Think of it as the story of two antagonists. One of them was an honest Senator who came to Washington to fight corruption. The other is an arrogant banker who's so sure of his untouchability that he wore "FBI" cufflinks when he made a public appearance last month.

The Senator

Former Sen. Ted Kaufman, whose epic struggle to bring Wall Street to justice was depicted in PBS Frontline's recent episode The Untouchables, made a striking observation on a press call today. "In a private case," Sen. Kaufman said, the Dexia bank's lawsuit "… uncovered reams of emails directly related to the fact that fraud was (allegedly) being committed by JPMorgan Chase."

He was referring to headlines like "E-Mails Imply JPMorgan Knew Some Mortgage Deals Were Bad" in the New York Times and "JPMorgan Hid Reports of Defective Loans Before Sales" in Bloomberg News. Sen. Kaufman added:

"It is just hard to believe that if the Department of Justice had made Wall St fraud a major priority, with the resources they have, they could not have found these same emails and brought these cases."

It's not just that the government wasn't bringing a case against JPMorgan Chase.  Everybody in Washington from the President on down was praising its CEO, Jamie Dimon, claiming he was our nation's smartest and most ethical banker. So were a lot of reporters. Roger Lowenstein's flattering profile of the dyspeptic Dimon remains a classic of the Wall Street flattery genre.

Even Alison Frankel, who has done some excellent reporting in this area, was somehow able to ask only last month (unless her editors wrote the headline for her): "Is JPMorgan Chase the new MBS (mortgage-backed securities) piñata?"

Sometimes a piñata turns out to be a real donkey.

FBI Cufflinks

Wall Street Journal reporter David Erlich sent this to his Twitter followers from the international finance soiree at Davos: "Jamie Dimon is sporting FBI cuff links at #Davos. Sadly he wouldn't let me take a picture of them."

But then, there are a lot of things Jamie Dimon doesn't want coming to light. What message do you suppose he was trying to send with those cufflinks, especially in the wake of the criminal inquiries into his bank's behavior in the "London Whale" scandal?  Peter J. Boyer and Peter Schweizer noted last May that, based on the Justice Department's record of hands-off attitude toward the bank, "JPMorgan Chase has nothing to fear from an FBI probe."

Even after JPMorgan Chase entered into enormous financial settlements - for charges that ranged from sophisticated investor fraud to plain old-fashioned Alabama bribery - it was considered somehow déclassé to suggest that the crime wave which occurred on Mr. Dimon's watch should in any way reflect badly on his character or managerial skills.

JPMorgan Chase was the "good" bank, and Dimon the "good" CEO. It was considered "unserious" to imagine that the bank's crimes could be pursued - or, despite mountains of evidence, that they had even been committed.  But somehow Dexia and its attorneys were able to obtain evidence that the Department of Justice, the FBI, and the enormous machinery of our national security state could not - or would not - find for itself.

What did FBI-cufflink wearing Jamie tell the public about that criminal matter, the $6 billion dollar loss that he told investors was nothing? "We did have record profits. Life goes on.”

I think we can guess what the "F" stands for.

The Evidence

The information that Dexia assembled is breathtaking -- and damning. The JPM section of their complaint begins by reminding us that JPMorgan Chase was lagging behind its Wall Street competitors in 2005. Dimon has tried to rewrite history since then by arguing that he was smarter than other bankers and stayed away from the short-term profits of mortgage-backed securities because he was wise enough to see how risky they were.

Nonsense. As the Dexia lawsuit recaps, they were just late to the game. Dimon was desperate to get it on the action, telling investors in the 2006 Annual Report that the unit handling MBS had "materially increased its product breadth and volume" - from virtually nothing to $25 billion in just a year.

Dimon also reassured investors that the unit "maintained its high lending standards" and had "materially tightened" its underwriting - much as he assured investors that the bank had tightened its standards after the 2008 crisis when the "London Whale" unit reporting directly to him wasn't following published standards, and much as he told them that the "London Whale" losses were a "tempest in a teapot" when he secretly knew they amounted to billions.

The emails uncovered by Dexia show that JPMorgan Chase tried desperately to make up for its late entrance into the mortgage feeding frenzy by cutting corners and misleading investors. In fact, the Dexia suit includes documentation which suggests that Dimon had already told a senior executive to sell off the bank's own ownership of these poorly-underwritten securities.

A Forbes magazine story cited in the suit also quote Dimon as saying "This stuff could go up in smoke!"

True Confessions

An internal JPMorgan Chase memo reportedly told staff how to cheat "Zippy," the company's underwriting system, by falsifying information in order to write bad loans. The memo was even entitled "Zippy Cheats & Tricks."

The Dexia filing extensively documents JPMorgan Chase's flouting of underwriting standards, its misrepresentations to investors, and its rewriting and falsification of independent analyses. These acts are strongly suggestive of criminal acts by individuals, as well as civil wrongdoing.

Sen. Kaufman spoke authoritatively about the deterrent effect that criminal indictments have against white-collar crime. Someone is much less likely to commit a white-collar crime, according to studies, if they know that they could be prosecuted. As Sen. Kaufman explained, this deterrent effect is much weaker for drug crimes, whose perpetrators have already faced the criminal justice system. But bank crimes aren't drug crimes - except, of course, when they are.

Sen. Kaufman added: "There have been a number of us saying in the cases against JPMorgan Chase and Goldman Sachs and Morgan Stanley and the big banks was that one of the problems with the settlements … is that they never had to admit wrongdoing."

The Badge

When JPMorgan Chase was sued over the actions of subsidiary Bear Stearns, it implied that it had only acquired that firm as a favor to the nation - a myth the press has often repeated - and made it clear that it felt it was unfair to be punished for the acts of an organization that was not under Mr. Dimon's supervision at the time. Thanks to Dexia, that particular injustice has now been corrected.

It remains to be seen if the Justice Department will follow Dexia's lead and investigate the compelling evidence of criminal actions at JPMorgan Chase.

Jamie Dimon may believe that he and his peers above the law, but there are still honest people trying to hold them accountable. And he may have those FBI cufflinks, but hey -- Elvis Presley got Richard Nixon to give him a badge from the Narcotics Bureau, and we know how that story ended.

(The press call was part of the Campaign for a Fair Settlement's call for prosecution of Wall Street crimes in the first 100 days of the President's second term.)

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Fox's Catherine Herridge has been reporting for a couple of weeks about the White House's change of policy regarding reporters' access to detainees at Guantanamo Bay, which while problematic from a journalist's perspective has all the earmarks of a classic bureaucratic conflict with reporters.

Herridge ran an update yesterday on Fox's Live Desk with Marsha MacCallum, including a clip of a Pentagon spokesman being short with Herridge, evidently, over her persistent questions on the issue. It looks like a tempest in a teapot, but Herridge is a serious reporter and her beef has some legitimacy, especially when it comes to transparency for this White House.

The interesting part of this report, though, came immediately after Herridge's report, when MacCallum hosted our old friend Judith Miller, the woman who helped bring you that six-years-and-running disaster on wheels known as the Iraq War. Miller decided that this Pentagon spokesman was in need of upbraiding:

MacCallum: What did you think of the Pentagon response there to Catherine's question?

Miller: You know, I thought, it's very combative. Excuse me, Mr. Pentagon Spokesman, for Fox doing our job. We're supposed to be there, we're supposed to be reporting on what the Pentagon is doing to and for these prisoners, or detainees, as they prefer to be called. And if he doesn't like our going back and back to look in on those people, well, maybe we should just believe everything they put out.

I found it completely combative, unnecessarily so.

So now we're being lectured on the relationship of reporters to official sources by the woman who was the faithful stenographer of Bush's Pentagon -- particularly Defense Secretary Donald Rumsfeld -- in selling the public on the notion that there were indeed weapons of mass destruction in the hands of Saddam Hussein. The woman who -- after the utter mendacity of her sources was revealed -- told an interviewer:

"[M]y job isn't to assess the government's information and be an independent intelligence analyst myself. My job is to tell readers of The New York Times what the government thought about Iraq's arsenal."

I don't have a problem with Fox reporters pushing for transparency from the Pentagon. I do have a problem with Judith Miller telling us how we should do that.

It sure is heart-warming, after all, to see Miller get concerned about looking into the accuracy of Pentagon claims -- though it does seem rather convenient that this is a concern of hers only now, now that we have a Democratic administration.

If she had demonstrated even an ounce of this concern during the Bush years, the nation might not have been talked into an outrageous, costly, and wholly unnecessary war.

James Moore wrote the ultimate survey of Miller's journalistic miscreancy.

The truth may set you free, but not if you're a Republican and the subject is taxes. After all, 95% of American families as promised received a tax cut from the Obama stimulus package. And while three-quarters of Americans support President Obama's proposal to roll back the Bush tax cuts for those earning over $250,000 to their Clinton-era levels, it turns out that affluent voters, too, chose Barack Obama over John McCain. Making matters worse, a Gallup poll Monday revealed that Americans' "views of income taxes among most positive since 1956."

So as their furious followers head off to their April 15th orgy of tea-bagging, the leadership of the GOP and its amen corner in the right-wing media have instead turned to tall tales on taxes.

Here, then, are 10 Republican Tax Day lies:

1. President Obama will raise taxes on small businesses.
2. The estate tax devastates small businesses and family farms.
3. 40% of Americans pay no taxes.
4. Tax cuts always increase revenue.
5. The GOP is the party of fiscal discipline.
6. Ronald Reagan was the greatest tax cutter of all time.
7. FDR caused the Great Depression, or at least made it worse.
8. Obama's cap-and-trade plan will cost each American family $3,100 a year.
9. Obama's tax proposals will undermine charitable giving.
10. The rich pay too much in taxes already.

For the details behind each of the GOP's Tax Day deceits, continue reading.

Continue reading »

I got chills reading this brief, but very truthful op-ed from Paul Krugman at the New York Times. Barack Obama's win last night was just one step into the future, lets hope Krugman's words ring loud and clear for future generations - Beware the Monsters...

Last night wasn’t just a victory for tolerance; it wasn’t just a mandate for progressive change; it was also, I hope, the end of the monster years.

What I mean by that is that for the past 14 years America’s political life has been largely dominated by, well, monsters. Monsters like Tom DeLay, who suggested that the shootings at Columbine happened because schools teach students the theory of evolution. Monsters like Karl Rove, who declared that liberals wanted to offer “therapy and understanding” to terrorists. Monsters like Dick Cheney, who saw 9/11 as an opportunity to start torturing people.

And in our national discourse, we pretended that these monsters were reasonable, respectable people. To point out that the monsters were, in fact, monsters, was “shrill.”! Read on...

democracy arsenal: Our network stooges remain in the tank, but the determinedly blinkered Beltway pundits have finally noticed McGrampa's serial gaffes, and even the normally hackish Joe Klein has written about his desperate dishonesty. But the Maverick's latest isn't a mere gaffe. It betrays a frightening fundamental ignorance of Iraq.

Calculated Risk: $1 trillion needed to solve the Housing Crisis. Mortgage rates increase sharply. G-Dub says, 'Wall Street got drunk'.

The Mahatma X Files: I'm feeling safer already! Thanks for caving on that FISA legislation, Barack!

Street Prophets: Joe Lieberman is less popular with Jews than Barack Obama

Skewz: S.C. state Senator and southern fried bigot posts Osama-Obama photo

The Satirical Political Report: McCain resubmits his op-ed to the New York Times

The Health Care For America Now initiative formally kicked off at the National Press Club today, and it sounds like a group with its eyes on the prize.

A consortium of progressive groups, think tanks, trade unions and activists are set to launch a $40 million health care campaign to prepare the ground for the next president to sign expanded care early in 2009.

The work of Health Care For America Now was first made public late last week. But the group, with Elizabeth Edwards as a figurehead, offered expanded insight into the details of its campaign during a meeting on Monday. In addition to spending $40 million — $1.5 million of which will be put behind an initial ad buy (national TV, print, and online) — the group will be sending organizers to 52 cities, blasting out emails to 5 million households, airing spots on MSNBC and CNN and submitting op-eds to major papers (officials hinted at the New York Times piece to come).

In addition, the campaign is going to take advantage of Moveon.org’s massive data files to reach out to like-minded supporters and officials promised to work in Democratic and Republican districts alike.

Here's the group's first ad:

You may have seen the ads on the site in the last week, but a new group of activists under the banner of Health Care Now is launching a $40 Million campaign today at the National Press Club with the single minded focus of getting comprehensive health care legislation passed by 2009. Huffington Post:

The work of Health Care For America Now was first made public late last week. But the group, with Elizabeth Edwards as a figurehead, offered expanded insight into the details of its campaign during a meeting on Monday. In addition to spending $40 million -- $1.5 million of which will be put behind an initial ad buy (national TV, print, and online) -- the group will be sending organizers to 52 cities, blasting out emails to 5 million households, airing spots on MSNBC and CNN and submitting op-eds to major papers (officials hinted at the New York Times piece to come).

In addition, the campaign is going to take advantage of Moveon.org's massive data files to reach out to like-minded supporters and officials promised to work in Democratic and Republican districts alike.

"We'll have an organizer in the district of every Blue Dog Democrat," said HCAN campaign manager Richard Kirsch of the conservative Democrats.

Because the media over the last six months or so has made the primary races the be all and end all of the news, creating narratives to make the horse race seem closer than it was or piling on the cream to encourage the pie fight (if you'll excuse the mixed metaphors), it's easy to not realize that the country is, as a whole, swinging back to the left side of the political spectrum as a response to how far right we've gone in the last decade or so.

David Sirota has documented this swing in his new book The Uprising and he sat down with Stephen Colbert to discuss it:

Download | play Download | play (h/t Heather)

DS: The Uprising is not about any candidate. The Uprising is about seeing candidates and politicians as vehicles for a movement. People want…

SC: Okay, what candidate is the vehicle for the movement? Let’s…okay, it’s the people, the people swell up underneath the candidate and they inflate him like a political power balloon. Who’s inflating faster?

DS: It’s your state legislators; it’s your city council people; it’s your governor…

SC: I wouldn’t want those people as President. I’ve met those people…

DS: That’s the whole point. We’re led to believe, by people like you, that the President is the only place…the presidential campaign is the only place where change really happens. And the point is that change happens all over the place. When I went out and reported this book, again, I met with people who are unionizing workers in Seattle. I met with people who are forming a third party in New York. I met with people again on the border. These are people who say change is happening far away from the presidential race.

SC: The New York Times—and I’m seeing why—even the NY Times has called you “a populist rabble-rouser”, okay? Are you a Che Guevara? Are you a Che Guevara for our age? Do you look forward to a day where college students wear your face on their shirt and don’t know what you did?

Gin and Tacos: Conservatives' states benefit the most from the federal tax policies they often oppose.

Shakesville: "Obama Racism/Muslim/Unpatriotic/Scary Black Dude Watch Part Forty-Three and Clinton Sexism Watch Part Ninety-One." Now with Bigot Bingo!

Huffington Post: Ali Eteraz debunks Edward Luttwack's claims that the Muslim world might seek to execute Barack Obama as an apostate. (Funny how the New York Times is essentially recycling the same, long-debunked concern trolling of Daniel Pipes and other right-wingers from four months ago.)

Campaign for America's Future: Bill Scher examines McCain's move "from independent maverick to incoherent conservative" on the environment, and Rick Perlstein's Nixonland book tour might be hitting your city this very week.

Media Bloodhound: Not even Tim Russert and his dry erase board can compete with John King's "months-long affair" with his interactive election map. (The map could do sooo much better.)

Guest roundup by Batocchio. Please e-mail submissions and tips to Batocchio9 at yahoo dot com. Thanks!

VetVoice:

The Pentagon has provided $30 billion in contracts to KBR during the Iraq War. Apparently that's just the Basic Troop Support Package, however, because it's not enough money to keep the contractor from electrocuting a dozen troops in showers and elsewhere throughout Iraq and Afghanistan. [..]

The New York Times piece goes on to explain:

The Army has provided little detailed information about the electrocutions, other than to say late Friday that 10 soldiers had been electrocuted in Iraq. A House committee has also reported that two marines died similarly.

One former KBR electrician was quite frank about what's going on:

And Mr. Bliss, who saw a soldier standing next to him in Qalat, Afghanistan, receive a severe shock from an electrical box that was not supposed to be charged, said his KBR bosses mocked him for raising safety issues. They were "not giving the Army what it needed," he said, "and not giving the soldiers what they deserved."