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Archive for the ‘Government Tomfoolery’ Category

How one man can buy another the U.S. presidency

Tuesday, January 24th, 2012

Do you know who this guy is?

You should.

He represents the future of America.

His name is Sheldon Adelson.

He’s a Las Vegas tycoon who put $5 million into Newt’s campaign superPAC two weeks ago.

Now there are reports that he’s going to put another $5 million in.

$10 million from one guy for one candidate in less than a month.

He couldn’t have done that before the Supreme Court’s Citizens United decision.

But now one guy can buy the presidency for another.

That’s our future.

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No matter which party you favor, that’s the future in this country.

It’s something out of a James Bond movie.

Goldfinger.

Dr. No.

Sheldon Adelson.

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A regulator’s blind eye is dangerous to us all

Sunday, January 15th, 2012

UPDATE: In January 2012, federal prosecutors announced that Spencer Barasch, formerly chief enforcement officer in the Fort Worth, Texas office of the Securities and Exchange Commission, had agreed to pay $50,000 to settle charges that he violated federal conflict-of-interest standards by providing representation for financier R. Allen Stanford, the Associated Press reported.

Barasch is now a partner with the Dallas law firm, Andres Kurth LLP.

Malcolm Bales, the U.S. Attorney for the Eastern District of Texas, said the fine, the maximum amount allowed under law, shows that the government is serious about cracking down on former federal officials who attempt to us their influence in the private sector, the AP reported.

Bales said, “There should be zero tolerance for people who serve the public and then go into the private sector and use [that service] for personal benefit,” he said, according to the AP. Barasch’s lawyer, Paul Coggins, a former federal prosecutor, said his client settled witht he government “to avoid the expense and uncertainty of protracted litigation.”

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Now here’s the original Watchdog Nation report:

I nominate Spencer C. Barasch for an asterisk when the whole story of the Great Recession is told by historians in years to come.

Dave Lieber writes about the financial scandals.

Spencer "Mr. Asterisk" Barasch

He is the Steven Bartman of the financial regulatory world.

In a baseball playoff game at Wrigley Field in 2003, Bartman touched a foul ball and disrupted a potential catch by the Cubs’ outfielder. The Cubs lost the lead — and the game. They never made it to the World Series. So Bartman is the Mr. Asterisk of Cubs’ baseball.

Dave Lieber writes about the financial scandals.

Steve Bartman, the Spencer Barasch of the baseball world

The same can be said for Spencer Barasch, too. I’m sure you don’t know who he is. But it’s important that you know these Dirty Dozen Facts about Mr. Asterisk:

1. Barasch was the former head of the Securities and Exchange Commission’s enforcement office in my hometown of Fort Worth, Texas.

2. In 1997, auditors in that office thought that accused swindler R. Allen Stanford may have been conducting a Ponzi scheme.

3. SEC enforcement, led by Mr. Asterisk, closed that inquiry because, he said, the plan lacked U.S. investors. That decision was described by some insiders as unprecedented. But Mr. Asterisk later explained, according to the SEC Inspector General, that he called Stanford’s attorney to sound out the case against him, and Stanford’s attorney explained why there was no case.

4. In 2002, SEC examiners again referred Stanford to enforcement. Again, Mr. Asterisk’s department took no action.

5. In 2003, the SEC received more complaints about Stanford’s investment scheme but did not act.

6. In 2004, SEC examiners prepared another case against Stanford.

7. In 2005, Mr. Asterisk decided once again that examiners will take no action.

8. That same year, Mr. Asterisk leaves the government for the Dallas law firm, Andrews Kurth, where he works today as a defense attorney. SEC staffers finally refer the case to enforcement, where the next year, the SEC opens an official investigation.

9. After leaving the government, Mr. Asterisk asked the SEC’s ethics branch for permission to represent Stanford. In his e-mail seeking permission, Mr. Asterisk wrote: “Every lawyer in Texas and beyond is going to get rich over this case. Okay? And I hated being on the sidelines.” His request was denied.

10. Even though he was denied, Mr. Asterisk did a small amount of work for Stanford in October, 2006, in apparent violation of SEC rules. The SEC has referred this to the State Bar of Texas.

11. In 2009, the SEC sued Stanford and criminal charges, still pending, were also filed. Victims claim losses around $7 billion. Stanford, who remains in jail, maintains his innocence.

12. On March 31, 2010, the SEC Inspector General released a report that targets Mr. Asterisk for the blame in lack of earlier prosecution. Read the full Inspector General report here.

Dave Lieber writes about the SEC

Do you see why this lawyer should be included in any telling of the Great Recession?

A regulator who thwarts justice because he has other goals in mind — including earning tons of money — is a dream come true for Wall Street and a nightmare for the rest of us.

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Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. The new 2010 edition of his book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, is out. Revised and expanded, the book won two national book awards in 2009 for social change. Twitter @DaveLieber

 

Assistant city manager in patronage flap resigns

Sunday, October 16th, 2011

An assistant city manager at Fort Worth City Hall resigned in October 2011 after Fort Worth Star-Telegram Watchdog columnist Dave Lieber revealed that she had helped orchestrate secret pay raises for a select few employees and top managers.

Her boss, the interim city manager, didn’t even know about most of them.

At the time, most city employees had gone three years without a raise.

Karen Montgomery had served with the city since August 2006.

Former assistant city manager Karen Montgomery

City officials declined to say whether the raises or any other issue led to her resignation, according to the Star-Telegram.

Read about Montgomery’s role here at Watchdog Nation. (Note these stories originally appeared in the Dave Lieber Watchdog column in the Star-Telegram.

Part I: A City Hall human resources director faces a lonely battle against patronage

Part II: When 100 City Hall workers out of 4,500 get raises, that’s patronage at its finest

 

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Rick Perry’s plane trips: An example of Sarah Palin’s crony capitalism?

Monday, September 12th, 2011

Update: On Jan. 3, 2012, the Securities and Exchange filed suit against Life Partners accusing it and top three executives of defrauding shareholders by overvaluing the life insurance policies it buys from its customers, AP reported.

The SEC also accused Life Partners president Brian Pardo of insider trading. Pardo and the company quickly denied the charges.

Original story follows:

Commission Sarah Palin blasted “corporate crony capitalism” in an Iowa September 2011 speech to supporters. Many interpreted this as an attack on Gov. Rick Perry’s pay-to-play political machine.

Maybe this is an example of the type of thing Palin is talking about:

As first reported in the Wall Street Journal and then Dave Lieber’s Watchdog column in the Fort Worth Star-Telegram, when Texas Gov. Rick Perry and his family flew to South Carolina in August 2011 to announce his presidential run, he rode on a private jet owned by a contributor facing major troubles from federal and state regulators.

Brian Pardo, chief executive of Life Partners Holdings of Waco, gave $50,000 in 2010 to Texans for Rick Perry, records show. He’s a pioneer in the life-settlement investment industry, where investors buy death bonds. They pay for portions of strangers’ life insurance policies, pay the premiums and collect after a person dies. If the people exceed life-expectancy estimates, the investments go bad.

At the federal level, the Securities and Exchange Commission notified Life Partners this year that it intends to file an enforcement action related to accounting and disclosure practices.

At the state level, the Texas State Securities Board, part of the executive branch, has investigated Life Partners for more than a year. Recently, the board — working with the Texas attorney general’s office — filed a court petition seeking to force the company to honor its state-issued subpoenas for company records. In court papers, the board says the company engaged in fraudulent business practices.

Life Partners refuses to give information to state securities regulators. Company lawyers say the financial products are not securities and shouldn’t be regulated as such.

AP PHOTO

No federal or state charges have been brought against the company, which has denied wrongdoing. But Life Partners also faces a slew of lawsuits from shareholders and disgruntled customers.

The governor’s rides in Pardo’s airplane — one to Iowa in addition to the South Carolina trip — were first reported on the front page of The Wall Street Journal.

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Life Partners didn’t respond to a request for an interview, but in an e-mail to the Journal, Pardo wrote, “I did not discuss the SEC investigation with the governor, to the best of my recollection.”

Perry spokesman Mark Miner told The Life Settlements Report website, “Mr. Pardo was not on the airplane with Governor Perry.” It wasn’t clear which of the two flights he was referring to.

Pardo told the newspaper that the Perry campaign paid for both trips, as required by federal election law.

Neither the governor’s office nor his campaign responded to a request for information from The Watchdog. The state securities board declined to comment, too.

Life Partners describes itself as a purchasing agent that matches people who can no longer afford or don’t want to continue paying their life insurance premiums — or people who bought policies to resell — with investors who buy fractional interests in the policies.

Life Partners’ estimates on when the original policyholders will die have been inaccurate, with many living longer than expected. The Life Settlements Report, an industry newsletter, said that for 262 deaths reported by the company, life expectancy was double the company’s estimates.

The company’s former life-expectancy estimator, a Reno, Nev., doctor, handled up to 200 individual medical reports a week. His job was to guess how long each person would live. By one estimate, he spent nine minutes per case compared with an industry standard of more than an hour reviewing a person’s health history.

Pardo is quoted in the WSJ as saying he supports Perry for president.

Is this the kind of matter that Sarah Palin is talking about?

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Dave Lieber, the author, is The Watchdog columnist at the Fort Worth Star-Telegram in Texas. His new book, Bad Dad, was just released and is getting dynamite reviews. It’s a true-story mystery thriller about what happens when the worst 10 minutes of your life go viral. The columnist is arrested by a police force he investigated. Learn more atwww.BadDadBook.com where you can read Chapter One. The hardcover and e-book are for sale at BadDadBook.com. Immediate shipment!

Disagreement over texting at movie theater leads to assault charge

Monday, September 12th, 2011

This column about texting in movie theaters by Watchdog Nation founder Dave Lieber touched a nerve with many people when it first appeared in the Dave Lieber Watchdog column in the Fort Worth Star-Telegram. The story received more than 100,000 Internet hits and turned out to be the #1 most read story in 2011 on the newspaper’s website. You can decide for yourself how you feel about this unusual situation.

Meet Dale Fout and Brenda Godwin. One weekday in April, they both went to a movie theater in Grapevine. Sat a row apart. Didn’t know each other.

By coincidence, they were born in the same year, two days apart. Both are 54. Fout, a marketing consultant, describes himself as a 220-pound “pretty big guy. I’m broad. I’m not fat. Used to play football.” Godwin says she is a 136-pound skin care specialist. Here’s how they met in the theater.

Her side

“He had his phone out. The light was shining at me. I’m thinking, ‘He’s going to turn it off.’” But he didn’t. ‘OK, this is ridiculous.’ So I reached over and tapped him on the shoulder. It was very bright. I was only trying to get his attention. He whipped around and said, ‘Don’t ever touch me.’ I was a little taken aback. ‘I wouldn’t have touched you if you didn’t have your phone out.’

“He jumps up and whirls around towards me and says, ‘I am charging you with assault,’ and he flew out of the theater.”

His side

Dale Fout

 

“I got a text, and I responded to it because it was something important. It was something that was on a deadline situation, OK. I held it against my chest purposely where I could barely see it. … I could text but hide the majority of the light coming from the phone.

“She said something. I couldn’t make it out. That’s why I turned. She was probably saying something like, ‘Get off your phone.’ I turned, and she pushed. She just happened to push my neck at the time my neck was in an awkward position. Kinda like having a little fender bender, and you get a little whiplash in your neck, you know.”

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Police report

“Fout advised he had been assaulted and his neck was in pain,” officer Emily Hays wrote. Fout was treated for neck pain by Grapevine paramedics. “Fout said a female who was sitting behind him in Theater 8 grabbed him by the shoulder because he was texting during the movie,” Hays wrote. “Fout said he got up, walked out of the theater and asked management to call police.”

Godwin told police, Hays wrote, that “she tapped him on the shoulder with one finger to ask him to stop texting. Godwin advised the male then jumped out of his chair and ran outside of the theater.

“Fout stated he was offended by the contact and desires prosecution. Godwin was issued citation #P0039176 for assault by contact.”

Police comment

“We’re the middle person on this,” Lt. Todd Dearing says. “Assault by contact is usually not something like this. It’s usually a shove.” Because police didn’t witness the incident, a ticket was written. It’s a misdemeanor, the equivalent of a traffic ticket. “We stay neutral in these things. That’s what the courts are for.”

The legal side

The common thinking is that in Texas, unwanted touching can justify an assault charge. That’s true, but there are requirements.

The law says: “A person commits an offense if the person … intentionally or knowingly causes physical contact with another when the person knows or should reasonably believe that the other will regard the contact as offensive or provocative.”

Jeff Bellin, SMU assistant professor of law, says that a tap is not an assault but that a shove may be.

“It would be a jury question, but I think most people would agree that tapping someone on the shoulder, even if you don’t know them, is normal. We expect that kind of interaction in our everyday lives.”

A jury would have to decide which person to believe. Fout’s injury would be key. He says his neck hurts “a little bit. I’m seeing a chiropractor. It’s not like she knocked me to the floor. … The therapist said, ‘Yeah, she put a knot right there.’ A tap on the shoulder isn’t going to cause that.”

Godwin says, “If he hurt his neck, that’s probably because of the way he whipped around.”

Because Godwin lives in Richmond, Va., she said it would be too expensive to return and fight the charge. So she paid a $260 fine.

After this story appeared, Fout appeared on the local TV news to defend himself.

What should you do?

The incident occurred at Cinemark Tinseltown, whose policy is to give texters a chance to behave. If they don’t, they are removed and given a refund or a rain check.

“If they are texting, we ask them to return to the theater at a time when they are less busy and can enjoy the movie,” Cinemark spokesman James Meredith says.

Watchdog tip: Although Cinemark says it sends employees into each theater every 20-30 minutes to check behavior, why wait? Go outside and talk to a staffer about the problem. Let that person do the deed.

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Visit Watchdog Nation HeadquartersDave Lieber's Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong

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Twitter @DaveLieber 

Dave Lieber shows Americans how to fight back against corporate deceptions in his wonderful national award-winning book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong. Are you tired of losing time, money and aggravation to all the assaults on our wallets? Learn how to fight back with ease — and win. Get the book here.

Read The Watchdog Nation manifesto here!