In the first half of 2012, losses due to the derivatives trading scandal in JPMorgan Chase's Chief Investment Office (CIO) climbed to $5.8 billion and are still rising.
On Friday's conference call, Jamie Dimon, Chairman and CEO of JPMorgan Chase, resorted to PR spin referring to the trading losses as an "accident." But the bank's financial filings belie his words. JPMorgan's disclosures reveal its investigation has uncovered a likely cover-up that could lead to criminal charges:
"Recently discovered information raises questions about the integrity of the trader marks, and suggests that certain individuals may have been seeking to avoid showing the full amount of the losses being incurred in the portfolio during the first quarter."JPMorgan also announced it restated its first quarter earnings. That's odd, because Jamie Dimon delayed filing JPMorgan's 10Q (a required financial statement) for the first quarter, and the firm missed the deadline.
Michael J. Moore and Dawn Kopecki at Bloomberg lobbed a grenade at Dimon over his April 13, 2012 disclosures in response to an analyst's question about media reports that JPMorgan Chase had engaged in enormous derivatives trades and that huge trading losses were imminent.
While JPMorgan booked a $718 million loss on the positions held by its chief investment office in the first quarter, it didn't publicly specify the loss when releasing the results April 13. When an analyst asked Dimon that day about media coverage of the trades, he dismissed them as a ["tempest in a teapot."]. ("Dimon Saw $1 Billion Potential Loss When He Made 'Teapot' Remark," July 13, 2012.)Intensified Criminal Investigation
The losses have led to a criminal investigation. So far the focus is on traders, but given that the control operations at JPMorgan should have checked the traders' marks and given the perceived flaws in Dimon's disclosures, the criminal investigation may broaden. Matt Goldstein and Jennifer Ablan at Reuters broke the story of how the criminal investigation has intensified following last week's disclosures:
Before last week's disclosure, the criminal probe largely had focused on the personal trading of some CIO traders, two of those sources said. The authorities were looking for evidence that some in London may have sold shares of JPMorgan in advance of the firm's May 10 disclosure that it could lose a minimum of $2 billion on the derivatives trades gone awry.
Now the investigation is focused on whether three JPMorgan employees in London committed fraud in reporting on their transactions. The bank is cooperating with authorities.
"JPMorgan Disclosed Possible Misconduct to Feds Ahead of Earnings," July 16, 2012.
Materially Misleading?Questions swirl around the character and timing of Dimon's disclosures to shareholders. Given the widespread speculation about JPMorgan's potential losses, which proved to be accurate, it raises the question of why people outside of JPMorgan were more aware of JPMorgan's risk and potential losses than Jamie Dimon claims to have been. His public estimates of losses have been a fraction of reality, and it raises the issue of whether he has materially misled stockholders.
This would be enough for European regulators to remove the Chairman and CEO of a bank. Moreover, JPMorgan has other serious issues. One additional example is in JPMorgan's commodities unit, which lost hundreds of millions of dollars in a 2010 coal bet that was outsized relative to the global market. The same commodities division is now being investigated for alleged abusive bidding practices that manipulated energy process in California and the Midwest. A judge gave JPMorgan a deadline to turn over emails it withheld in the investigation.
Dimon signed off on statements that his accounting controls and risk controls were adequate. Yet they were very far from adequate. (In an earlier post, I discussed Jamie Dimon's failure to provide reasonable corporate governance for the CIO unit: "Jamie Dimon: JPMorgan's Chief is the World's Funniest Financier." - May 19, 2012.) Under Sarbanes Oxley rules, he should be held accountable.
Accounting GimmicksThrough a variety of accounting gimmicks, JPMorgan was able to report second quarter net income of $5 billion, or $1.21 per share, exactly what analysts' projections said it would. Stephen Gandel, senior editor of Fortune saved me the trouble of providing examples of how JPMorgan moved money around to dress up its second quarter earnings. It would have been nice if JPMorgan could have made up its trading losses through business revenues instead of resorting to several games including this one:
Banks have to put money away for loans they believe are going to go bad. But banks can lower their expenses by putting away less money for future loan losses. In the second quarter, the bank put away just over $200 million for future loan losses. That was not only the lowest amount the bank had set aside in any three month period since the start of the financial crisis, it was the lowest by far. A year ago, the loan loss provision was $1.8 billion. ("How Jamie Dimon Hid the $6 Billion Loss," CNN Money, July 13, 2012.)I discussed the CIO's trading issue with Tom Hudson on Nightly Business Report on Friday:
Excerpt from TranscriptHUDSON: This strategy generated $2 billion in profits over the previous four years before this year. Deposit money wasn't lost, and you know this. Critics, defenders say this trading loss was just not all that material, considering the bank still is able to report a profit today.
TAVAKOLI: Well, that's ridiculous. Now look at what you just said, that this unit reported 2 billion in profit over several years. Now they have $5.8 billion in losses [for the first half of 2012]. The losses are climbing. The losses swamp the profits they reported previously, which shows you how outsized this trade was relative to the size of this unit, and this unit itself is a large bank within a tremendously big bank. Now this is one silo, one unit that blew up at JPMorgan and JPMorgan has trouble elsewhere. The way to look at this isn't in the context of the size of JPMorgan but the size of this unit. Now in terms of the profits that JPMorgan reports, it should be reporting profits. It has a $2.3 trillion balance sheet. The profits it's reporting relative to the size of their balance sheet are not big.
Disclosure: I do not have a position (long or short) in JPMorgan.
Endnote: Jane Wollman Rusoff interviewed me for Research Magazine's May cover story, "Finding the Culprits of the Crisis," about the deep monetary connections of Wall Street and Washington and the corrosive effect it has had on the economy and the Republic. We discussed risks at JPMorgan and control fraud in the banking system. The interview was conducted in March. I responded to a question about how banks lose money in a control fraud wherein perpetrators within the bank enrich themselves at the expense of shareholders:The fact that a bank lost money isn't an indication that they were a victim as opposed to being a perpetrator. A classic problem with control fraud is that the parasites destroy the host -- in this case, the host being the bank and the parasites being the bank employees. If you were the victim of a control fraud by the people who worked in your own bank but meanwhile, you were collecting huge bonuses, you overlooked the control fraud within your own institution.
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7/18/2012
Janet Tavakoli: JPMorgan Raises Fraud Questions: Rising Trading Losses Top $5.8 Billion (Update)
Banking Is a Criminal Industry Because Its Crimes Go Unpunished
Consider just this month's news in financial services.
First, Barclay's has been manipulating the Libor, the main interest rate upon which most other interest rates and financial transactions are based, since 2005. Moreover, Barclay's traders were colluding with traders in many other banks to assist them in manipulating the Libor too, so that they could all profit from their bets on it.
Second, JP Morgan Chase is having a really great month. Recent reports describe how it is resisting Federal subpoenas related to price-fixing in U.S. electricity markets. It is also accused (by former employees among others) of deliberately inflating the performance of its investment funds to obtain business. And finally, JP Morgan's failed "London whale" trade, which has now cost over $5 billion, is being investigated to determine whether the loss was initially concealed from regulators and the public.
Third, HSBC is paying a fine because it allowed hundreds of millions, perhaps billions, of dollars of money laundering by rogue states and sanctioned firms, including some related to terrorist activities and Iran's nuclear efforts. But HSBC is only one of at least 12 banks now known to have tolerated, and in some cases aggressively courted, money laundering by rogue states, terrorist organizations, corrupt dictators, and major drug cartels over the last decade. Others include Barclay's, Lloyds, Credit Suisse, and Wachovia (now part of Wells Fargo). Several of the banks created special handbooks on how to evade surveillance, created special business units to handle money laundering, and actively suppressed whistleblowers who warned of drug cartel activities.
Fourth, a new private lawsuit cites documents indicating that Morgan Stanley successfully pressured rating agencies into inflating the ratings of mortgage-backed securities it issued during the housing bubble.
Fifth, Visa and Mastercard have just agreed to pay $7 billion to settle a private antitrust case filed by thousands of merchants, who alleged that Visa and Mastercard colluded to fix fees and terms of service.
Just another month in financial services. Is it unusual? No, it's not. If we go back just a little further, we have UBS, HSBC, Julius Baer, and other banks actively marketing tax evasion services to wealthy U.S. and European citizens. We have senior executives of several banks (including JP Morgan Chase and UBS) strongly suspecting that Bernard Madoff was running a Ponzi scheme, but deciding to make money from him rather than turn him in. And then, of course, we have the financial crisis and everything that led to it. As I show in great detail in my book Predator Nation, we now possess overwhelming evidence of massive securities fraud, accounting fraud, perjury, and criminal Sarbanes-Oxley violations by mortgage lenders, investment banks, and credit insurers (including senior executives of Countrywide, Citigroup, Morgan Stanley, Goldman Sachs, Bear Stearns, AIG, and Lehman Brothers) during the housing bubble that caused the financial crisis. If we go back to the late 1990s, we have the massively fraudulent hyping of Internet stocks, and several banks (including Merrill Lynch and Citigroup) actively aiding Enron in committing its frauds.
So, July 2012 really isn't abnormal at all. The reason for this is very simple. Over the past two decades, the financial services industry has become a pervasively unethical and highly criminal industry, with massive fraud tolerated or even encouraged by senior management. But how did that happen?
Well, deregulation helped, of course. But something else was far more important. It is the one critical factor that unites all of the episodes cited above, including those of this month. This critical unifying factor is the total number of criminal prosecutions of major firms and senior executives as a result of all of these crimes combined.
And what is that number?
Zero.
Literally zero. A number that neither President Obama nor Mitt Romney shows the slightest interest in changing.
Consider the Obama administration's choices for the four most important positions in financial sector law enforcement. The attorney general (Eric Holder) and the head of the Justice Department's criminal division (Lanny Breuer) both come to us from Covington & Burling, a law firm that represents and lobbies for most of the major banks and their industry associations; indeed Breuer was co-head of its white collar criminal defense practice, and represented the Moody's rating agency in the Enron case. Mary Schapiro, the head of the SEC, spent the housing bubble in charge of FINRA, the investment banking industry's "self-regulator," which gave her a $9 million severance for a job well done. And her head of enforcement, perhaps most stunningly of all, is Robert Khuzami, who was general counsel for Deutsche Bank's North American business during the entire bubble. So zero prosecutions isn't much of a surprise, really.
In contrast, what do you think would happen to you if, as a lone individual, you were caught supporting Iran's nuclear program? Do you think that you would get off with a "deferred prosecution agreement" and a fine equal to a few percent of your annual salary? No?
But that's because you don't live right. You probably haven't been to the White House a dozen times since President Obama took office, or attended White House state dinners, like Lloyd Blankfein has. Nor have you probably overseen millions of dollars in lobbying and campaign donations, or hired senior administration officials, or sent your executives into the government in senior regulatory positions, or paid $135,000 for a speech by someone who later became chairman of the National Economic Council. And, well, you get the law enforcement that you pay for.
Charles Ferguson is the author of Predator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America.
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Descendants Of Matyas Fischer, Holocaust Victim, Sue European Banks For Allegedly Stealing Millions
A recent lawsuit claims that three major European banks have stolen millions from a Holocaust victim and his descendants.
The descendants of Matyas Fischer, a former bank owner who died in a concentration camp during the Holocaust, sued Erste Group, the Bavarian State Bank and the Hungarian National Bank in federal district court on July 5 for allegedly hoarding millions of dollars that belong to them, according to the complaint.
The Fischer family claims that the banks owe them at least $38 million for unreturned assets that include gold coins, foreign currency and diamonds worth an estimated $18 million, as well as bank deposits, cash, art, jewelry, records, securities and mortgaged buildings and properties. The Fischers accuse the banks of unjustly enriching themselves, violating international law and aiding genocide.
Since World War II, many banks have been restructured to form bigger banks. When accounting for mergers and acquisitions, these three banks now are responsible for the Fischer family's assets, Kenneth McCallion, the Fischer family's lawyer, told The Huffington Post.
The Fischer family also alleges that the banks contributed to the deaths of some Holocaust victims, including Matyas Fischer himself. The Fischer family's complaint claims that since the banks collaborated with the Nazis and the Hungarian occupying forces and prevented their Jewish customers from accessing their assets, Hungarian Jews were trapped and could not escape from getting sent to death camps. McCallion said that once Matyas Fischer's assets were stolen, "the family was impoverished and unable to really flee."
Matyas Fischer was deported to Auschwitz in 1944 and died of starvation in a Nazi concentration camp in Poland in 1945.
Fischer, who lived in Serbia, which at the time was part of Yugoslavia, started, owned and managed his own bank, the Peterreve Hitelbank. He inherited farmland from his family and received a large dowry from his wife's family. But Hungary, an ally of Nazi Germany, conquered Yugoslavia in 1941. Hungarian authorities then took his bank away and put a non-Jewish manager in charge, according to McCallion.
A month after Fischer was sent to Auschwitz, Fischer's wife and children were placed on the train to Auschwitz, according to Paul Fischer, 76, Matyas' youngest son. Paul Fischer, a former economics professor and car part manufacturer who lives in Brooklyn, is the lawsuit's lead plaintiff. But during that train ride, the wife and children were allowed to leave and instead sent to a labor camp in Austria that was "paradise" in comparison, Fischer said. They survived the Holocaust.
After World War II ended and Matyas Fischer's wife and children returned to Serbia, they never recovered Matyas Fischer's assets. The banks claimed they no longer had Fischer's assets and suggested that Nazi authorities had seized them, according to McCallion. McCallion said he believes that the banks simply stole Fischer's assets under the assumption that Jewish families were not coming back.
"The property was looted, and we feel it was unlawfully taken," Paul Fischer said. "Why shouldn't the children have it and benefit from it?"
Fischer said that now, he finally has the documentation to prove his case. He said he decided to start researching the issue 10 years ago because he did not want his dad to ask him after he died: "Why didn't you look for me?"
For its part, Erste Group denies responsibility for the Fischer family's assets. "Neither Erste Group Bank nor its Hungarian subsidiary bank, which was founded only decades after the end of World War II, view themselves as legal successors to any of the banks mentioned in the complaint," said Zsofia Banuta, a press officer for Erste Group, in a statement on Monday, adding that Erste Group has not yet been served with the complaint.
The Bavarian State Bank and the Hungarian National Bank declined to comment on the lawsuit, with the Hungarian National Bank also noting it has yet to be served with the complaint.
The Fischers filed the lawsuit after withdrawing from a class action suit against the European banks Erste Group, the Hungarian National Bank, OTP Bank, Credit Anstalt and the Bavarian State Bank, representing other Holocaust victims. Paul Fischer said they withdrew from the class action lawsuit because they have more documentation and are owed a substantial amount of money. The class action lawsuit prevailed in a district court, but after an appeal by the banks, it is pending a decision from a federal appeals court in Chicago, according to Robert Pavich, the lead attorney for the class action lawsuit.
It may take a while for federal courts to reach a decision on either the class action lawsuit or the Fischer family's lawsuit, Pavich said. That is because the Supreme Court will rule on the case Kiobel vs. Shell, most likely this fall. Kavich and McCallion said that the Supreme Court could choose to rule that non-U.S. citizens are not allowed to sue corporations in U.S. court for violating international law outside the U.S. Some of Matyas Fischer's descendants, who are plaintiffs in the Fischer family case, are not U.S. citizens.
A similar class action lawsuit, representing the 437,000 victims of the Hungarian Holocaust and their families against the Hungarian State Railways, claims that "although the Hungarian genocide was the single most extensive and brutal of all the Nazi genocides of World War II ... not even one percent of the Hungarian victims’ financial losses has been restituted."
"This is in sharp contrast to other Holocaust reparations initiatives that have been successfully prosecuted against other states and their instrumentalities," the class action lawsuit continued. "But in the case of Hungary, its agencies and instrumentalities so far have stalled, stonewalled, stridently misled, and falsely denied their role as profiteers from the Hungarian Holocaust."
The families of Holocaust victims have prevailed in cases similar to the Fischer family's lawsuit, according to McCallion. He listed three examples. In Bodner v. Banque Paribas in 2000, the federal district court in New York denied the French banks' attempt to dismiss the lawsuit, which alleged that French banks had failed to restitute assets that they had stolen from Jewish customers and their descendants. In another lawsuit in 2000, the federal district court in New York approved a settlement in which Swiss banks agreed to pay $1.25 billion to the descendants of Jews whose assets they allegedly stole. The Federal District Court in New York also approved a settlement in 2000 in which Bank Austria and Credit Anstalt agreed to pay $40 million to the descendants of Jews whose assets they allegedly stole.
CORRECTION: An earlier version of this article stated that Matyas Fischer died of starvation in a Polish concentration camp in 1945. Fischer died in a concentration camp in Poland.
Money Ruins Friendships For One In Five Americans, Survey Finds
Good luck keeping up with those finance majors you were friends with back with in college. According to recent survey results, growing income inequality is taking a toll on our social lives.
One in five Americans have lost a friend over a money dispute, according to a new survey by Harris Interactive on behalf of CouponCabin. The non-scientific survey polled 2,243 American adults online earlier this month.
Money not only stands in the way of our friendships when it comes to dining out or going to the movies. It also puts a strain on major life events.
The survey found that 22 percent of Americans -- including 37 percent of 18- to 34-year-olds -- have said no to being in a wedding party because of the price tag (being a bridesmaid costs an average of $1,695, WeddingChannel.com found, according to CNN).
One in five Americans have felt pressure to keep up with their friends when it comes to spending on housing, eating out, clothing, and more, the survey found.
Income inequality also is taking a toll on some Americans' love lives. Three in four single women said in a recent survey that they consider unemployment to be a disqualifying factor when considering dating a man. Only four percent of women said that they would definitely go on a date with an unemployed man.
Unfortunately, the economy isn't making it any easier for us to maintain relationships. The incomes of the top 1 percent spiked 275 percent between 1979 and 2007, while incomes of the middle 60 percent rose less than 40 percent, according to the Congressional Budget Office.
Many people that borrow from their friends are unlikely to pay their friends back, The Huffington Post wrote last week. Check out our list of tips to get your friends to pay up here.
Bank Contractors Break Into Occupied Homes, Terrify Residents, Lawsuits Say
It usually happens when homeowners are at work or out of town.
In Clawson, Mich., Nancy Cox returned home to find her possessions in the front yard, smashed with a sledgehammer, and a chalk drawing of a clown face on her garage with the tagline, "another job well done."
For Kenneth and Margaret Karpa in Pittsburgh, china and photos of their daughter were damaged. Missing belongings included a coin collection and the family cat.
In Kansas City, Allen Danforth discovered his elderly parents' furnishings -- tables, chairs, family heirlooms -- gone.
These homeowners allege in separate lawsuits that a contractor hired by a major bank to preserve abandoned properties against damage, mistakenly entered their homes while they were still occupied. In most cases, it appears that the contractor, known as a property inspector or property preserver, broke in after ignoring obvious signs of occupation: lights turned on, grass mowed and homes fully furnished.
"They need to be completely damn sure that the property is vacant," said Richard Fersch, the sergeant in charge of foreclosures in the Allegheny County, Pa., Sheriff's Office.
Fersch fields about one complaint a week from homeowners who return home to discover new locks on their doors. "But for some reason when these contractors ride by residences and don't see anyone home, they just jump the gun and change the locks. They even lock pets inside."
A review of court records by The Huffington Post turned up more than 50 homeowner lawsuits against banks and the two largest property management contractors in the U.S., Safeguard Properties and Lender Processing Services, stemming from break-ins of occupied homes. The allegations follow five years of generally woeful management of the foreclosure industry by all involved, as the inspector general for the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, is raising red flags about the lack of contractor oversight by the government-backed mortgage giants.
A June report by the inspector general cited deficiencies "in key [foreclosed home] contractor management controls" at Fannie and Freddie, which own or guarantee more than half of all home loans in the United States. Kristine Belisle, a spokeswoman for the inspector general, said she could not comment on whether the potential misconduct described in the report includes instances of wrongful contractor break-ins.
Diane Fusco, a Safeguard spokeswoman, said her company does "everything we can do to minimize" break-ins of occupied homes and that these incidents are "uncommon."
It isn't clear how often contractors are breaking into lived-in homes, but consumer lawyers say these legal complaints represent just a small sample of what is happening in communities across the country, as overzealous contractors whose earnings are pegged to the amount of work they do on a home are entering occupied houses, slapping new locks on doors and sometimes walking away with family possessions.
"If you are 45 days late on your mortgage payments, the bank can send out thugs to do a property inspection and break into your home," said Matthew Weidner, a Sarasota, Fla., lawyer representing homeowners in several similar cases. "People need to understand how dangerous this is. Someone is going to get [accidentally] shot."
'SCARY PROPOSITION'
Many of the problems with property inspections appear to stem from a lack of oversight and accountability. There are typically four layers of control between companies that own the loans, and the local contractors who actually do the work. Homeowners in recent years have complained that banks wrongfully charged them for unnecessary inspections, including one example from New Orleans where a bank billed a homeowner for an inspection supposedly conducted while the her parish was under a mandatory evacuation order.
Homeowners in neighborhoods stricken by foreclosures have also complained that banks aren't maintaining abandoned homes, especially those in largely abandoned neighborhoods.
Typically, a bank that services or collects the payments on a home loan will send an electronic notice to an independent contractor when a borrower is in default. The contracting company, in turn, will ask a local subcontractor in its network to conduct a "drive-by inspection." Abandoned homes are then supposed to be secured against the elements, vandalism or other types of damage.
Most of the lawsuits reviewed by HuffPost involve Safeguard, a Cleveland-based company that inspects 1.5 million homes each month. JPMorgan Chase, which did not respond to a request for comment, was the bank most often named in the lawsuits.
A memo written in 2011 by Robert Klein, the chairman of Safeguard, instructs inspectors and contractors to "use common sense" when determining occupancy status. "Look for uncollected mail, overgrown vegetation, or other signs of neglect that suggest no one has recently been to the property. Next, check the status of utilities to see whether power, gas and water are active. Finally, speak with neighbors and ask whether they can confirm the occupancy or vacancy of the property."
Klein's memo also says that the company was recently notified of several complaints having to do with securing occupied properties. Such errors, he wrote, can lead to lawsuits that "may require costly settlements, for the simple fact that unauthorized entry into an occupied property makes Safeguard's position difficult to defend."
Fusco said her company provides a vital community service "protecting neighborhoods." She declined to comment on pending litigation, but said mistakes do occasionally happen. "It is not a perfect science," she said.
The decision about whether to enter a private home is up to a local contractor. That disturbs Pamela Campbell, a circuit court judge for Pinellas and Pasco counties in Florida. Campbell said banks should have to obtain a court order before one of their contractors can enter a home.
"There should be due process," Campbell said. "When people borrow money to buy a house, they don't anticipate that someone may one day drive by their home and make a determination on their own about whether it is vacant or not, and then possibly change their locks and go through their stuff. That is a scary proposition to me."
HOME ALONE
Many homeowner lawsuits include allegations that in addition to "securing" their home, which means replacing locks and sometimes "winterizing" it against the elements, contractors also stole their belongings.
While Celeste Butler's father was dying in the hospital, contractors working for Safeguard "looted and ransacked the house stealing numerous family possessions and heirlooms," a lawsuit filed by Butler in King County Superior Court in Seattle claims.
Chris Davis, a Seattle attorney representing Butler, said that his client's father should never have been considered in default on the loan in the first place -- that there was a mix-up with the automatic withdrawal set up to pay the mortgage to JPMorgan Chase every month.
Allen Danforth and his Kansas City family were even more shocked to discover that Safeguard, hired by JPMorgan Chase, removed their possessions, according to their lawyer, Tony Stein. That's because they had just recently purchased the home at a short sale -- and they didn't even have a mortgage with the bank.
Christopher Steeves and his wife returned to the Punta Gorda, Fla., house they were renting while visiting from Canada to discover a laptop computer, iPod and six bottles of wine missing, according to a lawsuit filed in Florida circuit court by the homeowner, who claims she had to reimburse half of the rental cost. A police report said the contractor, who worked for First Property Preservation, a Sarasota company, denied taking the belongings and also denied opening the refrigerator and taking a beer, which was found open on the counter with his fingerprints on the can.
Consumer lawyers said that even if a contractor doesn't remove anything, breaking into a private home is enough to terrify and intimidate homeowners already worn down from battling their bank over a looming foreclosure.
Nancy Jacobini was in her Orlando home on a cloudy afternoon in September 2010 when she heard someone rattling the handle of her front door. "I heard aggressiveness at the door. I heard the chain being chopped off," she recalled. "I grabbed my cell phone and went into the bathroom, and called 911."
She didn't come out until three sheriff's deputies standing in her living room told her it was safe, she said. Jacobini moved the biggest piece of furniture in her living room, a 7-foot console and coat rack, in front of the door for extra security.
In April 2011, it happened again. "I hear someone wrestling with the door," Jacobini said. "All of a sudden there is a boom and it opens. I scream. I see the console moving. A big guy with dark hair pushes into the room."
At that point, Jacobini was making payments on a trial loan modification to JPMorgan Chase, and had filed a lawsuit against the bank in Orlando federal district court based on the earlier break-in. She didn't realize, she said, that the lock the first worker put on her door could be opened by other preservation workers working for the same company, a fact pointed out to her when she struck up a conversation with a contractor working next door.
Jacobini was shocked, she said, when the worker strolled over to her house and was able to open the lock on her front door with his key.
"You need to get a new lock," he said.
Bill Moyers: Presto! The DISCLOSE Act Disappears
Ask any magician and they'll tell you that the secret to a successful magic trick is misdirection -- distracting the crowd so they don't realize how they're being fooled. Get them watching your left hand while your right hand palms the silver dollar: "Now you see it, now you don't." The purloined coin now belongs to the magician.
Just like democracy. Once upon a time conservatives supported the full disclosure of campaign contributors. Now they oppose it with their might -- and magic, especially when it comes to unlimited cash from corporations. My goodness, they say, with a semantic wave of the wand, what's the big deal?: nary a single Fortune 500 company had given a dime to the super PACs. (Even that's not entirely true, by the way.)
Van Jones: How Millennials and Students Won a Massive Victory on Loan Rates
Four months ago, nearly everyone thought the interest rate on Stafford student loans was going to double -- and that there was nothing anyone could do about it.
Republicans in Washington were beating the drums of austerity, trying to convince Americans that everyone, except the ultra-rich, should be tightening their belts. Common beltway wisdom held that students were going to be sacrificed -- especially since their lobbying sway in Washington D.C. is far from overwhelming.
But Washington wisdom doesn't always account for an outside game. And when everyday Americans stand up and fight for something they believe in, they often win.
The way I see it, there are three reasons why we won on this particular fight:
1. The fight looked lost, but we jumped into the ring anyway with all our force.
The Rebuild The Dream community alone sent nearly 300,000 letters and petitions to Congress, made more than 15,000 phone calls, and sent over 3,000 letters to the editors of local papers across the country. All that pressure attracted the President himself to jump in and campaign hard, and his support was invaluable for this win. Getting President Obama on board was an impressive coalition effort involving U.S. PIRG, USSA, Campus Progress, Young Invincibles, Credo Action, and Rebuild the Dream.2. Grassroots pressure still works, and we proved it.
In the age of Citizens United, many progressives have lost hope in the power of individuals to affect change. We still have reason to hope: we might not be able to win in a battle of dollars, but we have the boots on the ground to stir things up. At the end of the day, every politician needs votes as well as money, and we used online and on-the-ground tactics to convince members of Congress and the President to join in the cause.3. Young people matter, and they can do huge things if we let them.
Young people captured the media's attention on this fight. They stormed Sallie Mae's corporate headquarters and held a massive "debt for diplomas" fake graduation ceremony where new grads were given massive amounts of debt. Young people have the power to change the conversation, and here they did. Millennials will make up 1/3 of the eligible voters in 2016, so politicians should start paying more attention.All of our organizations were firing on all cylinders, and it worked. We proved in this fight that millions of Americans are willing to stand up and fight for the American Dream. With that dream under attack by billionaires and bankers, it is more important than ever that we come together to organize on behalf of everyone's dreams. When we fight, we win, and this time-- we won.
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Scott Mowry – Worldwide Sea-Change Continues To Rapidly Unfold For The People Of The Earth – 18 July 2012 | Lucas 2012 Infos
After America’s great Fourth of July holiday came and went, many were left feeling greatly disappointed that reports of impending mass arrests of the world-wide dark cabal by US military forces never materialized as had been anticipated.
US Pentagon still ready for mass arrests?
Self-proclaimed Pentagon spokesman Drake had stated emphatically on the Global Voice 2012 radio broadcast of June 27, 2012 that a “green light” had been issued by the military to begin a sweeping take down of the world’s cabal forces, no later than July 4, 2012. Yet the expected great fireworks show was nowhere to be seen.
Then on his radio show for Sunday, July 15, 2012, Drake called upon ordinary citizens to begin to take action and carry out the arrests but he was summarily kicked off the airwaves by Blog Talk Radio only to return again on Monday, July 16th for a follow-up show.
It is possible Drake has miscalculated the Pentagon’s plans as was alluded to in a subsequent post by David Wilcock on June 29th entitled, “The ‘Green Light’: Wouldn’t It Be Nice?“. Admittedly now, the veracity of Drake’s sources has come into question, causing much consternation, frustration and anger to ensue among the faithful since the passing of yet another professed deadline.
Yet in the grand scheme, this is only a minor setback as many have failed to recognize or even acknowledge the vast multitude of transformations and profound changes that continue to unfold within our world on a daily basis.
Despite the lack of a massive arrest scenario as speculated by others beyond Drake, such as David Wilcock, Benjamin Fulford, etc., many historic, unheard of developments continue to occur in our world. These events are proving, beyond a shadow of a doubt, there is enough substantial evidence of a titanic sea-change within the ranks of the power structures of the world, growing more and more evident by the week –– if not by the day!
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Paid To Do What You Love ~ Neale Donald Walsch | The Galactic Free Press
My dear friends...
This week let's look at the Holy Experience and your work, or chief activity.
I want to begin this exploration by telling you that your life was never meant to be about "work." Not in the way that most people use the word.
The dictionary defines work as: activity involving mental or physical effort done in order to achieve a purpose or result; such activity as a means of earning income; employment; a task or tasks to be undertaken; something a person or thing has to do.
Life was meant to be joy, joy, and more joy--all attainable with no work at all. Mind you, I did not say without effort. I said, without work.
"Effort" does not have to mean "strain" or "stress" or "difficult or unwelcome exertion." Effort can mean, simply: "energy expended." And if that energy is expended happily--as in, for instance, a loving and frolicking sexual encounter, or the making of a snowman, or the swimming of laps in a pool on a sweltering summer's day--it can be a joyful effort. It takes "effort" to swim those laps, but it does not take "work." It takes "effort" to build that snowman, but it does not take "work." It takes "effort" to make love, but it does not take "work."
Any undertaking, even if it is at a place of employment, that brings you happiness, that leaves you brimming with excitement and pleasure, can hardly be called "work."
The Holy Experience is the moment in which we realize that we are being paid to do something that we absolutely love; something that we would pay another to let us do.
Musicians often experience this. Actors and singers and dancers often do. Carpenters and bakers and artists and clothing designers often do. Real estate sales persons often do. In fact, anyone does who loves what she or he is doing.
I'll never forget my first full years in the "work-a-day world." I was 19 years old, had attended college for two years and was invited by the Dean of Men to leave the university in favor of someone who wanted to use my seat to actually learn something--which my grades had demonstrated that I clearly did not seem to care much about.
I was free! My father, who was paying for my tuition and was not too pleased with my flunking out of school, said, "Okay, son. You think you know best? You're on your own." And then I did what I had always wanted to do; something I had dreamed about doing since I was 9 years old: I got a job in radio! I became a bona fide, real live, genuine radio announcer.
I can remember my very first payday. I could not believe--really and truly, plainly and simply, could not believe--that someone was going to actually give me money for doing what I was doing!
What I was doing was sitting in front of a microphone, playing my favorite music for four hours, and talking. In later years I used to tell the joke that I had to turn around and reach behind my back to grab my check because I couldn't look my boss in the eye and take the money. I just loved what I was up to! It was, for me, so easy. It wasn't work at all.
It was right then that I experienced that I didn't have to do something that I didn't like to do, that wasn't any fun, or that I wasn't really all that good at, in order to "earn my keep."
And we will continue this discussion in our next issue.
Hugs and love,
Neale
Freedom Project: USA: New Corruption Charges In Chicago ~ | The Galactic Free Press
USA: New Corruption Charges In Chicago ~ 18 July 2012
18 July 2012. The former campaign treasurer Dean Nichols, 62, of ex-Illinois State Senator Rickey Hendon, was charged along with 6 others with corruption following federal stings. They are charged with bribery conspiracy for allegedly paying kickbacks of $5,000 to a purported U.S. Department of Health and Human Services (HHS) official, who did not actually exist, in return for awarding $25,000 cash grants from the agency. There was no corrupt HHS official and no HHS grants were involved. “Instead, those elements were involved only as part of the scenario of the undercover investigation” stated a press release from the federal prosecutor’s office. Federal authorities allege that Nichols steered a State of Illinois grant of $50,000 to an organization operated by Nichols’ daughter from 2005 to 2006, and a $190,000 grant in 2007 to an organization operated by Hopkins with the understanding that a portion of the proceeds would go to Nichols and the state senator’s nephew.
Several of the defendants appeared in court on Tuesday afternoon before U.S. Magistrate Judge Jeffrey Cole.
Read more: ABC News – Intelligence Report: Feds climbing a new corruption ladder in Chicago www.corruption.net link to article
Accidental UFO Filmed in Bangkok (Video) | The Galactic Free Press
by Tom Rose
July 05, 2012 09:15 PM EDTA UFO was filmed unintentionally by a man in Bangkok as he was taking photos on a river cruise. It wasn't until he reviewed the photos later that he noticed the unidentified flying object in the pictures.
According to the witness, he was just taking pictures of the skyline as the cruise ship floated by and had no idea what he was actually catching on film.
These kinds of sightings are often the best type because of the spontaneous nature, with no intent on the part of the witness to attempt a hoax. The object in this series of pictures seems to be swooping down, trailing a stream of vapors as it flies.
The UFO looks like a saucer with some lights ringing the hull as it zooms past several high-rise buildings. This sighting could be discounted as simply a lens flare but for the fact that the same object appears in several different photos.
So, what is it?
Here's the video:
Romania President Likely To Be Impeached : Poll | The Galactic Free Press
Romania President Likely To Be Impeached : Poll – 18 July 2012
Posted on July 18, 2012 by lucas2012infos
BUCHAREST: Romanian president Traian Basescuis likely to be impeached by voters in a referendum on July 29, an opinion poll showed on Wednesday, providing turnout is high enough to make the vote valid.Prime Minister Victor Ponta’s ruling Social Liberal Union (USL) alliance also remains clear favourite to win a parliamentary election late in the year, the survey showed.
The leftist USL, backed by parliament, suspended Basescu earlier this month, saying he had overstepped his powers. European Union leaders have criticised Ponta for his campaign to oust his political rival.
Sixty-six per cent of the 1,104 people polled said they wanted Basescu to be impeached, with 34 per cent against. The president is unpopular for backing austerity measures, including salary cuts and a rise in sales tax.
Sixty-one per cent said they would vote in the referendum, the survey by pollster CURS for local newspaper Jurnalul National found.
Romania’s Constitutional Court has ruled that more than half the electorate must turn out for the referendum to be valid, a decision which improved Basescu’s chances of surviving.
Voter support for the USL has risen to 63 per cent, according to the poll conducted on July 11-16, despite the international criticism Ponta has received this month.
That indicates Ponta is likely to stay in power in the election due in November. A March opinion poll had put support for the USL at 48.4 per cent.
The political turmoil and policy paralysis caused by the dispute between Ponta and Basescu have raised concerns over a 5 billion euro ($6.11 billion) International Monetary Fund-led aid deal.
Markets have also been rattled, sending the Romanian leu to all-time lows against the euro.
Lucas – Still Not Believing Your Not Having A Say In Your Democracy? | The Galactic Free Press
Lucas – Still Not Believing Your Not Having A Say In Your Democracy? – 18 July 2012
Posted on July 18, 2012 by lucas2012infos
After the Citizens United court case the unlimited spending by the corporations and wealthy is now sanctioned. People in USA do not see the real for what it is. Your democracy is ruled by capitalism and greed, lobbyist and corporations and not “We The People” and the real things that should be addressed. You see corruption, interests entanglement, lobbying, senators and congressmen and campaigning for funds for re-election as less time is spent on Capitol Hill for the duties they are elected for and in keeping their oaths of office. Approximately 2 till 3 days they spent on the Hill. Reading the bills and amendments they should pass they do not. Yes unread they vote on and pass bills that limit and steal the rights you have as sovereign beings. You should ask them what they voted on. You’d be surprised!
We see an increasing flow of unconstitutional bills pass. In my opinion ‘The High Court judges’ approve of apparent infringements on the bill of rights and the rights the constitution has given you in political motivated decisions that are not allowed to be made. Judges are prohibited to make law, they can make weighted decision on the merits of the constitution and nothing more. Also the political appointments of judges for live is also a questionable practice. What is then being neutral and not biased.
I see in the pre-election campaigns of the parties the vote rigging, fraud, manipulation, biased and forfeited and bought media attention and so on. I believe if people say they have the greatest democracy of the world should really think again. Now the domination of money is key in buying and manipulating your vote. Yes the superpacs are now the way you get your democratic say and all with money. The by a few monopolists controlled media say what you should believe on their news and talk programs. Really?! One Billion is said to be spent till the election in November at campaign ads and air-time.
Should not be that money for those now living on the streets without food and shelter in the land of opportunities where the corporations and bankers and money rule and control your world. They even let YOU, pay the bill for their rigging of Libor, the FED scandals as seen and the other banking and financial institutions scandals, deceit and fraud and crimes are now daily exposed and reported. Do not forget the fraudulent disclosures that are flooding the courts now in claims .What about your democratic government and its institutions also being directed by the money controllers. Did they not get you in treaties that your thought to be sustainable loving eco happy. It was an attempt of a hidden NWO agenda to be put in place. Do you see the Treaty of the Law of the Seas that will give your waters and what is on, in and beneath it in the hands of the UN with the possibility of taxing you saying what you should do or not. Do you see the ruling and bills passed in favour of corporations that have been proven over the world to be crooks and criminals. Do your see you are inch by inch now inclosed by surveillance and control, you may even not have a say over your own sovereign body by having to eat GMO (processed) foods and proven unhealthy additives and being forcefully vaccinated with deadly vaccines. Do you see the misconduct, abuse power, unlawful and unconstitutional actions, unlawful arrests, intimidation, violence of your authorities, police and law-enforcement agencies. Do you see the spying on, and weaponization of your law-enforcement agencies with military technology like ray and magnetic pulse crowd control weapons, drones in your skies and a gun treaty against your second amendment rights almost in place.
And this is just a quick review. Is this not enough proof to say: “It is enough we want the constitution restored”. The only thing you have to do is take peaceful and civil disobedient actions and stay within the law even if those others break it. There are people who are now together with outside help busy already to try to change the things again in favour of the people. You can unite with them and give your assistance and support. Go change things before you are all real debt-slaves that only as zombies obey their masters control as in Orwell’s 1984.
Get up, Stand up! Stand up for your rights! : sings Marley. And oh boy was right.
Love and Light,
Lucas
(c) 2012 – Copyright of Lucas, all writings of Lucas maybe published, re-blogged and posted only in full without altering anything with thehttp://www.lucas2012Infos.wordpress.com blog mentioned in the article with name of the author Lucas.
Florida Cop Fired for Planting Dope, Says He Did That and More Under Orders | The Galactic Free Press
reason.com
J.D. Tuccille | July 2, 2012In Crestview, Florida, Police Street Crimes Unit investigator Tim White is out of a job for swiping grass from an evidence locker and planting it at a residence to beef up the grounds for a search warrant application. Even more interesting, he says he did so on orders from a supervisor. And that's just the beginning of the interesting revelations White turned over in a letter to David Cable, mayor of the city of 21,000. In fact, it's that letter that led to his newly unemployed status, and may lead to so much more.
Reports the Northwest Florida Daily News:
In the letter that led to him being investigated, White reported that he was instructed by “my supervisor” to drive to the supervisor’s home.
While there, he said he was ordered to dig a hole and then told to turn his department-issued weapon over to the supervisor, who used it to kill a sick dog that belonged to a family member.
White also reported that he conducted a “trash pull” as part of an investigation and “located a small amount of marijuana.”
“I advised my supervisor of my findings and my supervisor advised me ‘if I was in your shoes I’d get marijuana from the SWAT closet and add it to what you found,’ ” he said in the letter.
“I again was in fear of losing my job and felt obligated to do as instructed by my supervisor,” he added.
The third incident White reported in his letter involved him accompanying his supervisor on a surveillance mission.
“I … observed my supervisor jump a chain link fence leading to the back yard of the residence and walk towards the front door,”the letter said.
It states White had reason to believe the supervisor “did in fact enter the residence.”
The internal investigation conducted by Police Department Lt. Jamie Grant determined White may have committed five criminal offenses and four violations of Crestview’s city policy manual.
The criminal violations included: perjury, tampering with/or fabricating evidence, official misconduct, false report of the commission of a crime and trespassing.
The supervisor, left unnamed in White's letter, which can be read in all its corruptalicious splendor here (PDF), is identified by the newspaper as Sgt. Matthew Purvines, who says no way, no how, did he do any of that naughty stuff.
The allegation of planted evidence is especially intriguing, because it illustrates just how easy it is for police to come up with grounds for search warrants, considering that they usually have a ready supply of illegal stuff on hand. From the letter:
On a day between 2008 and 2010 I was conducting an investigation which involved trash pulls in order to obtain a search warrant for a residence. After a successful trash pull one more successful trash pull was needed. I conducted the trash pull and located a small amount of marijuana. I advised my supervisor of the my findings and my supervisor advised me :if I was in your shoes I'd get marijuana from the SWAT closet and add in to what you found." I was advised again if I mention what was said to anyone he/she would make sure that I was fired from the police department. I again was in fear of losing my job and felt obligated to do as instructed by my supervisor. The marijuana was located in a "dog box" which is identified as a metal container which houses items used to assist in the training of narcotics dogs.
White justifes his obedience to the illegal and unethical orders on the grounds that "[t]his supervisor in question used and still uses intimidation as a tool to control his subordinates and make them do things that he wants them to do."This is a department where former Street Crimes Union head Joseph Floyd has been charged with racketeering after, among other things, "he used his status as a police officer to solicit sexual acts," and one-time Police Chief Brian Mitchell was fired and now seeks reinstatement even as he alleges a host of illegal conduct by city officials.
If White's claims are true, the Crestview Police Department comes across as a ... special working environment that puts any bad job I've ever had in perspective, even the one in which I had to report to the owner's office once a week and answer the question "Jer, who's king of the mountain?" with "You, Don. You're king of the mountain." But even if the Crestview PD is an outlier, work environment-wise, I have to imagine that's not the only department in which police can, with relative ease, gain access to forbidden items and substances to plant on targets. That's something we all knew aready, but this illustrates that reality in detail.
So far, White has been fired, but not yet arrested or charged, and there doesn't appear to have been any further fallout from his allegations.
(HT to the source who sent me this, left unnamed because he/she didn't specify a desire to be identified and I don't want to cause anybody difficulties in an interesting town.)
Update: Mike Riggs has already had much fun with Crestview and former Major Joseph Floyd.
Source: reason.com
Shell and BP Targeted by UK Activists | The Galactic Free Press
BrandChannel.com
Posted by Sheila Shayon on July 16, 2012 03:29 PM
Shutting Down Shell: The Best Bits
The latest move in Greenpeace’s Save the Arctic campaign saw British eco-activists shutting down 74 of 119 Shell petrol stations in Edinburgh and London against the brand's plans to drill for oil in the Arctic, leading to the arrests of 24 campaigners on Monday, according to the Guardian.
The campaign is targeting Shell as prepares to begin drilling in the Arctic with Russian oil company Gazprom, a plan that U.S. activists rallied to sue and spoof campaigns to pop up. Protesters scaled the roofs of Shell stations and deployed emergency shut-off switches to stop petrol going to the pumps, removing a fuse that delays it being switched on again, while posting a message on Twitter that, "We're being careful not to destroy property. Even the carefully removed components will go back to Shell."
Greenpeace UK website elaborated, "It's part of the global week of action against Shell that kicked off with the occupation of the head office in the Hague – as well as our live TV channel, follow #tellshell on Twitter for all the latest from around the world."
The Save the Arctic campaign, launched by Virgin chairman Richard Branson, actress Lucy Lawless and Greenpeace International executive director Kumi Naidoo at the Rio+20 Earth summit, aims to prohibit oil drilling and industrial fishing in the Arctic by declaring the region a world park. Other celebs — including Robert Redford, Sir Paul McCartney, Penelope Cruz, Jude Law, Spanish director Pedro Almodovar, and Radiohead's Thom Yorke — have signed "the Arctic Scroll," an-anti oil drilling petition to be planted on the seabed at the North Pole.
"The Arctic is coming under assault and needs people from around the world to stand up and demand action to protect it," said Naidoo to the Guardian. "A ban on offshore oil drilling and unsustainable fishing would be a huge victory against the forces ranged against this precious region and the 4 million people who live there. And a sanctuary in the uninhabited area around the pole would in a stroke stop the polluters colonising the top of the world without infringing on the rights of indigenous communities."
"Shell is preparing, for the first time, to unleash a drilling fleet of huge vessels upon the fragile and beautiful Arctic, home of the polar bears,” commented Sara Ayech, a protester at the Battersea Park station, to the Guardian. "It's time to draw a line in the ice and tell Shell to stop. That's why today we're going to shut down all of Shell's petrol stations in the capital cities of London and Edinburgh. We've got dozens of people who will hit over 100 Shell garages throughout the day."
A Shell spokesman responded to the newspaper that while the company is "betting billions" on Alaska, it also "recognises that certain organisations are opposed to our exploration programme Offshore Alaska, and we respect the right of individuals and organisations to engage in a free and frank exchange of views about our operations. Shell has met with numerous organisations and individuals who oppose drilling offshore Alaska. We respect their views and value the dialogue. We have extended this same offer for productive dialogue to Greenpeace."
Protests are planned across Europe, including Denmark and Germany and on Twitter, @greenpeace_ch where a protester dressed as a polar bear picketing the home of Shell CEO Peter Voser was posted.
It's not the only oil and gas brand on the hotseat — rival BP, the London Olympics' official "fuel and gas provider" and "sustainability partner,” is also under siege as environmental groups protest their sponsorship with acts of "brand piracy." On July 5th, activists splashed a six-panel outdoor billboard touting BP's sponsorship of the London 2012 Olympics by defacing them with with oil-black paint. BuzzFeed posted photos showing the six-panel billboard, located along London's Cromwell Road.
Taking responsibility, f-ingthefuture.org commented: "Organisers of the Olympics have decided to allow BP, one of the dirtiest companies on earth, the opportunity to rebrand itself as socially responsible and take an active role in proposing how society should approach climate change. By sponsoring activities like the Cultural Olympiad, the London 2012 Festival, the World Shakespeare Festival and the Games themselves, BP is able to continue its catastrophic, though increasingly profitable, operations. That’s why we had to act."
Source: BrandChannel.com
Similar Story: Greenpeace Protests Shut Down 53 Shell Stations
NaturalNews – J.D. Heyes – FDA Caught Spying On E-mails Of its Own Scientists In Huge Surveillance Operation – 17 July 2012 | Lucas 2012 Infos
(NaturalNews) If you need any measure of just how statist and paranoid our Leviathan government has become, look no further than recent revelations that one of its own agencies has been caught spying on some of its own employees, just because they had differences of opinion regarding its operation.
The New York Times said previously undisclosed documents revealed recently indicate the Food and Drug Administration had conducted a “wide-ranging surveillance operation” against a group of disgruntled FDA scientists who had privately sent thousands of emails to Congress, attorneys, labor officials, journalists and, on occasion, even President Obama.
The report said initially the FDA had launched a narrow investigation into possible leaks of confidential agency data by five scientists, but that its scope grew quickly in mid-2010 into a far broader effort aimed at countering outside critics of the agency’s medical review process, as a cache of some 80,000 pages of computer documents indicated.
FDA officials who ordered the surveillance operation were seeking to squash what one memo called the “collaboration” of agency opponents comprised of 21 people, including FDA employees, congressional officials, outside medical researchers and journalists presumed to be working in unison to produce “defamatory” information about the agency.
A ‘specific danger to public safety’
As expected, agency officials defended the massive spying effort, using the excuse that agency computer monitoring was limited to just the five scientists who the FDA believed were leaking confidential information about the design and safety of some medical devices. Agency officials admitted the goal of the surveillance was to track the scientists’ communications, but they said the goal was never to impede those communications – only to see if the scientists were improperly sharing information.
Using so-called spy software that was designed to help employees monitor workers, the FDA managed to capture screen images from the government laptops of the scientists as they used them at work or at home.
The software tracked keystrokes, intercepted personal emails, copied documents on personal thumb drives and followed messages line by line as they were being composed, according to the cache of documents.
The large-scale surveillance operation stemmed from a long-standing and bitter dispute between FDA scientists and their supervisors regarding the former’s claims the agency’s faulty review processes have led to approval of medical imaging devices for mammograms and colonoscopies, which exposed patients to dangerous radiation levels, the Times reported.
It turns out that other government agencies believed the scientists.
According to the trove of documents, the Office of Special Counsel found in May 2012 that the scientists’ medical claims were legitimate enough to warrant a full investigation into what the office called “a substantial and specific danger to public safety.”
The captured documents, which included private correspondence to at least six congressional offices and oversight committees, copies of legal filings and grievances, along with personal emails – were inadvertently posted on a public Web site by a private document-handling contractor who works for the FDA. The Times said it “reviewed the records and their day-by-day, sometimes hour-by-hour accounting of the scientists’ communications.”
Did FDA cross a legal line – or three?
The scientists discovered last year that perhaps a few dozen of their emails had been nabbed by the FDA, a finding that led to their filing suit over the issue in September, following the dismissal of four of the scientists and a report disclosing the monitoring by The Washington Post in January.
That said, the immense scope of the spying operation and how far it reached had not yet been known, not even to some of the operation’s targets.
FDA officials said by monitoring the five scientists’ communications, their emails “were collected without regard to the identity of the individuals with whom the user may have been corresponding,” according an agency memo.
While it went on to describe the congressional officials and other “actors” as collaborating with the scientists in their effort to disclose the faulty processes, FDA officials said those outside the agency were never targets of the surveillance, though they were still suspected of receiving private agency information.
Federal agencies generally have the right to monitor their employees’ communications, but there are specific laws guiding interception of certain confidential information such as attorney-client communications, whistleblower complaints to members of Congress or their panels and workplace grievances filed with government watchdogs.
Even the Obama administration got nervous about the breadth of the FDA spying operation. In June the White House Office of Management and Budget sent out a government-wide memo reminding agencies it was permissible to monitor employee communications, but such monitoring could not, under the law, be used to intimidate whistleblowers.
Monitoring must be done in ways that “do not interfere with or chill employees’ use of appropriate channels to disclose wrongdoing,” said the memo, as quoted by the Times.
Needless to say, the FDA operation appears to have violated at least some of these laws. We’ll see if heads roll or if hands merely get slapped. Or less.
Sources:
http://www.nytimes.com
http://articles.chicagotribune.com
http://www.boston.com
