure, yeah. There was a
saxophonist named Patrick Ocean Jewell who was assaulted by police here
in New York City. They mistook a hand-rolled cigarette for a joint.
AMY GOODMAN: He had brought his girlfriend to the subway, liked to walk with her every morning.
MATT TAIBBI: Right.
AMY GOODMAN: He actually did not know who attacked him.
MATT TAIBBI: Right, yeah. No, the
police can be anyone these days. That’s another thing that most people
don’t know about. They don’t always come in uniform, and they don’t
always come in those unmarked Plymouths that they used to drive. They
can drive fancy cars. They can drive beaters. They can be dressed in
plainclothes. They can be black, white. You don’t even know who the cops
are anymore. And this guy was just sitting there at a train station
smoking a hand-rolled cigarette, and all of a sudden he’s being beaten
up by all these people, you know, and he only later figured out that
they were cops.
AMY GOODMAN: When he called to a police officer, started crying for help.
MATT TAIBBI: Yeah, he’s crying for
help, and a uniformed police officer comes and tells him to shut up. And
that’s when he realizes that they were cops. But this is—this is sort
of stop-and-frisk expanding its universe of targets. So, you know, now,
even if you’re white and middle-class, you know, now you, too, can be
part of this whole process. And that’s—
AMY GOODMAN: And your point in bringing—putting this in The Divide?
MATT TAIBBI: Is that—you know, is
that this is now beginning to affect everybody. I think one of the
problems that the increasing wealth gap is bringing to us is that
there’s a smaller and smaller group of untouchables, and then there’s a
sort of widening group of everybody else, and we all have the same lack
of respect from the law enforcement.
AMY GOODMAN: Well, Matt Taibbi, I
want to thank you for being with us, award-winning journalist. His book
is called The Divide: American Injustice in the Age of the Wealth Gap.
You never think about physical therapists as being a danger to
society, or the country, but that’s the new campaign spearheaded by
Medicare and the government.
Physical therapists are the “flavor of the month” in the government’s
pursuit for more monies in this never ending saga of Medicare running
out of money. Considering that these fines are running into the millions and possible prison sentences, this “fight against fraud” has become a very serious matter for our profession. Some notable recent cases against therapists:**
**It is public knowledge but I
want to say that I don’t like publicizing this type of news. Especially
when a fellow brother or sister has undergone suffering. I do believe
that this will save someone–someone from a hell of their own. I
apologize in advance to those involved in the cases I am mentioning. My
heart goes out to you.
If you look closely into these cases, you’ll find that this could happen to any one of us. Many
therapists are making similar, if not same, mistakes today. What’s
truly worrisome is that these simple “mistakes” are being labeled and
prosecuted by the government as “FRAUD” and federal crimes. The
punishments do not meet the crime, and there is little mercy. What’s even more scary is
that most therapists charged never knew they were doing anything wrong.
Most of the “laws” they were supposedly breaking are in fine print,
obscure, or ill-defined. No one was hurt, they had physician orders, and
patients loved the care. This did not save them from being treated like
criminals. Many report being intimidated, frightened and scared to
death by the officials involved. It’s not surprising that most take a
plea bargain–I mean how do you fight the government right? This is
bullying at a higher level and it doesn’t seem like it will stop any
time soon unless the public is made aware of it. A typical plea bargain is
made up of a hefty fine including a suspension or revocation of your
license. A plea is like a WIN for the prosecution who is essentially the
district attorney or attorney general, and the PT board. Yes, I did say
the PT board. They are not on your side. They exist to investigate
licensees and build up cases. If they don’t investigate and prosecute,
they are not doing their jobs. Their budgets get cut, and more. The PT
board is usually the one doing most of the initial data or evidence
gathering and they are the one’s essentially helping build the legal
cases against therapists. They are NOT on your side. Most therapists
don’t know this. Most therapists do NOT fight. The
reason being that fighting the PT board and the legal system can take
over a year of time, a whole lot of money, and even more stress. Not
many attorneys (even healthcare attorneys) know much about physical
therapy. Historically we have never undergone legal scrutiny (why should
we). They will charge you as they would a physician, which is a lot. It
can range anywhere between $50,000 to over $400,000 depending on the
length of charges and court time, etc. Your malpractice insurance
doesn’t cover much–maybe $10k. One therapist chose to fight.
She is a therapist in Arizona and was served with over 76 pages of charges. You might ask, “How can one get over 76 pages of charges filed against her and not have done anything wrong?” She
believed she didn’t do anything wrong so she chose to fight rather then
take a plea bargain. She is an incredibly strong and courageous
individual. Here’s a short segment of my interview with her. LISTEN HERE >>>http://jamespt.com/what%20did%20you%20go%20through.mp3
In the end, after 12-months of hell–six days in court–over
$200,000–she was found NOT GUILTY of all charges. This is seemingly
what’s happening across the country. I get reports regularly, and the
story is all the same–the government is going on a shopping spree with
their campaign of “Fighting Fraud”. I’m not saying they aren’t finding
real criminals out there, they probably are. But they are all too happy
about hitting hard and not caring where their punches land. In most
cases with physical therapists involved, the punishment is not fitting
the so-called crime. “What’s Going On Here?!”
The government is desperately attempting to keep Medicare afloat. It
seems the Obama administration will do anything to avoid Medicare from
going under while on his watch, even if it means sacrificing small
healthcare professionals that don’t have the wherewithal to defend
themselves. They are aggressively doing everything they can to find monies. Learn more here>>>.
We live in the best country in the world but right now Medicare needs
money, the government seems to want more money, and they are stopping
at nothing in order to get it.
They have hired Recovery Audit Contractors (RAC auditors) who are
more like “bounty hunters” bullying the innocent. They get a percentage
of the monies recovered so they are aggressive to say the least. In some
cases they are threatening and inappropriate.
They have also put out an award for consumers to turn in providers
for any suspicious activity, such as offering free services or improper
billings. (How can consumers understand coding and billing when even
business experts hardly can?).
Does this make any sense
when CEO’s of insurance companies are allowed to make record high
profits, making 80 and 100 million in a single-year, by…1) cutting off
benefits from deserved patients who never missed a premium payment,
letting them die and 2) delaying payments to providers and playing games
until the money falls through the cracks. Learn more here>>>
All the while the government makes laws that put a limit on how much a
consumer can even sue an insurance company, and now they are putting
bounties on the heads of therapists, the ones providing care to the
patients… Angry, yet?
Do not be a victim. Do not get caught up in this horrific game they are playing!
Fraud cases usually start with small minor “mistakes” made by providers. Things such as…
Not documenting correctly.
Not being specific enough.
Not noting rationales.
Not having prior level of function defined.
Not logging duration time of sessions.
Clerical errors.
Not documenting quantifiable progress, and more.
“Merely having a prescription, doing an eval note, and establishing goals is no longer going to cut it anymore.” -James Ko, PT
All the while there are
clinics across the country committing true fraud. I personally know of
clinics where they have patients sign-in, get some juice, eat some
pastries, watch a movie, get a massage, sit in the jacuzzi and then
sign-out, after which it’s billed to medicare as “physical therapy”. The
patients rarely even see a real physical therapist because there might
be a physician in the building. Instead of going after these true
criminals, the government is pursuing easier targets. Criminals appear
to be too smart and require more work to collect evidence against, so
innocent practitioners who are never trying to hide anything, and are
much more cooperative (no subpoenas usually necessary to get in), are
singled-out as easier prey. It’s sad but it’s true.
How to Avoid Fraud Charges and Become “Bullet-Proof”
These tools and tips may save you from going through hell some day: 1. Begin documenting important items only (not the SOAP you learned in school).
A small and seemingly insignificant
request for more documentation can lead to scrutiny. Nearly every case
starts here. Make sure to carefully look over your documentation before
sending to anyone. If you choose to make any additions or edits, make
sure to initial, date, and explain why the late entry. Do NOT try and hide the fact you made a late entry.
This could make a bad situation worse (obstruction of justice). The
bottom line is learn how to document correctly. Take the IndeFree
course; this is not a sales pitch. I don’t need to do that. Document
only that which is on their “checklist” of items–what they are looking
for. If your documentation is not systemized with all the necessary
components you leave yourself vulnerable to charges of fraud. Their
rationale is, “If it’s not written (or legible), it doesn’t exist.” And
if it doesn’t exist yet you chose to bill and get paid then you
committed fraud. And the punishment is severe. Make sure you are
including important items such as prior level of function, quantifiable
progress, time durations, medical necessity statements, safety concern
reports, etc. The list goes on but if you have it systemized it can be
quick and efficient.
“Most therapists are NOT documenting correctly making them easy prey for auditors.” -James Ko, PT
2. Don’t cooperate or let them in when showing up unexpectedly.
Auditors and officials are notorious for
showing up unexpectedly with no warning or notice. That’s protocol. They
know they have a better chance of obtaining evidence against you if
catching you off guard. They will also attempt to appear when owner is
not present. They know they can manipulate employees more easily than
owners. Number 5 below will discuss training your staff. They will
request access to charts and want to interview your staff. Do NOT let them.
You are not obligated in any way to give them access to anything or
speak with them. Make them come back and have a legal representative
present. Many fraud charges could have been avoided if the owner/staff
did not welcome them in and present them with an opportunity to gather
data (evidence).
3. Have legal representation during a scheduled audit or face to face meeting.
This is your legal right. Absent a
subpoena, you have the right to say no. Even if president Obama himself
came knocking on your door, you should say “Come back with a subpoena
and when my attorney is present.” Your malpractice insurance covers only
around $10,000. You may want to get the limit increased if your policy
allows it.
4. Don’t allow your staff to be questioned without an attorney present.
This is very important. In many cases,
employee testimonies become a main part of their evidence against you.
They don’t record the interrogations. Instead they hand write what they
think they heard. Later it’s used against you. They also frighten the
hell out of your staff which leads them to turn against the owner.
5. Train your staff to NOT let anyone in, or say anything.
Do this today. Make sure your staff is
trained to say “NO.” No one is allowed. Without the owners
authorization, and the patient’s authorization, no one is to gain access
to sensitive health information (or anything else), even if they are
carrying a badge–especially if they are carrying a badge. This is HIPAA
law. Many cases against therapists could have been avoided if staff were
trained properly. Write me and I’ll personally send you a copy of the
policy you should have staff sign and put in their files (or download here).
I sincerely hope you never get accused of fraud, I really do. It’s
hell. I know why you went into this profession. There are a lot of
easier ways to make money. Your intent is to do good. I hope you get a
chance to read this and sleep better at night. I know too many who wish
they would have seen this ahead of time.
Written by James Ko, PT
He is an advocate for the physical therapist in private practice. He
regularly serves as a defense expert witness in cases where therapists
are being unjustly accused of charges. He’s also the Founder of the
Therapist Advocacy Group (TAG).
Volunteer Lesley Payne stacking tins at the Coastland Family Church foodbank in Barry
Shock report reveals 330,000 food parcels handed out went to hungry
children in this country yet we have more millionaires than ever
Campaigners last night demanded David Cameron scrap his savage
welfare reforms after the number of emergency food parcels handed out
soared to more than a million.
Furious anti-poverty groups and church leaders said it was beyond belief that people in 21st century Britain are going hungry and relying on charity.
The
number of food parcels given out last year by the Trussell Trust alone
nearly tripled from 346,992 to 913,138. And 330,205 of those went to
children.
Another 182,000 are being donated each year by just 45 independent food banks, according to a recent survey.
Campaigners
say the shocking statistics shatter the PM’s twisted boast that his
welfare reforms are a “moral mission” giving hope to the poor.
Benefits
cuts and delays, the rising cost of living and pay freezes are forcing
more and more people into food banks, experts have long warned. One, on
Merseyside, is handing out rations at the alarming rate of one every
nine minutes.
Legal experts even claim Mr Cameron is breaching human rights laws by allowing people to go hungry.
And
Trussell Trust chief Chris Mould said the growing queues at food banks
is proof the economic recovery Chancellor George Osborne brags of is
still not affecting those on the breadline.
He added: “It’s close
to triple the numbers helped last year, shocking in 21st century
Britain. But perhaps most worrying of all is this figure is just the tip
of the iceberg of UK food poverty.
“It doesn’t include those
helped by other emergency food providers, those in towns where there is
no food bank, people too ashamed to seek help or the large number who
are only just coping by eating less and buying cheap food.
“In the
last year we’ve seen things get worse, rather than better, for many
people on low incomes. It’s been extremely tough for a lot of people,
with parents not eating properly in order to feed their children and
more people than ever experiencing unfair and harsh benefits sanctions.
“Unless
there is determined policy action to ensure the benefits of national
economic recovery reach people on low incomes we won’t see life get
better for the poorest anytime soon.”
More than four out of five food banks insist the rising queues are down to harsh, ideologically-driven welfare cuts.
Mr
Mould added: “A more thoughtful approach to the benefits regime and
sanctions in particular, increasing the minimum wage, introducing the
living wage and looking at other measures such as social tariffs for
energy would help to address the problem of UK hunger.”
The true
total of emergency handouts could be much higher because the Trussell
Trust runs less than half of the 1,000-plus food banks in the UK.
But
last night the Department for Work and Pensions stubbornly refused to
admit there was a problem. A spokesman said: “The OECD say there are
fewer people struggling with food bills compared with a few years ago
and benefits processing times are improving.”
But Shadow
Environment Secretary Maria Eagle declared: “The increase in the number
of households turning to food banks reveals the shocking truth of life
under Cameron’s cost-of-living crisis.
“While those at the very
top get a tax break everyone else is finding life is harder under the
Tories. Instead of hiding behind the Tory myth, that says the increase
in food banks is driving demand, it is time ministers got a grip and
took this issue seriously.”
Legal advice produced for the Just
Fair coalition of charities claims the food poverty scandal breaks the
International Covenant on Economic, Social and Cultural Rights. Article
11(2) guarantees the fundamental right of everyone to be free from
hunger.
PA
Questions to be asked: Prime Minister David Cameron
Just Fair said: “It is our opinion that the UK has violated the human right to food an breached international law.
“We
call on the Government to take immediate action.” Merseyside, the West
Midlands, Greater Manchester and Tyne and Wear have the highest numbers
using food banks.
The depressing figures have reignited Mr
Cameron’s war with the church after he claimed last week he was doing
God’s work on earth. More than 40 bishops and 600 faith leaders have
signed a second letter to the PM calling for action on poverty. It
follows one 27 church chiefs recently sent to the Mirror condemning his
welfare cuts.
Today’s letter to the PM and his deputy Nick Clegg
from church chiefs demands an independent inquiry into the scandal of
food banks. It is the biggest religious intervention of modern times.
The
End Hunger Fast campaign is behind the call. The group’s Keith Hebden
said: “The Government ignores this call at its peril. I have never seen
religious leaders so united on an issue and I hope our words and prayers
reach the ears of politicians who have the power to act.”
The
Right Reverend John Pritchard, Bishop of Oxford, added: “Being hungry is
one of the most miserable experiences and being hungry day after day,
month after month, with all its consequences of illness, must be
desperate.”
People cannot just walk into food banks and get
handouts. They have to be referred by a doctor, social worker or other
professional.
The row threatens to overshadow new figures out today the Tories hope will show the squeeze on wages is easing.
Mirror readers triggered a food bank debate in the Commons last year after more than 140,000 signed our petition.
They won't realize the geopolitical winds which are now blowing. Off in
their own lala land, the average American will be focused on sports,
celebrities, what the right amount of stealing (taxes) in society is,
gay rights, which foreign countries "we" should bomb next, the first
woman president, and so on and so forth, while their livelihoods are
sacrificed in the name of the US government.
They will wake up one morning, and their prospects will be gloomier than
they are now. Don't think such a thing happens? This exact thing just
happened in the Ukraine. Devastation. People wake up one morning and
suddenly everything they had worked so hard for is gone. "Oh, but that's
Ukraine!" you might say. "Not here in the US."
Well, when you realize that a lot of the policies now being instituted in Ukraine were supported by the US government and the International Monetary Fund,
which is largely funded by the US government, then maybe, just maybe
you will start to see things differently. If not, I understand. Public
schools are not kind institutions to reason. If that's not reason enough
just consider the growing police state.
Jim Rogers recently discussed with Yahoo! Finance how all Western
governments are bankrupt, which we cover regularly, stating "There is no
sound currency anymore...There's no paper money in 2014 and 2015 that's
going to be worth much of anything."
Bloomberg recently reported that the US dollar reached a two-year low,
its weakest level since November 2011. Furthermore, the US dollar has
lost 38.5% of its value since 2002. Rogers predicted the US will soon abandon the dollar for another currency!
"For the first time in recorded history we have all major banks and
central governments around the world printing huge amounts of money,"
Rogers said. "This has never happened in world history and so the world
is floating on an artificial ocean... of lots and lots of printed
money," said Rogers.
"The debt is going higher and higher. The money printing is going higher
and higher. We've had 50 or 60 years of success in America," he said.
"You've got to pay the price someday whether you like it or not. The
longer you delay the day of reckoning, the worse the day of reckoning is
going to be. This is not going to be fun."
THE SOLUTION
"Abolish the Federal Reserve," Rogers stated. "The world has gotten
along quite famously and well without central banks for most of world
history."
"America has had three central banks in our history, the first two
disappeared," he said. "This one's going to disappear too because they
keep taking on huge amounts of debt... they keep leveraging up the
balance sheet... they keep making mistake after mistake... they're
printing money, it's going to self-destruct before it's over...We'd be
better off with no central bank than this central bank."
EVERY LAST PENNY
It's no wonder why the IRS, Social Security and Treasury are going after
hardworking ordinary Americans. The government is flat-out broke! They
must simply get their hands on as much cash as possible, as quickly as
possible, to delay the inevitable - US dollar abandonment and inevitable
collapse.
We reported last week how the Bureau of Land Management invaded
Nevada in order to ready the land to be passed onto the Chinese. As you
see, the US government is in so much debt, it is selling off parcels of
land to creditors. But before it does that, it will have to go to war
with the American people... Many government officials have confirmed the
standoff there is not over and Ron Paul has warned against a WACO-style
siege.
Then, just yesterday, we reported how Social Security and Treasury are
stealing tax refunds to satisfy decade-old debts...oftentimes parents'
debts. (it turns out this recently was ceased until further
investigation, a testament to how getting the word out can change things
for the better)
The feds are so desperate they are pondering taxing employee perks like free food at lavish cafeterias, laundry and even yoga.
We here at The Dollar Vigilante know this information can be
overwhelming. The sad thing is, we are not being hyperbolic. We cannot
underscore in a daily blog the severity of the situation in which we
find ourselves.
CONCLUSION
Something
big is going on behind the scenes. Bankers are committing suicide or
being murdered, and the finance minister of Canada just died. We are
turning a corner and all of the debts and money printing is going to
have a massive effect possibly as soon as this year, as Jim Rogers
notes. Precious metals have been in a consolidation period for years
now, and TDV anticipated this and told our premium readers to go long
cash, but now I personally am turning hyperbullish on precious metals,
precious metals stocks and aggressive on shorting the overall stock
market and I will write more about this in the April issue of TDV. (For
more information on our subscriber area, click here.)
Capital controls have been ratcheted up across the entire world. We've
been covering the slow progression here, and with Foreign Account Tax
Compliance Act coming into full effect July 1st, 2014, we believe we are
in the final months when Americans can easily get their money outside
of the US. If you have assets in the US, you're on the precipice of
being too late! You should be running, not walking, to the lifeboats.
Remember, even the US government will be forced to abandon the dollar.
At the TDV Wealth Management Crisis Conference
the experts at TDV Wealth Management will set you on the right footing
to survive The End Of The Monetary System As We Know It. (TEOTMSAWKI)
If you are unsure if the conference meets your needs feel free to email
or call us for a free consultation on your affairs. You can email us at
crisisconference@tdvwealthmanagement.com or call +1-646-568-5518 Ext.
516. Anarcho-Capitalist. Libertarian. Freedom fighter against
mankind’s two biggest enemies, the State and the Central Banks. Jeff
Berwick is the founder of The Dollar Vigilante, CEO of TDV Media & Services and host of the popular video podcast, Anarchast.
Jeff is a prominent speaker at many of the world’s freedom, investment
and gold conferences as well as regularly in the media including CNBC,
CNN and Fox Business.
Gold
in U.S. Dollars – April 15 to April 16, 2014 – (Thomson Reuters)
Gold
in Euros – Jan, 2009 to April 16, 2014 – (Thomson Reuters)
