Tag Archives: Deferred Prosecution Agreement (DPA)

FIFA is patently corrupt, but what’s this FBI sting really been about…?

A precursory note to the disinterested:

I did not originally intend to post an article (certainly nothing so extended) about the ongoing investigations into football’s world governing body, FIFA. However, once I began to scratch just a little beneath the surface of this developing scandal, I found that it immediately led into areas completely unanticipated. Behind the cartoon kleptocracy running the show at FIFA HQ up popped more familiar faces: the gone, but not so easily forgotten Nicolas Sarkozy, the ubiquitous Benjamin Netanyahu, and — never far from any scandal — the unwanted opinion of John McCain. Added to which, there are political entanglements that ought to have a bearing on the current US Presidential election campaign – what is the role the Clintons have played?

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World Cup fever

When, in 2010, FIFA chief Sepp Blatter announced that Russia would host the 2018 World Cup a few eyebrows were raised… Moments later, however, as Blatter slipped his hand into a second envelope before revealing to the assembly of hopeful delegates that Qatar were to host in 2022, you could barely hear the feigned applause above the sound of jaws collectively dropping around the world.

Russia is a country very much riddled with corruption as we know (after the fall of communism, the so-called “liberalisation of markets” left the way wide open for the rise of the gangster oligarchs), but Russia is also a proud footballing nation. Supporters of the game recognised that Russia had at least earned its right to host football’s greatest tournament. The Qatar decision, on the other hand, instantly turned FIFA into a laughing stock.

Qatar has zero footballing tradition, effectively zero facilities, and due to its arid climate, close to zero blades of grass. What it had instead, and in prodigious abundance, was oil and money, and the political clout that goes with both. In other words, graft had again won the day – and just look who is smiling broadly beside the delegation of Qatari sheikhs as they jump for joy – bottom left of the screen [16 mins in], the sleek, silvery head of former President and (very likely, heaven forfend) soon-to-be (first) First Husband of the United States, Bill Clinton (a lot more on this Clinton connection later):

Whatever lingering hopes we’d had that FIFA may recover a little of its horribly sullied reputation were gone forever (though most supporters knew the score long before 2010), and all that was left was to marvel at the temerity of football’s world governing body, so casually throwing off any last pretence to probity and respectability.

With the rigged voting in 2010, it may be argued that the writing was on the wall for both FIFA and its seamy president Sepp Blatter, but with friends like Qatar around to watch your back, neither FIFA nor Blatter were about to be quite so unceremoniously deposed. Certainly the stage had been set, but the future remained secure for the heads of FIFA, or so it seemed until last week…

*

It wasn’t exactly extraordinary rendition. But when Swiss police arrested seven officials of FIFA, the international football federation, for extradition to the United States, there were some echoes of the secret terrorism arrests. Soccer is a global game, and it matters more to almost everyone than to Americans. So why is the US acting as the international sheriff and grabbing up non-US citizens to try them domestically for corrupting the sport worldwide? And, more to the point, why is this legal?

So writes Noah Feldman, who is a professor of constitutional and international law at Harvard.

Feldman’s questions are germane. But before we come to addressing them, it is worthwhile considering more closely the person in charge of so aggressively pursuing the case, Obama’s newly appointed US Attorney General, Loretta Lynch. Lynch has a point to prove, as an article published by the Guardian in February explains:

Opposition to Barack Obama’s nominee for US attorney general over her handling of the HSBC scandal is growing in Congress after she admitted deciding not to prosecute the bank for money laundering offences without hearing from key regulators or a separate investigation into tax secrecy. […]

“These decisions by the [Department of Justice] and Ms Lynch’s office raise troubling questions about whether pertinent information of public concern regarding HSBC was ‘swept under the rug’, if justice was served, and why HSBC was given special treatment that allowed it to walk away from such serious offences unscathed,” [Senator David] Vitter writes in a letter to current attorney general Eric Holder. “This case is increasingly relevant and pressing now that Ms Lynch has been nominated as the next attorney general.”

Lynch has confirmed she was not aware of the damning tax allegations against the bank when negotiating a deferred prosecution agreement (DPA) over it facilitating money laundering by Mexican drug cartels and helping clients evade US sanctions.

This was despite a separate investigation into documents from whistleblower Hervé Falciani showing HSBC’s role in colluding with Swiss bank clients to hide their assets from tax authorities, which were passed to the US government by French authorities.

“To my knowledge, my office did not have access to the Falciani documents prior to execution of the DPA [Deferred Prosecution Agreement],” said Lynch in responses published on Thursday. “I am not aware of whether or how the information was conveyed to the department, nor do I have information about why my office did not have access to it.”

The admission has angered campaigners who say the crucial Facliona [sic] documents were “lost in the haystack of information” at the DoJ but their public existence could have been easily verified.

“She could have looked it up on Wikipedia,” said Bart Naylor, an expert at Public Citizen1

Click here to read the full article.

Thanks to Lynch’s oversight (in both senses of the word), HSBC escaped prosecution despite proven charges of laundering money for drug cartels and for terrorists – setting an extremely dangerous “too big to jail” precedent. After this remarkably softly, softly approach to Wall Street, however, Lynch is now taking an altogether more muscular stance in the case of FIFA.

An approach which potentially sets a differently dangerous precedent as she risks accusations of judicial overreach, especially given the comparatively speaking, minor felonies – bribery and kickbacks of around £100 million over 24 years is the charge against the accused FIFA officials (close to the price Real Madrid paid Spurs for Gareth Bale), and not the multiple billions of the never-ending banking “scandals”, or, to offer a very different example, the child trafficking allegations for which both DynCorp and Halliburton have been implicated (but no prosecutions brought). Furthermore, these alleged offences were committed by officials not at the head of a multinational corporation, but of a sports body that the average American cares very little about. So, why is the FBI so bothered? Why now? And on what grounds did the FBI make last week’s arrests outside America? Back to Noah Feldman:

It turns out the legal basis for the FIFA prosecutions isn’t all that simple or straightforward – and therein lies a tale of politics and sport. The prosecutions are being brought under RICO, the Racketeer Influenced and Corrupt Organisations Act of 1970, which was designed to prosecute crime syndicates that had taken over otherwise lawful organisations. […]

Generally, as the US Supreme Court has recently emphasised, laws passed by Congress don’t apply outside the US unless Congress affirmatively says so. RICO on its face says nothing about applying beyond US borders. So you’d think it can’t reach conduct that occurred abroad, and much of the alleged FIFA criminal conduct appears to have done so.

But in 2014 the US Court of Appeals for the Second Circuit held that RICO could apply extraterritorially – if, and only if, the separate criminal acts required by the law, known as “predicate acts”, violated statutes that themselves apply outside US borders. […]

But what’s most remarkable, and even incendiary, about the indictment comes in the fine print. RICO requires the existence of a criminal enterprise. As part of its case, the US Department of Justice is alleging that FIFA, the organiser of the World Cup, became a criminal enterprise as a result of its use of systematic corruption. In effect, the US government is saying that FIFA became the Mafia. 2 [Emphasis added]

*

Sepp Blatter has not (yet) been indicted, but for most of last week he was decidedly the man most in the (media) frame. In spite of this, delegates at the 65th Congress re-elected him as FIFA president and then for days afterwards, Blatter brazenly refused to step down. During this period of prolonged ignominy, it had been Michel Platini, chief of European football’s ruling body, UEFA, who was most vociferous in calling for Blatter’s resignation:

[Blatter’s] speech came just hours after Frenchman Platini said the latest crisis had left him “absolutely sickened”, adding: “People have had enough, they don’t want this president any more.” 3

That was on Thursday 28th, the day before FIFA’s election for president, and after Platini had personally requested that Blatter step down. The same day, Platini also called for delegates to join him in voting for Jordan’s Prince Ali Bin Al-Hussein, saying:

“Sepp, I like to speak to you man to man, face to face. Listen we started together, now I am asking you to leave FIFA because we give a terrible image and this can’t go on.” 4

Now, it is here worth briefly reflecting upon Michel Platini’s reputation as a player. For Platini wasn’t just any old player, but acclaimed by many as the greatest player of his generation. Creative, imaginative, tremendously skilful, Platini had been lauded not only for his prodigious talents, but also for his clean approach to the game. That said, after becoming head of FIFA’s European affiliate UEFA, Platini, like Blatter (who was always a bureaucrat), moved into politics. The politics of sport is politics nevertheless.

Since Platini took the helm at UEFA, he too became deeply embroiled in scandals seemingly of his own making – scandals I will return to in a moment. Yet at the present time, the media have collectively latched onto Platini and adopted him as football’s knight in shining armour. So whatever Platini is reported to have said is often presented as though Platini himself has no political ambitions. But this is nonsensical. And in actual fact, Platini’s own decisions as a footballing chief also played a significant part in FIFA’s downfall too – if, that is, we accept that FIFA’s real troubles began with the absurd 2010 vote and Qatar’s moment in the sun.

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Qatar

In a 20-page investigation headlined “Qatargate”, the respected magazine France Football said that “acts of collusion and corruption” shaped the much-criticised FIFA decision to award the 2022 competition to the tiny, oil-rich Gulf state.

Among the alleged “acts of collusion”, the magazine listed a secret meeting called by President Sarkozy at the Elysée Palace on 23 November 2010. Ten days later – to worldwide astonishment – Qatar was chosen by a FIFA executive committee meeting in Zurich to host the World Cup in June-July 2022, despite summer temperatures in the Gulf of up to 50C.

This is taken from an article published by The Independent in January 2013. It continues:

Mr Sarkozy’s lunch guests included the crown prince of Qatar, Tamin bin Haman al-Thani, Michel Platini, president of the European Football Association (EUFA), and a representative of the investment fund which owned the then struggling French football club, Paris Saint-Germain (PSG).

France Football said that Mr Platini – a star of the France team of the 1980s – came under pressure at the lunch to switch his vote from the United States to Qatar.

The article ends with a quote from Nicolas Sarkozy:

One of the few international figures to have consistently supported the choice of Qatar is Mr Sarkozy. Just after the FIFA vote in 2010, he said: “Sport does not belong to a few countries. It belongs to the world… I don’t understand those who say that events should always be held in the same countries and the same continents.” 5

Click here to read the full article.

Eighteen months later, as the scandal rumbled on, we learned that Platini not only voted for Qatar in the ballot, but that he had been involved in another private meeting linked to the Qatar bid:

The Telegraph has unearthed evidence that Mr Platini, a former leading French international and the president of Uefa, European football’s governing body, had a private discussion with Mohamed Bin Hammam, the controversial Qatari [a former Fifa executive committee member and ex-president of the Asian Football Confederation] who paid millions of pounds to football officials around the world. […]

It is understood that the meeting took place shortly before Fifa awarded the 2022 World Cup to Qatar, and that Mr Bin Hammam personally lobbied Mr Platini to support the Emirate’s bid.

Fifa executive committee members vote in secret, but Mr Platini has disclosed that he voted for Qatar in the ballot, which was held in 2010. 6

Platini, whose son Laurent happened to be the chief executive of Qatar owned sports company Burrda, quickly denied the allegations, writing in response to The Telegraph article:

“I find it astonishing that conversations with a fellow member of the FIFA Executive Committee could suddenly be transformed into a matter of state.

I have obviously met with Mr. Mohamed Bin Hammam on many occasions in 2010 as we were both members of the same FIFA Executive Committee since 2002.

During those conversations with Mr. Bin Hammam, the topic of the discussions was my potential candidature for the FIFA Presidency. Mr. Bin Hammam was indeed trying to convince me to become a candidate for the 2011 FIFA Presidential elections.

Additionally, I wish to reiterate that I am the only member of the FIFA Executive Committee who publicly stated for which bid I have voted – proof of my full transparency – and that no one ever dictates terms or conditions to me.

Unfortunately, I am no longer surprised by the circulation of unfounded rumours which aim at tarnishing my image, especially in such an important time for the future of football.”

*

Ukraine and Russia

[Nonetheless,] the bid was still considered the outsider of the three.

Poland is still recovering from a match-fixing scandal and its government has been warned by Uefa and Fifa about political interference in the country’s football governing body.

Meanwhile, Ukraine has been hit by a political crisis, with the president trying to dissolve parliament. 7

This was how the BBC reported on the surprise victory by the joint Poland-Ukraine bid to host the Euro 2012 tournament. At the time, Italy had been favourites to win, even though their own bid was similarly overshadowed with issues relating to crowd violence as well as to a match-fixing scandal. The Italian authorities have always accepted the result, however, one person, and not an Italian but a Cypriot, would later publicly claim that he held evidence of backroom deals. UEFA’s response was swift:

European football’s governing body, Uefa, says it is taking legal action in response to allegations of corruption in the bidding race for Euro 2012.

Spyros Marangos, a former treasurer of the Cyprus Football Association [CFA], claimed this week that money had changed hands before the championship was handed to Poland and Ukraine.

He was told to provide evidence within two days to back up his claims.

But, according to Uefa, Mr Marangos had complained that was too short notice.

His lawyers told the BBC on Monday that Mr Marangos had tried for the past two years to draw the football body’s attention to the allegations for which he had witnesses. 8

Spyros Marangos, who had left the CFA in 2007, “made the allegations in German newspaper Suddeutsche Zeitung before telling Italian daily La Gazzetta dello Sport that he had proof to back up his claims.” In response, UEFA filed for damages in the Swiss courts and lodged a complaint with the Cypriot Attorney General. They also released an official statement:

‘UEFA has been obliged to take legal action firstly in order to establish whether any of the claims made by Mr Marangos have any substance to them, and therefore to make available any tangible elements in order to substantiate these claims. And secondly, to protect the integrity and the good name of UEFA and European football in general, which have been seriously damaged by these allegations.’ 9

Not that scandal surrounding the Euro 2012 tournament ended with Spyros Marangos’ unsubstantiated allegations. There have since been claims that once construction for the tournament started, as much as £2.5 billion (compare this with the £100 million in alleged bribes currently being investigated by the FBI) went missing in Ukraine alone:

Uefa, the governing body of football in Europe, is under pressure to investigate claims of massive corruption during Ukraine’s preparations for Euro 2012, amid allegations that as much as $4bn (£2.5bn) in state funds allocated for the tournament was stolen by officials.

Rebecca Harms, the leader of the Green faction in the European parliament, said Uefa had to investigate why Ukraine cancelled competitive tenders for all Euro 2012 projects in 2010. Instead, contracts for building stadiums, roads and other infrastructure projects were awarded to a handful of shadowy companies, including one based offshore in Belize. […]

Harms, a German MEP who visited Ukraine’s second city, Kharkiv, last week, told the Guardian: “I will confront Uefa with these questions. I will also raise them in parliament. In whose private pocket did the money go? Uefa [under Platini’s watch – my note] must take responsibility.” 10

This comes from a Guardian article published in 2012, a time when former Prime Minister “the gas princess” Yulia Tymoshenko had been jailed for her own part in a corruption scandal soon after her fierce opponent Viktor Yanukovych was re-elected into office. With pro-western Tymoshenko behind bars and more Russophilic Yanukovych back in power, the corporate media was much keener to switch its spotlight on to Ukrainian criminality.

But for reasons of political expedience, Ukraine and its oligarchs now get a more or less free pass. The media turns a blind eye, not merely to its corruption scandals, but to Kiev’s deliberate bombing campaign against civilians (a million people forced to flee to Russia), to its complicity in a massacre, and to the overt rise of fascism both within government spheres and military brigades. When searching out stories of corruption, attention has instead shifted solely to the misdemeanours of Russian oligarchs and to crimes committed (“allegedly” is a word reserved for western misdemeanours and indiscretions) by the Kremlin. Which brings us back to FIFA…

Given the sordid history of FIFA, the allegations will likely have a solid foundation. Four other people and two companies have already pleaded guilty to charges in the case. Allegations of bribery have long dogged FIFA. Vast fortunes are at stake when it comes to hosting prestigious sporting events, such as the World Cup and Olympics. Bribery has become endemic in the allocation of these events.

Mass sporting events, which are backed and sponsored by gigantic corporate interests, are fundamentally managed no differently than anything else organised by big business and the imperialist powers.

The decision by the Obama administration to pursue and file the charges, however, is both hypocritical and politically motivated. Indeed, the sums cited in the criminality within FIFA are dwarfed by the corrupt practices associated with the US and global financial system.

Following the arrests, FBI Director James Comey said, “If you corrupt our shores with your corrupt enterprise, whether that is through meetings or using our world-class financial system, you will be held accountable for that corruption. Nobody is above or beyond the law.”

Loretta Lynch, the Obama administration’s attorney general, spoke of a culture of “rampant, systemic and deep-rooted” corruption. In the attempt to justify action against individuals residing in and largely operating outside of the US, Lynch said, “In many instances, the defendants and their co-conspirators planned aspects of this long-running scheme during meetings held here in the United States.”

Comey and Lynch speak as representatives of a US elite that is guilty of criminality on a much larger scale. Their “world-class financial system” is one that allowed a parasitic elite to indulge in financial skulduggery that collapsed the world’s banking system in 2008, leading to a global recession. And they rewarded these same people for their criminal behaviour with trillions of dollars of public money.

“Rampant, systemic and deep-rooted” corruption is an apt description of the daily operations of US banks, yet no executive of a major bank has been arrested or prosecuted.

The well-documented financial corruption within football’s ruling body is being utilised by the US primarily as a propaganda weapon against Russia.

That comes from an article published on the World Socialist Web Site. I reprint such an extended passage simply because it so cogently summed up my own thoughts upon hearing that FIFA had been busted by the FBI. Can anyone honestly fail to make the same connection? Especially since, as the same article goes on to point out:

Moscow’s hosting of the 2018 World Cup has been turned by figures with the US ruling elite and their allies internationally into a question of paramount importance.

Senator Robert Menendez, who in April was indicted on federal corruption charges, said he was “especially pleased that Swiss and US authorities are investigating FIFA’s granting of the World Cup to Russia in 2018 and Qatar in 2022”, as he had “long been concerned about FIFA’s selection of Russia.”

He was supported by Senator John McCain, who jointly authored a letter to FIFA declaring, “In light of President Blatter’s continued support for Russia hosting the 2018 FIFA World Cup—despite Russia’s ongoing violations of Ukraine’s territorial integrity and other challenges to the post-WWII security architecture—we ask that you reconsider your support for President Blatter’s fifth term as FIFA President.

This follows a letter to FIFA last month from 13 US senators requesting that Blatter step in to take the World Cup away from Russia. 11 [Emphasis added]

As the new Cold War sets in, this action is rather blatantly about Russia – an Anglo-American desire to embarrass Putin – although there are more reasons besides why this meeting taking place in Zurich about the immediate future of “global soccer” might have been troubling some on Capitol Hill…

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Israel

In 2007, FIFA suspended Kuwait from all international matches because of “governmental interference in the national game”. In 2013, Cameroon Football Federation (Fecafoot) was suspended, and then last year, the Nigeria Football Federation (NFF) was also suspended “on account of government interference.” This year, both FIFA and UEFA were threatening to sanction Greece, who had previously been suspended briefly in 2006 when they were then-reigning European champions, before the threat was dropped.

This time around, however, it was the Israeli FA that were facing possible suspension, and not because of “governmental interference in the national game” (as is usually the case), but on the more aggravated grounds that Israel had violated rules relating to free movement of players and of racism. In fact, Israel was about to be called to account for its abuses against Palestinian footballers that have included harassment, assaults, arrests, deliberately targeted shootings 12 and actual killings 13. One of the most high profile cases involved Mahmoud Sarsak, who at 14 years old was the youngest-ever player in the Palestine League:

Its abuse of Palestinian footballer Mahmoud Sarsak undermined a promising career. In 2009, Israeli security thugs arrested him for trying to cross from Gaza to the West Bank to participate in a match – his legitimate right.

He was horrifically abused, lawlessly kept in administrative detention for three years uncharged. His lawyers were denied access to fabricated evidence against him.

He was guilty of the crime of football – freed in summer 2012 after a 92 day hunger strike. Israel ruthlessly targets other Palestinian footballers like Sarsak. 14

A more detailed list of Israel’s violations are available at the Stop the War Coalition website.

The Palestinian Football Association (which has been recognised by FIFA since 1998 and is led by president Jibril Rajoub) had been granted a vote on Israel’s suspension at last week’s FIFA Congress, and Palestine supporters were also gathered outside to lend vocal support to the call for Israel’s expulsion. Although delayed because of a bomb scare, the Palestinians  remained optimistic that the ballot would return a decision in their favour:

The Palestinian Football Association will push ahead Friday for a vote calling for the suspension of Israel from the world football organisation at Fifa’s scandal-riven congress in Zurich.

Despite last-ditch attempts at mediation by world football officials, the Palestinian delegation insisted it would push for a vote unless Israel expels five teams based in illegal Israeli settlements from its football league. […]

Both Palestinian and Israeli delegations in Zurich have been working around the clock since arriving in the midst of the biggest scandal to hit the world football organisation.

Twin Swiss and US investigations focussing on a far-reaching culture of kickbacks in Fifa have thrown the congress in Zurich into chaos, including both the re-election bid of Fifa president Sepp Blatter and other business on the agenda including the Palestinian bid to have Israel suspended.

Israel has sought the support of the European regional grouping UEFA of which it is a member to vote against the proposed suspension. [I will come back to this]

Its efforts to avoid a vote – which some see as damaging in itself as a vote for suspension – have seen it enlist Israel’s ministry of foreign affairs as well as the lobbying of key Fifa officials.

The Israeli prime minister, Binyamin Netanyahu, weighed in on Thursday, telling reporters that if Israel is suspended “it would be a blatant politicisation of sport and the result will be Fifa’s collapse”15

[Emphasis added]

That was taken from a Guardian article published on the morning of Friday 29th, the day of the vote, but by the evening everything had changed:

The Palestinian Football Association has withdrawn its call to have Israel suspended from Fifa in a chaotic last minute climbdown at the congress of football’s governing body in Zurich. Following days of negotiations, and the mediation of Fifa president Sepp Blatter, the Palestinian moves at the scandal-ridden congress appeared comprehensively outmanoeuvred by feverish Israeli lobbying and the opposition of senior Fifa officials, including Blatter.

As details of an impending deal emerged, the Palestinian delegation came out of the last round of talks expecting the congress to vote on an amendment to refer the main sticking point, the status of five Israeli clubs based in illegal settlements on the West Bank, to the United Nations.

But the Palestinian move was overruled by Blatter, to the clear dismay of the Palestinian delegation, whose lawyer tried to appeal from the floor. Instead, the issue will be referred to a new Fifa committee. […]

Palestinian sources confirmed that Rajoub had been under huge pressure to withdraw the suspension motion from delegates. “It is true everyone was putting pressure on him to withdraw,” said one. Blatter has always made clear he opposed a vote on suspension.

Following the withdrawal of the request to suspend Israel over claims of its racist and discriminatory policies towards Palestinian football, 90% of delegates voted to set up a new monitoring inspections committee to oversee a mechanism to ensure movement of players and equipment.

The size of the vote in favour of the motion – 165-18 – is likely to be the only consolation for the Palestinian side, which has been pushing a long-term campaign over what it says are Israeli abuses of Palestinian football.

The outcome seemed certain to be a cause for celebration for Israel. […]

Commenting on the outcome, Netanyahu said: “Our international effort has proven itself and led to the failure of the Palestinian Authority attempt to oust us from Fifa.” 16

Click here to read more of this follow-up Guardian article

Afterwards, Israeli minister, Yisrael Katz, posted this on Facebook:

Rajoub failed in his mission of throwing Israel out of FIFA.  Now’s the time to imprison him in the Muqata [like Israel did to Arafat] and let him play Stanga [hackysack] with his pals 17

Newly re-elected president Sepp Blatter, who had stated his opposition to the suspension of Israel, tried to be conciliatory, but what he said was all the more risible for his attempt:

“This has been an issue for the past two FIFA Congresses and I’m so happy that we’re coming to a solution. I’m sure both sides will apply the basic principle of FIFA which is solidarity, it is up to Israel to help and share a little bit more with Palestine.”

But Blatter was not alone in defending the indefensible. Back in April, Platini too had given his backing to Israeli Football Association (IFA) officials. The IFA later releasing a statement saying:

“Platini stressed that Israel is an inseparable part of UEFA and is an equal member that is welcome in the UEFA family.”

Then, at a press conference on the eve of the FIFA congress, Platini reiterated that:

[The] football’s world governing body ‘wouldn’t accept’ the Palestinian FA’s bid to ban Israel from FIFA, should the motion be put to a vote tomorrow. 18

So punishment that was thought good for Cameroon, Nigeria, Greece and many others, including even oil-rich Kuwait (should anyone suppose this is simply about money), was withheld from Israel. All the turmoil going on at FIFA can hardly have helped the Palestinian cause.

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Back to Qatar (and the Clintons)

Dozens of Nepalese migrant labourers have died in Qatar in recent weeks and thousands more are enduring appalling labour abuses, a Guardian investigation has found, raising serious questions about Qatar’s preparations to host the 2022 World Cup.

This summer, Nepalese workers died at a rate of almost one a day in Qatar, many of them young men who had sudden heart attacks. The investigation found evidence to suggest that thousands of Nepalese, who make up the single largest group of labourers in Qatar, face exploitation and abuses that amount to modern-day slavery, as defined by the International Labour Organisation, during a building binge paving the way for 2022.

According to documents obtained from the Nepalese embassy in Doha, at least 44 workers died between 4 June and 8 August. More than half died of heart attacks, heart failure or workplace accidents. 19

This is the opening to one of the earliest mainstream reports on the use of slave labour in constructing the World Cup infrastructure ready for Qatar 2022.

As this whole corruption fiasco has played out, and when not conducting the growing chorus of disapproval towards the disgraced but shameless Blatter, the media has also occasionally drawn a little more attention to the unseen costs of FIFA’s shock decision in 2010. For this is apparently what it takes to get our western media to fully investigate and to seriously challenge conditions within the despotic regimes of our Gulf State partners. And, on a similar note, we may now also return to consider the role of the Clintons in this whole debacle:

Bill Clinton looked anything but happy as he strode into the Savoy Baur en Ville hotel in Zurich in December 2010. The receptionists could tell he was irritated, but had no idea just how angry he was.

After closing the door to his suite, he reached for an ornament on a table and threw it at a wall mirror in a fit of rage, shattering the glass.

The former US president, who had spent two years travelling the world glad-handing members of football’s governing body, Fifa, could not believe America’s bid to host the 2022 World Cup had been beaten by, of all places, Qatar. 20

Hmmm, well he certainly doesn’t look like a man about to throw an ornament into a mirror in a fit of pique in that footage (embedded above), but then Bill is a renown diplomat, so presumably he was just putting a brave face on it. But hold up, what’s this…?

Former President Bill Clinton served as the honorary chairman of the U.S. committee that worked unsuccessfully to win the right to host the 2022 World Cup. The surprise winner that year was Qatar–and it turns out that the Qatari committee now planning the massive event has been a major donor to Clinton’s charitable foundation. […]

The foundation’s donor records, posted on its Web site, show that FIFA, or the Fédération Internationale de Football Association, has donated between $50,000 and $100,000 to the Clinton foundation. The Qatar 2022 Supreme Committee, which was formed in 2011 to build stadiums and other infrastructure after Qatar was named the 2022 host, has given between $250,000 and $500,000 to the foundation.

Naturally therefore, top of Loretta Lynch’s list will now be inquiries regarding these donations into the Clinton funds… Well, no:

U.S. officials Wednesday unsealed indictments against 14 top officials involved with soccer, accusing the group of bribery, money laundering and fraud.

While the [Clinton] foundation has no involvement with the investigations, it’s a reminder that the global philanthropy has accepted donations from many of the world’s richest and most powerful players. Its donor list runs to 200,000 names, and includes foreign governments, Wall Street and foreign financial institutions, energy conglomerates and others. The government of Qatar, for instance, which aggressively sought the World Cup, has given the foundation between $1 million and $5 million. 21

[Emphasis added]

Other “philanthropic” donations to the Clinton Foundation have come from Lockheed Martin, Boeing, General Electric and another less well-known aerospace manufacturer Hawker Beechcraft, who were part owned by Goldman Sachs. Coincidentally, many of these state and corporate donors had trade deals approved by Hillary Clinton’s State Department:

The monarchy in Qatar had similarly been chastised by the State Department for a raft of human rights abuses. But that country donated to the Clinton Foundation while Hillary Clinton was running the State Department. During the three full budgetary years of her tenure, Qatar saw a 14-fold increase in State Department authorizations for direct commercial sales of military equipment and services, as compared to the same time period in Bush’s second term. The department also approved the Pentagon’s separate $750 million sale of multi-mission helicopters to Qatar. That deal would additionally employ as contractors three companies that have all supported the Clinton Foundation over the years: United Technologies, Lockheed Martin and General Electric. 22

To read more about how these Clinton Foundation donors received contracts from Hillary Clinton’s State Department click here.

So let me pose this: is the bigger story here the one about a few (so far numbering fourteen) corrupt FIFA officials, or is it one about the financial irregularities of a former US President and his warmongering Presidential candidate wife?

[There are a great many other “scandals” surrounding and involving the Clintons, but I prefer to hold back from writing more about the misadventures of Bill and Hillary until a later date.]

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Beyond Blatter

Now that Blatter is gone, what about the future of world football itself? The consensus amongst supporters – in Europe at least – appears to be that FIFA as a whole ought to be reformed, or even abolished. But here (as always) I believe it is wise to be very careful what we wish for.

During my time as a football fan (a period that encompasses nearly my whole life) there have been enormous changes in the sport. In England, surely the most significant of these was the establishment of the Premier League.

Prior to the Premier League, the wealthiest clubs in England were already in the habit of pestering for a bigger share of the television revenues. Breakaway threats would come and go, but nothing very much altered. It happens, however, that there have always been two ruling bodies in English football – The Football League and the Football Association (FA) – and eventually all this talk of divorce was formalised by the oldest and grandest of two, the FA, who foisted a deal against The League’s broader interests and on behalf of the richest “big five” clubs. In consequence, the top division became effectively a league of its own, administered under the auspices not of The League, but the FA. Extra money from the new TV rights could then be divvied up amongst the clubs in the new Premier League. Thus greed won out over democracy, as was the fashion in the early 1990s (and as now).

There have been many consequences to the formation of the FA Premier League. Increased revenues have enabled its clubs to attract star players from across the world, and the standard of top level English football has certainly improved. But the new money mostly went into players’ wages, and as salaries and bonuses rapidly inflated, ticket prices also escalated, squeezing out many of the game’s long-standing supporters. As clubs’ loyalty to their supporters waned, so too did the players’ loyalty to their clubs. Loyalty in football has all but disappeared.

In short, the establishment of the Premier League has helped to accelerate the corporatisation of English football. Thirty years ago there were arguments about whether players’ shirts should be allowed to carry advertisements (the BBC allowed ads on Formula One cars but baulked at letting football go the same way), and debate over whether football matches could be played on Sundays (a day of rest, for those who remember). Who could have envisaged a future when TV executives (primarily at Sky) would demand football matches are played literally every day of the week and three times on Sundays! Meantime, the supporters, who often travel great distances to watch their teams, and who cling to the belief that the game belongs to them (I remain one of the millions of likewise deluded fools), have in truth become little more than an advertising backdrop. Colourful scenery for corporate giants to hang their logos on.

As this latest FIFA scandal unfolded, it was the corporate sponsors, we have repeatedly been informed, who pushed hardest for Blatter’s resignation, deeply concerned that their own brand may become tarnished with ties to FIFA’s corruption. Hurrah for enlightened self-interest; this is what we’re supposed to think. Forgetting how those very same offshore (for tax purposes) multinational entities, exploit their distant workers in third world sweatshops, twisting every health and safety and environmental regulation in unremitting efforts to maximise profit. We ought really to laugh out loud, if only it didn’t hurt so much.

Likewise, the news is that UEFA may soon be split from FIFA altogether. A move which the corporations would doubtless prefer – two tiers in world football, very much along the lines of the two-tiered English league. So is UEFA about to usurp FIFA just as the FA usurped the Football League in the early ’90s? I sincerely hope not.

One thing I have learned about FIFA during the last week or so that surprised me in a good way, is how its voting systems are actually more democratic than those for most other global institutions. Each affiliated football association, irrespective of its size or importance, gets just one vote. It is this equality amongst nations that has helped to preserve the World Cup as a genuinely international competition. The diversity surviving by virtue of one simple but surprising fact: that it is very much easier for teams from Oceania, Asia, Africa and even North America to qualify than for those from the footballing superpowers in Europe and South America. Such handicapping makes the World Cup what it is – and FIFA deserve credit for keeping the playing field unlevel.

FIFA’s “one association one vote” system is arguably the very epitome of what footballing democracy ought to be, and not as the media has repeatedly presented it, another measure of corruption within the organisation itself. Of course, FIFA’s system does make the buying-off of local officials in smaller and poorer nations worthwhile, whereas if the major nations were prioritised (as is usually the case), corruption of a different but more familiar form would likely proliferate instead. Meanwhile, the insinuation that only officials of the “lesser nations” are prone to corruption is one that smacks very much of racism.

In any case, once the pressure has built to overhaul the existing system, the great tendency will be to make changes to benefit the superpowers of the game. And with more control in the hands of those in Europe (assuming UEFA prevails), western domination of the world’s favourite sport will also mean football imperialism.

I would like to finish on a related issue presented again by Noah Feldman, professor of constitutional and international law at Harvard, as he concluded his piece for Bloomberg View:

How will the rest of the world react to the claim that soccer’s international governing body is a criminal enterprise under U.S. law? One possibility is that international observers will be grateful that someone finally stepped in to do something about endemic corruption within FIFA. It’s been a more or less open secret over the years that FIFA was corrupt in the ordinary, nontechnical meaning of the word. Perhaps – just perhaps – fans will be pleased or relieved that someone has taken on the task of cleaning up the mess.

That interpretation is optimistic, given America’s reputation for extraterritorial imperialism. The relative unimportance of soccer in the U.S. compared with every place else on earth makes concerns about imperialism still more pressing. Through creative and aggressive use of a highly unusual American law, the U.S. may well be seen as attempting a takeover of international soccer. 23

*

Additional: The 3 Horse Race at FIFA

“This guy, if he gets in, will make Blatter and co seem like saints.” So wrote a very good friend of mine after hearing rumours (months ago) that another ex-footballer Luis Figo might be standing for the FIFA presidency.

Well, I have just looked at the odds for the various candidates and it appears to be roughly a three horse race. Prince Ali Al-Hussein is favourite – the bookies not the people’s. Platini is a close second, and next is indeed Luis Figo. So might it be that Platini was only the stalking horse — perhaps, Prince Ali too? Although if you are looking for a really long shot, then the bookies are offering 500-1 on Vladimir Putin (in the same spirit, I’m offering 1000-1 on both Bill or Hillary Clinton — take your pick!)

*

Update: Where were the auditors?

Auditors are fond of telling anyone prepared to listen that they cannot be expected to spot every fraud or impending disaster when they comb through a company’s books.

But the Fifa affair, which has finally claimed the scalp of president Sepp Blatter, raises questions about long-term auditor KPMG, which did not raise an alarm despite the openly lavish lifestyles of some officials.

It is just the latest embarrassment for KPMG – the firm audited a string of scandal-hit clients including HSBC, HBOS, the Co-op Bank and US mortgage lender Fannie Mae, apparently without noticing anything amiss.

It is not alone. Its peers, EY, PricewaterhouseCoopers and Deloitte also stand accused of not spotting impending disasters on their client lists.

The latest furore inevitably raises questions not only over the conduct of KPMG, but the wider issue of how accountable are the accountants.

‘The Fifa affair begs a question of exactly what are audits good for,’ says Professor Prem Sikka of Essex University Business School.

‘If the auditors can’t spot millions of pounds going astray over many years, what can they do?

Click here to read the full article at thisismoney, which questions the ‘revolving door syndrome’ between accountancy firms, corporate boardrooms and our financial regulators.

*

1 From an article entitled “Loretta Lynch confirmation as attorney general dogged by HSBC scandal” written by Dan Roberts, published in the Guardian on February 20, 2015. http://www.theguardian.com/business/2015/feb/20/loretta-lynch-confirmation-attorney-general-hsbc-scandal

2 From an article entitled “U.S. Treats FIFA Like the Mafia” written by Noah Feldman, published by Bloomberg View on May 27, 2015. http://www.bloombergview.com/articles/2015-05-27/u-s-treats-fifa-like-the-mafia

3 From an article entitled “Fifa: Blatter refuses to quit as president & vows ‘to restore trust’” published by BBC news on May 28, 2015. http://www.bbc.co.uk/sport/0/football/32914907

4 Quoted here: http://www.morningstar.co.uk/uk/news/AN_1432819609175844000/platini-calls-on-blatter-to-step-down-uefa-to-attend-fifa-congress.aspx

5 From an article entitled “Nicolas Sarkozy ‘colluded’ to get Qatar 2022 World Cup” written by John Lichfield, published in The Independent on January 29, 2013. http://www.independent.co.uk/news/world/europe/nicolas-sarkozy-colluded-to-get-qatar-2022-world-cup-8471758.html

6 From an article entitled “Qatar World Cup 2022: France embroiled in corruption scandal” written by Claire Newell, Holly Watt & Ben Bryant, published in The Telegraph on June 2, 2014. http://www.telegraph.co.uk/sport/football/world-cup/10871065/Qatar-World-Cup-2022-France-embroiled-in-corruption-scandal.html

7 From an article entitled “Poland and Ukraine host Euro 2012” published by BBC news on April 18, 2007. http://news.bbc.co.uk/sport1/hi/football/europe/6562527.stm

8 Uefa to sue Cypriot over Euro 2012 corruption claim” published by BBC news on October 28, 2010. http://www.bbc.co.uk/news/world-europe-11645694

9 The quote and details above are taken from an article entitled “UEFA launch legal action over corruption allegations surrounding Poland and Ukraine” published in the Daily Mail on October 30, 2010. http://www.dailymail.co.uk/sport/football/article-1325142/UEFA-launch-legal-action-corruption-allegations-surrounding-Poland-Ukraine.html

10 From an article entitled “Euro 2012: Uefa urged to investigate $4bn corruption allegations in Ukraine” written by Luke Harding and David Leigh, published in the Guardian on June 20, 2012. http://www.theguardian.com/football/2012/jun/20/euro-2012-corruption-allegations-ukraine

11 From an article entitled US seizes on FIFA corruption to pursue campaign against Russia” written by Robert Stevens and Chris Marsden, published on the World Socialist Web Site on May 29, 2015. https://www.wsws.org/en/articles/2015/05/29/fifa-m29.html

12

Outrage has surfaced over the case  of two Palestinian teenage football players [two teenagers, Jawhar Nasser Jawhar, 19, and Adam Abd al-Raouf Halabiya, 17] who were reportedly shot in the feet at an Israeli checkpoint on their way home from practise on January 31. Israeli security forces said  the two were trying to throw bombs at police officers.

Doctors reportedly said  the two teens will never be able to play sports again due to their injuries, and will need months of treatment before assessing whether they can walk.

From an article entitled “Shooting renews calls for FIFA to kick out Israel” published by Al Jazeera on March 5, 2014. http://stream.aljazeera.com/story/201403052234-0023531

You can also read more on the same story here: http://www.ibtimes.co.uk/palestinian-teenagers-shot-feet-by-israeli-soldiers-after-playing-football-calls-fifa-israel-ban-1439183

13

Ahed Zaqout, a former Palestinian national team player, has been killed by an Israeli bomb that hit his apartment in Gaza, Palestinian medical officials said on Thursday.

“Palestine has lost one of its best players, he may have been the best midfielder we ever had,” Gaza sports journalist Khaled Zaher told Reuters.

From an article entitled “Former midfielder on Palestinian national team killed in Gaza air strike” written by Nidal Al-Mughrabi, published by Haaretz on July 31, 2014. http://www.haaretz.com/news/diplomacy-defense/1.608224

14 From an article entitled “Soccer Politics: Palestinian Bid to Expel Israel from FIFA Dropped” written by Stephen Lendman, published by Global Research on May 30, 2015. http://www.globalresearch.ca/soccer-politics-palestinian-bid-to-expel-israel-from-fifa-dropped/5452598

15 From an article entitled “Palestinian Football Association to push ahead for Israel’s suspension from Fifa” written by Peter Beaumont, published in the Guardian on May 29, 2015. http://www.theguardian.com/world/2015/may/29/palestinian-football-association-to-push-ahead-for-israels-suspension-from-fifa

16 From an article entitled “Palestine withdraw call to suspend Israel from Fifa” written by Peter Beaumont, published in the Guardian on May 29, 2015. http://www.theguardian.com/world/2015/may/29/palestinians-withdraw-call-to-suspend-israel-from-fifa-west-bank

17 Read more and find translation here: http://www.globalresearch.ca/did-israel-buy-its-way-out-of-fifa-suspension/5452609 

18 From an article entitled “Platini: FIFA ‘won’t accept’ Palestinian bid to suspend Israel” published by Jewish News on May 28, 2015. http://www.jewishnews.co.uk/platini-fifa-wont-accept-palestinian-bid-to-suspend-israel/

19 From an article entitled “Revealed: Qatar’s World Cup ‘slaves’” written by Pete Pattisson, published in the Guardian on September 25, 2013. http://www.theguardian.com/world/2013/sep/25/revealed-qatars-world-cup-slaves

20 From an article entitled “Qatar World Cup 2022 scandal: Bill Clinton’s fury at vote triggered global search for truth” written by Holly Watt, Claire Newell & Ben Bryant, published by The Telegraph on June 3, 2014. http://www.telegraph.co.uk/sport/football/world-cup/10871114/Qatar-World-Cup-2022-scandal-Bill-Clintons-fury-at-vote-triggered-global-search-for-truth.html

21 From an article entitled “Clinton Foundation donors included FIFA, Qatar host committee” written by Rosalind S. Helderman, published in the Washington Post on May 27, 2015. http://www.washingtonpost.com/blogs/post-politics/wp/2015/05/27/clinton-foundation-donors-included-fifa-qatar-host-committee/ 

22 From an article entitled “Clinton Foundation Donors Got Weapons Deals From Hillary Clinton’s State Department” written by David Sirota and Andrew Perez, published in the International Business Times on May 26, 2015. http://www.ibtimes.com/clinton-foundation-donors-got-weapons-deals-hillary-clintons-state-department-1934187

23 From an article entitled “U.S. Treats FIFA Like the Mafia” written by Noah Feldman, published by Bloomberg View on May 27, 2015. http://www.bloombergview.com/articles/2015-05-27/u-s-treats-fifa-like-the-mafia

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making out like bandits: the endless profits of an endless war

Last Monday [Dec 10th] was an extremely interesting day for news stories. For one thing, it was the day when the New York Times disclosed the altogether astonishing decision made by US federal authorities not to indict British bank HSBC for violations of the Bank Secrecy Act and the Trading with the Enemy Act:

HSBC’s actions stand out among the foreign banks caught up in the investigation, according to several law enforcement officials with knowledge of the inquiry. Unlike those of institutions that have previously settled, HSBC’s activities are said to have gone beyond claims that the bank flouted United States sanctions to transfer money on behalf of nations like Iran. Prosecutors also found that the bank had facilitated money laundering by Mexican drug cartels and had moved tainted money for Saudi banks tied to terrorist groups.1

High crime indeed, and please keep in mind the last part: “tainted money for Saudi banks tied to terrorist groups”. Could that mean al-Qaeda…?

HSBC was thrust into the spotlight in July after a Congressional committee outlined how the bank, between 2001 and 2010, “exposed the U.S. financial system to money laundering and terrorist financing risks.” The Permanent Subcommittee on Investigations held a subsequent hearing at which the bank’s compliance chief resigned amid mounting concerns that senior bank officials were complicit in the illegal activity. For example, an HSBC executive at one point argued that the bank should continue working with the Saudi Al Rajhi bank, which has supported Al Qaeda, according to the Congressional report.

The message is that bankers have become entirely immune to prosecution for almost any kinds of racket imaginable. No prosecution because, as the New York Times reports, of “concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system”, which is plainly ludicrous. Put simply, “too big to fail” has now slipped to become – and inevitably so, when you think about it – “too big to jail”:

Instead, HSBC announced on Tuesday that it had agreed to a record $1.92 billion settlement with authorities.

Apparently the biggest settlement in history, but chickenfeed to HSBC nonetheless. The same article also going on to explain how:

Given the extent of the evidence against HSBC, some prosecutors saw the charge as a healthy compromise between a settlement and a harsher money-laundering indictment. While the charge would most likely tarnish the bank’s reputation, some officials argued that it would not set off a series of devastating consequences.

A money-laundering indictment, or a guilty plea over such charges, would essentially be a death sentence for the bank. Such actions could cut off the bank from certain investors like pension funds and ultimately cost it its charter to operate in the United States, officials said.

So, excuses in hand, the federal authorities have chosen put aside the law and apply something they euphemistically call a “deferred prosecution agreement” – a glossy title for what is really nothing more or less than a ‘get out of jail free’ card.2

Click here to read the full report published in the New York Times.

You can also read and hear more about “deferred prosecution agreements” courtesy of William K Black in this previous article.

On Thursday, Democracy Now! invited Matt Taibbi, Rolling Stone contributing editor and author of “Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History.” Now you might be wondering how on earth an editor of Rolling Stone magazine became a serious fraud investigator, but seeing how others apparently better qualified and positioned were failing in that vital task, Taibbi eventually decided to jump in. He has since turned himself into one of leading experts on the current banking crisis (and its related scandals). And this is what Taibbi has to say regarding the latest cover-up:

Here we have a bank that laundered $800 million of drug money, and they can’t find a way to put anybody in jail for that. That sends an incredible message, not just to the financial sector but to everybody. It’s an obvious, clear double standard, where one set of people gets to break the rules as much as they want and another set of people can’t break any rules at all without going to jail.

It is unusual to see a news discussion in which all of the participants are at such a loss in trying to comprehend what they are describing, but here Taibbi and the others appear almost lost for words. Between all the raised eyebrows and the quizzical smiles, Taibbi put it this way:

[And] what’s amazing about that is that’s Forbes saying that. I mean, universally, the reaction, even in—among the financial press, which is normally very bank-friendly and gives all these guys the benefit of the doubt, the reaction is, is “What do you have to do to get a criminal indictment?”

What HSBC has now admitted to is, more or less, the worst behavior that a bank can possibly be guilty of. You know, they violated the Trading with the Enemy Act, the Bank Secrecy Act. And we’re talking about massive amounts of money. It was $9 billion that they failed to supervise properly. These crimes were so obvious that apparently the cartels in Mexico specifically designed boxes to put cash in so that they would fit through the windows of HSBC teller windows. So, it was so out in the open, these crimes, and there’s going to be no criminal prosecution whatsoever, which is incredible.

Click here to watch the interview or read the full transcript on the Democracy Now! website.

On the very same day, Monday 10th, the New York Times was also running an editorial piece entitled simply “Al Qaeda in Syria”. An article that begins:

The presence of rebel fighters in Syria that were trained and supported by Al Qaeda poses a serious problem for the United States and Western allies. The Nusra Front, an offshoot of Al Qaeda in Iraq, has become one of the most effective forces fighting against President Bashar al-Assad.3

Not that news of al-Qaeda rebel fighters in Syria can really be called news at all any more – this latest development involving the Iraqi group known as Jabhat al Nusra having already surfaced in a report from McClatchy that was published a week prior to the more prominent New York Times version of events:

When the group Jabhat al Nusra first claimed responsibility for car and suicide bombings in Damascus that killed dozens last January, many of Syria’s revolutionaries claimed that the organization was a creation of the Syrian government, designed to discredit those who opposed the regime of President Bashar Assad and to hide the regime’s own brutal tactics.

Nearly a year later, however, Jabhat al Nusra, which U.S. officials believe has links to al Qaida, has become essential to the frontline operations of the rebels fighting to topple Assad.4

Click here to read the full report from McClatchy.

The steady assent of al-Qaeda amongst the Syrian rebels is a story that has slowly been leaking out for many, many months. It emerged in the Guardian back in late July, and as long ago as August, the BBC had also put together their own news report to show how one group of Syrian insurgents were forcing prisoners to become unwilling suicide bombers – a story that was quickly removed by the BBC – but one that you can find embedded below from youtube:

The video footage in the report was actually shot by New York Times reporters (NYT again) who had spent five days following a group known as the Lions of Tawhid. And you can read an accompanying New York Times article published August 20th here.

At this time, both the BBC and the New York Times were still avoiding any mention of al-Qaeda, or for that matter circumventing words like Islamist or Jihadist that might be used to describe some of the rebels, and so instead the writer, C.J. Chivers, makes what with hindsight appears to be a few hints at the kind of force they might be dealing with: mentions of thick beards and repeated quotes from the rebels saying “God is Great” or along the lines of “we will kneel only for God.” Reading down the New York Times article, you will also find a parallel account of the story of the unwitting ‘suicide’ bomber who features in the (subsequently censored) BBC news clip:

The rebels lacked the heavy weapons to take the checkpoint in a head-on fight. So several of them would dress as civilians, move the truck bomb near the checkpoint and set it off. This would be the signal for an assault over the ground.

There was one problem. The Lions of Tawhid said they did not believe in using their fighters as suicide bombers.

Two fighters poured fuel into the truck’s gas tank while Mr. Meldaoun, the nurse, snipped branches from shrubs and stacked them on the bomb, hiding it from view.

The real plan was beginning to emerge. It involved the prisoner, Abu Hilal. The assurances that he would be released had been a deception. The fighters intended to put him behind the wheel of the truck bomb near the checkpoint and tell him to drive forward in a prisoner exchange.

[…]

“We told Abu Hilal, ‘Go, drive that way, your father is waiting for you there, don’t do any bad things in the future,’” Hakim said. “And he was so happy, and he drove.”

Abu Hilal stopped the truck at the checkpoint. Abdul Hakim Yasin pushed the button on the remote detonator, ready for the flash and thunderclap of more than 650 pounds of explosives. It would be the signal for his fighters to move forward and mop up.

Nothing happened.

He pushed the button again.

The truck did not explode.5

If the bomb had detonated this would have been a much more terrible atrocity, although obviously even this failed attempt was a war crime. And the embedded New York Times reporters might have highlighted the barbaric nature of this incident (as the BBC report had done), but instead the main body of the article devotes itself to presenting the rebels as a band of ordinary guys caught in the crossfire. Portrayed as romantic heroes, here is how the same article ends:

But as the rockets struck, the Tawhid fighters were barely distracted. They were waiting for the government soldiers nearby to show themselves, certain that night by night their foes were growing weaker, and their uprising was gaining strength.

After each explosion, Mr. Yasin, an accountant leading a life and a role delivered to him by war, keyed his two-way radio, and checked on his men. All around him they crouched in the smoky darkness, weapons ready, waiting for orders or for more action against a government they consider already dead.

It reads more like pulp fiction than serious journalism. But the point I wish to make is that mainstream stories about Islamist terrorists in Syria were just beginning to trickle out around this time. Indeed, in the New York Times blog of the following day [Aug 21st], David D. Kirkpatrick actually wrote the following:

Reports from Western officials, militant Islamist Web sites [sic], neighboring countries and, to a limited extent, inside the Syrian opposition indicate that Al Qaeda and homegrown militants are joining the fight and competing for influence. And that poses a vexing question for American policy makers and politicians. So far, all sides of the debate in Washington have called for supporting the insurgency, and the only question is how much. The Obama administration talks of diplomacy and economic sanctions, while some Republicans push to provide weapons to the insurgents. Is the United States acting side by side with Al Qaeda?6

Kirkpatrick is then very quick to answer his own question:

The short answer is no. A group as numerically tiny as Al Qaeda could never by itself steer a movement as large as the Syrian revolt. And even if Al Qaeda or other anti-Western militants are seeking to exploit or direct the Syrian uprising — why wouldn’t they? — that merely makes them rivals to the West for influence over the course of the revolt.

The difference three months later is that Kirkpatrick’s snap judgment is entirely overturned. Not only are al-Qaeda more or less running the Syrian revolt, but we also know that the American government is well aware of the fact. Obama himself now trying to explain the case for supporting the rebels, as he did on ABC news on Tuesday:

Obama expressed caution today about some Syrian factions involved with the coalition, warning that the United States will not support extremist elements.

“Not everybody who’s participating on the ground in fighting Assad are people who we are comfortable with,” Obama told Walters. “There are some who, I think, have adopted an extremist agenda, an anti-U.S. agenda, and we are going to make clear to distinguish between those elements.”

The president specifically singled out the group Jabhat al-Nusrah for its alleged affiliation with Al Qaeda in Iraq. The State Department says the jihadist group is responsible for nearly 600 violent attacks in major Syrian cities in the past year.7

Click here to read the full ABC news report and to watch the interview with Obama.

But did the situation in Syria really transform so rapidly and if so, how so…? I will leave the answers for others to fill in and move to the next part of Kirkpatrick’s rather remarkable article, as he candidly admits what many will have suspected all along:

The West, for its part, is eager to deprive Iran of its principal regional ally, the Assad government.

Yes, and lest we forget, this whole decade of war has consistently had as its long term objective some kind of military offensive against Iran. Meanwhile, and with regards to the developing crisis in Syria, these latest admissions make “Al Qaeda in Syria”, a more officially sanctioned story. With the ugly truth no longer plausibly deniable, the new hope of the American administration being that the press and the public won’t begin asking too many difficult but obvious questions. Questions like why does the US increasingly appear to be in cahoots with al-Qaeda – again?

So playing this whole story down has necessarily become the fall-back approach, and the New York Times helps the cause by reporting this latest episode (on Monday) with the same impartial tone as many of its earlier reports about the role and rise of the Syrian jihadists. Explaining to its readers that these al-Qaeda forces might “hijack the revolution”. And that “there are no easy answers.” And anyway, “[al-Qaeda’s] skilled fighters have been so effective.” Such a dilemma for any hawk…

The fear is that the group could hijack the revolution and emerge as the dominant force in Syria after Mr. Assad is ousted from power. […]

There are no easy answers, and no one believes that Washington, or any external power, can dictate the outcome. But President Obama still needs to provide a clearer picture of how he plans to use American influence in dealing with the jihadi threat and the endgame in Syria.

These repeated statements are a measure of how dumb they actually think most of us are. After all, American administrations have spent more than half a trillion dollars8 fighting off al-Qaeda forces in Afghanistan in a war that is well into its twelfth year. Yet we discover that the current administration are simultaneously backing a different group of resistance fighters, whilst fully aware that these other rebels are thoroughly infiltrated by al-Qaeda – and not just any old al-Qaeda, but a group that has established a foothold in another of the old war haunts, neighbouring Iraq. Asking us to believe that all of this has happened almost without them noticing truly beggars belief!

Mr. Obama has blacklisted the Nusra Front as a terrorist organization, which would make it illegal for Americans to have financial dealings with it. It makes sense to isolate the group and try to dry up its resources, but the designation by itself isn’t sufficient. American officials have to make a case directly to the countries or actors that are believed to be most responsible, either directly or as a conduit, for the weapons and other assistance to the Nusra Front: Qatar, Saudi Arabia, Turkey and Iraqi Kurdistan.

Click here to read the full report published in the New York Times.

Which means that as the war against al-Qaeda in Afghanistan grinds on and on into bloody stalemate, and through its horrors, helps in recruiting fresh militants ready to take up AK47s and plant IEDs against the imperialist infidels, there will be American officials “making a case” to favoured client states in the Middle East in efforts to persuade them not to supply “the weapons and other assistance” to this self-same enemy in a different place and under another name. Assistance that presumably includes all of that “tainted money for Saudi banks tied to terrorist groups”, laundered, so we now learn, by one of the world’s leading banks. A criminal enterprise that, in view of the laughable excuse for not seeking prosecution – remember those “concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system” – seems more than likely to continue. Such open corruption and such flagrant lies.

When Obama first came into office in 2008, the war in Afghanistan was already thought by many to be unwinnable. Obama might very easily (given the weight of public opinion) have begun the process of pulling troops out of Afghanistan. Instead of this, however, Obama brought in more troops and then covertly expanded operations across the border into Pakistan. This expansion being made possible thanks to a change in tactics; more specifically, by the use of secret and illegal drone strikes. Attacks that are officially unauthorised by the Pakistan government and illegal according to the United Nations.

The death toll from these cowardly and, by any proper understanding of the word, ‘terrorist’ drone strikes against the people of Pakistan is already estimated to be around 3000, of which, it is officially acknowledged9 that many hundreds are innocent civilians – deaths and injuries that the US continues to disregard as “collateral damage”.

All of which brings me to the third of the three reports from Monday 10th: a somewhat mixed but nonetheless worthwhile BBC Panorama investigation into “The Secret Drone War”. Reporter Jane Corbin interviewing members of families who have become victims of the drone attacks in Waziristan, a region inside Pakistan that the programme makers describe as “one of the most dangerous places in the world”.

Corbin also speaks with former cricketer and politician Imran Khan, who has helped to organise a mass anti-drone protest march across half the country, as well as to Medea Benjamin of CodePink and lawyer Clive Stafford Smith; just two of the many human rights activists who had joined in the march. And in the latter part of the programme, Corbin questions the use of so-called “signature strikes”: indiscriminate assassination where no named target has been located, but an attack is still launched against anyone unfortunate enough to be deemed involved in “an activity that looks suspicious”.

Click here to watch the Panorama episode “The Secret Drone War” which is available until Tuesday 10th December 2013.

It is now more than a decade since the then-US Under Secretary of State and prominent neo-con, John Bolton, (someone more recently spotted endorsing Mitt Romney during the presidential race) made an announcement in a speech that was entitled “Beyond the Axis of Evil” to the effect that:

… three nations [Cuba, Libya and Syria] could be grouped with other so-called “rogue states” – Iraq, Iran and North Korea – in actively attempting to develop weapons of mass destruction.10

Of those original six nations making up Bolton’s extended “Axis of Evil”, two, Iraq and Libya, have since been subjected to American-led campaigns resulting in regime change; one under Bush and one under Obama. Certainly, Obama’s less sustained “kinetic action” against Libya was to some extent sanctioned by the UN Security Council, in contrast to Bush’s entirely illegal “shock and awe” assault on Iraq. But there are many similarities.

After the bombardment and with the old despotic rulers gone, oil contracts and reconstruction deals were quickly approved by the newly appointed representatives of the two countries. Both countries were then otherwise abandoned to the chaos that the war had brought, and, as a direct consequence of the war, both are now teeming with jihadi forces. Syria, which was another country on Bolton’s wish list, is now suffering from a similar influx of jihadists, whilst waiting its turn for yet another Nato “intervention”. Is all of this mere coincidence?

Of course, we don’t hear so much about the “war on terror” these days, even as it continues unabated in the Af-Pak conflict; and absolutely nothing at all about that loose-fitting alliance called the “Axis of Evil”. Instead, we have been hearing more again about “weapons of mass destruction”. Periodic reminders of the nuclear threat from Iran, and most recently, new rumours of chemical weapons about to be used in Syria. Rumours that rhyme with yellowcake uranium and those mobile chemical warfare laboratories of George W. Bush and Colin Powell’s vivid imaginations.

We see then that under Obama the methods have changed in some respects, but that the general trajectory remains unaltered. American foreign policy still following a course that was publicly outlined by the Project for the New American Century (or PNAC) as far back as 2000. Certainly the talk is less bellicose and more guarded, but the war profiteering goes on and even the list of target nations has remained significantly unaltered.

The battle over Libya was justified as humanitarian, and any full-scale intervention in Syria will most likely be presented the same way (unless, that is, the WMD card comes into play), and yet in other ways the cloak of humanitarianism has since been dropped altogether. So we learn, for instance, from “a despicable article in Military Times” that the US military has recently declared that children have become legitimate targets on the battlefield, at least when it comes to operations in Afghanistan. The following coming from an article published on Dec 4th in The Nation magazine and frankly entitled “The US Military Approves Bombing Children”:

When Marines in Helmand province sized up shadowy figures that appeared to be emplacing an improvised explosive device, it looked like a straightforward mission. They got clearance for an airstrike, a Marine official said, and took out the targets.

It wasn’t that simple, however. Three individuals hit were 12, 10 and 8 years old, leading the International Security Assistance Force in Kabul to say it may have “accidentally killed three innocent Afghan civilians.”

But a Marine official here raised questions about whether the children were “innocent.” Before calling for the M142 High Mobility Artillery Rocket System mission in mid-October, Marines observed the children digging a hole in a dirt road in Nawa district, the official said, and the Taliban may have recruited the children to carry out the mission.

Shockingly, the [Military Times] article quotes a senior officer saying that the military isn’t just out to bomb “military age males,” anymore, but kids, too:

“It kind of opens our aperture,” said Army Lt. Col. Marion “Ced” Carrington, whose unit, 1st Battalion, 508th Parachute Infantry Regiment, was assisting the Afghan police. “In addition to looking for military-age males, it’s looking for children with potential hostile intent.”11

Click here to read the full article by Robert Dreyfuss.

I began writing this article because within these three different reports from last Monday there is a common thread. On one level that thread is simply al-Qaeda – bombed in Afghanistan and Pakistan, covertly supported in Libya and Syria, and all whilst the US government turns its blind eye to any financial assistance provided by banks like HSBC. All of which, for different reasons, makes a nonsense of the on-going “war on terror”. It makes no sense, that is, until one considers the underlying geo-strategy combined with the enormous profits to be made from all these wars. It makes no sense, in other words, unless you look at who the winners are – the private contractors alongside the global financiers. Because these wars are all very lucrative.

To understand just how profitable, I highly recommend a documentary entitled “Iraq for Sale” that was made by acclaimed filmmaker Robert Greenwald in 2006. It is embedded below:

You might also be interested in reading an extended pamphlet called “War is a Racket” (available online) that was written by Major General Smedley D. Butler and first published as long ago as 1935.

Butler, who was the most highly decorated soldier in American history, takes the case of war profiteering during WWI, and in a few short chapters he lays out the evidence with countless, very detailed examples. His research and considerable military experience leading him to the conclusion that, as he states in the very first paragraph:

“War is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are recognised in dollars and the losses in lives.”

On another occasion12, Butler summarised his own part in that racket with these words:

“I spent 33 years in the Marines, most of my time being a high-class muscle man for big business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents. ”

Tragically, that same old war racket is now reaching a new apogee. So is there any appropriate and useful response to this never-ending carnage and human misery? Butler saw only one lasting solution:

“A few profit – and the many pay. But there is a way to stop it. You can’t end it by disarmament conferences. You can’t eliminate it by peace parleys at Geneva. Well-meaning but impractical groups can’t wipe it out by resolutions. It can be smashed effectively only by taking the profit out of war.”

Ending the war profiteering won’t happen overnight, but it is definitely an objective we might practically and realistically aim for. It would mean reversing the last twelve years of American foreign policy, but this is not impossible. It will require America and the rest of the world to make genuine international attempts to stall this insane war machine once and for all. The journalists could even help to set the ball rolling by reporting promptly and honestly as the battles continue to rage. Later, the courts must bring to justice all of the criminals who were complicit. No more deferred prosecution agreements for anyone. If all of this requires little short of a revolution, then what’s the alternative? Doing nothing means only that this war racket will keep on growing unopposed, when already we find its shadow over everything.

*

In the meantime, and if you are an American citizen, you might like to add your name to a “We the People” petition to the White House that calls for a cease to “all funding and support for al-Qaeda terrorists and extremist rebels in Syria”:

Hillary Clinton has admitted that Al-Qaeda is supporting the Syrian rebels, who are backed by the Obama administration with $200 million dollars in aid. According to McClatchy Newspapers one of these groups, Al Nusra Front, an Al-Qaeda affiliate, is now conducting “the heaviest frontline fighting” in Syria and has been responsible for terrorist attacks. Impartial observers such as Dr. Jacques Beres say the majority of rebels in Syria are foreign extremists whose goal is to impose Sharia law. These rebels have also been filmed burning U.S. flags and chanting anti-American slogans. Funding terrorists is a crime under the National Defense Authorization Act. Such activity has had disastrous consequences in the past, such as 9/11. We demand all support direct or indirect to cease immediately.

To locate the petition click here.

1 From an article entitled “HSBC to Pay $1.92 Billion to Settle Charges of Money Laundering”, written by Ben Protess and Jessica Silver-Greenberg, published by the New York Times on December 10, 2012. http://dealbook.nytimes.com/2012/12/10/hsbc-said-to-near-1-9-billion-settlement-over-money-laundering/

2 Ibid.

“The HSBC deal includes a deferred prosecution agreement with the Manhattan district attorney’s office and the Justice Department. The deferred prosecution agreement, a notch below a criminal indictment, requires the bank to forfeit more than $1.2 billion and pay about $700 million in fines, according to the officials briefed on the matter. The case, officials say, will claim violations of the Bank Secrecy Act and Trading with the Enemy Act.

“As part of the deal, one of the officials briefed on the matter said, HSBC must also strengthen its internal controls and stay out of trouble for the next five years. If the bank again runs afoul of the federal rules, the Justice Department can resume its case and file a criminal indictment. An independent auditor will also monitor the bank’s progress to strengthen its internal controls, and will make regular assessments on the firm’s progress.”

3 From a New York Times Editorial entitled “Al Qaeda in Syria” published on December 10, 2012. http://www.nytimes.com/2012/12/11/opinion/al-qaeda-in-syria.html?_r=0

4 From an article entitled “Al Qaida-linked group Syria rebels once denied now key to anti-Assad victories”, written by David Enders, published by McClatchy Newspapers on December 2, 2012. http://www.mcclatchydc.com/2012/12/02/176123/al-qaida-linked-group-syria-rebels.html

5 From an article entitled “Life With Syria’s Rebels in a Cold and Cunning War”, written by C. J. Chivers, published by the New York Times on August 20, 2012. http://www.nytimes.com/2012/08/21/world/middleeast/syrian-rebels-coalesce-into-a-fighting-force.html?pagewanted=all

6 From an article entitled “Concerns About Al Qaeda in Syria Underscore Questions about Rebels”, written by David D. Kirkpatrick, published by the New York Times on August 21, 2012. http://thelede.blogs.nytimes.com/2012/08/21/concerns-about-al-qaeda-in-syria-underscore-questions-about-rebels/?ref=middleeast

7 From a report entitled “Obama Recognizes Syrian Opposition Group”, written by Devin Dwyer and Dana Hughes, published by ABC news on December 11, 2012. http://abcnews.go.com/Politics/OTUS/exclusive-president-obama-recognizes-syrian-opposition-group/story?id=17936599#.UMyZ_qywbZP

8 You can find a detailed breakdown of the costs of recent US military interventions at this site courtesy of the National Priorities Project : http://costofwar.com/about/counters/

9 A full official breakdown can be found here: http://counterterrorism.newamerica.net/drones

10 From a BBC news report entitled “US expands ‘axis of evil’” published May 6, 2012. http://news.bbc.co.uk/1/hi/1971852.stm

The report continues as follows:

“[Bolton] also warned that the US would take action.

“America is determined to prevent the next wave of terror,” he said, referring to the 11 September attacks in Washington and New York that killed up to 3,000 people.

“States that sponsor terror and pursue WMD (weapons of mass destruction) must stop. States that renounce terror and abandon WMD can become part of our effort, but those that do not can expect to become our targets,” he said.”

11 From an article entitled “The US Military Approves Bombing Children”, written by Robert Dreyfuss, published in The Nation magazine on December 4, 2012. http://www.thenation.com/blog/171582/us-military-approves-bombing-children#

12 From Socialist newspaper Common Sense in 1935. You can find the quote attributed here: http://en.wikiquote.org/wiki/Smedley_Butler

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William Black on the deregulated race to financial ruin

On Saturday [Oct 6th] William K Black, Associate Professor of Law and Economics at the University of Missouri-Kansas City and a former bank regulator, spoke again with Max Keiser on the second half of his tri-weekly Russia Today programme, Keiser Report.

The discussion ranged from how major financial criminals are protected by Deferred Prosecution Agreements under the disastrous tenure of Lanny Breuer as Assistant Attorney General for the Criminal Division of the US Department of Justice, to how, more generally, the City of London became such an important player in the international deregulatory race to the bottom:

Let’s begin with what Black had to say about the UK Financial Services Authority (FSA) and their part in the London Interbank Offered Rate or Libor Scandal [19:30 min into the show]:

Max Keiser: We recently saw the rigging of global interest rate markets Libor. The FSA says they will in the future prosecute bankers involved in rigging Libor. The overwhelming evidence, including all of the emails, suggests this was a prosecutable racket. Why can’t they prosecute the crime that has happened in real time, right now?

William Black: You used the word ‘can’. It has nothing to do with ‘can’. ‘Can’ refers to ability. This is a problem of ‘will’… You can’t create a competition in laxity, which is exactly what the FSA deliberately did. It competed with the Securities and Exchange Commission in the United States [SEC] and the CFTC, the Commodity Futures Trading Commission, and of course Congress, to who can have the absolute weakest regulation.

If you do that, you’re never going to have regulatory leaders with backbone. And you’re never going to have staffers who often have backbone, because why would you go to work for an entity that exists to serve the banks as opposed to serving the people. Good people will leave in those circumstances. And so what you’re seeing is the FSA – and by the way the Bank of England – continue to be the land of the invertebrates. Where if you have any backbone, you’re not allowed.

MK: [referring to the party political conferences] None of the [party] leaders on the local television address the fact that London is a cesspool of regulation – that it won the competition to have the least biting regulatory framework and that’s why the global economy and financial markets are in such disarray…. How are we going to rectify this, what do you suggest?

WB: Well, first let’s think out that if you have a competition in laxity, everybody loses. Everybody ends up with crappy regulation, and that’s exactly what happened throughout the Eurozone and in the United States. The only way to win a competition in laxity is not to engage in the competition.

Let me give you two specific examples, from a conference I was at just last week in Baltimore. Brooksley Born, one of the heroes who issued the famous warning about Credit Default Swaps, and got swashed by that bi-partisan coalition of the Clinton administration and Alan Greenspan, and Phil Gramm said that as soon as the FSA got created, then leaders – senior leadership of the FSA – began coming to the United States to industry conferences, and saying you should leave America and do your deals and relocate in the City of London, because we will give you weaker regulation.

And then a guy who had been with the Securities and Exchange Commission for many, many years said that’s exactly what happened on Initial Public Offerings, IPOs. That the City of London officials began coming to the United States, to the trade meetings, and saying do your IPOs in the City of London instead of Wall Street because we will look the other way while you do this.

And so I’d only make one minor thing about your point. Of course the Labour Party on finance issues is not a party that is remotely of the left. It is a party of what would be, in US terms, ‘the extreme right’. The Lib-Dems were every bit as bad, and the Conservatives, if anything, are worse. And so there has been no choice in the United Kingdom for over a decade, if you actually wanted to vote for someone who’s really going to regulate. So that’s what you have to change. And one of the British parties has to be changed into a party that represents the people… instead of representing the huge financial institutions.

Because you’ve just seen what happens to a nation that wins a competition in laxity; it loses its moral soul and it has repeated financial crises, because what it will attract is the worst pond scum throughout the world, and it will have regulatory leaders who will stand by while the pond scum destroy the nation.

In the first half of the same interview, Keiser asks Black to talk more specifically about Lanny Breuer, the head of the Criminal Division of the US Department of Justice, “caught boasting of his love for Deferred Prosecution Agreements”.

In fact, William Black had already written an extended article tackling the same subject back on September 17th. Entitled “Fiat Justitia? Breuer fires blanks on elite financial frauds”, Black’s piece entertainingly summed up Breuer’s recipe for disaster as follows:

Beurre blanc is the classic white butter sauce of France. Americans who hate the French claim that they became adept at saucing to cover up the rot in their meat in earlier times. A beurre blanc does not remove the rot. It masks the bad taste and the bad color of bad meat. Indeed, the sauce makes the dish even less healthy. If the rotten meat doesn’t get you, the sauce’s cholesterol will.

“Breuer blanc” is the classic white butter sauce served by the increasingly oxymoronic Justice Department to cover up the rot in elite American banksters. Lanny Breuer runs the Criminal Division during the continuing cover up of the greatest and most destructive epidemic of elite white-collar crime in our history. The ingredients of “Breuer blanc” consist of a generous portion of inaction and a large dollop of hypocrisy all emulsified with esters of excuse.

Black then goes on to explain how all of the last three US administrations, each having been bought off by huge political contributions, have been equally irresponsible in allowing “elite financial firms and their senior officers to commit fraud with near impunity”:

It was a travesty and a national tragedy that [Attorney General, Eric] Holder and Breuer (and their predecessors) have failed to do their duty to hold the banksters accountable. It is beyond comprehension that Breuer is bragging about his failure to prosecute elite corporate frauds. […]

The reality is that prosecutions of financial fraud fell dramatically under Bush and declined further under Obama. Breuer has not indicted a single elite Wall Street bankster whose frauds drove the crisis. I have been unable to find evidence that he has even conducted grand jury investigations of the elite banksters who drove the crisis. (Grand juries are secret, but they generally become public because the witnesses can disclose their existence.) Even if a few grand jury investigations of the Wall Street banksters have occurred, there cannot have been more than a handful of investigations worthy of the name. I know of none, and that includes Countrywide, WaMu, IndyMac, Lehman, Merrill Lynch, Goldman, the huge mortgage banks, and Citicorp.

And when it comes to the use of Deferred Prosecution Agreements [DFAs], Black begins by quoting what Breuer himself described as “the focus” of a speech he made on September 13th to an audience of New York attorneys, before then adding his own response:

“Tonight, I want to focus on one aspect of our white collar criminal enforcement in particular: the use of deferred prosecution agreements, or DPAs. Over the past three-and-a-half years, the Department of Justice has entered into dozens of DPAs, and non-prosecution agreements, or NPAs. I’ve heard people criticize them and I’ve heard people praise them. What I’m here to tell you, is that, along with the other tools we have, DPAs have had a truly transformative effect on particular companies and, more generally, on corporate culture across the globe.”

You will find the statement at 7:37 min into this youtube clip of Breuer’s speech:

Click here to read a very tidy official transcript of Lanny Breuer’s speech posted on the US Department of Justice website.

William Black’s response:

Breuer’s claim is preposterous. Here are key facts that show he is serving us tripe. First, he is correct that we have just run an experiment for over a decade – we no longer typically prosecute elite U.S. corporations that commit felonies. We have dramatically reduced financial fraud prosecutions and in the cases where the Criminal Division still troubles a felonious corporation it typically negotiates a DPA, or more pathetic still, a NPA. A DPA rarely leads to a prosecution of the corporation, so it too is really an agreement not to prosecute. DPAs and NPAs are primarily used for non-elite corporations, so when Breuer claims “dozens of DPAs” one should not assume that his Criminal Division is taking on vigorously fraudulent elite corporations, particularly elite U.S. corporations that commit felonies.

Far from proving that DPAs caused a “sea change in corporate compliance,” a December 2009 GAO study found that the Justice Department did not collect data on DPAs until 2009, had no performance measures for “corporate compliance,” and had no reliable information on purported improvements in corporate compliance.

William Black concludes the article as follows:

Breuer is a lawyer, not an economist. A lawyer should know better. We have known for millennia that the way to provide justice is to follow the maxim: Fiat Justitia; Ruat Caelum (let justice be done, though the heavens fall). The maxim may sound impractical, but long experience has demonstrated that the best way to prevent the heavens from falling is to always provide justice and ignore the claims that the elites should be given special favors lest the heavens fall. Breuer, Holder, and Obama are all lawyers who were taught that the temptation to create a special, favorable set of rules for the elites is not simply unjust but also the surest means of destroying a democracy, an economy, and a society. Politics, of course, teaches the opposite lesson and Breuer, Holder, and Obama became politicians a long time ago. Politics is raw, serving up crudités variées. Breuer’s speech coaching defense counsel on how to provide him with the excuse to avoid prosecuting elite corporate felons was crude and unworthy of any representative of the Department of Justice.

Click here to read William Black’s complete article.

And here’s what William Black said to Max Keiser [13:40 min]:

I was appalled. I, you know, used to help the prosecutions during the savings and loan [crisis] days. And I was a Justice Department lawyer, as was my wife. And Lanny Breuer set out a roadmap on how people could avoid getting prosecuted their elite white-collar criminal banks that caused the financial crisis. And the way he said to do it is hire yourself an economist and be really ‘too big to fail’ and claim that a lot of innocent workers are going to lose their jobs if you take any prosecution against my criminal bank. You know, in other words you hold the workers hostage. […]

Well, the deferred prosecution means non-prosecution, and everybody knows it means non-prosecution. And the one exception proved the rule. Arthur Andersen was offered a third Deferred Prosecution Agreement and refused it, and went to trial and lost… and so you know there’s no more Arthur Andersen. But the lesson the justice Department learned from all of that is: Oh my God, we can’t actually prosecute anybody large, and so they essentially don’t prosecute large organisations anymore. […]

This is all about removing the deterrents. This is all about allowing people to commit the crimes with absolute impunity. And this was more than a wink-wink, nod-nod… This is how you give me the excuse not to prosecute. And it was wonderful! Breuer said: Now I want to warn you, this approach won’t always work…

Not always – just all of the time…!

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