Goldman-Sachs Thrives

Goldman Sachs generates huge profits in bonds
By Jim Kim

Reposted from FierceFinance

March 31, 2010


The record low interest rates that we've seen in the wake of the recession have been great news for big bond dealers. They will likely see killer profits--and none more so than Goldman Sachs (NYSE: GS), which is enjoying a banner quarter.

Fox Business News reports that "senior traders at rival firms say Goldman's traders are cranking out record revenues in trading bonds, taking advantage of record-low interest rates that has fueled a massive rally in the fixed-income markets." Indeed, speculation holds that the firm's revenue exceeded the level hit in the second quarter of last year, when it earned a massive $6.8 billion in fixed-income revenues.

UBS (NYSE: UBS) is also having a banner quarter, generating $2.3 billion in revenue. High-yield bonds seem to have been the biggest beneficiary. Bond funds are booming in general, but who knows when it will all end. Bill Gross (Bill Gross news) has warned that the historic, long-term bond rally may be nearing an end.

For more:
- See Foxs' article on Goldman Sachs
- See Bloomberg on UBS


Click on title above for related story: "Dont Cry for Goldman-Sachs," ;

http://www.foxbusiness.com/story/markets/industries/finance/dont-goldman-sachs/

Former-Goldman Sachs chairman to become CEO of MF Global Holdings

25 March 2010

Jon Corzine, former chairman at Goldman Sachs, has been appointed as the new chief executive officer (CEO) at MF Global Holdings with immediate effect.

He was employed at the investment bank for 24 years, working as chief financial officer, chairman and helping to expand the organisation’s presence in Asia.

Mr Corzine has also worked in the public sector, having served as New Jersey governor between 2006 and 2010 as well as a member of the US Senate from 2001 until 2006.

Previous post holder Bernard W Dan will remain with the company until May to ensure a smooth transition.

Mr Corzine said: “I see a substantial opportunity for the firm to expand its leadership position in serving clients globally in cash and derivatives markets.”

“We will continue to provide the highest level of service to our clients, create new opportunities for employees and grow shareholder value. Profitability and responsibility must go hand in hand with growing our franchise.”

MF Global forecast revenues for the fourth fiscal quarter ending March 31st to be between $235 million and $245 million.

Mr Dan explained that “personal reasons” were behind his decision to leave the company.

By Jim Ottewill




http://www.bobsguide.com/guide/news/2010/Mar/25/Former-Goldman_Sachs_chairman_to_become_CEO_of_MF_Global_Holdings

Soros Fund Buys $38 Million in Lehman Claims From Goldman Sachs

March 24, 2010, 12:04 AM EDT

By Linda Sandler

March 24 (Bloomberg) -- Soros Fund Management LLC bought $38 million in claims on bankrupt Lehman Brothers Holdings Inc. from Goldman Sachs Group Inc., according to court filings.

The claims consist of Lehman program securities, according to the filings yesterday. The purchase price wasn’t disclosed. The Soros firm’s Quantum Partners Ltd. was the buyer.

Claims on Lehman, which outlined a liquidation plan on March 15 for the biggest U.S. bankruptcy in history, trade frequently between banks and short-term or long-term debt investors.

The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

--Editors: Peter Blumberg, Michael Hytha.

To contact the reporter on this story: Linda Sandler in New York at lsandler@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.





http://www.businessweek.com/news/2010-03-24/soros-fund-buys-38-million-in-lehman-claims-from-goldman-sachs.html

Investors: Un-Common Wisdom says Bet on China

For those GBs' who have $$$ to invest

Click on title above for article

Revlon Securities Class Action Filed

A class action lawsuit has been filed against Revlon Inc, alleging that Revlon and certain of its officers, directors and controlling shareholders violated the federal securities laws by withholding material information from those persons who tendered their shares into Revlon's September 24, 2009 Exchange Offer, pursuant to which Revlon offered to exchange each outstanding share of its Class A common stock ("Common Stock") for one share of a newly issued series of Revlon Preferred Stock (the "Series A Preferred"). Following the October 8, 2009 consummation of the Exchange Offer, pursuant to which the members of the Class tendered 9,336,905 shares of Revlon Class A common stock for shares of Series A Preferred, Revlon announced stellar financial results for its quarter ended September 30, 2009 ("Third Quarter 2009") causing the Company's Common Stock price to rise by over 300%.

The complaint further alleges that despite the fact that the Exchange Offer closed only a week after Revlon's Third Quarter 2009, its stockholders were not provided with material information about the Company's expected positive results possessed by defendants. The tendering stockholders were entitled to receive such critical information before deciding whether to exchange their Common Stock. Plaintiff seeks damages on behalf of a class for the losses they suffered as a result of defendants' non-disclosure of material facts and breaches of their fiduciary duties. Plaintiff is seeking remedies under section 14(a) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), and Rule 14a-9 promulgated thereunder by the SEC, and under Delaware state law.

The case seeks to certify a class that includes all shareholders who tendered their shares for conversion to preferred stock pursuant to Revlon's Exchange Offer of September 24, 2009.

St. Jude Medical, Inc STJ Securities Stock Fraud

Company: St. Jude Medical, Inc
Ticker Symbol: STJ
Class Period: Apr-22-09 to Oct-6-09
Date Filed: Mar-22-10
Lead Plaintiff Deadline: May-21-10
Court: District Court for the District of Minnesota

Allegations:
An investor in St. Jude Medical filed a lawsuit in the United States District Court for the District of Minnesota on behalf of purchasers of the common stock of St. Jude Medical, Inc, between April 22, 2009 and October 6, 2009, alleging violations of Federal Securities Laws by St. Jude Medical.

According to the complaint the plaintiff alleges that St. Jude Medical and certain of its officers and executives violated the Securities Exchange Act of 1934 by failing to disclose between April 22, 2009 and October 6, 2009, material adverse facts about St. Jude Medical's true financial condition, business and prospects. Then on October 6, 2009, St. Jude Medical issued a press release announcing "preliminary third quarter results," for the period ending October 3, 2009. The press release reported that St. Jude Medical was reducing its earnings guidance for the completed third quarter. In response to this announcement, the price of St. Jude Medical common stock (STJ) declined from $38.24 per share to $33.40 per share on extremely heavy trading volume.

Shares of St. Jude Medical (STJ) traded recently at $39.41 per share, down from its 52-week high of $41.96 per share, $47.97 per share in August 2008, and over $53 per share in 2006.

St. Jude Medical, Inc, located in St. Paul, MN, develops, manufactures and distributes cardiovascular medical devices for the global cardiac rhythm management, cardiology and cardiac surgery and atrial fibrillation therapy areas and implantable neurostimulation devices for the management of chronic pain. The Company operates in four business segments: Cardiac Rhythm Management (CRM), Cardiovascular, Atrial Fibrillation and Neuromodulation Systems.

If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.

Master of the universe: Can Hugh Hendry teach us to love hedge funds?

Hugh Hendry's hedge fund, Eclectica Asset Management, is profiting handsomely from the ailing Greek economy. How can he defend cashing in on the misfortunes of others? Easily, he tells Simon Usborne



A stack of hardbacks sits on the windowsill in the office of hedge fund manager Hugh Hendry. They make up a reading list perhaps now common in London's embattled financial community.


The Volatility Machine: Emerging Economics and the Threat of Financial Collapse sits under a copy of Lords of Finance: The Bankers Who Broke the World, a timely examination of the Great Depression. On top of the pile, lies a dog-eared dictionary open at the page with words beginning "sco-". What was Hendry looking up? He bounds around his desk. "Oh, yes," he says, running his finger down the page, "it was for an article I wrote about hedge fund managers last week. I was looking up 'scourge', as in 'scourge on society'."

Hendry does not see himself as "a person who harasses or causes destruction", but he is painfully aware that that is how many of us see him. Originally a byword for staggering personal wealth apparently derived from having licences to print money, hedge funds have become, after the recession, a symbol of something more sinister. When I canvass opinions of Hendry before our interview, they are generally negative. One knowledgeable denizen of Wall Street, who prefers not to be named, writes in an email: "Hendry is the Person I'd Most Like To Punch." It's the same story in Europe. Poul Rasmussen, the former prime minster of Denmark, who is waging a war against speculators like Hendry by pushing for more EU regulation, tells me on the phone from Brussels: "Hedge funds are like vultures, or hunting dogs. When a state is in trouble, you can be sure that in a nano-second they'll make attacks."

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It's an ugly characterisation that Hendry hears more and more. And he's had enough. Combining staggering self-assurance – the product of more than 20 years in investment finance – with the zeal of a preacher and a remarkable facility for extended metaphors, the 41-year-old Scot has become the self-appointed defender-in-chief for a secretive profession under siege. "Of course it bothers me that I'm hated," Hendry says. "I listen to some of the things people say on debates on Radio 4 and it terrifies me to hear such hostility. What bothers me is that the silence of rich guys who are embarrassed about being rich helps whip up this frenzy that makes us seem like villains." Hendry, who will later argue that hedge fund managers offer a "social service", says the public "is being fed a line that preys on their ignorance. The person who would like to punch me doesn't have that insight."

*****

Hendry is the boss at Eclectica Asset Management, which he launched five years ago. Like all hedge funds, it takes money from investors and uses it to make bets on their behalf. A good bet means a healthy return for investors – and, of course, a fat fee for the fund manager. Eclectica is, by his own admission, a hedge fund minnow. "The total size of the assets we have under management is about £450m," he says. "There are funds that manage $20bn [£13bn]." Leading a team of a dozen or so fund managers, analysts and traders, Hendry asks his clients (most of whom he says are individuals) to invest a minimum of 100,000 dollars, pounds or euros. He says that most funds demand at least $5m. Talking later about the real big hitters, Hendry says, "Some of these guys, I should be shining their shoes."

But it's clear that Hendry does okay. He responds to enquiries about his personal wealth (and many other questions about his private life) with a polite "fuck off", but his financier's uniform of well-cut blue shirt, navy tie, Gucci specs and a chunky Louis Vuitton watch shouts money. Not that all areas of his life conform to the stereotype. His stark, mahogany-free office is not in Mayfair or Knightsbridge but in the shadow of the Whiteleys shopping centre in Bayswater, a short hop in his G-Wiz electric car from his Notting Hill home. Sure, he has a house in the country ("a Cotswolds caricature"), but he reaches it, with his wife and three young children, in a second-hand Land Rover Discovery.

Whether or not his relatively modest lifestyle is something studied rather than a product of a tight budget, Hendry has carved out a nice life. And he's terrified that a backlash against his profession will force him out. "I don't want to go and live in Switzerland or some Caribbean island," he says. "I like it here." But for many people, Hendry has become persona non grata. Poul Rasmussen, who is now an MEP and president of the Party of European Socialists, has been the driving force behind proposed EU regulation of the hedge fund industry that would significantly trim its powers.

The Alternative Investment Fund Managers directive and the popular, speculators-as-devils sentiment it represents, amounts to such a significant attack on the largely Anglo-American hedge fund industry that it has almost sparked a diplomatic crisis.

First Timothy Geithner, the US Treasury Secretary, made a veiled threat of US retaliation if the directive were pursued. Then, on the eve of a meeting of EU finance ministers last Tuesday, at which the reforms were due to be discussed, Prime Minister Gordon Brown made a late-night telephone call to his Spanish counterpart, José Luis Rodríguez Zapatero, also appealing for restraint. Spain, which holds the EU presidency, then dropped the directive from the agenda. Rasmussen calls the Spanish retreat, after "incredibly heavy lobbying" by the London hedge fund community, "a disgrace".

Rasmussen and Hendry have come to represent two sides in an increasingly bitter and, at times, personal war of words about the moral and financial value of the hedge fund in a post-recession society. The two came head-to-head on the BBC's Newsnight earlier this month. While Rasmussen kept it civil, his disdain was palpable. Hendry, meanwhile, listened to his foe while wearing a permanent sneer, before suggesting that Rasmussen was a "champagne socialist travelling business class on the back of money created by risk-takers like me".

*****

So who's right? Both sides see answers in a nation on its knees. Greece's economy is in meltdown after years of massive borrowing and spending. Now, as the banks that lent to Greece scramble to shore up their finances after the global economic crisis, they want their money back. Greece can't pay. That means it risks going into default, which means banks would have to take massive write-offs, which would affect lending, hammer the euro and send economic shockwaves across the world. What has this got to do with Hendry? "As Greece spends less, its economy will prove weaker and it could go back into recession," he explains. "In that event, it seems unlikely that the European Central Bank would raise interest rates, because if it did, it would precipitate further financial duress and strain upon a vulnerable country. I have substantial investments which are betting that interest rates will not go up this year. If they do, I will lose money, but if I'm right, I could make a return of about 20 per cent of the size of my fund." He adds: "I don't think that makes me a bad guy."

Others do, however. Hendry's is one example of many positions held by hedge fund managers that mean they and their clients will profit as the Greek economy sinks. Rasmussen and his supporters believe that some of these positions make things worse for Greece by forcing up interest rates on the debt it is already struggling to repay. The country's Prime Minister, George Papandreou, said in a speech in Washington earlier this month, "An elected government, making huge changes with the consent of its people, is being undermined by concentrated powers in unregulated markets – powers which go beyond those of any individual government."

Hendry is in effect being accused by a Prime Minister and a leading MEP of exacerbating the suffering of people, of causing mass unemployment and widespread strikes that have seen the closure of schools, and violent clashes on the streets of Athens. He has a lot to answer for.

But is Rasmussen right? Hugh, are you a vulture? "It wouldn't be a pretty metaphor," he replies, "but you could say that when you see a vulture picking the bones of a springbok, it's picking the bones on a dead carcass. The vulture wasn't responsible for the death."

Okay, so it's not his fault. Hendry did not bring down Greece, whose trials have been widely blamed on reckless lending by banks, reckless borrowing by Greece, and book-fiddling in Athens to hide the scale of public debt. But when did vultures start offering a social service? To illustrate one of his more surprising arguments, the hedge fund manager moves from the savannah to my house: "Say I buy insurance on your house burning down. I don't live in your house, so why on earth would I want to have anything to do with any future outcome there? Well, I'm not dumb. I give great consideration to spending mine and my clients' money. So if I'm buying insurance that pays out on your house burning down, then there's a strong probability there's a fire hazard. I suggest you do something about it. You would perhaps discover your wiring was faulty and replace it. If you do, my curiosity and information has helped to prevent a catastrophe."

Hendry goes further. He says it's common for hedge fund managers to write letters to company bosses, telling them what they are doing wrong and what they should do to fix it. So, less vulture and more canary in the coal mine. A prettier metaphor, but one that, in many minds, doesn't fly. Company bosses appreciate his input about as much as the Greek Prime Minister does. "We are their worst nightmare because we're well-financed, we're intelligent and the problem is that, right now, the message we have is rather unpalatable," Hendry says. "Our business is to say that the emperor has no clothes."

But surely Hendry's biggest hurdle in convincing us he does good is that, when hedge fund managers make millions at the same time that others lose millions, it looks bad. Hendry saw it for himself when he dropped his kids at their private school the day after the 2008 Lehman Brothers collapse. "A lot of parents were immediately affected, because the majority of senior employees at Lehman's had most of their savings invested in the stock," he recalls. "Suddenly they woke up and it was zero and they were wondering if their children could still go to school. The misery was palpable and I was shocked by the human cost. But it was weird, because I knew my fund was up 20 per cent that day. I was cockahoop."

*****

Hendry's conviction and antagonistic tendency are the result of a life in which he has never conformed. The son of a Glasgow lorry driver, he always wanted out: "I knew that if I knuckled down I'd be in control of my destiny... and, for a kid from that background, your ticket into the middle classes was law or accountancy." He chose accountancy, becoming the first member of his family and one of few pupils from his school to go to university (at Strathclyde). He was then the first non-Oxbridge graduate to get a job at the prestigious Edinburgh investment management firm, Baillie Gifford. But, as fearless then as he is now, he was labelled a troublemaker. After a move to the City, he became a frustrated nobody on a floor of 400 traders. Still he spoke up, but his voice wasn't welcome and he was fired inside a month. It was only after a chance meeting with Crispin Odey, the millionaire grandee of the London hedge fund scene, that Hendry felt he belonged. "It was a meeting of minds," says Hendry, who won awards as a fund manager with Odey's outfit, after being hired in 1999. "He checked my references, got the message that I was a troublemaker, and said, 'You're one of us, you're one of the pirates'."

Now in charge at Eclectica, which he launched in 2005, Hendry says it's his job to operate outside the herd. During our 90-minute interview, his phone, which he says is not on divert, hasn't rung once. His desk isn't scattered with company reports and spreadsheets but instead with books, a pile of CDs and a Chronicles of Narnia DVD. His day begins with the school run, followed by a visit to his local coffee shop and a 10am start. He attends a Spinning class and does yoga. He writes commentary, published on his website, which is as colourful as his language and quotes anyone from Keynes to Roald Dahl. He says he has "no dialogue" with anyone else in the City: "I make the greatest profit from contentious posturing. But because that posturing is deemed now to be no longer economically contentious but also politically contentious, I feel as if I have gone into a conflict with society at large."

Perhaps the pirate/vulture imagery isn't helping. Neither beast is renowned for its emotion or compassion. It can make Hendry appear cold-hearted as well as infuriatingly self-assured. The man who wants to punch him was moved by another notorious Newsnight clash. Last month, Hendry came up against Joseph Stiglitz, the Nobel prize-winning American economist and former chief economist of the World Bank. When Stiglitz was being, in Hendry's words, "egregiously wrong" about Greece's woes, Hendry delivered a finger-pointing rebuke that began with the words: "Erm, hello. Can I tell you about the real world?"

But if emotion is one luxury Hendry can rarely afford, he says it's because, in global finance, it comes at too high a price. He springs from the table back over to the window, where the dictionary is now closed, and pulls out a copy of The Economic Consequences of the Peace, by the visionary British economist, John Maynard Keynes. Published in 1919, the book argues that the massive reparations demanded of Germany after the First World War jeopardised the European economy. Keynes prescribed forgiveness, economically at least. Hendry draws parallels between the Allies and today's banks. "They should be generous," he says. "By insisting that Greece, for example, should repay everything they are impoverishing us all."

But it's a message not heard by the banks, which leaves countries like Greece relying on official bailouts. Hendry says that's damaging. "German and French banks have got billions of euros in Greece, even though everyone knew Greece was using its credit card too much. And now they're stuck and want to pull the money out. But if they do, you'll get a bank failure in Greece and the whole thing unravels. And so you've got the politicians on the other side who keep rescuing them with your money – that impoverishes you. If Keynes were alive today he would write a book called "The Economic Consequences of the Bailout".

So, what, just let everything go up in flames – savers, bankers, Greeks be damned? "I believe in tough love. Let's look at Iceland. I didn't invest money in Icesave because they took risks I would never take to offer very high interest rates. You take a risk, you get it wrong, you pay. Instead the government says, don't worry, here's my friend the taxpayer with a cheque. You're impoverishing us all to bail out people who make bad decisions." Hendry says it's the same in Greece, where "the champagne socialists I refer to want to bail out the bankers not the people. But they can confuse the people by saying, look, here are these evil speculators – it's their fault."

*****

And so it comes back to the war with Rasmussen, who's still hell-bent on cutting hedge funds down to size. You get the sense that it's Hendry's character as much as his argument that enrages his enemies. Why should I listen to this jumped-up financier?

"This isn't personal," Rasmussen says. "It's about fundamental ethics. Compare ordinary, hard-working families earning their money to what these guys in the hedge fund industry are doing. We want to tell these guys, you have to behave in accordance with what's decided by society. If I were in the hedge fund industry I would feel a bit lonely."

But Hendry doesn't feel lonely, and is hopeful that Rasmussen's directive, which he says would ultimately cause greater inflation and make us poorer, will fail. He says he has had messages of support from other managers unable, or unwilling, to speak out. "I got an email from a financial journalist telling me there was now an acronym for me – BHFMTFH, or 'boutique hedge fund manager turned folk hero'. I don't think it will take off." Hendry has found an instant audience for his voice because it's rare for anyone from his profession to speak out, never mind become a minor celebrity with a following on YouTube (that Stiglitz take-down has 35,000 views). He claims his openness is bad for business. "A lot of guys play golf or shoot furry animals," he says. "I don't. My vice is speaking to fuckers like you."

Leaving his office, Hendry shows me to the main floor, where young men in polo shirts are eating lunch hunched over their monitors. Bolted to the far wall, a giant plasma screen sporting a spreadsheet offers a live update of Eclectica's funds. "Can you imagine having a screen on your wall saying, every minute, 'you're a great journalist, you're a shit journalist, you're a shit journalist, you're a good journalist'? I have that. I risk my money and my clients' money every day."

Right now, Hendry is just an average fund manager – the figures on the screen show he's losing money, albeit a fraction of a per cent of his funds (and it's only 1pm). "If I get things wrong, don't worry about me – I'm not going to get bailed out. I'll lose everything and you'll never hear from me again."

In the meantime, what remains is that nagging question about the moral implications of the work of hedge funds, which is only growing in the popular imagination, even if Hendry doesn't see it. "PEOPLE DO NOT SUFFER WHEN I SUCCEED," he 'shouts' when I press him in an email the day after our interview. Taking him back to my house, which has now burned down because, presumably, I haven't heeded his warnings and haven't checked my (faulty) wiring, I ask if, before cashing in, he stops to think about my lost possessions and memories – the fact that I'm now homeless. "I guess that if I retain my UK citizenship and therefore am subject to paying taxes, then when the fire engines come to hose down your house, you know what? I paid for the fire brigade."

Long and short of it: What are hedge funds?

Machiavellian manipulators of markets, or successful servants of savers? The truth is that the term 'hedge fund' covers a multitude of sins. In a nutshell, a hedge fund is a professionally run investment vehicle that takes in money from a group of savers – usually high-net-worth individuals or institutions such as pension funds – and makes bets on their behalf.

Assuming the bets pay off, the hedge fund manager gets a generous fee and investors earn a good return on their money.

Different hedge funds pursue very different strategies and invest in all sorts of different assets, from shares to commodities to debt. But the sector is associated with two trading techniques in particular: short selling and leverage.

Short selling means selling an asset you don't own in the hope of being able to buy it back at a cheaper price later. It's a way to bet on the price of something falling. Leverage, meanwhile, means borrowing extra money to invest; it can make winning bets many times more profitable, but losing wagers are correspondingly painful.

Much of the notoriety that surrounds the hedge fund industry stems from the fact that as private funds, usually off-limits to ordinary savers, they are lightly regulated and don't have to tell the world too much about what they're up to. Many funds are highly secretive and committed to keeping a low profile.

For conspiracy theorists, that makes the sector an easy target. European officials, for example, have accused hedge funds of conspiring to use the Greek crisis as an opportunity to provoke a run on the euro. Two years ago, hedge funds were accused of planting false rumours during the banking crisis.

There's no doubt that some hedge funds, worth billions of pounds, are very powerful. For example George Soros, the best-known of all hedge fund managers, made £1bn by aiding and abetting the UK's exit from the Exchange Rate Mechanism in 1992. But the sector has no more bad eggs than any other part of the financial services industry. And it played almost no part in causing the financial crisis of the past three years.







http://www.independent.co.uk/news/business/analysis-and-features/master-of-the-universe-can-hugh-hendry-teach-us-to-love-hedge-funds-1924913.html

Goldman Sachs CEO Lloyd Blankfein Receives Total Compensation Of $9.8 Mln For 2009

3/20/2010 9:55 AM ET


(RTTNews) - According to a preliminary proxy statement filed with the regulator, total compensation for Lloyd Blankfein, Chairman and Chief Executive Officer of Goldman Sachs Group Inc.(GS: News ) , was approximately $9.8 million, which included a $600,000 salary, $9 million in restricted stock awards and about $262,000 in other compensation.

Blankfein also received $18.7 million in distributions from investment funds open to executives and employees of the firm, according to a regulatory filing on Friday.

Goldman Chief Operating Officer Gary Cohn received $15.1 million, Chief Financial Officer David Viniar $11.5 million, and former President and Chief Operating Officer Jon Winkelried got $9.8 million.

GS closed the Friday's regular trading session at $177.90, up $0.45. In the after-hours trading, the shared declined 0.28% and ended at $177.40

Click here to receive FREE breaking news email alerts for Goldman Sachs Group Inc. and others in your portfolio

by RTT Staff Writer

For comments and feedback: contact editorial@rttnews.com

Lloyds accused of avoiding tax to artificially boost profits

Guardian – A former employee of Lloyds Banking Group has accused the bank of artificially inflating its profits by almost £1bn through the use of aggressive tax-avoidance schemes and exotic “Lehman- style” offshore deals which he said amounted to false accounting. The former senior tax manager at the bank told an employment tribunal Lloyds was involved in running battles with Revenue & Customs after it embarked on a hostile relationship with the tax authority over multimillion-pound corporation tax bills while involved in extensive manipulation of the way it accounted for unpaid taxes.

Click on title above for original article; http://www.guardian.co.uk/business/2010/mar/18/lloyds-banking-tax-avoidance-allegations


Thanks to OpenYourEyes for passing this along;
http://www.openyoureyesnews.com/2010/03/19/lloyds-accused-of-avoiding-tax-to-artificially-boost-profits/

Bernie Madoff's Computer Programmers Indicted on Conspiracy, Falsifying Charges

Former CFO's Cooperation with Officials Led to Arrests
By MEGAN CHUCHMACH
Mar. 17, 2010

Two former computer programmers who worked for notorious Ponzi scammer Bernie Madoff were indicted today on charges of conspiracy and falsifying records.


Former computer programmer for Bernard Madoff Jerome O'Hara, left, exits Manhattan Federal Court with his attorney Gordon Mahler following his arraignment, in this Nov. 13, 2009 file photo, in New York.

Jerome O'Hara, 47, and George Perez, 44, allegedly "developed and maintained computer programs that generate false and fraudulent records," the U.S. Attorney for the Southern District of New York said.

They are each charged with one count of conspiracy, one count of falsifying records of a broker-dealer, and one count of falsifying records of an investment adviser.

O'Hara's attorney Gordon Mehler told ABCNews.com, "We intend to plead not guilty and therefore Mr. O'Hara is presumed innocent even though it has been more than four months since he's been arrested."

"Mr. Perez will be pleading not guilty to the indictment, which is merely an accusation," Perez's attorney Larry Krantz said. "We will be defending him zealously against the charges."

Madoff's former CFO Frank DiPascali, who pleaded guilty last August to multiple counts of fraud, conspiracy, money laundering, perjury and income tax evasion, has been cooperating with officials and reportedly provided information that led to the indictments against O'Hara and Perez.

In a court filing in December, DiPascali's attorney Mark Mukasey wrote of DiPascali's "fruits of…assistance" and said "information he provided contributed to the arrest of three individuals to date."

Mukasey identified O'Hara and Perez but didn't name the third party.


Federal prosecutors filed papers in late February indicating that DiPascali's cooperation with prosecutors will result in an "extraordinary letter" seeking leniency for DiPascali, who faces up to 125 years in prison. He remains behind bars because, even though prosecutors have asked that DiPascali be allowed to return to his New Jersey home prior to sentencing, the judge in the case has rebuffed their requests and set DiPascali's bail at $10 million.

If convicted on all charges, O'Hara and Perez face 30 years behind bars.

ABC's Drew Sandholm contributed to this report.



http://abcnews.go.com/Blotter/Madoff/bernie-madoffs-computer-programmers-indicted-conspiracy-falsifying-charges/story?id=10129566

U.S. Chamber of Commerce 2 Lobby Against Financial Reform

Here's what the U.S. Chamber of Commerce has been up to in the past couple weeks:

Flying 250 CEOs to DC to lobby against workers' rights and the Employee Free Choice Act.1
Spending $7 million to defeat President Obama's healthcare reform bill – with plans to spend millions more.2
Preparing a $3 million ad blitz to lobby against financial reform – funded by, you guessed it: bailed out banks.3
But this is just a warm-up. According to The Washington Post, the U.S. Chamber of Commerce is "gearing up to play a major role in this year's midterm elections on a scale to rival the nation's two main political parties," spending at least $50 million on races around the country.

To get an idea of just how bad this could get, you've got to read the whole article below.

Please forward the frightening and eye-opening article below to everyone you know who cares about democracy – and ask them to sign our "Not My Chamber" pledge at www.notmychamber.org.

Here at American Rights at Work, we've been working tirelessly to stop the U.S. Chamber of Commerce's anti-progress agenda. 24,436 people have already signed the Not My Chamber pledge and we need to make sure more people know about the U.S. Chamber's activities. Please forward the article below!

Sincerely,

Manny, Liz, Elizabeth, Doug, and the American Rights at Work team



--------------------------------------------------------------------------------


Forward this article and ask your friends to sign the "Not My Chamber" pledge: www.notmychamber.org

U.S. Chamber of Commerce sets sights on Democrats ahead of midterm elections

By Dan Eggen
Washington Post
Tuesday, March 16, 2010

The U.S. Chamber of Commerce, already one of Washington's largest lobbying groups, is gearing up to play a major role in this year's midterm elections on a scale that rivals the nation's two main political parties.

Modeled in part on Barack Obama's 2008 campaign juggernaut, the group has built a grass-roots operation known as Friends of the U.S. Chamber of Commerce. It has a member list of 6 million names, aimed at lobbying on legislation and swaying voters to back preferred candidates, primarily Republicans, in battleground areas, officials said.

The group will target vulnerable Democrats in up to two dozen states with ads, get-out-the-vote operations and other grass-roots efforts. The chamber plans to spend at least $50 million on political races and related activities this year, a 40 percent increase from 2008.

The strategy follows the chamber's record lobbying effort at the end of 2009, when it spent nearly $800,000 a day rallying opposition to Democratic proposals in Congress. All told, the organization spent more money on lobbying and political activities last year than either the Democratic National Committee or the Republican National Committee, which serve as the main fundraising and grass-roots operations for the parties.

...

One early example of its influence came in January, when the chamber spent $1 million on ads to help Republican Scott Brown win a hotly contested special election for the U.S. Senate in Democratic-leaning Massachusetts. The group praised Brown as a candidate who "empowers business, not politicians" and hailed his Jan. 19 victory.

Brown was initially scheduled to be sworn in Feb. 11, but the group joined GOP leaders in pushing the date a week earlier. The change allowed Brown to take office just in time to cast a decisive vote against Craig Becker, a pro-union nominee to the National Labor Relations Board whom the chamber strongly opposed.

The group's heightened presence in the elections "is a real wake-up call for those of us on the other side," said Mike Gehrke, spokesman for Change to Win, a coalition of five major labor unions. "They're going to be bigger, they're going to be more aggressive and they're going to use tactics that progressives and Democrats have not seen a group like the chamber use before."

...

Many Democrats note that local Chamber affiliates often have disputes with the parent organization, and they point out that Apple, Nike and several major utilities have quit the group or its board over its position on climate legislation.

The chamber has accepted as much as $20 million from insurance companies for ads opposed to Obama's health-care reform proposals and is leading an effort to spend up to $10 million on opposition spots this month.

Note from American Rights at Work: To help fight back against the U.S. Chamber of Commerce and stand up for working people, take action at www.notmychamber.org.

Click on title above to read the full article; http://www.washingtonpost.com/wp-dyn/content/article/2010/03/16/AR2010031602040_pf.html

1http://www.washingtonexaminer.com/opinion/columns/Business-leaders-swarm-hill-to-fight-card-check-85995692.html
2 http://www.nytimes.com/2010/03/15/health/policy/15health.html
3http://www.google.com/hostednews/ap/article/ALeqM5g7ffRdswXTlfgaQS0FCOZmrvbwcAD9EG1D400

Study Shows Money Flooding into Campaigns for State Judgeships

Justices Ginsburg, O'Connor Say Fundraising Could Corrupt System, Reform is Needed


Click on title above for Special Report;
http://abcnews.go.com/Blotter/study-shows-money-flooding-campaigns-state-judgeships/story?id=10120048

Insurance Rates Jump for Poor in Pennsylvania

http://www.fiercehealthcare.com/story/insurance-rates-jump-poor-pennsylvania/2010-03-17?utm_medium=nl&utm_source=internal

eBay Founder Waxes Political, Ignites Immigration Debate;

http://blogs.abcnews.com/thenote/2010/03/meg-whitman-alters-immigration-rhetoric-.html?utm_source=twitterfeed

A Lesson in Need (Compare & Contrast) and Lip Service Giving

Click on title above for short vid

Exposing a Sham - Recovery

The Sham Recovery
Friday 12 March 2010

by: Robert Reich | RobertReich.com


(Photo: seiuhealthcare775nw; Edited: Lance Page / t r u t h o u t)

Are we finally in a recovery? Who's "we," kemosabe? Big global companies, Wall Street, and high-income Americans who hold their savings in financial instruments are clearly doing better. As to the rest of us – small businesses along Main Streets, and middle and lower-income Americans – forget it.

Business cheerleaders naturally want to emphasize the positive. They assume the economy runs on optimism and that if average consumers think the economy is getting better, they'll empty their wallets more readily and – presto! – the economy will get better. The cheerleaders fail to understand that regardless of how people feel, they won't spend if they don't have the money.

The US economy grew at a 5.9 percent annual rate in the fourth quarter of 2009. That sounds good until you realize GDP figures are badly distorted by structural changes in the economy. For example, part of the increase is due to rising health care costs. When WellPoint ratchets up premiums, that enlarges the GDP. But you'd have to be out of your mind to consider this evidence of a recovery.

Part of the perceived growth in GDP is due to rising government expenditures. But this is smoke and mirrors. The stimulus is reaching its peak and will be smaller in months to come. And a bigger federal debt eventually has to be repaid.

So when you hear some economists say the current recovery is following the traditional path, don't believe a word. The path itself is being used to construct the GDP data.

Look more closely and the only ones doing better are the people and private-sector institutions at the top. Many of America's biggest companies are sitting on huge amounts of cash right now, but that says nothing about the health of the U.S. economy. Companies in the Standard&Poor 500 stock index had sales of $2.18 trillion in the fourth quarter, up from $2.02 trillion last year, and their earnings tripled. Why? Mainly because they're global, and selling into fast-growing markets in places like India, China, and Brazil.

America's biggest companies are also showing fat profits and productivity gains because they continue to slash payrolls and cut expenditures. Alcoa, for example, had $1.5 billion in cash at the end of last year, double what it had on hand at the end of 2008. Sounds terrific until you realize how it did it. By cutting 28,000 jobs – 32 percent of workforce – and slashed capital expenditures 43 percent.

Firms in S&P 500 are now holding a whopping $932 billion in cash and short-term investments. And they can borrow money cheaply. Corporate bond sales are brisk. So far in 2010, big U.S. corporations have issued $195.2 billion of debt, excluding government-guaranteed bonds. Does this spell a recovery? It all depends on what the big companies are doing with all this cash. In fact, they're doing two things that don't help at all.

First, they're buying other companies. (Walgreen last month spent $618 million for New York drugstore chain Duane Reade; Bank of New York Mellon, $2.3 billion for PNC Financial Services; Monster, $225 million for jobs.com; Diamond Foods, $615 million for Kettle Foods.) This buying doesn't create new jobs. One of the first things companies do when they buy other companies is fire lots of people who are considered "redundant." That's where the so-called merger efficiencies and synergies come from, after all.

The second thing big companies are doing with all their cash is buying back their own stock, in order to boost their share prices. There were 62 such share buy-backs in February, valued at $40.1 billion. We're witnessing the biggest share buyback spree since Sept 2008. The major beneficiaries are current shareholders, including top executives, whose pay is linked to share prices. The buy-backs do absolutely nothing for most Americans.

(None of this, by the way, is stopping supply-side fanatics from arguing government needs to cut taxes on big corporations in order to spur the recovery. Their argument is absurd on its face. Big companies don't know what to do with all their cash they have as it is. They aren't investing it in new plant and equipment and new jobs. So why should the government cut their taxes and enlarge their cash hoards even more?)

The picture on Main Street is quite the opposite. Small businesses aren't selling much because they have to rely on American – rather than foreign – consumers, and Americans still aren't buying much.

Small businesses are also finding it difficult to get credit. In the credit survey conducted in February by the National Federation of Independent Businesses, only 34 percent of small businesses reported normal and adequate access to credit. Not incidentally, the NFIB's "Small Business Optimism Index" fell 1.3 points last month, just about where it's been since April.

That's a problem for most Americans. Small businesses are where the jobs are. In fact, small businesses are responsible for almost all job growth in a typical recovery. So if small businesses are hurting, we're not going to see much job growth any time soon.

The Federal Reserve reported Thursday that American consumers are shedding their debts like mad. Total US household debt, including mortgages and credit card balances, fell 1.7 percent last year – the first drop since the government began recording consumer debt in 1945. Much of the debt-shedding has been through default – consumers simply not repaying and walking away from homes and big-ticket purchases.

This is hardly good news. But here's the Wall Street Journal's take on it: "the defaults are leaving many people with more cash to spend and save, jump-starting the financial rehabilitiation" of the economy.

Baloney. As of end of 2009, debt averaged $43, 874 per American, or about 122 percent of annual disposable income. Most economic analysts think a sustainable debt load is around 100 percent of disposable income – assuming a normal level of employment and normal access to credit. But unemployment is still sky-high and it's becoming harder for most people to get new mortgages and credit cards. And with housing prices still in the doldrums, they can't refinane their homes or take out new loans on them. The days of homes as ATMs are over.

Some cheerleaders say rising stock prices make consumers feel wealthier and therefore readier to spend. But to the extent most Americans have any assets at all their net worth is mostly in their homes, and those homes are still worth less than they were in 2007. The "wealth effect" is relevant mainly to the richest 10 percent of Americans, most of whose net worth is in stocks and bonds. The top 10 percent accounted for about half of total national income in 2007. But they were only about 40 percent of total spending, and a sustainable recovery can't be based on the top ten percent.

Add to all this the joblessness or fear of it that continues to haunt a large portion of the American population. Add in the trauma of what most of us have been through over the past year and a half. Consider also the extra need to save as tens of millions of boomers see retirement on the horizon. Bottom line: Thrifty consumers are doing the right and sensible thing by holding back from the malls. They saved a little over 4 percent of their disposable income in fourth quarter of 2009. In the months or years ahead they may save more.

Right and sensible for each household but a disaster for the economy as a whole. American consumers accounted for 70 percent of the total demand for goods and services in the American economy before the Great Recession, and a sizable chunk of world demand.

So what happens when the stimulus is over and the Fed begins to tighten again? Where will demand come from to get Main Street back, create jobs, raise middle class wages? Not from big businesses. Certainly not from Wall Street. Not from exports. Not from government.

So, where? That question is the big unknown hanging over the U.S. economy. Until there's an answer, an economic "recovery" for anyone other than big corporations, Wall Street, and the wealthy is a mirage.






http://www.truthout.org/the-sham-recovery57638

Senator Calls For Aggressive Financial Reform, Deplores Current 'Incremental' Steps

Shahien Nasiripour, Huffington Post

March 11, 2010

A senator is calling for the break-up of megabanks and a firmer separation between Main Street banking and Wall Street trading, joining the ranks of leading economists and business titans demanding aggressive financial reform far beyond what the Obama administration and Democrats in Congress are pushing.

In a Thursday morning speech on the Senate floor, Sen. Ted Kaufman (D-Del.) blasted the "incrementalism" approach to fixing the nation's broken financial system, laid bare by a financial crisis that wiped out trillions of dollars in wealth and sent the economy into a tailspin not seen since the Great Depression.

Rather than nibbling around the edges, Kaufman wants to impose strict limits on financial firms' activities; significantly cut them down in size; and wants Congress to act more forcefully because federal banking and securities regulators failed to protect the public from an increasingly dangerous financial industry.





For full article click on title above or go here;
http://www.huffingtonpost.com/2010/03/11/senator-calls-for-aggress_n_494699.html

Goldman Sachs to Dictate Health-Care Costs?

Goldman Sachs now entwined in healthcare debate
By Jim Kim


Goldman Sachs (GS), being Goldman Sachs, draws lot of unwanted attention. Now, it's even a player in the debate over healthcare reform. The Obama Administration (Barack Obama news), according to the New York Times, is seizing on a new report by Goldman Sachs analysts that shows "how insurers can be aggressive in raising prices, they also walk away from clients because competition in the industry is so weak, the White House said. And officials will point to a finding that rate increases ran as high as 50 percent, with most in 'the low- to mid-teens'--far higher than overall inflation."

Is this good or bad for the bank? It perhaps never intended to be made a de facto ally of the administration. But it just might be seen as a PR ploy (public relations news). The results of the report aren't hugely controversial, the conclusions are not earth shattering. In another era, it might been seen as a PR coup, highlighting the high quality of their research. Or is that merely groping for a silver lining?

NY Times article "Obama Wields Analysis of Insurers in Health Battle," ....By DAVID M. HERSZENHORN (http://www.nytimes.com/2010/03/07/health/policy/07health.html)

Obama Wields Analysis of Insurers in Health BattleBy DAVID M. HERSZENHORN
Published: March 6, 2010

WASHINGTON — To bolster the case for a far-reaching overhaul of the health care system, the Obama administration is seizing on a new analysis by Goldman Sachs, the New York investment bank, recommending that investors buy shares in two big insurance companies, the UnitedHealth Group and Cigna, because insurance rates are up sharply and competition is down.

White House officials on Saturday said that the Goldman Sachs analysis would be a “centerpiece” of their closing argument in the push for major health care legislation. The president and Democratic Congressional leaders are hoping to win passage of the legislation before the Easter recess. Republicans remain fiercely opposed to the bill.

The Goldman Sachs analysis shows that while insurers can be aggressive in raising prices, they also walk away from clients because competition in the industry is so weak, the White House said. And officials will point to a finding that rate increases ran as high as 50 percent, with most in “the low- to mid-teens” — far higher than overall inflation.

The analysis could be a powerful weapon for the White House because it offers evidence that an overhaul of the health care system is needed not only to help cover the millions of uninsured but to prevent soaring health care expenses from undermining the coverage that the majority of Americans already have through employers.

Republicans, however, could also point to the analysis as bolstering their contention that Democrats should be focused more on controlling costs and less on broadly expanding coverage to the uninsured.

The research brief is largely based on a recent conference call with Steve Lewis, an industry expert with Willis, a major insurance broker.

In the call, Mr. Lewis noted that “price competition is down from a year ago” and explained that his clients — mostly midsize employers seeking to buy health coverage for their employees — were facing a tough market, in which insurance carriers are increasingly willing to abandon existing customers to improve their profit margins.

“We feel this is the most challenging environment for us and our clients in my 20 years in the business,” Mr. Lewis said, according to a transcript included in the Goldman brief. “Not only is price competition down from a year ago,” he added, “but trend or (health care) inflation is also up and appears to be rising. The incumbent carriers seem more willing than ever to walk away from existing business resulting in some carrier changes.”

The report also indicated that employers are reducing benefit levels, in some cases by adding deductibles for prescription drug coverage in addition to co-payments, and raising other out-of-pocket costs for employees as a way of lowering the cost of insurance without increasing annual premiums and employee contributions to them.

Kathleen Sebelius, the secretary of health and human services, is expected to discuss the Goldman analysis on two Sunday television talk shows, “Meet the Press” on NBC and “This Week” on ABC.

In his call with Goldman, Mr. Lewis said beneficiaries were feeling the brunt of the changes to existing policies. “Visually to employees, they’re fairly significant,” he said.

But the report also sounded cautionary notes that the administration will probably not want to highlight.

Asked by Goldman analysts about the effort to pass major health care legislation, Mr. Lewis said many employers experiencing increases in their insurance costs were nonetheless apprehensive about the president’s proposal.

“They’re very mixed in their reaction, quite candidly consistent with what we’re seeing in the polling numbers by party lines,” Mr. Lewis said. “I think most people would acknowledge that there’s a need for health care reform; employers continue to be very frustrated. So when they look at what the Obama administration and the Democratic majority state as their goals to increase access and lower cost and rail at what may be termed oligopolistic behavior of carriers in certain markets, I think employers really buy in to that message and have much of that frustration and anger at our lack of solutions.”

And yet, he said, there is little enthusiastic support from employers for the Democrats’ proposals.

“Many of them still view the legislation and the partisanship coming out of Washington as possibly the medicine worse than the disease,” he said. “So many employer groups that we’re talking to feel like it would be a shame to lose an opportunity to do something with respect to health care reform. But many are starting to feel like maybe nothing is better than something in this current environment.”


Click on title above for GS Report; http://graphics8.nytimes.com/packages/pdf/health/20100307_GOLDMAN.pdf

Poverty is hitting the suburbs with more sting

Bastions of the middle class, Twin Cities suburbs are seeing financial pain spreading quietly among their residents. They now have more poor people than the core cities of Minneapolis and St. Paul.

By MARY JANE SMETANKA, Star Tribune

Last update: March 6, 2010 - 10:03 PM

In a startling shift, Twin Cities suburbs now have more poor people than the core cities of Minneapolis and St. Paul.

Job losses, foreclosures and disappearing insurance coverage have pushed requests for food stamps, medical assistance and emergency housing aid to record levels. Homeless numbers are rising. Food shelves are scrambling to meet demand.

It's a trend mirrored in suburbs across the nation, where a recent study found that suburban poverty has grown five times faster than it has in big cities.

Worst hit are single moms and unskilled workers whose finances were shaky before the economy dipped. But financial stress reaches well into the middle class.

"These are really the new poor,'' said Edna Hoium, Anoka County's income maintenance director. "They're shocked to find out how little they have to have to qualify for benefits."

"The stories are very quiet,'' said Cathy Maes, executive director of ICA, a Minnetonka food shelf that opened a satellite in Hopkins to meet new demand. "There's a lot of pride."

They are hard-working people like Claudia Morris, 34, of Hopkins. The divorced mother of two has a college degree and a $21-per-hour job as a Costco supervisor. She had always provided for her kids on her own. Then last summer her car was hit by a driver who ran a red light. Hospital scans after the accident revealed a growth in Morris' neck: thyroid cancer.

An operation and radiation treatments followed. But health insurance didn't cover all of the costs. She struggled with fatigue as doctors tried to balance her medications. Unable to work full time, Morris moved her family from a Minnetonka apartment to a cheaper house that she rents in Hopkins.

Bills stacked up. She emptied her savings and borrowed from relatives, "even my grandpa." In desperation last fall, she went downtown to apply for food stamps. She wasn't poor enough to qualify.

Click on title above for rest of story


http://www.startribune.com/local/west/86722707.html?elr=KArksUUUU

Toyota Greedy Bastards

Eye-opening hearings in Congress have showed America that Toyota is willing to put the safety of drivers at risk.

Now it's clear they're willing to put longtime employees' jobs at risk as well. Toyota has announced plans to close a 25-year old factory in California by the end of this month.

Laying off 5,000 workers will only be the beginning. The closure will decimate an entire community.

50,000 workers, vendors, and suppliers – and the families who depend on them – could immediately lose their livelihoods.

Tell Toyota: Your workers and customers deserve better. Keep the Fremont plant open!

Toyota was the #1 beneficiary of the "cash for clunkers" program. And they've also benefited from millions of dollars in government-paid training.

But despite strong U.S. sales and all the taxpayer support Toyota has gotten over the years, they're moving California Corolla production to Japan and to a non-union plant in Canada.

If you're outraged that Toyota is benefiting from subsidies and turning around and abandoning an entire community, let their leadership know!

Toyota got its start in America when it opened the Fremont, CA, plant they are about to shut down. Over the years, an entire community was built around the plant.

If Toyota shuts down this factory, it'll be the largest mass layoff in California since the Great Recession began. The chain reaction will impact 200,000 people. School teachers, small business owners, police officers, firefighters, and even local beauticians all depend on the plant to boost tax revenue and consumer spending.

In spite of its recent troubles, Toyota remains an extremely successful company. Toyota can definitely afford to keep the plant open. But we have to act quickly, because the plant is slated to close on March 31.

Sign our petition today. Hold Toyota accountable for abandoning its workers.

Thanks for your continued support of America's workers.

Sincerely,

Manny, Liz, Beth, Doug, and the American Rights at Work team

Wasteful spending accounts for $1.2 trillion of healthcare costs

Click on title above for article;

http://www.fiercehealthcare.com/story/wasteful-spending-accounts-1-2-trillion-healthcare-costs/2010-03-04?utm_medium=nl

'Til Debt Do Us Part; How to Profit During Recession

Click on title above to see how YOU TOO can make Boo-Coo profits while the little folk are tossed out of their homes, lose their jobs and go hungry and w/out medical care...

and no one or no-body w/ the power to change things really gives a damn

and that, in my mind, is a BIG Black Mark on humanity

and a negative measure of just how far we HAVENT come in

our evolution and/or what we like to call our CIVIL-I-ZATION

People are starving

Children are starving - all over the world

in Nations BIG and small, rich and poor

...and yet, we consider only what is good for US

What will benefit US

As we revel in our fake wars and our very real quest for world dominion.

Shme on US. Shame on the World.

Another Dirty Politician Scolded by Ethics Panel but Keeps His Hi-Payin Job

Charlie Rangel Steps Down as Ways and Means Chairman
03/3/10
Filed Under:House, Scandal, Investigations, Taxes

Rep. Charlie Rangel (D-N.Y.) has temporarily given up his chairmanship of the House Ways and Means Committee, days after being admonished by an ethics panel for taking two corporate-sponsored trips to the Caribbean in violation of House rules.

In remarks Wednesday morning in a House press gallery, Rangel said he had sent a letter to Speaker Nancy Pelosi "asking her to grant me a leave of absence" until the ethics committee completes its investigation. The announcement leaves the door open for Rangel, 79, to reclaim the position if he is eventually cleared by the ethics committee.

The panel is continuing to investigate Rangel's campaign finances and unreported income from rental properties.

The 20-term congressman did not answer questions about his decision or a possible replacement, saying only that the situation had brought distracting attention and he is stepping down "in order to avoid my colleagues having to defend me during their elections," Politico reported.

The Ways and Means chairmanship could temporarily go to Rep. Pete Stark of California, the committee's second-ranking Democrat, according to ABC News.

Pelosi released a brief statement noting that she will honor Rangel's request for a leave and commending him "for his decades of leadership on jobs, health care, and the most significant economic issues of the day."

Rangel's move comes when it appeared increasingly unlikely that he would survive a House vote this week on stripping him of chairmanship of the powerful tax writing committee.

"We don't have the votes to save him," one Democratic member told NBC on Tuesday.

The ethics committee issued a report last Friday finding that members of Rangel's staff knew that several trips the congressman took to the Caribbean in 2007 and 2008 were indirectly funded by private corporations. The committee added that there is no evidence that Rangel himself knew who paid for the trips, but the committee formally admonished him and his staff nonetheless.

More worrisome for the congressman is a much larger investigation by the committee looking into whether he failed to pay the required taxes on a property in the Dominican Republic. A separate inquiry is also looking into an allegation that Rangel improperly used his office to raise money for a New York City academic center named for him.

Rangel, who has served in Congress since 1971, had remained defiant, slamming newspapers for their investigations and criticizing the ethics panel on the House floor.


Click on title above for original article;
http://www.politicsdaily.com/2010/03/03/charlie-rangel-to-take-leave-of-absence-from-ways-and-means-co/