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This is an Open Thread
Jan 31 2012
Our regular featured content-
These featured articles-
This is an Open Thread
Jan 31 2012
This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.
Find the past “On This Day in History” here.
January 31 is the 31st day of the year in the Gregorian calendar. There are 334 days remaining until the end of the year (335 in leap years).
On this day in 1865, The United States Congress passes the Thirteenth Amendment to the Constitution of the United States, abolishing slavery, submitting it to the states for ratification.
The Thirteenth Amendment to the United States Constitution officially abolished and continues to prohibit slavery and involuntary servitude, except as punishment for a crime. It was passed by the Senate on April 8, 1864, passed by the House on January 31, 1865, and adopted on December 6, 1865. On December 18, Secretary of State William H. Seward, in a proclamation, declared it to have been adopted. It was the first of the Reconstruction Amendments.
President Lincoln was concerned that the Emancipation Proclamation, which outlawed slavery in the ten Confederate states still in rebellion in 1863, would be seen as a temporary war measure, since it was based on his war powers and did not abolish slavery in the border states.
Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.
Section 2. Congress shall have power to enforce this article by appropriate legislation
The first twelve amendments were adopted within fifteen years of the Constitution’s adoption. The first ten (the Bill of Rights) were adopted in 1791, the Eleventh Amendment in 1795 and the Twelfth Amendment in 1804. When the Thirteenth Amendment was proposed there had been no new amendments adopted in more than sixty years.
During the secession crisis, but prior to the outbreak of the Civil War, the majority of slavery-related bills had protected slavery. The United States had ceased slave importation and intervened militarily against the Atlantic slave trade, but had made few proposals to abolish domestic slavery, and only a small number to abolish the domestic slave trade. Representative John Quincy Adams had made a proposal in 1839, but there were no new proposals until December 14, 1863, when a bill to support an amendment to abolish slavery throughout the entire United States was introduced by Representative James Mitchell Ashley (Republican, Ohio). This was soon followed by a similar proposal made by Representative James F. Wilson(Republican, Iowa).
Eventually the Congress and the public began to take notice and a number of additional legislative proposals were brought forward. On January 11, 1864, Senator John B. Henderson of Missouri submitted a joint resolution for a constitutional amendment abolishing slavery. The abolition of slavery had historically been associated with Republicans, but Henderson was one of the War Democrats. The Senate Judiciary Committee, chaired by Lyman Trumbull (Republican, Illinois), became involved in merging different proposals for an amendment. On February 8 of that year, another Republican, Senator Charles Sumner (Radical Republican, Massachusetts), submitted a constitutional amendment to abolish slavery as well as guarantee equality. As the number of proposals and the extent of their scope began to grow, the Senate Judiciary Committee presented the Senate with an amendment proposal combining the drafts of Ashley, Wilson and Henderson.
Originally the amendment was co-authored and sponsored by Representatives James Mitchell Ashley (Republican, Ohio) and James F. Wilson (Republican, Iowa) and Senator John B. Henderson (Democrat, Missouri).
While the Senate did pass the amendment on April 8, 1864, by a vote of 38 to 6, the House declined to do so. After it was reintroduced by Representative James Mitchell Ashley, President Lincoln took an active role in working for its passage through the House by ensuring the amendment was added to the Republican Party platform for the upcoming Presidential elections. His efforts came to fruition when the House passed the bill on January 31, 1865, by a vote of 119 to 56. The Thirteenth Amendment’s archival copy bears an apparent Presidential signature, under the usual ones of the Speaker of the House and the President of the Senate, after the words “Approved February 1, 1865”.
The Thirteenth Amendment completed the abolition of slavery, which had begun with the Emancipation Proclamation issued by President Abraham Lincoln in 1863.
Shortly after the amendment’s adoption, selective enforcement of certain laws, such as laws against vagrancy, allowed blacks to continue to be subjected to involuntary servitude in some cases. See also Black Codes.
Jan 31 2012
BASIC CABLE, NY – After a decades-long battle that spanned nearly two weeks, Stephen Colbert has wrested control of Colbert Super PAC from the clutches of his arch-nemesis and dear friend, Jon Stewart. Colbert then showed his deep commitment to transparency by disclosing the Super PAC’s financial information several hours before being legally required to.
“Colbert Super PAC has brought in a staggering $1,023,121.24, which my accountant explains to me that is a number far above ‘one,’ ‘two,’ ‘five,’ or even ‘many'” said Stephen Colbert, President and Returning Champion of Colbert Super PAC. “We raised it on my show and used it to materially influence the elections – in full accordance with the law. It’s the way our founding fathers would have wanted it, if they had founded corporations instead of just a country.”
Colbert Super PAC sent their forms to the Federal Election Commission on Tuesday at 12:01 AM, making them the first to file on the last filing day. Copies of the form can be found on the internet by Asking Jeeves, or simply clicking here.
Colbert Super PAC, temporarily known as The Definitely Not Coordinating With Stephen Colbert Super PAC, is officially registered as Americans For A Better Tomorrow, Tomorrow, and is considering changing it again to John Colbert Cougar Super MellenPAC.
Stenography- the fundamental principle of modern journalism.
Jan 31 2012
The surprise announcement by President Barack Obama that he was appointing New York State’s Attorney General Eric Schneiderman to head a new group, the Residential Mortgage-Backed Securities Working Group, that would be investigating securities fraud from the housing bubble and financial crisis. The announcement elicited some interesting reactions from the President’s supporters and critics expressing both praise and doubt about the new committee and just how much force it would really have considering the other appointees to the panel. Public opinion seems to be that few if any of the real perpetrators of the housing bubble and financial crisis have been held accountable.
On Friday, the group held its first press conference. US Attorney General Eic Holder, along with Mr. Schneiderman and Housing Secretary Scott Donovan, explained the purpose of the group, on what it would be focusing some of its powers and announced it had already issued 11 subpoenas:
“We are wasting no time in aggressively pursuing any and all leads,” Mr. Holder said. “In sending out those subpoenas, we consulted with the S.E.C. in making a determination as to where they should go.” Officials would not say which companies received the subpoenas.
“We are not going to be looking at the same things they are examining,” he added. “We’re going to be working with them but looking at a separate group of institutions.”
Schneiderman added that by working together with the SEC, IRS and Justice Department state Attorneys Generals would give them more information with which to bring prosecutions and civil suits at the state level:
In addition, the New York State Martin Act, which gives the attorney general broad powers to elicit information during investigations, “is more flexible than federal securities laws,” Mr. Schneiderman said. The New York and Delaware attorneys general also have jurisdiction over the trusts that hold the mortgages that underlie the mortgage-backed securities, making them “the bricks and mortar of this entire structure.”
By coordinating their efforts, group members might be able to share documents and information that usually would be in individual agency silos, Mr. Holder said.
Friday evening, Schneiderman sat down for an interview with MSNB’s Rachel Maddow, where he further discussed the committee’s focus, the agencies that would be involved and the roll of the states. Dayen, who still has strong reservations about the RMBS working group, thinks that the group lacks serious substance mostly because the use of wording like “resolving allegations”, not “crimes” and the lack of supporting staff and the appearance of disinterest by Assistant Attorney General for the Criminal Division Lanny Breuer who was absent at the press conference. However, he does see some promise. In the past, the IRS was reluctant to get involved, but as David Dayen at FDL News Desk indicated there could be huge tax fraud implications:
But I want to pull out the sentence I highlighted previously in Schneiderman’s interview which shows that at least he is thinking creatively about this. He said that “We have the Internal Revenue Service in because there are huge tax fraud implications to some of the stuff that went on.” I suppose he could be talking about a few different things (like the tax evasion from the banks using MERS instead of recording mortgage transfers at public records offices and paying a fee), but my guess is he’s talking about REMIC claims.
REMICs are an acronym for Real Estate Mortgage Investment Conduits. When you’re talking about mortgage pools used in securitization, you’re talking about REMICs. And REMICs have special tax treatment; they are exempt from federal taxes provided they only invest in “qualified mortgages” and other permitted investments. Here’s the important part: under the 1986 Tax Reform Act, the REMIC must receive all of its assets in the trust within 90 days and the assets have to be performing (not in default). Any REMIC violations make the vehicle subject to a penalty tax of 100%, with additional penalties as they apply.
Well, the strong suspicion is that, during the bubble years, the trustees did not properly convey the mortgages to the REMICs. Which makes the whole investment vehicle a massive tax fraud. That’s a huge level of exposure. You’re talking about $3 trillion in REMICs.
This obviously goes much deeper than fraud.
I became Attorney General about a year ago and started digging into this, and realized that New York and Delaware, which is why my collaboration with Beau Biden was so important, we had a unique place. Because all of the mortgage-backed securities were actually pools of mortgages deposited into New York trusts or Delaware trusts. We started looking at what she’s talking about, did they actually get all the paperwork done, things like that. And we realized that there’s a lot of work to do but a lot of potential for proving liability. [..]
To get this done Rachel, you need resources, you need jurisdiction, and you need will. And when I stood there today with Eric Holder and my other colleagues in government and other prosecutors, I really felt that we had that level of commitment […] what we realized as we started to go back and forth over the last few months is that we all need to work together. There are situations that, New York’s securities law is a stronger law in some ways than the federal laws. Some of our statutes of limitations, though, are shorter. So we can’t go as far back. The federal statute is longer. We need everyone together. And the folks that we have in on this… the Consumer Financial Protection Bureau, Rich Cordray just, a whole array of new powers just came into existence with his appointment, which the President just got done very recently. That’s a huge addition. We have the Internal Revenue Service in, because there are huge tax fraud implications to some of the stuff that went on. All of the people who are in this, all of the agencies who are designated, working together, can achieve so much more than any one of us on our own.
h/t David Dayen for the transcript.
There is still a lot of doubt about this commission and it’s purpose and goals. Matt Stoller at naked capitalism is curious to know if this panel will indict Vikram Pandit, the CEO of Citibank, for possible violations of Sarbanes-Oxley. He sees two problems with this task force. The first is the Obama administration’s policy “to protect the banking system’s basic architecture, which means the compensation structure and the existing personnel who run these large institutions.” And secondly:
Obama personally believes in the legitimacy of the existing banking institutional framework and he strongly suspects that no crimes were committed. He has hired a raft of people – including Jack Lew, Tim Geithner, Eric Holder, Larry Summers, and so on and so forth – who agree, and has implemented policies such as Dodd-Frank that assume as much. [..]
These people aren’t stupid, they aren’t without principles, and they aren’t electorally driven. They are ideologues. They really believe in a neoliberal political economy, where government throws money at the economy through private channels and private channels do with it whatever they think best.
That’s quite a conflict of ideologies. Stoller concludes with more questions and doubts:
There are many details of the task force that are as of yet not public, so it is not clear to me that doing a case like this is possible. But it’s quite obvious that mega-bank officials and regulators lying about the perilous state of various financial institutions to the public was a key part of the crisis, and that accountability on this front is probably critical to restoring faith in the system. It would certainly be a big statement upfront if this is what this task force attempted to take on. Will it? That’s a very good question, and one I hope we get answers to, soon.
Here’s hoping that this isn’t just an election year sham and Eric Schneiderman has the will to stand up to the Obama neoliberals.
Jan 31 2012
"Mortgage Fraud is a Top Priority for This Administration"
By Matt Stoller, Naked Capitalism
Friday, January 27, 2012
Mortgage fraud is a top priority for this Administration, especially when public dollars are at stake.
The vigorous pursuit of real estate professionals who perpetrated mortgage fraud is a top priority for federal authorities in this region.
Mortgage fraud is a top priority for this administration. We will aggressively pursue both individuals and corporations who defraud federal mortgage insurance programs, which are so important to this economy.
Mortgage fraud is a top priority for the U.S. Justice Department in the District ofArizona, where it has destroyed property values, lending institutions, and entire neighborhoods in our community. No question, complex fraud schemes – a prime example, here – played a role in crashing our real estate market. Culprits like these defendants will be tracked down, prosecuted and convicted. I congratulate the FBI for their thorough investigation that led to this significant sentence.
The prosecution of those who commit mortgage fraud is a top priority of the Department of Justice and this U.S. Attorney’s Office. Those who commit such crimes seriously erode the confidence of financial institutions to lend money which is a key element of the future strength of our economy.
There is rampant fraud in South Florida. I think that’s unfortunate. It is embarrassing that we are known in some circles as the fraud capital of the country. I don’t like that title.
The investigation and prosecution of mortgage fraud is a top priority of the Justice Department and this office. Prosecuting these cases helps protect the integrity of the housing market.
Promises Made, and Remade, by Firms in S.E.C. Fraud Cases
By EDWARD WYATT, The New York Times
Published: November 7, 2011
Nearly all of the biggest financial companies, Goldman Sachs, Morgan Stanley, JPMorgan Chase and Bank of America among them, have settled fraud cases by promising the S.E.C. that they would never again violate an antifraud law, only to do it again in another case a few years later.
A New York Times analysis of enforcement actions during the last 15 years found at least 51 cases in which 19 Wall Street firms had broken antifraud laws they had agreed never to breach.
S.E.C. officials say they allow these kinds of settlements because it is far less costly than taking deep-pocketed Wall Street firms to court and risking losing the case. By law, the commission can bring only civil cases. It has to turn to the Justice Department for criminal prosecutions.
FCIC Referred Criminal Securities Fraud Violations to Justice Deparment a Year Ago
By: David Dayen, Firedog Lake
Monday January 30, 2012 11:39 am
I remember confirming with the Justice Department that they received those referrals of potential violations of law from the FCIC. As it turns out, that happened a year ago Saturday. And we’ve heard nothing arising out of those criminal referrals from the existing Financial Fraud Task Force.
In addition, we knew at the time that those criminal referrals related to violations of secruties law, in other words precisely what the new RMBS working group would want to investigate.
The Justice Department has had this information, contained in depositions and official testimony, for a little over a year. They’ve done nothing. The Securities and Commodities Fraud working group would have been the natural arm of the Financial Fraud Task Force to which to refer those FCIC findings. The co-chairs of that group included Lanny Breuer and Robert Khuzami, who are also co-chairs of the RMBS working group that Schneiderman co-chairs.
Even those excited about this working group would have to admit that the same people at the federal level had the same access to the same violations of law and sat on their hands for the entire tenure of the Obama Administration. That’s why some people are skeptical that this new working group will lead to anything real. I recognize the claims that the dynamic around financial fraud and making Wall Street pay has changed generally, and that the Administration’s political people know they have a problem with coziness toward Wall Street, and so they may let the rope out a little bit. Plus there are prosecutors in DoJ at a lower level who may be dying to get their hands on some of this material and work with the new mandate to make some real noise. I understand that perspective. Time will tell if that will resolve in any different manner than the FCIC criminal referrals did.
Angelides closes by saying that “I look forward to President Obama’s newly appointed task force righting the financial wrongs that were committed, including the matters identified by the FCIC and referred to the Department of Justice.” So do I.
Jan 31 2012
Everybody has the ability. Some are better in different areas than others. Some just don’t accept or rather perhaps have “learned”/been indoctrinated into thinking there is nothing more than the mere five senses. I get impressions from a first glance at a picture. Evil people really stand out.
You can do it too. Try it.