Exposing Countrywide
Eileen Foster and the Failure of Corporate Criminal Justice
By RUSSELL MOKHIBER | CounterPunch | May 23, 2012
Last month, Eileen Foster was at the National Press Club to receive the $10,000 Ron Ridenhour Prize for Truth-Telling. In 2007, Foster was a vice president in charge of investigating fraud at Countrywide Financial. A full time job, if you can keep it. Which she couldn’t.
Because she took her job seriously.
A Countrywide employee in Boston called Foster with evidence of widespread loan fraud in the Boston area.
Foster investigated and confirmed the employee’s report and eventually shut down six Countrywide offices in Massachusetts.
She started to pursue what appeared to be systemic fraud at the company when the executive suite got itchy.
On September 8, 2008, they came to Foster and put a 14-page document on her desk. Foster calls that a gag order. They also offered her $228,000. Foster calls that hush money. She was told if she accepted the money and signed the document, she could quit. If not, she would be fired.
She was fired.
Foster filed a complaint with the Department of Labor under the Sarbanes-Oxley whistleblower provisions.
Twenty-one out of 1,500 whistleblowers have gotten a favorable response from the Department of Labor.
So, Foster knew it was a bit like hitting the lottery.
But lo and behold, she hit it.
In October 2011, the Department of Labor ruled in her favor.
And in December 2011, the CBS News show 60 Minutes did a story titled Prosecuting Wall Street that featured Foster.
Now, Bank of America, which acquired Countrywide, is appealing the Department of Labor’s ruling.
A public hearing is scheduled for October 22.
On the 60 Minutes segment, Steve Kroft reported that “Eileen Foster has never been asked — and never spoken to the Justice Department – even though she was Countrywide’s executive vice president in charge of fraud investigations.”
We asked Foster – did the Justice Department ever contact you?
“Not before 60 Minutes,” Foster says. “After 60 Minutes, yes.”
What happened?
“I’m not sure I can talk about that,” she says.
“I’m encouraged, but I’m not sure if the movement is in the right direction,” Foster said. “There had been things taking place prior to the 60 Minutes piece.”
It has been widely reported that the U.S. Attorney in Los Angeles opened and closed an investigation of Countrywide without bringing charges. Is that what Foster is talking about?
“I’m not talking about any specific effort.”
“If what took place in these organizations wasn’t illegal, there has been a lot of activity which has taken place since that seems to me is clearly illegal – perjury, obstruction of justice and witness tampering.”
Is it your sense that this is over and done with and that the Justice Department has moved on?
“I hope not,” Foster said. “I have a fear that it is probably over and done with.”
At the Press Club last month, Foster said that she doesn’t trust the corporate line on internal reporting of problems.
“Critics insist that a whistleblower be compelled to first report problems internally, supposedly to provide the corrupt company the chance to correct wrongdoing,” Foster said at the Press Club. “But when I followed protocol and reported internally, I was summarily eliminated. The wrongdoing was protected, not corrected.”
“We cannot allow corporate malfeasance to run rampant and become institutionalized. People need to know that many corporations use hotlines and reporting policies to silence whistleblowers and conceal fraud.”
“Corporations now screen applicants for whistleblowing tendencies and assign lawyers to participate in internal investigations so they can shield the wrongdoing under the cloak of ‘privilege,’” Foster said. “The Congress and State Legislatures should eliminate the corporate lawyer cover-up by eliminating the use of so-called privileges in these circumstances.”
“So here we are several years after the onset of the financial crisis, caused in large part by reckless lending and risk-taking in major financial institutions. And still, not one executive has been charged or imprisoned! This stands in stark contrast to the savings and loan debacle in the 1980’s, where prosecutors sent more than 800 bank officials to jail.”
“Our current administration has defended the lack of prosecutions by labeling the executives’ actions ‘bad behavior,’ but not illegal. Assistant Attorney General, Lanny Breuer, told Steve Kroft of 60 Minutes, that although the risk-taking was offensive, and the greed was upsetting, it didn’t mean the Department of Justice could bring a criminal case. Perhaps we simply need a different means to a justifiable end.”
“When prosecutors were unable to convict Al Capone of racketeering, they convicted him of tax evasion instead. If there is insufficient legal evidence to convict these executives of what we believe are obvious crimes, then the federal government should refocus. Overwhelming evidence of perjury, witness tampering and obstruction of justice exist in the numerous claims, court filings and trial and investigative transcripts. We must not let these deeds go wholly unpunished. Perhaps financial industry whistleblowers should be permitted to present their information to grand juries without the help of government prosecutors. Then the people can decide how best to address this outrageous wrongdoing.”
“We can and must uphold the law and prosecute those who break it, especially “white collar criminals”, no matter how highly placed or how cozy they are with government officials. We must insist on full and complete investigations with accountability and punishment for the guilty parties. We must ‘keep the heat on’ and see justice done.”
[For the complete transcript of the Interview with Eileen Foster, see 26 Corporate Crime Reporter 21(10), print edition only.]
Russell Mokhiber edits Corporate Crime Reporter.
Related articles
- Recognizing Heroes (alethonews.wordpress.com)
- Chilling Dissent on Wall Street (counterpunch.org)
Palestinian farmland exploited for Israeli military exercises
May 22, 2012 | International Solidarity Movement, West Bank
Monday May 21 is the third day in a row of Israeli military exercises in and around the small Palestinian village of Khirbet Atwayel outside Nablus. These exercises prevent the farmers from working on their lands and force the villagers to sleep under the sound of heavy shelling with the constant presence of soldiers.
Khirbet Atweyel is a village located on the slopes West of the Jordan valley. The 18 families that reside there are almost exclusively farmers and have been victims to the actions of the Israeli Occupation Forces (IOF) for a long time.
Every month, Israeli soldiers arrive, erect tents, and stay for a few days while they receive various kinds of military training. These include the shooting of live rounds, rocket missiles, and other heavy artillery. During these days, the farmers are denied entry to their own lands and can only stand aside and watch while soldiers drive their jeeps and other vehicles over the fields.
Volunteers with the International Solidarity Movement (ISM), together with members of the municipality of the nearby town of Aqraba, approached the village on Monday, May 21.
“As usual, the soldiers stop their activities when they see internationals in the village. Only ten minutes ago they were shooting rockets on the hills a couple of hundred meters from the town’s houses,” Basem, the mayor of Khirbet Atwayel says.
Later, whilst two ISM activists attempted to approach the field in order to better photograph the military tents, Israeli soldiers opened fire nearby. The activists were forced to turn around and flee the way they came. A rocket was fired on an adjacent hill, creating an ear piercing bang.
“These rockets are the kind of weapons they usually shoot at night. If you come here between 10-11 p.m. you will find they shoot dozens, making it impossible to sleep,” Basem says.
The military training, however, is only one of many aspects of oppression that the people of Khirbet Atwayel suffer on a daily basis. Like many other villages in the Jordan valley, Khirbet Atwayel is in Area C. It is under full Israeli civil and military control. One result is that the villagers are not allowed to have wells or water cisterns. Instead, they are forced to buy water from Aqraba and transport it in tanks to their houses. This makes the basic necessity of water enormously expensive. Irrigation of crops has become impossible and farmers are left to hope that the winter will bring enough rain.
When asked for his thoughts about the future of his village, Basem replied, “the occupiers are obviously trying to get rid of us, but we were born in this village and this land has been within our families for generations. We will never leave and give up what is rightfully ours.”
Related articles
- Palestinian teen shot during Israeli military training (alethonews.wordpress.com)
- 18 year old shepherd shot by Israeli soldiers in Jordan Valley (alethonews.wordpress.com)
- Israeli Forces Abduct Palestinians From Across the West Bank, Take Them to Unknown Destinations (occupiedpalestine.wordpress.com)
- Israeli military armored vehicle rams Palestinian bus injuring at least 19 passengers (alethonews.wordpress.com)
Israel urged to release satellite TV director
Ma’an – 23/05/2012
BETHLEHEM – Israeli authorities should release the director of a new Palestinian satellite broadcaster who has been detained since Thursday, the Committee to Protect Journalists said Tuesday.
“Israeli authorities should consider the message they are sending by imprisoning the head of a station that covers news about prisoners,” said Mohamed Abdel Dayem, CPJ’s coordinator for Mideast issues.
“Authorities should not be holding Bahaa Khairi Moussa, and certainly not without explanation. He should be released immediately, and the station’s equipment should be returned.”
Moussa, the general director of the Palestine Prisoner Channel, was arrested Thursday in Jenin. Soldiers confiscated his station’s equipment during the raid, his colleagues said.
Reporters Without Borders, meanwhile, strongly condemned the arrest.
“Such abuses aimed at stifling the Palestinian media must cease,” the group said Monday.
“This is the third time since the start of 2012 that the Israeli authorities have victimized a Palestinian media organization. We call for the immediate release of Baha Mousa and the return of all confiscated equipment,” the Paris-based group said in a statement.
It called the raid “illegal under international law” because it took place in Palestinian territory.
In April, soldiers shut down the officers of a new broadcaster in occupied East Jerusalem and in February, soldiers raided two Palestinian TV stations, Watan and Al-Quds TV in Ramallah.
Related articles
- Israel ‘arrests TV director, confiscates equipment’ (alethonews.wordpress.com)
- Israel arrests 800,000 Palestinians since 1948 (alethonews.wordpress.com)
- Israel raids Ramallah TV stations (alethonews.wordpress.com)
Nasrallah calls for restraint after Syria kidnapping
Press TV – May 22, 2012
Hezbollah Secretary General Seyyed Hassan Nasrallah has denounced the abduction of 13 Lebanese citizens by Syrian armed militants but also called for restraint and a measured response.
On Tuesday, Nasrallah said it is the duty of the Lebanese government to ensure that the abducted people are able to return home safely.
“We will work day and night until those beloved are back with us… The Lebanese state and government have a responsibility to work toward the release of those kidnapped,” he added.
Commenting on the situation and the recent violence in Lebanon, he asked the Lebanese people to exercise self-restraint and said that nobody should resort to violence.
“I call on everyone to show restraint… It is not acceptable for anyone to block roads or carry out violent acts,” Nasrallah added.
Anti-Syrian government armed militants kidnapped the 13 Lebanese people near the Syrian town of Aazaz, which is on the border with Turkey. The Lebanese were returning to Lebanon after visiting Shia shrines in Iran.
The armed militants reportedly hijacked their bus, then kidnapped the men and released the women.
There is no more information about the whereabouts of the abductees.
Syria has been experiencing unrest since mid-March 2011. While the West and the Syrian opposition say the government is responsible for the killings, Damascus blames “outlaws, saboteurs, and armed terrorist groups” for the unrest and insists that it is being orchestrated from abroad.
Al-Manar reports:
… In response to some people who threatened to kidnap Syrian nationals in Lebanon, Sayyed Nasrallah said that this act of revenge is forbidden and that the Syrian nationals are “our brothers, and nobody should make such unacceptable act personally.” …
The names of the kidnapped men according to media reports:
Abbas Shoaib, Hassan Mahmoud, Hussein al-Siblani, Ali Abbas, Abu Ali Saleh, Mahdi Ballout, Hussein Arzouni, Hussein Omar, Mustafa Yassine, Mohammad Monzer, Awad Ibrahim, Ali al-Ahmar, Ali Zgheib, Rabih Zgheib, Ali Termos and Ali Safa.
The Nearly $1 Trillion National Security Budget
By Chris Hellman and Mattea Kramer | TomDispatch | May 22, 2012
Recent months have seen a flurry of headlines about cuts (often called “threats”) to the U.S. defense budget. Last week, lawmakers in the House of Representatives even passed a bill that was meant to spare national security spending from future cuts by reducing school-lunch funding and other social programs.
Here, then, is a simple question that, for some curious reason, no one bothers to ask, no less answer: How much are we spending on national security these days? With major wars winding down, has Washington already cut such spending so close to the bone that further reductions would be perilous to our safety?
In fact, with projected cuts added in, the national security budget in fiscal 2013 will be nearly $1 trillion — a staggering enough sum that it’s worth taking a walk through the maze of the national security budget to see just where that money’s lodged.
If you’ve heard a number for how much the U.S. spends on the military, it’s probably in the neighborhood of $530 billion. That’s the Pentagon’s base budget for fiscal 2013, and represents a 2.5% cut from 2012. But that $530 billion is merely the beginning of what the U.S. spends on national security. Let’s dig a little deeper.
The Pentagon’s base budget doesn’t include war funding, which in recent years has been well over $100 billion. With U.S. troops withdrawn from Iraq and troop levels falling in Afghanistan, you might think that war funding would be plummeting as well. In fact, it will drop to a mere $88 billion in fiscal 2013. By way of comparison, the federal government will spend around $64 billion on education that same year.
Add in war funding, and our national security total jumps to $618 billion. And we’re still just getting started.
The U.S. military maintains an arsenal of nuclear weapons. You might assume that we’ve already accounted for nukes in the Pentagon’s $530 billion base budget. But you’d be wrong. Funding for nuclear weapons falls under the Department of Energy (DOE), so it’s a number you rarely hear. In fiscal 2013, we’ll be spending $11.5 billion on weapons and related programs at the DOE. And disposal of nuclear waste is expensive, so add another $6.4 billion for weapons cleanup.
Now, we’re at $636 billion and counting.
How about homeland security? We’ve got to figure that in, too. There’s the Department of Homeland Security (DHS), which will run taxpayers $35.5 billion for its national security activities in fiscal 2013. But there’s funding for homeland security squirreled away in just about every other federal agency as well. Think, for example, about programs to secure the food supply, funded through the U.S. Department of Agriculture. So add another $13.5 billion for homeland security at federal agencies other than DHS.
That brings our total to $685 billion.
Then there’s the international affairs budget, another obscure corner of the federal budget that just happens to be jammed with national security funds. For fiscal 2013, $8 billion in additional war funding for Iraq and Afghanistan is hidden away there. There’s also $14 billion for what’s called “international security assistance” — that’s part of the weapons and training Washington offers foreign militaries around the world. Plus there’s $2 billion for “peacekeeping operations,” money U.S. taxpayers send overseas to help fund military operations handled by international organizations and our allies.
That brings our national security total up to $709 billion.
We can’t forget the cost of caring for our nation’s veterans, including those wounded in our recent wars. That’s an important as well as hefty share of national security funding. In 2013, veterans programs will cost the federal government $138 billion.
That brings us to $847 billion — and we’re not done yet.
Taxpayers also fund pensions and other retirement benefits for non-veteran military retirees, which will cost $55 billion next year. And then there are the retirement costs for civilians who worked at the Department of Defense and now draw pensions and benefits. The federal government doesn’t publish a number on this, but based on the share of the federal workforce employed at the Pentagon, we can estimate that its civilian retirees will cost taxpayers around $21 billion in 2013.
By now, we’ve made it to $923 billion — and we’re finally almost done.
Just one more thing to add in, a miscellaneous defense account that’s separate from the defense base budget. It’s called “defense-related activities,” and it’s got $8 billion in it for 2013.
That brings our grand total to an astonishing $931 billion.
And this will turn out to be a conservative figure. We won’t spend less than that, but among other things, it doesn’t include the interest we’re paying on money we borrowed to fund past military operations; nor does it include portions of the National Aeronautics and Space Administration that are dedicated to national security. And we don’t know if this number captures the entire intelligence budget or not, because parts of intelligence funding are classified.
For now, however, that whopping $931 billion for fiscal year 2013 will have to do. If our national security budget were its own economy, it would be the 19th largest in the world, roughly the size of Australia’s. Meanwhile, the country with the next largest military budget, China, spends a mere pittance by comparison. The most recent estimate puts China’s military funding at around $136 billion.
Or think of it this way: National security accounts for one quarter of every dollar the federal government is projected to spend in 2013. And if you pull trust funds for programs like Social Security out of the equation, that figure rises to more than one third of every dollar in the projected 2013 federal budget.
Yet the House recently passed legislation to spare the defense budget from cuts, arguing that the automatic spending reductions scheduled for January 2013 would compromise national security. Secretary of Defense Leon Panetta has said such automatic cuts, which would total around $55 billion in 2013, would be “disastrous” for the defense budget. To avoid them, the House would instead pull money from the National School Lunch Program, the Children’s Health Insurance Program, Medicaid, food stamps, and programs like the Social Services Block Grant, which funds Meals on Wheels, among other initiatives.
Yet it wouldn’t be difficult to find savings in that $931 billion. There’s plenty of low-hanging fruit, starting with various costly weapons systems left over from the Cold War, like the Virginia class submarine, the V-22 Osprey tiltrotor aircraft, the missile defense program, and the most expensive weapons system on the planet, the F-35 jet fighter. Cutting back or cancelling some of these programs would save billions of dollars annually.
In fact, Congress could find much deeper savings, but it would require fundamentally redefining national security in this country. On this issue, the American public is already several steps ahead of Washington. Americans overwhelmingly think that national security funding should be cut — deeply.
If lawmakers don’t pay closer attention to their constituents, we already know the alternative: pulling school-lunch funding.
Chris Hellman and Mattea Kramer are research analysts at the National Priorities Project. They wrote the soon-to-be-published book A People’s Guide to the Federal Budget, and host weekly two-minute Budget Brief videos on YouTube.
Copyright 2012 Chris Hellman and Mattea Kramer
Related articles
- Gutting START; Re-Starting a Nuclear Arms Race (alethonews.wordpress.com)
- New Paper Argues for Immediate, Practical Cuts in Military Spending (nationalinterest.org)
- GOP: Shield DOD, cut poverty funds (politico.com)
Second round of Iran-P5+1 talks in Baghdad
Press TV – News Analysis-05-21-2012
Indian refiner MRPL secures Iranian insurance for oil shipment
Press TV – May 22, 2012
India’s refiner MRPL has received a crude cargo under the coverage of an Iranian insurance company to become the first Indian firm taking such an action in the face of oil embargoes against the Islamic Republic, sources say.
Mangalore Refinery and Petrochemicals (MRPL) “recently got a cargo insured by an Iranian firm and other cargoes can also be insured from Iran. The company will do that on a case-by-case basis,” Reuters quoted one of the sources on Monday.
The Iranian insurer provided coverage for MRPL’s crude cargo of about 707,500 barrels, which arrived at India’s Mangalore Port last week.
Another source said, “As long as we can avail of Iranian cover we will continue to import cargoes on that basis.”
India is one of the biggest customers for Iranian crude. The Asian country accounts for more than 10 percent of Iran’s annual oil exports, worth about $12 billion.
Earlier in May, Indian General Insurance Corp. (GIC) said it planned to provide third-party liability coverage up to $50 million for ships importing Iranian crude in a bid to prevent the oil embargoes from disrupting Iranian crude shipments to India.
The European Union approved new sanctions on Iran’s oil and financial sectors on January 23. The sanctions are meant to prevent member states from buying Iranian crude or doing business with its central bank. The sanctions will come into force as of July 1.
Additionally, the embargo banned European companies from transporting, purchasing or insuring crude and fuel originating in Iran and intended for anywhere in the world.
The US and the EU have imposed new financial sanctions as well as oil embargoes against Iran since the beginning of 2012, claiming that the country’s nuclear energy program includes a military component, a claim Iran has strongly rejected.
Related articles
- S. Korea seeks exemption from EU Iran oil ban (dawn.com)
- US “not impressed” with India over Iran oil ties (alethonews.wordpress.com)
- ‘Iran oil sanctions bad idea if they work’ (alethonews.wordpress.com)
- Nuclear Agency Deal with Iran Cuts Crude Price (247wallst.com)
Gaza engineer still in isolation despite deal
Ma’an – 22/05/2012
RAMALLAH – A Gaza engineer kidnapped by Israel in the Ukraine last year is the last remaining prisoner held in solitary confinement, after the hunger-strike deal sought to end the practice, his lawyer said Tuesday.
Dirar Abu Sisi is still being held in an isolation cell in Ashkelon prison, while all others have been returned to normal wards, lawyer Karim Karim Ajwah said, noting his case was “kept secret in an unusual way.”
Abu Sisi disappeared in February 2011 while traveling on a train in Ukraine and Israel later announced that it was holding him in a southern Israeli jail.
A former head of the Gaza power plant, he is accused of working with Hamas to improve its rocket technologies.
Abu Sisi threatened to refuse food and water if promises to move him from solitary confinement are not fulfilled.
He asked his lawyer to contact Egypt to intervene in his case, after the country brokered a deal last Tuesday between Israeli authorities and Palestinian prisoners to end a mass hunger strike in Israeli jails.
The agreement included a commitment to move isolated prisoners to normal cells within 72 hours, according to prison representatives.
Related articles
- Israel’s prison regime can no longer go unnoticed (altahrir.wordpress.com)
