Lest someone claim that I am but a DC-hostile, fed-fighting small “l” libertarian, let me be the first to say: Much respect goes to the GAO for their response to a Deep Capture story.
Readers of Deep Capture may have noticed that, while I may not be on the best of terms with some federal institutions (e.g., the SEC), I have sought to be respectful to individuals serving the public in whatever capacity, and especially, to those institutions which appear to me to be part of the solution and not part of the problem. For example, recently I wrote of the Congressional Research Service, “The CRS is one of the most respected institutions in Washington, DC, and its output is universally considered non-partisan, objective, and thorough” (“It Only Hurts When I Laugh“). And in June of 2008, in an essay (“So You Say You Want a Revolution?“) now linked to dozens of times through this site, I wrote of the GAO:
Another place you can turn is the United States Government Accountability Office. The GAO is probably the most respectable group in DC (setting aside the military). When Congress needs a non-partisan, no-bullshit answer to any question, they turn to the GAO. Write Chuck Young at youngc1@gao.gov and let him know about your interest in naked short selling and the general issues raised in DeepCapture.com.
Notwithstanding such general warm sentiments Deep Capture feels towards the GAO, a recent GAO publication (“Securities and Exchange Commission: Oversight of U.S. Equities Market Clearing Agencies“) disappointed my Deep Capture colleague, Mark Mitchell, enough for him to write a fairly scathing analysis of it (“Our Watchdogs and the Financial Scandal of the Century“).
Today the GAO’s Orice Williams (“Director, Financial Markets and Community Investment, US GAO”) has responded to Mark Mitchell’s story, to the great credit of the GAO and Ms. Williams herself. Because one can fairly read her intent to be one of public response (Ms. Williams has, in fact, posted this in the comments on Mark’s story), out of courtesy to Ms. Williams and respect for her organization I am reproducing her response here, in full, so that it not be lost among the comments of others.
———- Forwarded message ———-
From: Orice M Williams
Date: Wed, Apr 8, 2009 at 4:12 PM
Subject: Mr. Mitchell,
To: mitch0033@gmail.com
Mr. Mitchell,
On March 26, 2009, GAO issued a correspondence entitled Securities and Exchange Commission: Oversight of U.S. Equities Market Clearing Agencies. It was an interim product of an ongoing study on Regulation SHO and not, as mistakenly stated in the article, a report on the findings of an “investigation.” The March 2009 correspondence was issued as an interim product to provide Congress and the public with a descriptive overview of how U.S. clearing agencies settle and clear equities securities trades and how SEC oversees the clearing and settlement systems of these agencies through its examination process. Therefore, the information provided was descriptive and not intended to evaluate SEC’s oversight of clearing agencies or to provide detailed information on examination findings. Further, as is the case with all GAO reports, the March 2009 correspondence provided an introduction that explained why GAO did this work. In this case, as noted in the letter, GAO did this work because of the importance of an effective clearance and settlement process. This is our standard reporting format and is neither strange nor uncommon. GAO’s final report on Regulation SHO and SEC’s efforts to address failures to deliver and naked short selling will be issued in May 2009.
I have posted this information as a response to your article. However, I also wanted to bring it to your attention.
Regards,
Orice
Orice M. Williams
Director
Financial Markets and Community Investment
US GAO
If I know Mark, he may have something to write in reply. In the meantime, however, the publication of this GAO letter is required, I believe, by those very principles of journalistic integrity which Deep Capture was established to illustrate and defend.
And to Ms. Williams I say: Much respect indeed.
…. Following the Money Trail…
Greenspan, Rubin and Summers Silenced The Woman Who Could Have Prevented This Financial Mess…
The Woman Who Could Have Prevented This Financial Mess Was Silenced by Greenspan, Rubin and Summers
By Katrina vanden Heuvel, TheNation.com. Posted October 11, 2008.
A sad tale emerges of willfully arrogant behavior designed to undermine a wise woman’s good judgment.
“Break the Glass” was the code-name high-level Treasury Department figures gave the $700 billion bailout; it was to be used only as a last-resort measure.
Now millions have been sprayed and damaged by broken glass.
But more than a decade ago, a woman you’re likely never to have heard of, Brooksley Born, head of the Commodity Futures Trading Commission — a federal agency that regulates options and futures trading — was the oracle whose warnings about the dangerous boom in derivatives trading just might have averted the calamitous bust now engulfing the US and global markets. Instead she was met with scorn, condescension and outright anger by former Federal Reserve Chair Alan Greenspan, former Treasury Secretary Robert Rubin and his deputy Lawrence Summers. In fact, Greenspan, the man some affectionately called “The Oracle,” spent his political capital cheerleading these disastrous financial instruments.
On Thursday, the New York Times ran a masterful and revealing front page article exposing the culpability of Greenspan, Rubin and Summers for the era of dangerous turbulence we live in.
What these “three marketeers” — as they were called in a 1999 Time magazine cover story — were adept at was peddling the timebombs at the heart of this complex crisis: exotic and opaque financial instruments known as derivatives — contracts intended to hedge against risk and whose values are derived from underlying assets. To cut to the quick, Greenspan, Rubin and Summers opposed regulating them. “Proposals to bring even minimalist regulation were basically rebuffed by Greenspan and various people in the Treasury,” recalls Alan Blinder, a former Federal Reserve board member and economist at Princeton University, in the Times article.
In 1997, Brooksley Born warned in congressional testimony that unregulated trading in derivatives could “threaten our regulated markets or, indeed, our economy without any federal agency knowing about it.” Born called for greater transparency — disclosure of trades and reserves as a buffer against losses.
Instead of heeding this oracle’s warnings, Greenspan, Rubin & Summers rushed to silence her. As the Times story reveals, Born’s wise warnings “incited fierce opposition” from Greenspan and Rubin who “concluded that merely discussing new rules threatened the derivatives market.” Greenspan deployed condescension and told Born she didn’t know what she doing and she’d cause a financial crisis. (A senior Commission director who worked with Born suggests that Greenspan and the guys didn’t like her independence. ” Brooksley was this woman who was not playing tennis with these guys and not having lunch with these guys. There was a little bit of the feeling that this woman was not of Wall Street.”)
In early 1998, according to the Times story, one of the guys, Larry Summers, called Born to “chastise her for taking steps he said would lead to a financial crisis. But Born kept at it, unwilling to let arrogant men undermine her good judgment. But it got tougher out there. In June 1998, Greenspan, Rubin and the then head of the SEC, Arthur Levitt, Jr., called on Congress “to prevent Ms. Born from acting until more senior regulators developed their own recommendations.” (Levitt now says he regrets that decision.) Months later, the huge hedge fund Long Term Capital Management nearly collapsed — confirming some of Born’s warnings. (Bets on derivatives were a key reason.)
“Despite that event,” the Times reports, ” Congress (apparently as a result of Greenspan & Summer’s urging, influence-peddling and pressure) “froze” Born’s Commissions’ regulatory authority. The next year, Born left as head of the Commission. Born did not talk to the Times for their article.
What emerges is a story of reckless, willful and arrogant action and behavior designed to undermine a wise woman’s good judgment. The three marketeers’ disdain for modest regulation of new and risky financial instruments reveals a faith-based fundamentalist approach to the management of markets and risk. If there is any accountability left in our system, Greenspan, Rubin and Summers should not be telling anyone how to run anything. Instead, Barack Obama might do well to bring back Brooksley Born and promote to his team economists who haven’t contributed to the ugly mess we’re in.
Katrina vanden Heuvel is editor of The Nation.
( http://www.alternet.org/workplace/102559/the_woman_who_could_have_prevented_this_financial_mess_was_silenced_by_greenspan,_rubin_and_summers/ )
A delectable tidbit about one of the major hucksters of voodoo economics, Alan Greenbacks, and a hedgefund tryst:
http://www.cnbc.com/id/22659152
—– Original Message —–
From: marv eatinger
To: fraud@gao.gov ; CFLETTERS ; Criminal.Division@usdoj.gov ; hawked@sec.gov ; casework@grassley.senate.gov ; caseyk@sec.gov ; aguilarl@sec.gov ; ENFORCEMENT ; brandon_barford@banking.senate.gov ; oig@sec.gov ; lee@leeterry.com ; mitch0033@gmail.com ; info@teamemerald.com ; ra-erwebmaster@state.pa.us
Sent: Wednesday, April 15, 2009 5:56 PM
Subject: “DUE DILIGENCE” VERSUS THE STATUTE OF LIMITATIONS VERSUS DALECO RESOURCES CORP PUBLIC STOCKHOLDERS LEGAL RECOURSE CONCERNING SECURITIES FRAUD!!!!
“DUE DILIGENCE” VERSUS THE STATUTE OF LIMITATIONS 1 minute ago Marv Eatinger Says:
April 15th, 2009 at 8:54 am
Anonymous – reply to your response #20:
If a fraud is on going, every time an event is created in order to cover up a past fraudulent act the statute of limitations is tolled & starts over.
“In cases where a cause of action has been fraudulently concealed, the statute of limitations is tolled until the action is, or could have been, discovered through the exercise of due diligence. ”
Daleco Resources Corp committed many frauds. It all started in May of 1984 with their 20F filing with the SEC. An ex-SEC lawyer (MARIO V. MIRABELLI NOW WITH PATTON BOGGS) who was the managing partner of Shea & Gould law firm took his proprietary knowledge of how the SEC handles the filings of public companies and manipulated Daleco’s SEC filings for the years of 1984, 1985, 1986 & 1988 into different branches of the Division of Corporate Finance in order to cover up the accounting fraud that Daleco’s management conspired with its auditors (COOPERS & LYBRAND ACCOUNTING FIRM) in order to steal at least $30,000,000 + of oil & gas properties and leave the public stockholders without a clue as to what actually happened. Shea & Gould dissolved with a special night meeting of partners in January of 1994, one week after I had sent them my third certified letter over a period of two years. They never answered any of my certified letters!
In January of 1991 the fraud division of the Fresno California IRS service center sent me a letter assigning a claim no. 95-52791-1 to my submission of 19 form #211’s having to do with entities associated with Daleco Resources Corp. In the letter of assigning the above IRS claim number the IRS stated that “As soon as we have completed our investigation and evaluation, we will notify you. Please let us know if you change your address.” This letter was signed by Theron C. Polivka Director, of the Service Center. To this day I have not been able to find out what has happened to my claim number and is it active or not active!
It is always possible that the Federal Government would just as soon look the other way because Daleco exposes all the loopholes and weaknesses of the regulatory authorities in the 1980’s & 1990’s. But this case is on going and that is why I am committed to hang in there.
Marv Eatinger
“In cases where a cause of action has been fraudulently concealed, the statute of limitations is tolled until the action is, or could have been, discovered through the exercise of due diligence. ”
IF SEC SCRUTINY (SEC “DUE DILIGENCE”) OF DALECO’S VIOLATIONS CONCERNING SECURITIES FRAUD WAS CIRCUMVENTED BY MARIO V. MIRABELLI’S (SHEA & GOULD LAW FIRM) ABILITY & PROPRIETARY KNOWLEDGE OF HOW THE SEC HANDLES PUBLIC CORPORATION FILINGS, WOULD A COURT OF LAW DECIDE THAT PUBLIC INVESTORS IN DALECO RESOURCES CORP HAD NO RECOURSE BECAUSE THE STATUTE OF LIMITATIONS HAD RUN ITS COURSE? IF THE SEC HAD NO IDEA AS TO DALECO’S SECURITIES FRAUD VIOLATIONS, COULD A PUBLIC STOCKHOLDER IN DALECO BE EXPECTED TO PERFORM A LEGAL ASPECT CALLED “DUE DILIGENCE” ??
Following the Money Trail
——————————————–
- Former U.S. Senator Tom Daschle’s…
$1 million-a-year consulting contract with the New York-based firm [InterMedia Advisors LLC.]
- Former President Bush and ex-U.K. Prime Minister John Major have advised the firm [Washington-based Carlyle Group]
- John Snow as its chairman and former Vice President Dan Quayle as chairman of its international unit [Cerberus Capital Management LP].
- French president Nicholas Sarkozy’s half brother, Olivier Sarkozy, works alongside Quarles at Carlyle Group as head of Carlyle’s Global Financial Services group.
——–
Wednesday, February 4, 2009
The Revolving Door Between Wall Street and Upper Echelon Government
Bloomberg recaps, the goings on:
Former U.S. Senator Tom Daschle’s…$1 million-a-year consulting contract with the New York-based firm [InterMedia Advisors LLC.]highlights how buyout firms often turn to former politicians to court investors and make deals. Former President George H.W. Bush, ex-Treasury Secretary John Snow and former Senate Majority Leader William Frist have all worked for private-equity funds…
Washington-based Carlyle Group helped pioneer the use of former government officials as fund raisers and dealmakers. Former President Bush and ex-U.K. Prime Minister John Major have advised the firm, and its ranks currently include former U.S. Treasury Undersecretary Randal Quarles.
Cerberus Capital Management LP, the New York-based firm that owns Chrysler LLC, counts John Snow as its chairman and former Vice President Dan Quayle as chairman of its international unit.
Not to be forgotten is that French president Nicholas Sarkozy’s half brother, Olivier Sarkozy, works alongside Quarles at Carlyle Group as head of Carlyle’s Global Financial Services group.
Labels: CarlyleGroup, OliverSakozy, RandalQuarles, TomDaschle
( http://www.economicpolicyjournal.com/labels/RandalQuarles.html )
Following the Money Trail
——————————————–
former U.S. Senator Adlai Stevenson III Co-Founder of HuaMei Capital Co. (HMCC)….
HuaMei Capital Co. (HMCC), a financial services advisory firm based in Chicago with three offices in China, began operations earlier this year. It is a unique 50-50 U.S.-China joint venture. The company’s founders, former U.S. Senator Adlai Stevenson III and Leo Melamed, Chairman Emeritus of the Chicago Mercantile Exchange, discussed HMCC’s goals in a recent conversation.
( http://www.thedeal.com/pdf/EOC_Winter07.pdf )
================================
HuaMei Capital Company principals and officers ….
OUR TEAM
HMCC was organized in May 2005 by Adlai E. Stevenson III, former U.S. Senator and chairman of SC&M Investment Management Corporation and Co-Chairman of Stevenson, Melamed & Associates, Leo Melamed, chairman and CEO of Melamed & Associates, co-chairman of Stevenson, Melamed & Associates and the recognized founder of financial futures markets, Roger Kumar, an analyst and fund manager who is president of SC&M Investment Management Corporation, and Phillip Goldstick, a former Illinois legislator and advisor to government officials and chairman of G Equity Investment Group, Ltd., a registered broker-dealer participating in Private Placements.
( http://www.huameicapital.com/index.php?option=com_content&view=category&layout=blog&id=4&Itemid=5 )
=======================================
Adlai E. Stevenson, 78, a former US Senator, is Chairman of SC&M Investment Management Company and Chairman of the Adlai Stevenson Center on Democracy.
http://www.adlai3.com
Following the Money Trail
——————————————–
Former U.S. Senator Connie Mack is joining the board of directors of American Momentum Bank
( http://www.bizjournals.com/tampabay/stories/2007/03/05/daily51.html )
…. Following the Money Trail…
Former United States Senator John Edward Sununu…
…has joined the board of a subsidiary to Bank of New York Mellon — a firm that, in addition to receiving bailout funds, has been hired by the Treasury Department to administer the program.
—-
The Sprintin’ Sununu Board Game
By Dean Barker, Blue Hampshire
March 4, 2009 – 05:00 am
View the original
The Sprintin’ Sununu Board Game, 1st Edition.
The Sprintin’ Sununu Board Game 2nd Edition:
NEW YORK, Feb. 25 PRNewswire-FirstCall — BNY ConvergEx Group, LLC, a leading provider of global agency brokerage and investment technology solutions, today announced that former United States Senator John Edward Sununu has been appointed to the Board of Managers of ConvergEx Holdings, LLC, the holding company of BNY ConvergEx Group.
…He currently is a member of the Congressional Oversight Panel created to oversee the expenditure of Troubled Asset Relief Program (TARP) funds and to provide recommendations on regulatory reform.
The Sprintin’ Sununu Board Game, 2nd Edition (recalled):
John Sununu, who serves on the Congressional Oversight Panel monitoring the government’s bailout progam, has joined the board of a subsidiary to Bank of New York Mellon — a firm that, in addition to receiving bailout funds, has been hired by the Treasury Department to administer the program.
( http://www.politicker.com/new-hampshire/62553/sprintin-sununu-board-game )
iStandup,in which direction is the momentum for the American Momentum Bank?