Goldman Sachs banker embroiled in massive overseas money scandal

Source: NY Post

Goldman Sachs’ cozy relationship with the Malaysian government is coming back to haunt the firm and one of its regional chairmen.
The fallout from the widening scandal hitting the white-shoe investment bank involves Tim Leissner, the Singapore-based chairman of Goldman’s Southeast Asia operations, who has left that country and relocated to Los Angeles on a leave of absence from the firm.
A state fund — 1Malaysia Development Berhad (1MDB) — was set up with Leissner’s assistance, and Goldman was paid sky-high commissions for bond sales. Then $681 million tied to the fund mysteriously turned up in the bank account of Malaysian Prime Minister Najib Razak.
The FBI reportedly is investigating all the fund’s transactions in concert with wider probes of money-laundering allegations spanning five countries.
These probes could force Goldman to face the wrath of a congressional inquiry, according to one legal expert.

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Pilot Flying J’s former president indicted in fuel rebate withholding scheme

Former Pilot Flying J president Mark Hazelwood has been indicted on several counts of various fraud and conspiracy charges stemming from Pilot Flying J’s widespread fuel rebate fraud scheme that came to light in April 2013.
Hazelwood, who was indicted Tuesday, Feb. 9, on 10 counts of fraud and three counts of making false statements, joins about a dozen other former Pilot employees facing criminal charges in the scam. Also indicted Tuesday was the company’s former VP of Sales, John Freeman. Six other former Pilot employees were also indicted in the Feb. 9 proceedings.
Pilot said in a statement it is “disappointed and saddened” by the indictments, and that it could not comment further. “The company has cooperated with the investigation since its beginning and will continue to do so. The company repaid affected customers, accepted legal responsibility, and agreed to pay a monetary penalty. The trust and confidence of Pilot Flying J’s customers continues to be of paramount importance to the company and their continued support and loyalty is very much appreciated.”
Since the fuel rebate scheme was uncovered, Pilot has settled both the civil and criminal cases against the company, doling out $85 million to 5,500 trucking companies to resolve the civil suits and $92 million to the Department of Justice to resolve the criminal charges. The criminal settlement absolved the company of future punishment, but prosecutors can still pursue action against individuals allegedly involved in the case.
Hazelwood left Pilot in the wake of the 2013 FBI raid on the company’s Knoxville, Tenn., headquarters. Federal authorities sent him a “target letter” in September 2014, notifying him of a pending criminal investigation into his alleged involvement in the scam. Freeman was fired around the same time Hazelwood left the company.

Updated numbers in Pilot Flying J case: Truck stop chain to pay $85M in settlement

More recent court documents show Pilot Flying J will be paying $84.9 million in its settlement agreement, including $56.5 million for owed fuel rebates, nearly ...

Court records, including a 120-page affidavit released in April 2013, include transcripts of conversations — secretly recorded by an FBI informant working for Pilot — held between Hazelwood, Freeman and other Pilot employees allegedly discussing the scam and how to use it against trucking companies who signed diesel fuel purchasing contracts with the truck stop chain.
Authorities accused Pilot Flying J of covertly denying carriers tens of millions of dollars in owed fuel rebate checks by intentionally and systematically changing diesel price figures after carriers had purchased the fuel. The scheme, according to authorities, was said to have lasted nearly a decade.
In its July 2014 agreement with the U.S. Justice Department, Pilot agreed to submit regular reports to the DOJ on internal compliance reviews and steps it has taken to prevent such a scheme from reoccurring.
Pilot owner and CEO Jimmy Haslam, who has not been identified as a target in any criminal investigations, has maintained he knew nothing about the scheme and has denied any involvement in it.

Last lawsuit against Pilot Flying J in fuel rebate scheme refiled, carrier claims Pilot targeted ‘mom and pop’ carriers

Wright Transportation out of Mobile filed its suit Dec. 11, 2015, in Mobile County, Alabama, again restating its claims that Pilot intentionally and fraudulently scammed ...

$50 Silver: When Do We See It? Mike Maloney

Watch Mike’s full presentation and breakout session here: https://goldsilver.com/hsom/silversum… What everyone wants to know is when will gold & silver prices take off? But predicting the timing of any such move is nearly impossible. What I have tried to do is combine the fundamentals of supply and demand with technical analysis of prior market patterns. This has convinced me that the monetary authorities are in panic mode and when their experiments fail, gold & silver will be the best way to protect your wealth.
As the price of silver starts to move around – beware of anyone who purports to tell you exactly where it is headed, and be especially wary of anyone who claims to know where AND when it will happen. There are just too many moving pieces to this manipulated mess to be able to do this. All you can do is come to your own conclusions, using history and logic as your main guide – then throwing in the level of government insanity that you see fit. Look at the big picture. Learn all you can. Make your own decisions.

Austerity causes biggest rise in England’s death rate since WWII – health expert

Government cuts to social services could be killing large numbers of vulnerable people in England, a health journal has said, as new figures show 2015 saw the biggest increase in the national death rate for decades.

Preliminary figures from the Office for National Statistics (ONS) indicate mortality rates in 2015 rose by 5.4 percent on 2014 – an increase of nearly 27,000 deaths, bringing the total to 528,340.
Death rates in England and Wales had been falling since the 1970s, but this trend reversed in 2011 when mortality rates started rising.
Health advisers are now saying the rising death rate could be caused by cuts to vital social services. Oxford University Professor Danny Dorling, who is also an adviser to Public Health England, said the increase in deaths could be the biggest since World War II.
“When we look at 2015, we are not just looking at one bad year. We have seen excessive mortality – especially among women – since 2012. I suspect the largest factor here is cuts to social services – to Meals on Wheels, to visits to the elderly,” he said.
“We have seen these changes during a period when the health service is in crisis, while social care services have been cut back.
“The statistics clearly show that this is the biggest rise we have seen since the 1960s. But this may well turn out to be the greatest rise since the Second World War, taking into account the sustained nature of the rise, as well as other factors, such as the trend for immigration of older people in the 1960s.”
Research published last June by the Association of Directors of Adult Social Services (ADASS) showed that Britain’s most vulnerable people are at risk due to an additional £1.1 billion (US$1.6 billion) of cuts to adult social care.
ADASS President Ray James said at the time withholding government funds must be short-lived “if we are going to avoid further damage to the lives of older and vulnerable people who often will have no one else but social care to turn to.”
Cuts to other benefits, such as disability and unemployment, have also taken their toll on vulnerable sections of society.
Last week it was revealed a mentally ill man in Glasgow, Scotland killed himself after his benefits were stopped by the Department for Work and Pensions (DWP).
Paul Donnachie, 50, had his disability benefit payments stopped in June 2015 after he failed to turn up for four work capability assessments. His sister, Eleanor, told the Daily Record “the government murdered him.”
“The Conservative government aren’t living in the real world and have no idea how people live,” she said. “They don’t care about working-class people and the vulnerable.”
Age UK charity director Caroline Abrahams called on the government to investigate the rising death rate.
“These figures suggest something is going badly wrong…we owe it to older people to investigate why last year’s statistics are so unusually high and to take firm action to address the causes, whatever they may be,” she said.
A spokesperson for the Department of Health said it will continue to monitor the data closely.
“This is provisional data and our experts monitor deaths closely. Excess winter deaths can be due to a number of causes and deaths can fluctuate from year to year,” the spokesperson said.
“We will continue to monitor this data closely and be advised by experts on any action necessary.”

Via RT. This piece was reprinted by RINF Alternative News with permission or license.

The quiet rebellion of Conservative England

Among the early daffodils and neatly trimmed hedges of the Tory heartlands, grassroots party members are growing angry at David Cameron over Europe

Robert Webb and Robert Lister at the Conservative Club in Walton are disappointed with the EU negotiations  Photo: John Nguyen/The telegraph

 

A handful of regulars - mostly men in their fifties and sixties - sit alone at small tables, reading newspapers and sipping their pints of beer.

On a sunny Thursday afternoon, the Conservative Club at Walton-on-Thames seems an unlikely place to find the seeds of a growing revolt.

The town lies in one of the safest of Tory seats, Esher and Walton, in Surrey, held by the MP Dominic Raab with 63 per cent of the vote at last year’s election.

Yet in this Tory heartland, behind the neat hedges and trimmed lawns, disappointment at the new Conservative government is beginning to give way to a simmering sense of anger.

For all their quiet manners, the members of Walton's Conservative Club have had their fill of the European Union. Many also feel that David Cameron, the Prime Minister who promised voters a radical new deal for EU membership, has let them down.

Looking up from his copy of the Telegraph’s sport section, Clive Gee, 60, says simply: “We are paying too much into the EU and we are not getting enough back.”
Clive Gee feels we are giving more than we're getting from the EU  Photo: John Nguyen/The Telegraph
But the cause of the most personal sense of hurt among these “grassroots” Tories is a feeling that Mr Cameron and his party’s ruling elite no longer care about them.
Volunteers who walked miles each day, delivering leaflets and knocking on doors during last year’s general election, now feel overlooked by the party’s high command. The Prime Minister has even told his MPs to ignore the wishes of their local constituency associations when deciding whether to back his new deal and vote to remain in the EU or to leave at the forthcoming referendum.
Last week, more than 40 local party chiefs and activists expressed their outrage at Mr Cameron's attitude in a letter to this newspaper.
Robert Webb, 79, treasurer of the local branch of the Conservative Association, confirms that Mr Cameron’s remarks have “upset” many activists who have campaigned tirelessly for the party.
“They worked their guts out at the last election,” he says. “I know we did here. We are such a safe seat, we put a lot of people into Surbiton, and Twickenham, and we sent some down to Portsmouth – all of which were successful. And then to be told to ignore us - I think that was a mistake on his part.”
In the back bar of the club, which is reserved for members, two portraits hang on the wall. One is of Margaret Thatcher, still a heroine for the dwindling number of Tory social clubs across the land. The other is of a youthful-looking Mr Cameron.
Robert Webb finds the loss of British sovereignty upsetting  Photo: John Nguyen/The Telegraph
Mr Webb, a retired accountant, says he was “on the fence” about Europe and wanted to see what the Prime Minister could achieve through his much-vaunted renegotiation of Britain’s membership. But his is disappointed and displeased.
“As he seems to be coming back with very little, I am almost certainly going to be voting ‘out’,” he says. “I am just so angry that he has gone into these negotiations and he doesn’t seem to have asked for very much.”
Mr Cameron, he says, is like a man who wants to buy a car and tells the salesman that he is willing to pay the full price before starting to haggle.
For Mr Webb, it is the loss of British sovereignty that he finds most upsetting. Watching MPs in a parliamentary debate last week lament the erosion Britain’s ability to determine its own destiny moved him.

“We have stood alone before in this country and we can do so again,” he says. “I don’t think the British people ever intended to lose their sovereignty but it is gradually being taken away from us.”
Yet Mr Webb, and his friend, Robert Lister, 82, cannot be dismissed as dewy-eyed, sentimental old men. They are thoroughly well informed about all the latest developments in Mr Cameron’s renegotiations – and thoroughly unimpressed.
Mr Lister, who had a long career as a chartered engineer and who is still called upon as a consultant, believes his four grandsons will prosper in a “bright future” if Britain leaves the EU.
“Britain’s expertise in engineering is known world-wide,” he says. “We are in a very strong position and even out of Europe people will still want to do business with us. What else are they going to do?”
Undecided voters want to hear plain facts from both sides of the campaign
He is dismayed at how ready the Prime Minister seems to be to “plumb the depths” in order to persuade the public to stay in the EU. In particular, he criticises Mr Cameron’s so-called “Project Fear” warnings that migrants could come to Britain because border controls would move from Calais to Kent if the UK voted to leave.
“These scaremongering tactics – they really should be above that,” Mr Lister says. “They will frighten people to death, saying that they are going to have camps in Kent and Dover, coming in overnight.”
Debbie and Georgia Hamilton feel constituents are ignored   Photo: John Nguyen/The Telegraph
In the late afternoon outside the club, the sun dazzles. Daffodils, tricked into bloom by the mild winter, create an illusion of spring. A few minutes’ away beside the river, men walk their dogs, while young mothers push buggies along the towpath.
Debbie Hamilton, 55, and her 23-year-old daughter, Georgia, who is expecting to have a baby in a week’s time, regard it as “ridiculous” for Mr Cameron to tell his MPs to ignore their local party members in the referendum.
“MPs are supposed to listen to their constituents and take their constituent’s views to government,” Mrs Hamilton says. “I thought that was the whole point.”
Neil Luxton, who owns a small telecoms business and is walking his dog, Noodle, says he will be voting to leave the EU. “I believe we are an island nation and we should be standing up for ourselves,” he says.
Neil Luxton will vote for a Brexit  Photo: John Nguyen/The Telegraph
As a retired government scientist, John Sheldon likes to make up his mind based on the evidence.
“I am just astounded that intelligent, educated people fail to see what a drag it is,” Mr Sheldon says. The 84 year-old has been a Conservative councillor in the area for 21 years and he is also unhappy at Mr Cameron’s cavalier approach to offending the Tory grassroots.
“We work jolly hard,” Mr Sheldon says. “The money we put in, supporting social events, well on top of the subscriptions to the party, and the time we put in, is huge.
“I have done all of this in my retirement. It has taken a huge chunk of my life - and I am not untypical. Everybody around me works their socks off. Just today, we have walked miles stuffing letterboxes. We do that all the time. For us to be sidelined would be quite horrifying.”
Mr Cameron may not have intended to offend anybody, “but the casual way he suggested that MPs should follow their own conscience [rather than listening to their local Conservative associations], was quite offensive”.

Mr Sheldon regards the Prime Minister as a disappointment. He attended the Conservative conference in 2005 at which Mr Cameron delivered the speech of his life – from memory - to win over the party faithful during the last leadership election.
“He seemed like a breath of fresh air. But since then my faith in Mr Cameron has thinned.”
His list of common complaints among Conservative supporters – the “running down” of the Armed Forces, the indulgent spending of billions of pounds on overseas aid, the failure to limit the impact of migration – can be heard in any pub in the area.
“I am not a rebel,” Mr Sheldon says. “Mutiny is the greatest crime that can be committed by a sailor. When everybody can see the captain is steering towards the rocks, you have to ask yourself whether that’s preferable to everybody drowning.”
James Wathan supports Mr Cameron for 'attempting to achieve some sort of reform' in the EU  Photo: John Nguyen/The Telegraph
The Conservatives will be split by the referendum, he fears but Britain’s destiny is more important.
“The risk of damaging the Conservative Party is very great. But which is more valuable, the fate of the Conservative Party or the fate of the country? My admiration for Mr Cameron is limited and it has diminished. Nobody is indispensable and there are some good people coming along. I would not be at all sorry to see a new PM.”
As the sun sets and a wintry chill returns to the air, one passer-by is willing to speak up for the EU.
James Wathan, 58, agrees that MPs should not have to “fall in line”. But he supports Mr Cameron for “attempting to achieve some sort of reform” in the EU and says he fears that leaving would endanger the economy. “We want to continue to be a successful economy. I suspect we would be better off in Europe.”
Who is this lone voice, a pro-European, willing to give the PM the benefit of the doubt, in Walton-on-Thames? “You really want to know?” he asks. “I’m a managing director at Deutsche Bank.”

Fed's Kashkari Calls for Radical Approach to Megabanks

WASHINGTON — Neel Kashkari shocked much of the financial world Tuesday by saying the Dodd-Frank Act was insufficient and that breaking up the big banks and turning them into public utilities may be the only way to end "too big to fail."
In his first public speech as president of the Federal Reserve Bank of Minneapolis, he said Congress and regulators need to consider a more radical approach to preventing future bailouts. His message was unusual enough because it came from a sitting head of a Fed regional bank, but it was all the more powerful because Kashkari is a former Goldman Sachs executive and chief architect of the Treasury Department's 2008 bailout program.
"While significant progress has been made to strengthen our financial system, I believe the [Dodd-Frank] Act did not go far enough," Kashkari said. "I believe the biggest banks are still too big to fail and continue to pose a significant, ongoing risk to our economy."
Kashkari credited Dodd-Frank with increasing capital requirements on banks and said that has reduced systemic risk. But he said some other key reforms, including resolution plans known as "living wills," are proceeding at a glacial pace and it is unclear if regulators would even use their new tools if they faced a future crisis.
"Given the massive externalities on Main Street of large bank failures in terms of lost jobs, lost income and lost wealth, no rational policymaker would risk restructuring large firms and forcing losses on creditors and counterparties using the new tools in a risky environment, let alone in a crisis environment like we experienced in 2008," Kashkari said. "They will be forced to bail out failing institutions—as we were."
Kashkari went on to suggest that regulators and Congress should consider breaking up the banks into "smaller, less connected, less important entities"; requiring banks to become public utilities by holding "so much capital that they virtually can't fail"; and "taxing leverage throughout the financial system."
In a panel presentation right after his remarks, he clarified that he was not necessarily advocating for banks' breakups, but said that "it's one of the solutions" that should be considered.
He also said that the Minneapolis Fed will be launching a far-ranging initiative "to consider transformational options and develop an actionable plan to end TBTF," including symposia, research efforts and cost-benefit examinations of different policy options.
Kashkari, who ran an unsuccessful campaign for governor of California as a Republican in 2014, has staked out a political position with his comments that are more in line with the views of Wall Street hawks like Democratic Presidential candidate Bernie Sanders, I-Vt., and Sen. Elizabeth Warren, D-Mass., who have repeatedly criticized regulators for not being fast or stringent enough in their oversight of the largest banks.
But Kashkari's comments met skepticism from fellow panelists and former Fed members on the Brookings program. Don Kohn, former vice chairman of the Fed during the financial crisis, he was not convinced that post-crisis reforms had failed to adequately address "too big to fail." Kohn said such a judgment was likely impossible to make with certainty, especially given the incomplete status of the living wills process.
"I certainly share Neel's objective of ending 'too big to fail' — that is, allowing any large financial institution to fail with minimal damage on the financial system and the economy," Kohn said. "I don't know why [Dodd-Frank reforms] won't work."
Former Minneapolis Fed President Gary Stern, meanwhile, similarly expressed skepticism of Kashkari's dour view of Dodd-Frank reforms, saying that calls for vastly expanded capital rules might be effective in some ways, but that other options available to regulators have hardly been considered. For example, requiring banks to have an independent chairman of the board, independent board members, or other measures to affect the makeup of banks' internal management structures could be more effective than inflexible external regulatory rules, Stern said.
"I don't think [Kashkari's plan] takes advantage of other improvements we could make," Stern said. "In my experience, senior bankers are willing to push back or ignore regulatory pressure. They are less likely to do so when they're getting pressure from their boards of directors, and that's an avenue that has been underutilized to date."
Kashkari said his decision to stake out such a hawkish position so early in his tenure was one of conscience. Since joining the Minneapolis Fed late last year and becoming president on Jan. 1, he has become increasingly convinced that systemic risk remains in place and that he should use his position as head of the regional Fed bank to advocate for more stringent reform.
"If I'm not willing to stand up and share my concerns, then I wouldn't be doing by job," Kashkari said.

Even if Russia and OPEC tango, oil prices won’t budge an inch

As Russian officials consider trying to forge an agreement with OPEC in order to help push up oil prices, they are missing an unfortunate truth – factors such as the discord within the oil producers’ body, the positions of Saudi Arabia and Iran and the strength of the dollar all mean that the price of oil is unlikely to bounce back any time soon.

With the Russian economy seriously battered by export oil plummeting in value to its lowest level in the last 12 years, top executives from the government and energy sector have fallen into an old trap and now intend to play the OPEC trump card: Decrease output and dissolve the present glut by creating a relative shortage of supply.
For the record: In 2015, producers were extracting and offering the global markets a surplus of over 1.84 million barrels per day of crude oil that the market did not want and could not absorb.
In late January, Russian Energy Minister Alexander Novak suggested he was ready and eager to attend an emergency OPEC meeting, called by Venezuela, to forge an agreement to wind down oil production by 5 percent, to be done simultaneously and in good faith.
The same recipe for saving the embattled global industry, which has lost and written off some $500 billion in the last few years, was articulated by Rosneft CEO Igor Sechin when addressing the International Petroleum Week in London last week.

Common wisdom claims it is sufficient to engineer rebalancing within market fundamentals by cutting production and then watch tight supply automatically drive prices up. This did happen before triggering accusations by primary energy consumer nations that OPEC was manipulating the market. Today it won’t work and the grand idea of a concord between Russia and OPEC is not feasible.
The reasons this is a doomed enterprise are manifold but not all of them are apparent. It is all too easy to point out to the inherent squabbling within OPEC. This is the first argument. Now the disarray within OPEC has been exacerbated by the hostilities in Syria and Iraq, unleashed with the tacit support and financial sponsorship of Saudi Arabia and the Gulf monarchies, which view it through the prism of the holy war against the apostates: the Shiites of Iran and Iraq as well as the Alawites in Syria.
Secondly, apart from the regional showdown between the two branches of Islam, a similar business strategy is being pursued by the two main stakeholders. The Saudis persistently protect their oil market share against outsiders, that is the U.S. shale frackers, Russia and other non-OPEC traditional purveyors.
The Iranians, who are banking on revitalizing their energy sector, damaged by Western sanctions, have made it absolutely clear that they would not even consider putting a cap on production until they surge the current daily exports of app. 1.1 million barrels to 1.5 million barrels. In sum, neither Riyadh nor Tehran would go for a 5 percent diminishment of their oil output.
Thirdly, even if a miraculous consensus of OPEC members takes place and they manage to accommodate Russia as a temporary ally under a “marriage of convenience” deal, it will not affect prices to the extent the producers envisage. It will not be a game-changer.
Why? It is worthwhile quoting World Bank analysts, who claimed: “The sharp oil price drop in early 2016 does not appear fully warranted by fundamental drivers of oil demand and supply.”
The logic of this observation resonates with the earlier statement made by Rosneft chief Sechin when he attributed the flight of investors from oil to financial regulators in the United States.
Commodity market players who use derivatives like futures contracts, forward contracts, options, swaps and warrants, the multitude of contractors and subcontractors, and notably a sophisticated system of hedging of shale oil extraction – all these factors are instrumental in determining the price of this product and, according to the Rosneft boss, will define the industry’s development.
A more comprehensible explanation was offered by Konstantin Simonov, director general of Russia's National Energy Security Fund, who fired a succession of questions: “Why are all energy and raw materials markets tumbling? Are we witnessing an oversupply across the board, say, from aluminium to coffee? Has anyone heard of the arrival of shale coffee?”

His suggested answer sounds a bit provocative yet intriguing: “The FRS (Federal Reserve System in the United States) is playing a stronger dollar. And all the money from all the primary energy markets are invested into the dollar.”
The oil prices, in other words, are now detached from the market fundamentals. They do not reflect the classical pendulum of supply and demand. Moscow-based experts have calculated that 95 percent of all the oil derivatives belong to U.S.-registered banks.
With the FRS luring investors into a formidable U.S. dollar, the chances of causing a rebalancing of the oil market through tightening supply, looking at it through the eyes of the producing nations, are pitifully slim.
Against this “new normality,” even if Russia and OPEC go out for a tango, the global oil prices won’t budge and go down.
The opinion of the writer may not necessarily reflect the position of RBTH or its staff.