Posts tagged Justice Department
By Hunter Lewis
Will Washington Take Down Apple — And Why?
Is Apple being given a hint to fork over more campaign contributions?
The US Department of Justice has not only successfully sued Apple for arguably non-existent anti-trust violations in the e-book market. It has even demanded– and gotten– a court appointed “monitor” placed inside the company to supervise the company’s pricing decisions.
This is a company that went from an $18 billion market value in 2000 to a $455 billion market value in 2013. During the same period, Microsoft’s market value fell from $603 billion to $290 billion. Should anyone expect the success story to continue now that the government is meddling with all the company’s pricing?
Apple appealed the anti-trust judgement this Tuesday, but was unable to get the government “monitor’s” work suspended while the case is under appeal. Among the interesting facts that have come out about the “monitor,” Michael Bromwich: he bills for his time at $1,100 an hour and charged $138,432 for his first two weeks of “work.”
Apple has labeled Bromwich’s appointment “unprecedented and unconstitutional.” We wish it were unprecedented. This form of government price interference and intimidation has become increasingly common.
Joseph Covington, who headed the Justice Department’s Foreign Corrupt Practices Act Division in the 1980’s, told Forbes, in reference to monitors appointed to enforce that act: “ This is good business for Justice Department lawyers who create the marketplace [ for monitors] and then get…a job there [ after they leave government].”
Nor is it limited to the Justice department. If a company gets into the sights of the Federal Trade Commission (FTC) or even the Food and Drug Administration (FDA), the terms of settlement increasingly include “monitoring” by highly paid lawyers, who are typically former FTC or FDA employees.
This is not just the small time corruption it might seem. It is tremendously damaging to the economy. The collapse of the Soviet Union should have demonstrated once and for all how important honest and unimpeded prices are for an economy.
If the government takes control of pricing, as it is doing in more and more sectors of the economy, it is guaranteeing unemployment and economic suffering. It is also guaranteeing an ever greater problem of crony capitalism, as companies respond by increasing their campaign contributions or take other steps to buy influence in Washington.
Apple is and ought to be ramping up its Washington presence. A Politico article of May 2012 wondered about the earlier naivete of the company leadership. Did they really think they could get away with lobbying expenditure of only $500,000 in the first quarter of that year compared to $5mm for Google and $1.8mm for Microsoft? Did they really think they could get away with having no company political action committee (PAC) from which to make campaign contributions?
Apple might have thought it was safe, even untouchable. Was not the company an icon of American economic leadership? Did not Apple employees overwhelmingly direct what campaign contributions they made to President Obama? Even with the lawsuit, had not Apple employees in fact given 93 percent of their contributions to Obama in 2012 and only 7% to Romney? Wasn’t that good enough?
Well no. Google employees gave 98 percent of their money to Obama and it was a whole lot more money ($727,702 versus $338,752). Apple CEO Tim Cook hadn’t even maxed out ( given to the legal limit) in his own contribution.
This lack of political involvement may be contrasted with Amazon’s Jeff Bezos, who stood on the other side of the anti-trust suit, even though he had created what certainly looked like a near monopoly in e-books, the subject of the suit. Apple is not wrong to argue in its legal filing that its entry into the sector “marked the beginning, not the end, of competition.” But Bezos has bought the Washington Post, and Washington officials will think twice about tangling with him.
In thinking about Apple’s relative lack of political involvement in the past, we should also keep in mind what Politico reported last month: “ President Barack Obama has a plan to save the Senate’s tenuous Democratic majority: sell a populist message… and raise lots of cash.”
In Washington doing favors for special interests is one way of raising cash. But so is intimidating them. Either way you get paid, whether from gratitude or fear.
In addition, there is another reason why Apple could now be in the crosshairs of the Justice Department. On November 5, 2013, the company issued a report containing this: “ Apple has never received an order under Section 215 of the USA Patriot Act. We would expect to challenge such an order if served on us.” This made jaws drop both in Silicon Valley and Washington. It was daring, perhaps foolhardy. It was directly taking on the government.
Before leaving the besieged Apple, we might pause to consider how the company also gives the lie to one of the great economic myths of our day: that falling prices ( deflation) hinder an economy. Here is a typical version of the myth from an AP story last month: “ Many economists have worried that the Eurozone may be about to suffer a debilitating bout of deflation….Falling prices can hurt an economy as consumers postpone spending in the hope of getting cheaper deals in the future while businesses fail to innovate and invest.”
This all backward. Businesses innovate and invest in order to become more productive. Being more productive allows them to lower prices, improve quality, and get more customers. Everyone benefits from lower prices, but especially the poor and the middle class, who have the most trouble dealing with rising prices.
Apple is a good illustration of all this. Various tech experts on the internet have been discussing what an Apple Iphone would have cost if available in 1991. What would we have had to pay to get similar features and power in some form ( clearly not hand held)? The estimates vary but the top one approaches $4mm.
Shouldn’t it be obvious ( to anyone other than a Federal Reserve official) that falling prices, produced by innovative and productive businesses such as Apple, are exactly what we should be hoping for? If so, why is the government determined both to create inflation and to interfere with Apple’s price setting decisions?
Image credit: http://www.againstcronycapitalism.org
About Hunter Lewis
Hunter Lewis is co-founder of AgainstCronyCapitalism.org. He is co-founder and former CEO of global investment firm Cambridge Associates, LLC and author of 8 books on moral philosophy, psychology, and economics, including the widely acclaimed Are the Rich Necessary? (“Highly provocative and highly pleasurable.”—New York Times) He has contributed to the New York Times, the Times of London, the Washington Post, and the Atlantic Monthly, as well as numerous websites such as Breitbart.com, Forbes.com, Fox.com, and RealClearMarkets.com. His most recent books are Crony Capitalism in America: 2008–2012, Free Prices Now! Fixing the Economy by Abolishing the Fed, and Where Keynes Went Wrong: And Why Governments Keep Creating Inflation, Bubbles, and Busts. He has served on boards and committees of fifteen leading not-for-profit organizations, including environmental, teaching, research, and cultural and global development organizations, as well as the World Bank.
Justice Dept. Sues Bank of America Over Mortgage Securities
Washington – The Justice Department sued Bank of America on Tuesday, accusing the bank of defrauding investors by vastly underestimating the quality of mortgage-backed securities.
Eric H. Holder Jr., the United States attorney general, said the lawsuit was “the latest step forward in the Justice Department’s ongoing efforts to hold accountable those who engage in fraudulent or irresponsible conduct.”
Bank of America, the Justice Department said, cloaked the risk associated with $850 million worth of securities backed by residential mortgages. In a corporate filing last week, Bank of America said it was bracing for the action.
The lawsuit is another blow for Bank of America, which is already reeling from a number of legal problems. Unlike many of its headaches that stem from its takeover of Countrywide Financial, which was once the nation’s biggest mortgage lender, the woes on Tuesday concern Bank of America’s own mortgages.
Every Scottish Newborn to Have “State Guardian”
EDINBURGH — Scottish author Stuart Walton, a sociology and criminology professor at the University of Abertay Dundee, warns that his country is now being used to test what he calls a “dystopian” plan in which every child, from birth, would be assigned a “state guardian” who would have the supposed authority to represent the child’s interests against his parents.
This report also includes…
EDINBURGH — Officials in Scotland are using hospital snoops and nursery school children to monitor the attitudes of parents regarding “diversity.” Under an initiative called Getting It Right for Every Child, parents of newborns are secretly monitored by hospital staff to assess their “suitability” for raising their children.
WASHINGTON — Less than a week after a major address in which President Obama outlined what he called restrictions on the use of drone strikes, another “signature strike” was carried out in Pakistan that resulted in the death of several people who were living in adobe huts.
WASHINGTON — Seeking to contain growing media outrage over the Justice Department’s invasive scrutiny of reporters, Attorney General Eric Holder offered to meet with representatives of major media outlets in an off-the-record briefing. Representatives from the Washington Post and the Wall Street Journal indicated that they would attend the meeting on terms offered by Holder.
MOSCOW — The father of Chechen native Ibragim Todashev, who was killed by an FBI agent following an interrogation in Orlando, Florida, has accused the Bureau of executing his son in order to “shut him up.” Speaking at a press conference in Russia, Abdulbaki Todashev said of the FBI: “They come to your house like bandits, and they shoot you.”
This is Chuck Todd, NBC’s political news director saying this.
Even a fiat currency and the casino game of fractional reserve standards are not enough to cover the never ending greed. Banks use your deposited money plus imaginary reserve policy funds to make bad bets, and lose. But who really lost? The banks get bailed out by Washington D.C. criminals, you get foreclosed on and then you are responsible for the cost of the bailout.
Part 1 of 4. To view complete please follow the link provided above. Bernie Madoff and other smaller fish got constant mainstream media coverage while the big ponzi scheme rolls along with white glove treatment, as it seems only the Wall Street thieves approved by D.C. are officially too big to fail.
Your thoughts appreciated below.
“HSBC will pay $1.9 billion to settle a money-laundering probe by U.S. federal and state authorities, reports CBS News. The financial institution was in violation of the Bank Secrecy Act and the Trading With the Enemy Act.
The U.S. probe found transfers of billions of dollars on behalf of nations such as Iran, which is under international sanctions, and is often believed to funnel money to such groups as Hamas. There were also transfers through HSBC’s U.S. division by Mexican drug cartels.”*
There’s a two-tier justice system in America. Need proof? Bankers for HSBC were found guilty of laundering billions of dollars for drug cartels and groups linked to al-Qaeda. Their punishment? Pay a small portion of their billions of profit, and defer bonuses. Stephanie George received a life sentence without parole in 1997 because her boyfriend stashed half a kilogram of cocaine in her home and she had a couple of previous small-time drug deal on her record. Cenk Uygur breaks down this ridiculous disparity of justice between the rich and the poor, explaining why we need to change the system.
As President Obama insists on a speedy end to the war in Afghanistan, his administration has other plans. A facility owned by the private security force once known as Blackwater has been awarded a $22 million contract to house US troops through 2015.
The private military company Academi — formerly Blackwater and, more recently, Xe — is the proud winner of a no-bid contract that will keep them profiting off Uncle Sam’s wars for the next few years. Under a deal first reported by Wired.com’s Danger Room, Academi will assist the recently created US Special Operations Joint Task Force–Afghanistan with housing facilities and office space on their massive 10-acre compound in Kabul named Camp Integrity.
According to Danger Room reporter Spencer Ackerman, Academi won the rights to lease Camp Integrity to the special ops team through May 2015, providing accommodations for some 7,000 elite troops.
By Ben Protess
Federal prosecutors in New York sued Bank of America on Wednesday, accusing it of carrying out a mortgage scheme that defrauded the government during the depths of the financial crisis.
In a civil complaint that seeks to collect $1 billion from the bank, the Justice Department took aim at a home loan program known as the “hustle,” a venture that has become emblematic of the risk-fueled mortgage bubble. The complaint adds to a flurry of federal and private lawsuits facing Bank of America’s beleaguered mortgage business.
Bank of America inherited the “hustle” home loan program with its purchase of Countrywide Financial in 2008. Prosecutors say the effort, kept alive by Bank of America through 2009, was intended to churn out mortgages at a rapid pace without proper checks on wrongdoing. The bank then sold the “defective” loans without warning to Fannie Mae and Freddie Mac, the government-controlled housing giants, which were stuck with heavy losses and a glut of foreclosed properties.
Yet again, the Congress, courts, executive branch and the establishment media work together to protect the nation’s most powerful actors
So pervasive and reliable is the rule of elite immunity – even in the face of the most egregious crimes – that one finds extreme examples on a weekly basis. Six weeks ago, the Obama justice department forever precluded the possibility of criminal accountability for Bush torturers by refusing to bring charges in the only two remaining torture cases, ones involving the deaths of the detainee-victims by torture.
The Obama campaign is now running a new campaign ad against Mitt Romney that rails against a litany of Wall Street “criminals” and “gluttons of greed”, but as David Dayen astutely notes, those examples were all imprisoned during the Bush era because the Obama administration has prosecuted no significant Wall Street executives for the 2008 financial collapseand thus have none of their own examples to highlight:
“So the Obama campaign could not fill a list of three Wall Street criminals that the Obama Justice Department actually sent to jail. Heck, they couldn’t fill a list of one!
“This is despite Eric Holder telling students at Columbia University in February of this year that his Justice Department’s record of success on fighting financial fraud crimes ‘has been nothing less than historic.’ But not historic enough that his boss could point to, well, one Wall Street criminal behind bars as a result of DoJ’s actions.
That’s painfully telling. Nobody from Bank of America or Wells Fargo or Citigroup or JPMorgan Chase or Goldman Sachs or Bear Stearns or Morgan Stanley or Merrill Lynch or even Countrywide or Ameriquest was available to stand in as a ‘glutton of greed’ in this advertisement. Literally no major figure responsible for the financial crisis has gone to jail. So the campaign has to use two CEOs from a decade-old accounting scandal, and a garden-variety Ponzi schemer.”
And now, the US supreme court just consecrated one of the most corrupt acts of the US government over the past decade: its vesting of retroactive legal immunity in the nation’s telecom giants after they had been caught red-handed violating multiple US eavesdropping laws. Just as the Obama DOJ forever precluded any legal accountability for Bush-era torturers, the supreme court on Tuesday forever precluded any legal accountability for AT&T, Verizon, Sprint and other telecoms for their crucial participation in the illegal Bush NSA warrantless eavesdropping program (the Obama DOJ, needless to say, supported the position of the telecoms).
When the New York Times revealed on 16 December 2005 that the Bush administration was spying on the telephone calls and emails of American citizens without the warrants required by the criminal law, it exposed lawbreaking not only by government officials but also by the nation’s largest telecoms. Multiple laws were in place at the time imposing both criminal and civil liability on telecoms for enabling government spying on the communications of their customers without warrants or other legal authority, and that is exactly what these telecoms did. One former AT&T employee, Mark Klein, publicly described how AT&T had even built a separate room with no purpose but to permit the National Security Agency unfettered access to all of its customers’ communications.
By Kurt Nimmo
House Oversight and Government Reform Chairman Darrell Issa has confirmed that wiretap applications reveal in-depth detail on the Fast and Furious operation, including evidence showing that “agents were well aware that large sums of money were being used to purchase a large number of firearms, many of which were flowing across the border.”
Roll Call reports today that Issa released details concerning the wiretaps in the House. His disclosure is protected by the Speech or Debate Clause in the Constitution, which offers immunity for Congressional speech on the floor.
According to Darrell Issa’s letter sent to Maryland Democrat Rep. Elijah Cummings on May 24, not only did ATF officials know about the purchases, they oversaw activity by straw purchasers and ended their surveillance without interdicting the guns.
“Although ATF was aware of these facts, no one was arrested, and ATF failed to even approach the straw purchasers,” Issa’s letter states. “Upon learning these details through its review of this wiretap affidavit, senior Justice Department officials had a duty to stop this operation. Further, failure to do so was a violation of Justice Department policy.”
As we noted on June 22, Obama lied to the American people on March 23, 2011, when he said that neither he nor Attorney General Holder authorized the effort to arm the drug cartels in Mexico. Several weeks later, on May 3, Holder lied to Congress. He said he did not know who approved Fast and Furious. He also lied when he said he “probably heard about Fast and Furious for the first time over the last few weeks.”
Issa talks about contempt and criminal case against Holder.
On Thursday, House Republicans held Attorney General Eric Holder in contempt of Congress. The House made the historic move after Holder refused to divulge additional documents on the gun-running operation and Obama invoked executive privilege in an attempt to block the request for more information.