If Bachmann is Gasping for Media Oxygen, What Do You Say About Ron Paul?

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One of the strangest comments post- Iowa straw poll came from reporter Kelly O'Donnell on NBC Nightly News (8/14/11):

Both Pawlenty's exit and Perry's launch consumed political oxygen that typically would have gone to the straw poll's actual winner, Congresswoman Bachmann, who appeared on all five Sunday morning talk shows, including Meet the Press.

I'm having trouble imagining how someone could put those two thoughts together. Bachmann was merely on five national TV shows Sunday morning. That's being overshadowed?
If that's oxygen deprivation, one has to wonder what you'd call the media treatment of Ron Paul, who finished one percentage point behind Bachmann, despite being treated as a non-candidate by the national media. Politico's Roger Simon  (8/15/11), argued that you can't say the straw poll means almost nothing and that Bachmann's victory makes her a top-tier candidate:

Straw polls are just organized bribery, with the campaigns buying the tickets and distributing them to supporters. (And, in fact, this is what I wrote before Ames.)
What they really show, many argue, is not where the philosophical heart of the party is, but the organizational abilities of the candidates.
Fine, I'll buy that. But why didn’t Paul get the same credit for his organizational abilities as Bachmann did for hers?

He points out that last time around finishing second was treated as a victory:

Four years ago, Mike Huckabee came in a bad second to Romney, losing by 13.4 percentage points. Huckabee managed to spin that into a victory at Ames and became a media darling.
But Paul almost wins the thing and he remains poison.

Simon's conclusion, though, is disappointing.  GOP operatives and officials were responsible for determining the winners/losers storyline:

So don’t blame the media. Here are Republicans, presumably Republican operatives, who said if one candidate wins, the contest is significant, but if another wins the contest is not credible.

That doesn't add up. Reporters don't have to take their marching orders from party operatives.
But if you want the definitive take-down of the corporate media's Paul-blocking top-tierism watch this segment from the Daily Show:



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Is the SEC Covering Up Wall Street Crimes? @rollingstone

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Imagine a world in which a man who is repeatedly investigated for a string of serious crimes, but never prosecuted, has his slate wiped clean every time the cops fail to make a case. No more Lifetime channel specials where the murderer is unveiled after police stumble upon past intrigues in some old file – "Hey, chief, didja know this guy had two wives die falling down the stairs?" No more burglary sprees cracked when some sharp cop sees the same name pop up in one too many witness statements. This is a different world, one far friendlier to lawbreakers, where even the suspicion of wrongdoing gets wiped from the record.

That, it now appears, is exactly how the Securities and Exchange Commission has been treating the Wall Street criminals who cratered the global economy a few years back. For the past two decades, according to a whistle-blower at the SEC who recently came forward to Congress, the agency has been systematically destroying records of its preliminary investigations once they are closed. By whitewashing the files of some of the nation's worst financial criminals, the SEC has kept an entire generation of federal investigators in the dark about past inquiries into insider trading, fraud and market manipulation against companies like Goldman Sachs, Deutsche Bank and AIG. With a few strokes of the keyboard, the evidence gathered during thousands of investigations – "18,000 ... including Madoff," as one high-ranking SEC official put it during a panicked meeting about the destruction – has apparently disappeared forever into the wormhole of history.

Under a deal the SEC worked out with the National Archives and Records Administration, all of the agency's records – "including case files relating to preliminary investigations" – are supposed to be maintained for at least 25 years. But the SEC, using history-altering practices that for once actually deserve the overused and usually hysterical term "Orwellian," devised an elaborate and possibly illegal system under which staffers were directed to dispose of the documents from any preliminary inquiry that did not receive approval from senior staff to become a full-blown, formal investigation. Amazingly, the wholesale destruction of the cases – known as MUIs, or "Matters Under Inquiry" – was not something done on the sly, in secret. The enforcement division of the SEC even spelled out the procedure in writing, on the commission's internal website. "After you have closed a MUI that has not become an investigation," the site advised staffers, "you should dispose of any documents obtained in connection with the MUI."

Many of the destroyed files involved companies and individuals who would later play prominent roles in the economic meltdown of 2008. Two MUIs involving con artist Bernie Madoff vanished. So did a 2002 inquiry into financial fraud at Lehman Brothers, as well as a 2005 case of insider trading at the same soon-to-be-bankrupt bank. A 2009 preliminary investigation of insider trading by Goldman Sachs was deleted, along with records for at least three cases involving the infamous hedge fund SAC Capital.

The widespread destruction of records was brought to the attention of Congress in July, when an SEC attorney named Darcy Flynn decided to blow the whistle. According to Flynn, who was responsible for helping to manage the commission's records, the SEC has been destroying records of preliminary investigations since at least 1993. After he alerted NARA to the problem, Flynn reports, senior staff at the SEC scrambled to hide the commission's improprieties.

As a federally protected whistle-blower, Flynn is not permitted to speak to the press. But in evidence he presented to the SEC's inspector general and three congressional committees earlier this summer, the 13-year veteran of the agency paints a startling picture of a federal police force that has effectively been conquered by the financial criminals it is charged with investigating. In at least one case, according to Flynn, investigators at the SEC found their desire to bring a case against an influential bank thwarted by senior officials in the enforcement division – whose director turned around and accepted a lucrative job from the very same bank they had been prevented from investigating. In another case, the agency farmed out its inquiry to a private law firm – one hired by the company under investigation. The outside firm, unsurprisingly, concluded that no further investigation of its client was necessary. To complete the bureaucratic laundering process, Flynn says, the SEC dropped the case and destroyed the files.

Much has been made in recent months of the government's glaring failure to police Wall Street; to date, federal and state prosecutors have yet to put a single senior Wall Street executive behind bars for any of the many well-documented crimes related to the financial crisis. Indeed, Flynn's accusations dovetail with a recent series of damaging critiques of the SEC made by reporters, watchdog groups and members of Congress, all of which seem to indicate that top federal regulators spend more time lunching, schmoozing and job-interviewing with Wall Street crooks than they do catching them. As one former SEC staffer describes it, the agency is now filled with so many Wall Street hotshots from oft-investigated banks that it has been "infected with the Goldman mindset from within."

The destruction of records by the SEC, as outlined by Flynn, is something far more than an administrative accident or bureaucratic fuck-up. It's a symptom of the agency's terminal brain damage. Somewhere along the line, those at the SEC responsible for policing America's banks fell and hit their head on a big pile of Wall Street's money – a blow from which the agency has never recovered. "From what I've seen, it looks as if the SEC might have sanctioned some level of case-related document destruction," says Sen. Chuck Grassley, the ranking Republican on the Senate Judiciary Committee, whose staff has interviewed Flynn. "It doesn't make sense that an agency responsible for investigations would want to get rid of potential evidence. If these charges are true, the agency needs to explain why it destroyed documents, how many documents it destroyed over what time frame and to what extent its actions were consistent with the law."

How did officials at the SEC wind up with a faithful veteran employee – a conservative, mid-level attorney described as a highly reluctant whistle-blower – spilling the agency's most sordid secrets to Congress? In a way, they asked for it.

On May 18th of this year, SEC enforcement director Robert Khuzami sent out a mass e-mail to the agency's staff with the subject line "Lawyers Behaving Badly." In it, Khuzami asked his subordinates to report any experiences they might have had where "the behavior of counsel representing clients in... investigations has been questionable."

Khuzami was asking staffers to recount any stories of outside counsel behaving unethically. But Flynn apparently thought his boss was looking for examples of lawyers "behaving badly" anywhere, including within the SEC. And he had a story to share he'd kept a lid on for years. "Mr. Khuzami may have gotten something more than he expected," Flynn's lawyer, a former SEC whistle-blower named Gary Aguirre, later explained to Congress.

Flynn responded to Khuzami with a letter laying out one such example of misbehaving lawyers within the SEC. It involved a case from very early in Flynn's career, back in 2000, when he was working with a group of investigators who thought they had a "slam-dunk" case against Deutsche Bank, the German financial giant. A few years earlier, Rolf Breuer, the bank's CEO, had given an interview to Der Spiegel in which he denied that Deutsche was involved in übernahmegespräche – takeover talks – to acquire a rival American firm, Bankers Trust. But the statement was apparently untrue – and it sent the stock of Bankers Trust tumbling, potentially lowering the price for the merger. Flynn and his fellow SEC investigators, suspecting that investors of Bankers Trust had been defrauded, opened a MUI on the case.

A Matter Under Inquiry is just a preliminary sort of look-see – a way for the SEC to check out the multitude of tips it gets about suspicious trades, shady stock scams and false disclosures, and to determine which of the accusations merit a formal investigation. At the MUI stage, an SEC investigator can conduct interviews or ask a bank to send in information voluntarily. Bumping a MUI up to a formal investigation is critical, because it enables investigators to pull out the full law-enforcement ass-kicking measures – subpoenas, depositions, everything short of hot pokers and waterboarding. In the Deutsche case, Flynn and other SEC investigators got past the MUI stage and used their powers to collect sworn testimony and documents indicating that plenty of übernahmegespräche indeed had been going on when Breuer spoke to Der Spiegel. Based on the evidence, they sent an "Action Memorandum" to senior SEC staff, formally recommending that the agency press forward and file suit against Deutsche.

Breuer responded to the threat as big banks like Deutsche often do: He hired a former SEC enforcement director to lobby the agency to back off. The ex-insider, Gary Lynch, launched a creative and inspired defense, producing a linguistic expert who argued that übernahmegespräche only means "advanced stage of discussions." Nevertheless, the request to proceed with the case was approved by several levels of the SEC's staff. All that was needed to move forward was a thumbs-up from the director of enforcement at the time, Richard Walker.

But then a curious thing happened. On July 10th, 2001, Flynn and the other investigators were informed that Walker was mysteriously recusing himself from the Deutsche case. Two weeks later, on July 23rd, the enforcement division sent a letter to Deutsche that read, "Inquiry in the above-captioned matter has been terminated." The bank was in the clear; the SEC was dropping its fraud investigation. In contradiction to the agency's usual practice, it provided no explanation for its decision to close the case.

On October 1st of that year, the mystery was solved: Dick Walker was named general counsel of Deutsche. Less than 10 weeks after the SEC shut down its investigation of the bank, the agency's director of enforcement was handed a cushy, high-priced job at Deutsche.

Deutsche's influence in the case didn't stop there. A few years later, in 2004, Walker hired none other than Robert Khuzami, a young federal prosecutor, to join him at Deutsche. The two would remain at the bank until February 2009, when Khuzami joined the SEC as Flynn's new boss in the enforcement division. When Flynn sent his letter to Khuzami complaining about misbehavior by Walker, he was calling out Khuzami's own mentor.

The circular nature of the case illustrates the revolving-door dynamic that has become pervasive at the SEC. A recent study by the Project on Government Oversight found that over the past five years, former SEC personnel filed 789 notices disclosing their intent to represent outside companies before the agency – sometimes within days of their having left the SEC. More than half of the disclosures came from the agency's enforcement division, who went to bat for the financial industry four times more often than ex-staffers from other wings of the SEC.

Even a cursory glance at a list of the agency's most recent enforcement directors makes it clear that the SEC's top policemen almost always wind up jumping straight to jobs representing the banks they were supposed to regulate. Lynch, who represented Deutsche in the Flynn case, served as the agency's enforcement chief from 1985 to 1989, before moving to the firm of Davis Polk, which boasts many top Wall Street clients. He was succeeded by William McLucas, who left the SEC in 1998 to work for WilmerHale, a Wall Street defense firm so notorious for snatching up top agency veterans that it is sometimes referred to as "SEC West." McLucas was followed by Dick Walker, who defected to Deutsche in 2001, and he was in turn followed by Stephen Cutler, who now serves as general counsel for JP Morgan Chase. Next came Linda Chatman Thomsen, who stepped down to join Davis Polk, only to be succeeded in 2009 by Khuzami, Walker's former protégé at Deutsche Bank.

This merry-go-round of current and former enforcement directors has repeatedly led to accusations of improprieties. In 2008, in a case cited by the SEC inspector general, Thomsen went out of her way to pass along valuable information to Cutler, the former enforcement director who had gone to work for JP Morgan. According to the inspector general, Thomsen signaled Cutler that the SEC was unlikely to take action that would hamper JP Morgan's move to buy up Bear Stearns. In another case, the inspector general found, an assistant director of enforcement was instrumental in slowing down an investigation into the $7 billion Ponzi scheme allegedly run by Texas con artist R. Allen Stanford – and then left the SEC to work for Stanford, despite explicitly being denied permission to do so by the agency's ethics office. "Every lawyer in Texas and beyond is going to get rich on this case, OK?" the official later explained. "I hated being on the sidelines."

Small wonder, then, that SEC staffers often have trouble getting their bosses to approve full-blown investigations against even the most blatant financial criminals. For a fledgling MUI to become a formal investigation, it has to make the treacherous leap from the lower rungs of career-level staffers like Flynn all the way up to the revolving-door level at the top, where senior management is composed largely of high-priced appointees from the private sector who have strong social and professional ties to the very banks they are charged with regulating. And if senior management didn't approve an investigation, the documents often wound up being destroyed – as Flynn would later discover.

After the Deutsche fiasco over Bankers Trust, Flynn continued to work at the SEC for four more years. He briefly left the agency to dabble in real estate, then returned in 2008 to serve as an attorney in the enforcement division. In January 2010, he accepted new responsibilities that included helping to manage the disposition of records for the division – and it was then he first became aware of the agency's possibly unlawful destruction of MUI records.

Flynn discovered a directive on the enforcement division's internal website ordering staff to destroy "any records obtained in connection" with closed MUIs. The directive appeared to violate federal law, which gives responsibility for maintaining and destroying all records to the National Archives and Records Administration. Over a decade earlier, in fact, the SEC had struck a deal with NARA stipulating that investigative records were to be maintained for 25 years – and that if any files were to be destroyed after that, the shredding was to be done by NARA, not the SEC.

But Flynn soon learned that the records for thousands of preliminary investigations no longer existed. In his letter to Congress, Flynn estimates that the practice of destroying MUIs had begun as early as 1993, and has resulted in at least 9,000 case files being destroyed. For all the thousands of tips that had come in to the SEC, and the thousands of interviews that had been conducted by the agency's staff, all that remained were a few perfunctory lines for each case. The mountains of evidence gathered were no longer in existence.

To read through the list of dead and buried cases that Flynn submitted to Congress is like looking through an infrared camera at a haunted house of the financial crisis, with the ghosts of missed prosecutions flashing back and forth across the screen. A snippet of the list:
PARTY MUI # OPENED/CLOSED ISSUE
Goldman Sachs MLA-01909 6/99 - 4/00 Market Manipulation
Deutsche Bank MHO-09356 11/01 - 7/02 Insider Trading
Deutsche Bank MHO-09432 2/02 - 8/02 Market Manipulation
Lehman Brothers MNY-07013 3/02 - 7/02 Financial Fraud
Goldman Sachs MNY-08198 11/09 - 12/09 Insider Trading



One MUI – case MNY-08145 – involved allegations of insider trading at AIG on September 15th, 2008, right in the middle of the insurance giant's collapse. In that case, an AIG employee named Jacqueline Millan reported irregularities in the trading of AIG stock to her superiors, only to find herself fired. Incredibly, instead of looking into the matter itself, the SEC agreed to accept "an internal investigation by outside counsel or AIG." The last note in the file indicates that "the staff plans to speak with the outside attorneys on Monday, August 24th [2009], when they will share their findings with us." The fact that the SEC trusted AIG's lawyers to investigate the matter shows the basic bassackwardness of the agency's approach to these crash-era investigations. The SEC formally closed the case on October 1st, 2009.

The episode with AIG highlights yet another obstacle that MUIs experience on the road to becoming formal investigations. During the past decade, the SEC routinely began allowing financial firms to investigate themselves. Imagine the LAPD politely asking a gang of Crips and their lawyers to issue a report on whether or not a drive-by shooting by the Crips should be brought before a grand jury – that's basically how the SEC now handles many preliminary investigations against Wall Street targets.

The evolution toward this self-policing model began in 2001, when a shipping and food-service conglomerate called Seaboard aggressively investigated an isolated case of accounting fraud at one of its subsidiaries. Seaboard fired the guilty parties and made sweeping changes to its internal practices – and the SEC was so impressed that it instituted a new policy of giving "credit" to companies that police themselves. In practice, that means the agency simply steps aside and allows companies to slap themselves on the wrists. In the case against Seaboard, for instance, the SEC rewarded the firm by issuing no fines against it.

According to Lynn Turner, a former chief accountant at the SEC, the Seaboard case also prompted the SEC to begin permitting companies to hire their own counsel to conduct their own inquiries. At first, he says, the process worked fairly well. But then President Bush appointed the notoriously industry-friendly Christopher Cox to head up the SEC, and the "outside investigations" turned into whitewash jobs. "The investigations nowadays are probably not worth the money you spend on them," Turner says.

Harry Markopolos, a certified fraud examiner best known for sounding a famously unheeded warning about Bernie Madoff way back in 2000, says the SEC's practice of asking suspects to investigate themselves is absurd. In a serious investigation, he says, "the last person you want to trust is the person being accused or their lawyer." The practice helped Madoff escape for years. "The SEC took Bernie's word for everything," Markopolos says.

At the SEC, having realized that the agency was destroying documents, Flynn became concerned that he was overseeing an illegal policy. So in the summer of last year, he reached out to NARA, asking them for guidance on the issue.

That request sparked a worried response from Paul Wester, NARA's director of modern records. On July 29th, 2010, Wester sent a letter to Barry Walters, who oversees document requests for the SEC. "We recently learned from Darcy Flynn... that for the past 17 years the SEC has been destroying closed Matters Under Inquiry files," Wester wrote. "If you confirm that federal records have been destroyed improperly, please ensure that no further such disposals take place and provide us with a written report within 30 days."

Wester copied the letter to Adam Storch, a former Goldman Sachs executive who less than a year earlier had been appointed as managing executive of the SEC's enforcement division. Storch's appointment was not without controversy. "I'm not sure what's scarier," Daniel Indiviglio of The Atlantic observed, "that this guy worked at an investment bank that many believe has questionable ethics and too cozy a Washington connection, or that he's just 29." In any case, Storch reacted to the NARA letter the way the SEC often does – by circling the wagons and straining to find a way to blow off the problem without admitting anything.

Last August, as the clock wound down on NARA's 30-day deadline, Storch and two top SEC lawyers held a meeting with Flynn to discuss how to respond. Flynn's notes from the meeting, which he passed along to Congress, show the SEC staff wondering aloud if admitting the truth to NARA might be a bad idea, given the fact that there might be criminal liability.

"We could say that we do not believe there has been disposal inconsistent with the schedule," Flynn quotes Ken Hall, an assistant chief counsel for the SEC, as saying.

"There are implications to admit what was destroyed," Storch chimed in. It would be "not wise for me to take on the exposure voluntarily. If this leads to something, what rings in my ear is that Barry [Walters, the SEC documents officer] said: This is serious, could lead to criminal liability."

When the subject of how many files were destroyed came up, Storch answered: "18,000 MUIs destroyed, including Madoff."

Four days later, the SEC responded to NARA with a hilariously convoluted nondenial denial. "The Division is not aware of any specific instances of the destruction of records from any other MUI," the letter states. "But we cannot say with certainty that no such documents have been destroyed over the past 17 years." The letter goes on to add that "the Division has taken steps... to ensure that no MUI records are destroyed while we review this issue."

Translation: Hey, maybe records were destroyed, maybe they weren't. But if we did destroy records, we promise not to do it again – for now.

The SEC's unwillingness to admit the extent of the wrong doing left Flynn in a precarious position. The agency has a remarkably bad record when it comes to dealing with whistle-blowers. Back in 2005, when Flynn's attorney, Gary Aguirre, tried to pursue an insider-trading case against Pequot Capital that involved John Mack, the future CEO of Morgan Stanley, he was fired by phone while on vacation. Two Senate committees later determined that Aguirre, who has since opened a private practice representing whistle-blowers, was dismissed improperly as part of a "process of reprisal" by the SEC. Two whistle-blowers in the Stanford case, Julie Preuitt and Joel Sauer, also experienced retaliation – including reprimands and demotions – after raising concerns about superficial investigations. "There's no mechanism to raise these issues at the SEC," says another former whistle-blower. Contacting the agency's inspector general, he adds, is considered "the nuclear option" – a move "well-known to be a career-killer."

In Flynn's case, both he and Aguirre tried to keep the matter in-house, appealing to SEC chairman Mary Schapiro with a promise not to go outside the agency if she would grant Flynn protection against reprisal. When no such offer was forthcoming, Flynn went to the agency's inspector general before sending a detailed letter about the wrongdoing to three congressional committees.

One of the offices Flynn contacted was that of Sen. Grassley, who was in the midst of his own battle with the SEC. Frustrated with the agency's failure to punish major players on Wall Street, the Iowa Republican had begun an investigation into how the SEC follows up on outside complaints. Specifically, he wrote a letter to FINRA, another regulatory agency, to ask how many complaints it had referred to the SEC about SAC Capital, the hedge fund run by reptilian billionaire short-seller Stevie Cohen.

SAC has long been accused of a variety of improprieties, from insider trading to harassment. But no charge in recent Wall Street history is crazier than an episode involving a SAC executive named Ping Jiang, who was accused in 2006 of enacting a torturous hazing program. According to a civil lawsuit that was later dropped, Jiang allegedly forced a new trader named Andrew Tong to take female hormones, come to work wearing a dress and lipstick, have "foreign objects" inserted in his rectum, and allow Jiang to urinate in his mouth. (I'm not making this up.)

Grassley learned that over the past decade, FINRA had referred 19 complaints about suspicious trades at SAC to federal regulators. Curious to see how many of those referrals had been looked into, Grassley wrote the SEC on May 24th, asking for evidence that the agency had properly investigated the cases.

Two weeks later, on June 9th, Khuzami sent Grassley a surprisingly brusque answer: "We generally do not comment on the status of investigations or related referrals, and, in turn, are not providing information concerning the specific FINRA referrals you identified." Translation: We're not giving you the records, so blow us.

Grassley later found out from FINRA that it had actually referred 65 cases about SAC to the SEC, making the lack of serious investigations even more inexplicable. Angered by Khuzami's response, he sent the SEC another letter on June 15th demanding an explanation, but no answer has been forthcoming.

In the interim, Grassley's office was contacted by Flynn, who explained that among the missing MUIs he had uncovered were at least three involving SAC – one in 2006, one in 2007 and one in 2010, involving charges of insider trading and currency manipulation. All three cases were closed by the SEC, and the records apparently destroyed.

On August 17th, Grassley sent a letter to the SEC about the Flynn allegations, demanding to know if it was indeed true that the SEC had destroyed records. He also asked if the agency's failure to produce evidence of investigations into SAC Capital were related to the missing MUIs.

The SEC's inspector general is investigating the destroyed MUIs and plans to issue a report. NARA is also seeking answers. "We've asked the SEC to look into the matter and we're awaiting their response," says Laurence Brewer, a records officer for NARA. For its part, the SEC is trying to explain away the illegality of its actions through a semantic trick. John Nester, the agency's spokesman, acknowledges that "documents related to MUIs" have been destroyed. "I don't have any reason to believe that it hasn't always been the policy," he says. But Nester suggests that such documents do not "meet the federal definition of a record," and therefore don't have to be preserved under federal law.

But even if SEC officials manage to dodge criminal charges, it won't change what happened: The nation's top financial police destroyed more than a decade's worth of intelligence they had gathered on some of Wall Street's most egregious offenders. "The SEC not keeping the MUIs – you can see why this would be bad," says Markopolos, the fraud examiner famous for breaking the Madoff case. "The reason you would want to keep them is to build a pattern. That way, if you get five MUIs over a period of 20 years on something similar involving the same company, you should be able to connect five dots and say, 'You know, I've had five MUIs – they're probably doing something. Let's go tear the place apart.'" Destroy the MUIs, and Wall Street banks can commit the exact same crime over and over, without anyone ever knowing.

Regulation isn't a panacea. The SEC could have placed federal agents on every corner of lower Manhattan throughout the past decade, and it might not have put a dent in the massive wave of corruption and fraud that left the economy in flames three years ago. And even if SEC staffers from top to bottom had been fully committed to rooting out financial corruption, the agency would still have been seriously hampered by a lack of resources that often forces it to abandon promising cases due to a shortage of manpower. "It's always a triage," is how one SEC veteran puts it. "And it's worse now."

But we're equally in the dark about another hypothetical. Forget about what might have been if the SEC had followed up in earnest on all of those lost MUIs. What if even a handful of them had turned into real cases? How many investors might have been saved from crushing losses if Lehman Brothers had been forced to reveal its shady accounting way back in 2002? Might the need for taxpayer bailouts have been lessened had fraud cases against Citigroup and Bank of America been pursued in 2005 and 2007? And would the U.S. government have doubled down on its bailout of AIG if it had known that some of the firm's executives were suspected of insider trading in September 2008?

It goes without saying that no ordinary law-enforcement agency would willingly destroy its own evidence. In fact, when it comes to garden-variety crooks, more and more police agencies are catching criminals with the aid of large and well-maintained databases. "Street-level law enforcement is increasingly data-driven," says Bill Laufer, a criminology professor at the University of Pennsylvania. "For a host of reasons, though, we are starved for good data on both white-collar and corporate crime. So the idea that we would take the little data we do have and shred it, without a legal requirement to do so, calls for a very creative explanation."

We'll never know what the impact of those destroyed cases might have been; we'll never know if those cases were closed for good reasons or bad. We'll never know exactly who got away with what, because federal regulators have weighted down a huge sack of Wall Street's dirty laundry and dumped it in a lake, never to be seen again.

Editor’s Note: The online version of this article has been amended from the print version to reflect that the SEC’s case against Deutsche Bank proceeded beyond a Matter of Inquiry to a full-blown investigation.

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Rupert Murdoch and Media Policy @savethenews

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The scandal engulfing Rupert Murdoch and his media empire began with phone hacking in the United Kingdom, spread to the United States and has now sparked a global debate about the problems that arise when media get too big and too cozy with those in power. 

Murdoch and his company, News Corp., are the poster children for media consolidation. More than any of the current crop of media moguls, Murdoch accrues political influence through aggressive manipulation of his company’s media outlets. It's not just how they cover the news, but how they use this coverage to gain access to elected officials.

Murdoch's ties to leadership have proven fruitful in promoting candidates, and winning official approval of the policies and mergers he has sought over the years. But this could be changing. The phone-hacking scandal has shaken the leadership of Murdoch’s media empire, scuttled his takeover of a U.K. satellite company, sparked public outrage and inspired talk of new regulations among lawmakers. All of this comes just as the U.S. Federal Communications Commission takes up its long-overdue review of its media-ownership rules. 

So far more than 200,000 people in the U.S. have called on Congress to launch an investigation into whether Murdoch and his company were engaged in similar illegal activities in the U.S.  You can take action here.

On this page we have collected resources about Rupert Murdoch, News Corp. and their impact on U.S. media policy.

What Murdoch Owns: Check out the info-graphics created by the New York Times, The Independent and PR Daily over the years to see the vast reach of Murdoch’s media holdings.

Murdoch’s Media Policy Misdeeds: Find out how Murdoch’s News Corp. has used its media muscle and lobbying power to change the laws and reshape America’s media to its benefit.

Murdoch in Washington: The Sunlight Foundation, a nonprofit promoting greater government openness and transparency, has traced News Corp.’s political influence by following the money. Check out its in-depth report and graphic.

Fox Television Stations: Murdoch controls 28 local television stations around the country. Many of these stations are involved in shady deals like covert consolidation or the broadcasting of fake news and corporate propaganda. Find out where these stations are and how you can take action to challenge their FCC broadcast licenses.

Whack a Murdoch: Grab your mallet and take action for better media. Whack a Murdoch and hammer down on media corruption.

Who Owns the Media: Visit our interactive media-ownership charts to see what Murdoch owns, and how just six other companies control the majority of what we watch, read and hear. 

Blog Posts: Read more about Murdoch’s dodgy — and at times illegal — business deals, how the phone-hacking scandal is impacting the U.S. and what this all means for media ownership in America:

• Rupert Murdoch's Greatest Moments in Ethics and Integrity, by Craig Aaron, The Huffington Post
• Scandal Stirs U.S. Debate on Big Media by Brian Stelter, the New York Times 
• Troubles That Money Can’t Dispel, by David Carr, the New York Times  
• News Corp.'s Soft Power in the U.S. by David Carr, the New York Times
• Murdoch Hacked Us Too by Frank Rich, New  York
• The (Murdoch) Empire Strikes Back by Howard Kurtz, Newsweek
• The Trouble with Rupert by Timothy Karr, the Huffington Post
• Murdoch Scandal Jumps the Pond, by Timothy Karr, the Huffington Post
• Murdoch Facade Crumbling as Scandal Takes Root in America, by Tim Karr, the Huffington Post
• A 24/7 Spotlight on Murdoch, by Katrina Vanden Heuvel, The Nation

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Libyan Deaths, Media Silence Were Dozens Killed in Majer NATO Airstrikes? @FAIRmediawatch

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Allegations of Libyan civilian deaths as a result of NATO bombing have often been covered in the corporate media as an opportunity to scoff at the Gadhafi regime's unconvincing propaganda (FAIR Blog, 6/9/11).

But dramatic new allegations that dozens of civilians were killed in Majer after NATO airstrikes on August 8 have been met with near-total media silence.

According to Libyan officials, 85 civilians were killed in Majer-- a town south of Zliten, a site of frequent clashes and NATO airstrikes. There is no reason journalists should take this claim at face value. But reports from the scene suggest that something significant happened. According to Agence France Presse (8/9/11), "Reporters attended the funerals of victims and saw 28 bodies buried at the local cemetery.... In the hospital morgue, 30 bodies -- including two children and one woman -- were shown along with other bodies which had been torn apart."

The AFP report included NATO denials, with a spokesman claiming that the target "was a military facility clearly."

A Reuters correspondent (8/9/11) "counted 20 body bags in one room, some of them stacked one on top of the other.... In total, reporters saw about 30 bodies at the Zlitan hospital." The New York Times (8/10/11) ran a 170-word version of a Reuters dispatch which noted: "There was no evidence of weapons at the farmhouses, but there were no bodies there, either. Nor was there blood."

Amnesty International has called for an investigation, which led to this mention from CNN anchor John King (8/11/11):

Amnesty International is demanding that NATO investigate whether a Monday strike on Moammar Gadhafi''s forces killed 85 Libyan civilians including 33 children. NATO says it has no evidence of civilian casualties at this point.

A Nexis database search yields very little coverage in U.S. outlets beyond that brief comment. But that is not because no reporters were present. CNN correspondent Ivan Watson covered a mass funeral after the strikes. But his report aired only on CNN International (8/10/11). Watson reported a visit to "three or four houses that had been demolished by some kind of missiles from the sky."

He added:

We were also shown a morgue where there were the bodies of at least 25 people. Many of them appeared to be men. There were some women and children included among those corpses.

Watson noted that it was "impossible for us, from this perspective, to confirm whether or not 85 people were in fact killed, but it does appear that at least some women and were among those hurt in this deadly strike." (You can watch Watson's report here).

Watson's CNN.com report (8/10/11) included an interview with a Libyan who claimed that nine members of his family were killed in the attack, including his two-year old daughter. Watson also interviewed a man who was burying his daughter.

It is curious that Watson's reporting was shared with CNN's international audience, but not broadcast to its domestic audience.

But Watson did appear on CNN a few days earlier from the scene of another NATO strike in Zliten. The point of that report (8/5/11) was to suggest that official claims of civilian deaths were suspicious. In that segment, Watson noted that on a visit to a law school that had been attacked by NATO forces, he found what "appear to be uniforms over here, these olive green pants. And then we have got boxes here that look an awful lot like they could have been holding ammunition."

Reporting that undermines Libyan claims of civilian casualties has been a staple of the war so far-- as evidenced by headlines like "Libya Government Fails to Prove Claims of NATO Casualties" (Washington Post, 6/6/11) and "Libya Stokes Its Machine Generating Propaganda" (New York Times, 6/7/11).

Is Majer being ignored by the media because it is just more clumsy Libyan propaganda? Or is it because the story might conflict with the media's overriding message that Libyan civilians aren't dying in NATO's airstrikes? In any event, corporate media outlets that have so diligently sought to debunk Libyan claims of civilian deaths should investigate what happened in Majer. On the BBC website, reporter Matthew Price published one such effort (8/11/11), headlined "What really happened in Libya's Zlitan?" There should be more like it.

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Background Briefing: Murderous Mexico

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Charles Bowden

In the first five months of this year, an astonishing 18,500 Mexicans have been murdered - with very few convictions. In the last five years 66 journalists have been murdered. Mexico is a failed state with corruption, no rule of law, and spin and lies all around - including in America. The speaker is American non-fiction writer Charles Bowden.

Kirsten Garrett: Today you'll hear some amazing figures and a startling take on what's happening in Mexico. And it's all a salutary lesson for many other governments and other places in the world where the rule of law is weak. As you'll hear, Mexico is now the most murderous country in the world. In five years, 66 journalists have been killed and 12 have disappeared. And in the first five months of this year, all together 18,500 murders have been committed.

Charles Bowden is a renowned and prize-winning non-fiction author and he's campaigned repeatedly for the American government to tell the truth about what the Mexicans are doing to each other and what America is doing to Mexico. Mexico is the largest Spanish-speaking, Catholic nation in the world. The war on drugs has failed, but, nevertheless, most murders have nothing to do with drugs but are an outcome of society with a weak legal system, an ineffectual government that makes money out of things as they are, and a corrupt police and military. There are hundreds of small, local gangs that make money however they can and kill each other and many women with impunity.

Charles Bowden: The reason you don't hear about it anymore is the death rate got so high, focussing on women no longer seemed to explain things for a lot of people. We had 3900 people slaughtered in a city of a million last year. Ten per cent were women, 90 per cent were men. Nobody's case gets solved. That's what happened.

But the issue still goes on. I mean, there are scholars who just specialise in what's called femicide, the murder of women, in Juarez. The problem I have simply is it's about the same percentage of women murdered anywhere in Mexico and in Mexico murders get committed but not solved.

Kirsten Garrett: This is Background Briefing and I'm Kirsten Garrett. Charles Bowden is talking at the Commonwealth Club of California. Today's talk explains that most Mexicans go to America not to sell drugs, but because they're afraid of being killed by their own people. Many are so poor, they don't have shoes. There are no severed heads on the border between America and Mexico, it's a beat-up, says Charles Bowden. He says he's sick of the lies authorities tell about Mexico and he's ashamed to see what's allowed to happen as US politicians spend $40 billion a year on drug enforcement and beat up the fear and deny what he says are the realities. Charles Bowden.

[Applause]

Charles Bowden: I want to tell you about some lies my country has taught me. That's really why I came up here. Look, it's 1958 and Ramon Miguel 'Mike' Vargas, a Mexican drug enforcement agent, tells his wife, 'Susie, one of the longest borders on earth is right here between your country and mine. An open border. Fourteen hundred miles without a single machine gun in place. Yeah, I suppose that all sounds corny to you.'

Ramon's a fake. He's actually an actor named Charlton Heston and Susie turns out to be Janet Leigh, two years before she had that bad shower day in Psycho. But still the point carries. In 1958, a B movie out of Hollywood thought nothing of stating that the border was safe and open. Of course Hollywood being Hollywood it had the length of the line off by about 500 miles.

Now flash forward to April this year. This time El Paso County judge Veronica Escobar is playing El Paso County judge Veronica Escobar and she's testifying before the Senate Committee on Homeland Security and Government Affairs in Washington DC. She says, 'While federal law enforcement has gone on record to praise the border wall, it is to me and others an example of considerable federal dollars being spent on a rusting monument that makes my community look like a junkyard... We are indeed on the frontlines and a safe border means a safe nation,' she said. 'But vilifying immigrants, building expensive, ugly walls, and encouraging hysteria and xenophobia only hurts our border communities, our commerce, and the economy of our nation.'

Senator John McCain, played as it happens by Senator John McCain, would have none of such talk. He said, 'I don't view ranchers who live in the southern part of my state, who had repeated home invasions, as xenophobic.' And he said he does not believe the US borders immune to being affected by Mexico's violence; there is no logic associated with that, he's noted. Well, yes, maybe there is no logic associated with that, but there's something backing up the argument that violence is not spilling north across the borders. For years, crime has been declining on this side all along the border. That's not an opinion but something even more thrilling than logic: damned facts.

Well, look, I think we're in a sorry state at this moment in this country. We're having real problems. I think we're being told lies and we argue, we use as evidence, the lies we're being told: US government lies, the Mexican government lies. But, you know, I give talks and I go on radio and pretty much every time somebody comes up after a talk, or somebody calls at the end of the radio show, and they're always Mexican Americans and they've always lost someone in the violence and they're always a breath of fresh air and they don't lie. They know that people are getting killed who are pretty much like themselves. They know that people who are getting killed are poor. They know the people getting killed are not big drug folks, but mothers and fathers and brothers and sisters and aunts and uncles and cousins. They know the people getting killed are blood kin. Often the people that come up to me have tears in their eyes.

I want to talk about the lies my country taught me so that we can also feel this pain and face the truth. This last December, the first snow was falling, I'm in Santa Fe, New Mexico. This girl leans forward; she says in a quiet voice that her uncle was a sicario, a killer for a drug organisation. But she says, 'He's dead now. He committed suicide.' The other people in the room fall silent. I'm in a public high school. Many of the students are here because of scholarships. All of them are here to learn the arts: dance, theatre, painting, sculpture, so forth. They're the gifted ones we have, the ones we bet on and hope will bring us some truth and beauty.

There are things now that cannot be said and if said cannot be heard. The girl who had an uncle who was a sicario, a contract killer, an uncle who finally killed himself out of despair, she can't be heard. What can be heard are shouts and the shouts feature tiny phrases: 'illegal immigration,' 'national security,' 'violence spilling across the border,' 'river of iron,' 'build a wall,' 'war on drugs,' 'war on terror,' 'Minutemen,' 'kidnappings,' ' beheadings.' You know, for a while I got used to everybody telling lies about the border. For several years I would visit with the Minutemen; couldn't take a stroll without muskets, infrared, this and that, the whole basic Rambo ensemble. But I've changed. I think I'm seeing the beginning of a race war and it's been started by my fellow citizens.

Now I want us to take a look at some basic lies, touted by US politicians and believed by many and seldom questioned by the US media.

Lie number one: Mexico is undergoing a cartel war. If so, it's a damned strange one, since it doesn't interfere with the delivery of drugs to the United States and it doesn't affect the price of drugs in the United States. In the past four years, according to the Mexican government about 40,000 Mexicans have been butchered. Human rights groups argue the number's well north of 40,000. Now, the Mexican government insists 90 per cent of these newly murdered Mexicans are criminals. The Mexican government reluctantly admits it has only examined at most five per cent of these murders. In last fall, the Mexican senate admitted that for years the Mexican government has been operating its own death squads. So we have dead people and to be honest we don't know if they were criminals or not. And we have a drug industry in Mexico that is not missing a shipment and there's no real increase in drug prices in the US, the big market.

Ciudad Juarez is the core of this killing. In three years it's had over 8000 people slaughtered, or maybe more. Here's a window into the unreality. Last year, the official tally of murders in Juarez was 3100 dead. This made the city possibly the most dangerous spot on the surface of the earth. But, hey, wait a minute. This spring the Mexican government revised this number and said actually 3900 people had been slaughtered in the city. That would give Juarez a murder rate of 300 per 100,000. New York City, our beloved Babylon, runs about six per 100,000. How can a tally miss 800 corpses? How can a government be trusted that can't even accurately count the dead it failed to protect?

But if this is a cartel war, somebody must explain why there's no effect on the drug industry. If this is a war by the Mexican government against cartels, somebody must explain why only poor nobodies seem to die. Also, if this is a cartel war I'd like some reporter to actually talk to some cartel people, to actually go visit these criminals. I'd like some reporter to take a break from repeating government propaganda. Yes, drug organisations fight each other. Yes, they've done this often in the past. But they never even remotely hit this level of violence. In the past four years, for example, the murder rate in Juarez has increase thirteenfold.

Lie number two: the Mexican army under Plan Merida is fighting the drug organisations. Here we enter a fantasyland that's essential for scholars and governments. It is that the drug industry in Mexico is organised, with a top and a bottom. It is that by killing people at the top we can topple the industry. I think last year 10 or 15 bosses were killed, some tracked to their bloody ends by US drones, our new favourite death toy. As I mentioned, this has had no effect on drug shipments to the United States. There is no surge in prices. There's no panic among consumers about having an adequate supply of drugs. So what's going on? Well, several things. One, Mexico's dependent on the earnings of the drug industry. US outfits like DEA peg the hard currency earnings of the drug industry at 30 to 50 billion a year from Mexico. Now, this tops remittances from Mexicans working illegally in the US; tops the bucks made off tourism; and it most likely tops Mexico's number one legal source of foreign currency: oil, a nationalised industry with dying oilfields that the president of Mexico says will be exhausted in ten years or less, and oilfields that also supply about 40 per cent of the federal budget in Mexico.

Given these facts, we have be on drugs to think Mexico's going to eliminate its drug industry. As for the Mexican army, it has had thousands of human rights violations since it joined the drug war. These violations are for little things, like rape, murder, extortion, kidnapping, robbery, and - oh yeah - torture. Our US State Department, in a report, made these charges. It has placed its people in charge of the army, in charge of various police departments around the country; it's coerced Mexican media and it has had no influence on the delivery of drugs in the US. So the best way to think about the Mexican army and its 191,000 members is that it's the largest single criminal organisation in the country. And beyond that it's bulletproof. In four and a half years of this war, with 40 or 50,000 dead Mexicans, the army, working on the frontlines, has officially lost 105 people. Good God, any decent army loses that many a year to cirrhosis!

[Laughter]

Let's see. Last year in Juarez, 3900 people died. In four and a half years, maybe 105 soldiers died. What kind of a war is this? Well, it's a war where the Mexican army claims it's killed 1566 bad guys, or about four per cent of the 40,000 Mexican dead. Let's just pause here a moment. The Mexican army fights Mexican drug organisations for almost five years and loses 105 soldiers, kills 1500 out of 40,000. I'll tell you what kind of a war this is - it's a war for drugs; for the power and the money in drugs. And it's been lost by the government of Mexico because of false assumptions, false assumptions shared by our government. You can kill a boss and it's got no effect on the business except that somebody gets a new job. You can bust up drug organisations and it really has no effect on the business, since the business operates quite well with smaller units. You can slaughter guys in the business; there's almost an endless supply of young guys eager to take up the work.

I have a friend who had a young woman come to him in Juarez for counselling. She was a sicaria, a contract killer. She'd cut the heads off I think of, I don't know, four or five people. She needed the work. He also has women come to him for counselling who are considering drug dealing in their neighbourhoods as a more moral choice than prostitution, since they must do something to feed their families. And my friend's a minister.

So you can't really wipe out the dreaded drug business, for three simple reasons: people need the jobs; the government needs the money; and in the end the police and soldiers all join the business. In one six year period over a hundred thousand members of the Mexican army deserted. US military intelligence assumes they left the army for the drug industry, because it pays a lot better for killing people.

Ah yeah, one more detail: our war on drugs. After 40 years of the US war on drugs, after spending a trillion dollars, after creating the largest per capita prison population on earth, drugs are more freely available than when this war began, cheaper in constant dollars, and generally of better quality. If we took these trends logically, we can see a future where the US is a police state studded with prisons, where the Mexicans are all dead and where drug prices are so low they are virtually free.

How did we arrive at this lunacy? Well, by seeing others in our own image. After 9/11, US government could not imagine that such an attack could take place without a state sponsor. Turns out this hell we all witnessed that morning was accomplished by a guy living in a cave, with the help of some pals. Al-Qaeda's more an idea than an organisation. It can be penetrated, people in it can be killed, like Osama bin Laden, but it cannot be easily wiped out, because the notion of using terror as a political tool spreads easily - the subways in London, that train in Madrid, and so forth.

I think we face the same blindness in the war on drugs. One, we're using cops to solve a public health problem. Two, we imagine drug organisations as kind of like automobile companies, where we bust the management, blow up a few factories, and we bring the devils to their knees. Well, we're wrong. There is no real centre in the drug industry. Many people can produce the stuff, many people can move the stuff, and the profit's so high that nothing stops people from leaping into the business.

So here's the deal. We're 40 years into a hopeless war that creates better and cheaper drugs, kills lots of Mexicans, imprisons lots of Americans, finances lots of cops, and solves nothing. Absolutely nothing.

I have a friend who spent 20 years undercover as a narc. He lost partners, he killed people, he damned near went crazy with the stress. When he started working in the Dallas/Fort Worth Metroplex, heroin ran around $232,000 a kilo wholesale. When he turned in his badge a few years ago, heroin in the Dallas/Fort Worth Metroplex ran around $72,000 a kilo wholesale and the purity had gone up to 94 per cent. He told me, 'Look at these numbers. That's what I accomplished in a lifetime of work.'

Well, let me return to my list of lies.

The wall. The wall's going to cost us $8-10 billion when the dust settles. And the bill will keep rising, because the nature of walls is this: they're never really finished, but keep getting improved over time. The wall will never solve poverty. Mexicans migrate north because of poverty. The wall will never stop drugs, because drugs will come north in trucks and the trucks will come through US ports of entry and the agents at those ports will be paid bribes. All this is already happening.

But the American people love the wall, because it's solid and they can point to it and say, 'Problem solved.' And American politicians love the wall, because they can point to it and say, 'Hey, I voted for that. Problem solved.' At the moment, every indicator suggests the migration of the Mexican poor has stalled, but the war has little to do with it. The remedy turns out to be the collapse of the American economy. But this breather will not last. Mexico is suffering more than the US in the collapse. Inevitably, wall or no wall, people are going to resume the march north.

But here's the point I want to make. The wall's not about national security. The 20,000 armed agents we now have on the Mexican border are not about national security. Terrorists sensibly arrive in the US at airports, with nice documents. The people crossing the Rio Grande, risking their lives in the deserts of the southwest, are not terrorists; they're poor people. The wall is part of our war on the poor.

Now I come to one of my very favourite lies. I'm getting to be a gourmet on this stuff, you know. I used to be a gourmet on... Violence spilling across the border. This was the favourite theme of Senator John McCain in his re-election campaign last fall. You know, Senator [Jan] Brewer of Arizona... McCain said famously, 'Build the dang wall.' If you really care about the security of this country, get very worried when we're producing sailors that say 'dang.'

[Laughter]

He also said violence was spilling north over the border and insisted the National Guard troops be sent to the line. Governor Brewer complained of severed heads littering the Arizona desert. Well, let's calmly review the facts. I realise fear seems to be the political drug of choice. Well, let's try an old-fashioned thing: facts. For the past decade, all along the Mexican border on the US side, crime has been declining year by year. El Paso, Texas, facing Juarez, had five murders in 2010 and was rated variously the safest city in the US or the second safest. Nogales, Arizona, just had its first murder in three years. An ex-cop murdered his estranged wife. Now as for the severed heads, there's not been a single one found in the Arizona desert. There is no reason for Senator McCain to demand National Guard troops on the border because of this case. But that's what he did. There's no reason for the senator and the governor to claim violence is spilling across the border. But they both did.

I could be kind - I have a soft streak in me - and assume they're mentally impaired. But I think they're deliberately lying in order to get votes and I think this kind of lying can lead to a race war. And I'm a little sensitive on this subject. I spend about a half a year, half of each year, on the Arizona border in an isolated house. It's about 20 miles to the line from the house and there's nothing between me and the line but some mountains, grassland, a few isolated ranches. I hardly lock the doors.

There are times I can hear trucks of drugs moving down the dirt road in the night. Once in a while I see guys backpacking drugs and they're all neatly dressed in black. I don't think there's been a murder in the area in 20 years. The area has stash houses. There's been a few incidents in the past years. About a year or so ago they did a big drug bust in a nearby town. They nailed 20-odd people and announced they'd wiped out a major pot ring. The kingpin was driving a 1987 car. Such is the violence on this side of the border.

Now here's another one: the river of iron.

Kirsten Garrett: 'The river of iron' is a phrase used in America to talk about the arms trade going on from America to Mexico, and at this point in his talk Charles Bowden says it's rubbish. The figures are inexact and they're not explicit and the Mexican gangs and drug dealers make billions anyway; they have rocket launchers and grenades and AK-47s and they use them to kill each other. They don't need guns from America. He also said desertion from the Mexican army is on a grand scale and the soldiers take their guns with them. These may be made in America. Don't believe in the river of iron, it's another lie. Charles Bowden asks why there are so many lies.

Charles Bowden: I think all these lies exist for a few simple reasons. One, we all seem to like the lies. 'Cos they don't cost us anything: we can be against guns; we can say that drugs are bad; we can toss money to the Mexican army; finance the US police state; and go on our merry way. What the hell - we can build a wall, too. We can do anything but look at the real facts on the ground. What we find is growing poverty in Mexico, growing violence, and the expanse of police and military powers; the flight of the affluent - an estimated 30-60,000 rich Mexicans have crossed the bridge and moved from Juarez to El Paso in the last three years, for example.

And now there are colonies of illegal refugees, people who didn't come here for economic reasons; they came here out of fear of being murdered. Since political asylum is difficult and close to impossible for Mexicans to achieve, they blend into border areas. In Las Cruces, New Mexico, for example, the local community college grew 77 per cent in a year and 99 per cent of the growth was English as a second language. This is an underground community beneath the notice or compassion of the US government. Meanwhile, back in Juarez, 27 per cent of the houses have been abandoned; 40 per cent of the retail businesses have closed; an estimated 10,000 orphans have been created; 100,000 dogs have been abandoned; and now well over 8000 people murdered in three years.

And we talk about violence spilling across the border and we talk of the need for a wall and we talk of the border as a national security issue. What we seem to skip over is that at our doorstep the largest human rights crisis in the western hemisphere is happening right in front of our lying eyes. I'll make it simple. The primary force between the migration of the Mexicans north is a failure of the Mexican economy. In Juarez, for example, about half the teenage kids are neither in school nor have jobs. Every year or so a think tank or government agency seems to spew out numbers stating Mexico is booming. You have to wonder why nobody tells the Mexican people this wonderful fact, since at least ten per cent of their population's out living here illegally.

NAFTA, the North American Free Trade Agreement, destroyed light industry and peasant agriculture and triggered what is probably the largest human migration on earth. Now NAFTA was endorsed by both political parties, passed during President Clinton's first term, and it was sold as a solution to illegal Mexican migration and to Mexican poverty. It is an absolute failure. It has cost US workers an estimated 200,000 to 700,000 jobs. It has created huge warrens of poverty on the border, where Mexicans work in US factories for slave wages. It has in Juarez created a generation of children raised without parents because their mothers and fathers slave in these factories. There are now an estimated 900 street gangs in Juarez as a result. NAFTA must be renegotiated so that it neither destroys American jobs nor destroys Mexican families. It must guarantee the right of labour to organise and guarantee workplaces that are not toxic. Now this isn't too damned hard. We manage to build factories all over this country that meet that standard.

Next, stop giving money to the Mexican army. We give them about $500 million a year, so they can kill Mexicans. Stop seeing a military solution to an economic problem. Legalise drugs. The war on drugs is a failure that kills Mexicans, imprisons Americans, gives tens of millions of dollars per year to murderous scum, terrorises drug users, and creates a police state. Albert Einstein once said that insanity meant doing the same thing over and over and expecting different results. He must have been thinking of our war on drugs.

OK. A short review. NAFTA's a failure. The war on drugs is a failure. The migration north of Mexicans is driven by poverty and big walls don't answer that fact. Nobody is coming here to blow up our lives. Violence is not spilling north. The river of iron, the fact that some killers in Mexico use US guns, is a sideshow and so far has little or no factual basis. Now it's time to stop lying, because these lies kill people. If you want the world to get worse, if you want more death, more migration, more violence, well, continue to support these policies. Both governments will applaud you as you join their dance of death. If you say build the wall higher, give more guns to the Mexican army, hire more police to bust drug addicts, jail Mexicans who come here to work illegally. Hell, you might even get elected to congress.

I was born in 1945. I was born into a country that believed in the future and wasn't afraid. When I've raised these issues before, I've been told that my answers are simple. Well, fine. So's the Sermon on the Mount. We can't fix Mexico, only Mexicans can. We can certainly stop doing things to make it worse.

Thank you.

[Applause]

Kirsten Garrett: This is Background Briefing, on ABC Radio National. Speaking is author Charles Bowden. Now, at the Commonwealth Club of California, there were questions from the floor.

Woman 1: What do you see as the main reason that so many Mexicans are being killed - poor people, as you say - by their own police and soldiers?

Charles Bowden: I can't give you an exact answer. I'll give you some things that are going on. 'Social cleansing', a term you may have heard in other countries, like Latin America. Some of the people getting killed, people in drug clinics, et cetera, are just being massacred by the government because the Mexican army thinks that Mexico would be better without them.

Secondly, some of it's actual killing by drug organisations. Now, I'll give you a very quick piece of history: 2007 was the most violent year in the history of Juarez, a city about 350 years old: 310, 320 people were killed. Suddenly it went to 1600 and then 2700 and then 3900 killings a year. That can't be explained by conflicts in the drug industry. Look, these bastards been killing each other since the beginning of time. It's a business not a recreation. Something else is happening. I think it's the breakdown of a society. I think after decades of mismanagement, growing poverty, et cetera, things explode. A lot of the people getting killed are failing to pay extortion. You have a tamale cart, you didn't meet your 30 bucks that week, or 20, whatever, 10, whatever it is, and they kill you. And you're being killed by gangs. Look here, there's no big drug guy up saying, 'Go ahead, kill that guy with the tamale cart. He didn't pay me a couple of bucks this week.' This is just people killing each other 'cos there's nothing there anymore; in other words, a breakdown.

But the only way you can explain each murder is to look at each murder. And here's the problem; none are investigated. There are no known facts... except the corpse.

Man 1: How much violence on this side of the border is connected to drug cartels on that side, with the distribution...

Charles Bowden: Good question.

Man 1: ...and gang activity.

Charles Bowden: Yeah. Some of the violence on this side is connected to the other side, but it doesn't really happen here. For years, like in El Paso, if you failed to pay for a drug load, somebody comes to your house, puts you in a trunk, and you get a free trip to Juarez, usually don't come back. Now, that's always gone on. It's gone on in, like, Phoenix, Tucson; all these communities have home invasions; that's part of what's going on. But if that were counted, it would not significantly increase the rate of violence on this side. It is simply a misconception that violence is spilling across the border north.

It is spilling south. We're giving half a billion dollars a year to the Mexican army, for example, and they're killing people. We have a prohibition against drugs; that's killing people. Look, I get a little tired of American politicians saying somebody in the city rolling a joint is murdering a Mexican. Frankly, they don't even know where Mexico is. You might as well say somebody having a beer in Chicago in '25 was trying to kill people when he just got out of the stockyards and wanted a beer. This is nonsense. What's killing people is this absurd prohibition on drugs. It's 40 years into the game, it's a total failure and we ought to admit it. Look, you don't have to be in favour of drugs, any more than you have to drink Coca Cola. This just isn't working.

Man 2: Can you discuss the increase in violence since the militarisation of the attempt to stop the drug traffic in Mexico? I mean the advent of the Zetas and the hyper-violence that we see now; the beheadings and whatnot. I mean, that didn't go on ten years ago.

Charles Bowden: Two points, yeah. Wherever the army goes, more dead people show up. The Zetas originally were an anti-drug organisation group, created in the mid-90s, financed in part by the US. I have a friend, former DEA, who used to be their paymaster. But they looked at the pay scale and went south on us, you know, and joined the Gulf Cartel. They're a paramilitary group, some of them were trained in the US - think of a bunch of Rambos. And they kill people. But you don't know who they kill. What I'm saying is every time a bird falls out of the sky now, the Mexican government says it's the Zetas. It's kind of like John Dillinger in the 30s. He could rob banks the same day in seven states.

There are lots of gangs killing people. I'm not belittling these guys; in fact, this autobiography of the sicario that I worked on with Molly Molloy - it's really her book - what he told us, the sicario, was that he's impressed with the Zetas. He brushed up against them in his work, murdering people. He said only a Zeta can kill a Zeta. So they're good.

But the violence is too widespread. I mean, a retired Mexican general floated a trial balloon a couple of weeks ago in the leading magazine in Mexico and said, 'Well, look, 40 per cent of the country's been lost to drug organisations.' The trial balloon was do you have to let the army cordon off section by section? Go in and cleanse it? Well, I know what that means if you don't; I'm half German.

Man 3: Given the theme you set up about heading south in terms of the violence, it seems like a popular theme lately in the media is to talk about the growing violence in Guatemala, in Central America...

Charles Bowden: Oh yes.

Man 3: So can you put that into the context of what's going on...

Charles Bowden: Oh yeah. I don't know if I can put it into context. Look, Central America's turning into a bloodbath - grenades sell for $6.50 a piece in the markets of Guatemala, leftovers from our dirty little wars; they have more grenades than they know what to do with. But there's an excellent book I didn't write, naturally, called Gomorrah, by Roberto Saviano. It's about Naples. What he sees and what I think I'm seeing, thanks in part to him - he's a kid in his late 20s - about the Camorra, the mafia of Naples is there's getting an international sort of industry of crime that is the economy that has no centre, that really has no capos, and that it's the economy of the future. And I really recommend the book to you. I think I'm seeing that in Mexico, Central America. I am not an expert, but it's the only way I can explain it.

The myth of Mexico now as shared by both governments and a lot of the Mexican people is two or three capos can go in a room, get sober, and stop the violence. I think we're way past that. You can't put the genie back in the bottle.

Woman 2: The dialogue about legalising drugs has been going on for quite some time, and there have been some prominent political leaders who have made noises about this and come out openly, including a former California gubernatorial candidate last year who never got out of the Republican primary and a former secretary of state, George Shultz. And I was actually here at the Commonwealth Club about 15 years ago where I heard him say that. Where is that dialogue now? Is there any leader taking the helm for that?

Charles Bowden: Look, I find it hard to explain how I now live in a country where people in both parties will stand up for gay marriage and there isn't a politician in this country that will stand up for marijuana even. Paul Volcker says this policy is bad, you know, in this recent report. It's hardly like it's a bunch of crazy people. But I think it has to come. I mean, we can't afford this war any more than we can afford the war in Afghanistan. We are spending 30, 40 billion a year. In the last year of the Clinton administration we were spending about 40 billion a year on narcotics enforcement. This cannot go on. It's just like I read this morning - one of those little windows of lucidity having coffee - that we're dropping 20 billion a year in Afghanistan and Iraq on air conditioning. Jesus, I wish I took drugs, you know; I could comprehend that.

So, look, I'm not trying to put you off. I will say this, somebody has to stand up. They can't say decriminalise. Decriminalise is nice but doesn't do anything. It means you get to buy drugs but criminals get to sell them, meaning the black market still exists, you're still giving the same amount of money to killers and, you know, it isn't going to work. It didn't work with prohibition. The only way you retired Al Capone was legalising booze. Now, booze isn't good for you - although it's nice - but that was the only way out. That's why I personally don't think you can do it unless you legalise everything.

We have to do what we did with alcohol. We know alcohol's destructive, we know it's violent. I used to be a crime reporter. When you look at the police blotter on Sunday morning, you're not looking at a bunch of crimes committed because the old man had a joint and beat up his wife. It's all booze and we all know it, but we've created a system where people can get drunk but they can't scare the horses, increasingly can't drive a car. I mean, I love it. You see a bunch of alcoholics riding round the cities now on old bicycles; the new green generation. We're going to have to do the same thing with drugs, because I don't see any other choice. This is at most a public health issue. We're the public. Cops aren't good at that.

One of the reasons I'm against sending the National Guard to the borders - not that I'm against the National Guard - I think every American has the right to go camping - is that they're not trained in police work; they're trained to eliminate targets. You're sending the wrong group. We're sending the wrong group to solve drug addiction by sending policemen. That's the best I can do. I know it isn't good enough, but hell I'm only human.

Man 4: A number of years ago there were quite a few women that they were finding their bodies along the border. I believe it was around Juarez and they were working. But since this drug thing I don't read anything about it anymore and I don't know what really ever happened. I just wondered if you knew.

Charles Bowden: I can tell you what happened. The reason you don't hear about it anymore is the death rate got so high, focussing on women no longer seemed to explain things for a lot of people. Now, we had 3900 people slaughtered in a city of a million last year, or 1,200,000. Ten per cent were women, 90 per cent were men. Nobody's case gets solved. That's what happened.

But the issue still goes on. I mean, there are scholars who just specialise in what's called femicide, the murder of women, in Juarez. The problem I have simply is it's about the same percentage of women murdered anywhere in Mexico and in Mexico murders get committed but not solved.

There's an excellent movie made by two Mexican citizens who got PhDs at Berkeley, called Presumed Guilty. It came out about two years ago; it's a documentary. I cannot recommend it highly enough. You'll never have another question about the Mexican justice system; you'll never use the word justice, either. It's splendid. They're both attorneys, Mexican citizens, and it's revelatory. PBS has shown it once.

Woman 3: It's so funny that you just mentioned the documentary because I'm actually going to Mexico City in a couple of weeks for the Merida Initiative. And so I was curious what your opinion was of the Merida Initiative, which is basically to strengthen their justice system and to help them transition from inquisitorial to more adversarial. And I wanted to know, was this another one of your myths. Would you, like, add this to the list of myths? Or do you think this could have a positive effect on Mexico?

Charles Bowden: I don't know how to answer that. Partly it's above my pay grade; partly Mexicans have to fix Mexico; partly this system has to be broken, I think almost, to be fixed down there. Look, I don't have a solution. The only thing I know, as an American, is I don't want my government making it worse. It's just like there are many Americans that used to sort of wonder why we were propping up somebody like General Franco. Well, that's the way I feel now; that our policies are hurting the Mexican people and in the end it hurts us and they're not helping us.

Look, it's no benefit to me or anybody in this room if you have somebody working in the Electrolux factory, for example in Juarez, on a wage that's not a living wage, you know. That doesn't help us any more than it helped to move the factory there. There's an excellent book called, I think, Mollie's Job, by William Adler, where he tracks a job from New Jersey to the woman who gets it in Mexico. And the woman who lost it in New Jersey's life is destroyed. She happens to be African American. And the woman in Matamoros who gets it - a Mexican - her life is slavery and destroyed. That's the point I want to bring up; that these initiatives, you know, like Javier Sicilia's Caravan Against Violence, that's for Mexicans to decide. And I'm a little sceptical, but I can't speak against somebody being against violence, because I'm against violence.

But, I'll tell you the truth, if I ran the world (that's next time I come here and speak, I'll be God). Look, I think this country can only sustain 100, 120 million people. I think we're overpopulated. I think we're beyond carrying capacity. I think we're destroying the earth. But I wasn't raised to take that fact and tell a Mexican man, woman and child to go die in a ditch. That's my problem. My problem's my damned mother, you know, she taught me this stuff.

Man 5: One of the things that struck me over the last several years is how quiet the Catholic Church in Mexico has been about what's happening. Is that your impression, or is that just a distortion...

Charles Bowden: Yes, I mean, look, that's a long issue because of the historic conflict between the government and the church. And now they have a rapprochement. The PAN Party that's running Mexico is catholic. The current president, Felipe Calderon, is devoutly Catholic. And so, yes, they've been silent in my opinion. Not completely. I mean, there have been bishops that have spoken out -but there hasn't been a slaughter like this of Mexicans since the Mexican revolution. This is not some sideshow. Your government's trying to tell you, 'Well, it's just drug guys killing each other.' Well, actually I want Hillary Clinton, I want President Obama to go to the goddamn morgue and tell me which one of those corpses is a drug person; these thousands of poor people, don't even have shoes. I'm a little tired of listening to that kind of crap.

OK, well thank you.

[Applause]

Kirsten Garrett: That was prize-winning author and campaigner Charles Bowden speaking at the Commonwealth Club of California recently. And there'll be a link to his biographical details on the Background Briefing website. I'm Kirsten Garrett. This is ABC Radio National.

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Seed Savers Exchange, Svalbard, and Corporatism

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I’ve been uncertain what to think about the power struggle at the Seed Savers Exchange, the deposition of its co-founder and longtime executive director Kent Whealy, the charges and countercharges of mismanagement, Leader arrogance, and lack of transparency and democracy (there seems to have been quite a bit of these on both sides), and the SSE’s peculiar partnership with the globalization seed vault at Svalbard.

 

One thing that’s clear is that the Svalbard relationship is gratuitous and cannot have been undertaken for the reasons current management claims, that it represents an increased resiliency for the SSE’s stocks. If that were really the intent they’d have expanded and distributed their own network and facilities (like the way a plant would with its own seeds), not have sought further concentration in a corporate fortress.

 

This is true even if the claims of Whealy and others about the contract between SSE and Svalbard are exaggerated. Whealy claims that the varieties reposed at Svalbard cannot easily be repossessed, nor are there barriers to Monsanto and others using them for proprietary research. Worst of all, Svalbard can now demand access to and possession of any and all seeds in the SSE library. SSE would have to comply with any such demand laundered through Svalbard by Monsanto and other rackets.

 

Torgrimson and the rest deny these claims. They and the NordGen managers of the vault say they can take back their deposits any time they want, that nobody can do anything with those deposits without their OK, and that nothing in the contract gives Svalbard any right to anything other than what’s been deposited in the vault.

 

My own reading of the contract is that it’s intentionally vague and can possibly be interpreted the way Whealy claims. Anyone who knows the history of globalization knows how these things are likely to work, so it’s reasonable to be suspicious of anything vague. But of course a pollyanna liberal (or someone pretending to be that; Whealy’s own interpretation of his nemeses is that they’re mostly stupid starfuckers who don’t know how they’re being manipulated by corporatism – see below for the latest on this) would argue that the contract’s fine.

 

(I wrote more on the War on Seeds here and here.)

 

I repeat that no one trying to set up a network of seed banks for democratic and relocalization purposes would have anything to do with centralized system vaults like Svalbard. If you fear for the safety and viability of the seeds at any one location, then spread them among hundreds, thousands. This year I’m making a (so far very modest) start at beginning a seed library as a project of our relocalization group. We’ll see what kind of help I get this fall from the community garden, etc. But a corporatist vault is dubious on its face, the contract language gives grounds for further suspicion, these are enough to make the decision that such collaboration is likely to cost far, far more than one might gain, and it’s unnecessary from any legitimate point of view. (For more on Svalbard’s backers, see for example the donor list at the Global Crop Diversity Trust. Monsanto’s not explicitly listed, but most of the rest of the gang’s there – Syngenta, Dupont/Pioneer, the Gates Foundation, the Rockefeller Foundation, the World Bank CGIAR, etc.)

 

And now for the latest, the most clear window yet on SSE’s corporate liberal treachery. They’re now crowing about a visit from none other than their president Obama. I’ll spare you excerpts from their sickening paean to a mass murderer and co-conspirator in the looting of tens of trillions of dollars from the American people. But masochists can read it here. Note how all the happy talk about seed saving is 100% from their side, while Obama evidently didn’t even pretend to respect SSE’s mission.

 

There’s good reason for that. Monsanto is one of Obama’s favorite corporations, according to the record of his actions. Anyone who knows anything about seed saving knows that Monsanto is dedicated to a totalitarian purge of all non-proprietary seed use from the face of the earth. Over ten years ago it commissioned Enron collaborator Arthur Andersen to reverse-engineer a strategy for literal world domination based on control of the food supply, through a monopoly on all seeds. Anyone who cares anything for SSE’s mission regards Monsanto as enemy #1.

 

Obama, meanwhile, has appointed and promoted more Monsanto cadres in his administration than Bush did in 8 years. Most notoriously, he elevated Monsanto lobbyist Michael Taylor to the anti-democratic post of Food Czar, with vague but vast theoretical administrative power over our food and seeds. The recently passed and Obama-supported Food Control bill is intended to legislatively validate an administrative dictatorship over food. Monsanto wrote much of this bill. Obama is Monsanto’s president.

 

The SSE Leadership knows all this, yet chooses to welcome this arch-criminal and lie to its membership about what it means. This is the strongest evidence yet that Whealy is right about the “seat at the table” corporate liberal sellout attitude among SSE’s management, or perhaps something more sinister. Since Obama certainly wants organizations like SSE to cease to exist, it follows that if traitors within wanted to dissolve the project (not overtly, but by gutting it from within), they’d try to astroturf the membership into thinking Obama’s their ally, and that the organization should fall into line with administration directives. For example, there haven’t yet been any new FDA rulings on seeds based on the new legislation, but they’re probably coming.

 

This would then put the Svalbard collaboration in a more explicable, evil perspective. 

 

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Stockton residents vent rage at Orica meeting @newcastleherald

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Outraged Stockton residents jeered and heckled Orica officials last night as they tried to apologise for last week’s leak of the toxic chemical hexavalent chromium from their plant.

More than 200 people packed the public meeting to seek answers, in particular why the multinational company never called emergency services the night of the industrial accident, which would have prompted public warnings.

Residents said the company had lost their trust and they remained angry about the three-day delay in notifying them of the leak.

The residents told of children with rashes, family members with aggravated asthma and pets with irritated eyes.

Orica general manager James Bonner apologised on behalf of the company.

‘‘We are really sorry about this incident,’’ he said. ‘‘We are absolutely committed to it not happening again.’’

Company representatives were repeatedly heckled by the crowd, who accused them of lying and covering up the accident.


Orica’s site manager Stuart Newman told the crowd that an accident like last week’s hexavalent chromium leak had never happened before.

He said it was caused when water got into a vent and mixed with a catalyst, creating a chemical the company was not practised in dealing with.

He said the company’s first priority that night had been its staff and its next major concern was stopping the hexavalent chromium running off-site and into the Hunter River.

Mr Bonner and the other company representatives last night sought to assure residents that testing had found levels of the chemical in the community were low and posed no health threat.

Stockton resident Simon Rook said he was out fishing off Stockton at the time of the spill.

He asked independent toxicologist John Frangos if he could assure him he would be OK. He was told ‘‘yes’’.

John Hayes, of Mayfield, said the wind could have easily been blowing towards Mayfield, Honeysuckle or Cooks Hill.

He said it wasn’t a Stockton issue it was a ‘‘Newcastle issue’’.

‘‘Maybe what has to happen is their licence needs to be revoked,’’ he said.

Resident Steve Abrahall asked why the company did not realise immediately that residents downwind of the leak would be affected.

‘‘Didn’t the penny drop or are your control systems that lame?’’ he asked.

‘‘Didn’t you know there was wind blowing or did you think you could get away with it?’’

For a gallery of pictures charting the Orica chemical leak, click here.

While some residents were concerned about the suburb’s reputation and property values, others were more concerned with potential long-term health effects.

Many conceded that while the leak had been an accident, the company’s worst mistake was the way it handled matters in the wake of the contamination.

Newcastle MP Tim Owen, who was at last night’s meeting, also faced a barrage of questions about the government’s response and law enforcement.


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