HOW to IMMEDIATELY DISPROVE RUSSIAN HACKING

COURTESY of NSA WHISTLEBLOWER BILL BINNEY
http://www.computerweekly.com/feature/Interview-the-original-NSA-whistleblower
https://www.reddit.com/r/IAmA/comments/3sf8xx/im_bill_binney_former_nsa_tech_director_worked/
http://www.washingtonsblog.com/2016/12/creator-nsas-global-surveillance-system-calls-b-s-russian-hacking-report.html
http://www.washingtonsblog.com/2017/11/70011.html
How to Instantly Prove or Disprove Russian Hacking
by WashingtonsBlog  /  November 14, 2017

“It’s newsworthy that CIA head Mike Pompeo recently met with Bill Binney – who designed the NSA’s electronic surveillance system – about potential proof that the DNC emails were leaked rather than hacked. It’s also noteworthy that the usual suspects – Neocon warmongers such as Max Boot – have tried to discredit both Binney and Pompeo. But there’s a huge part of the story that the entire mainstream media is missing. Specifically, Binney says that the NSA has long had in its computers information which can prove exactly who hacked the DNC … or instead prove that the DNC emails were leaked by a Democratic insider. Remember – by way of background – that the NSA basically spies on everyone in America … and stores the data long-term.

After the story of Pompeo’s meeting with Binney broke, Binney told Washington’s Blog:

Here’s what they would have from the programs you list [i.e. NSA’s Fairview, Stormbrew and Blarney spying programs, which Edward Snowden revealed] plus hundreds if not thousands of trace route programs embedded in switches in the US and around the world.

First, from deep packet inspection, they would have the originator and ultimate recipient (IP) of the packets plus packet series 32 bit number identifier and all the housekeeping data showing the network segments/path and time to go though the network.

 

And, of course, the number of packet bits. With this they would know to where and when the data passed. From the data collection, they would have all the data as it existed in the server taken from.  That’s why I originally said if the FBI wanted Hillary’s email, all they have to do is ask NSA for them. All this is done by the Narus collection equipment in real time at line rates (620 mbps [mega bits per second,] for the STA-6400 and 10 gbps [giga bits per second] for the Insight equipment).

 

Binney explained what these numbers mean:  Each Narus Insight device can monitor and record around 1,250,000 emails each second … or more than 39 trillion emails per year. Wired reported in 2006:

Whistle-blower Klein allegedly learned that AT&T was installing Narus boxes in secure, NSA-controlled rooms in switching centers around the country.

Binney told us there are probably 18 or so Narus recording systems throughout the U.S. deployed by the NSA at AT&T facilities, drawing our attention to the following NSA document leaked by Edward Snowden:

And this AT&T graphic:

(Binney has figured out their locations from publicly-available sources. He has also mapped out similar monitoring systems at Verizon facilities.) Binney also sent me hard-to-find company literature for Narus.  Here are some interesting excerpts:

Narus Insight …

  • Provides full visibility into network traffic
  • Analyzes at macro or micro level targeting specific or aggregate full-packet data for forensic analysis

And:

Universal data collection from links, routers, soft switches, IDS/IPS, databases, etc. provides total network view across the world’s largest IP networks.

 

Binney also pointed me towards a couple of network engineering principles that show that figuring out who hacked the emails (or proving they were leaked) is well within NSA’s capabilities. Initially, when data is transmitted online, it is sent using the TCP/IP Packet format.  Put simply, data is not sent in a vacuum, but rather as part of a bundle containing a lot of other information. Here’s the TCP part of the bundle:

And here’s the IP part of the bundle:

So any data analyst can learn a tremendous amount about the source address of the sender, the destination address of the receiver and a boatload of other information by using a “packet sniffer” to  inspect the “packets” of information being sent over the web. Additionally, it’s simple to conduct “traceroute” searches. “Traceroute” is a computer network diagnostic tool for displaying the route and measuring transit delays of packets across an Internet Protocol network. Wired reported in 2006:

Anything that comes through (an internet protocol network), we can record,” says Steve Bannerman, marketing vice president of Narus, a Mountain View, California, company. “We can reconstruct all of their e-mails along with attachments, see what web pages they clicked on, we can reconstruct their (voice over internet protocol) calls.”

So NSA can easily use basic packet sniffers and traceroutes, and see this. Remember, Edward Snowden says the NSA could easily determine who hacked the Democratic National Committee’s emails:

Binney told us:

Snowden is right and the MSM is clueless. Do they have evidence that the Russians downloaded and later forwarded those emails to wikileaks? Seems to me that they need to answer those questions to be sure that their assertion is correct… You can tell from the network log who is going into a site.  I used that on networks that I had.  I looked to see who came into my LAN, where they went, how long they stayed and what they did while in my network…

 

Further, if you needed to, you could trace back approaches through other servers etc. Trace Route and Trace Watch are good examples of monitoring software that help do these things.  Others of course exist … probably the best are in NSA/GCHQ and the other Five Eyes countries.  But, these countries have no monopoly on smart people that could do similar detection software.

He explained:

If it were the Russians, NSA would have a trace route to them and not equivocate on who did it.  It’s like using “Trace Route” to map the path of all the packets on the network.  In the program Treasuremap NSA has hundreds of trace route programs embedded in switches in Europe and hundreds more around the world.  So, this set-up should have detected where the packets went and when they went there.

 

He added:

As Edward Snowden said, once they have the IP’s and/or other signatures of 28/29 [the supposed Russian hacking groups] and DNC/HRC/etc. [i.e. the DNC and Hillary Rodham Clinton], NSA would use Xkeyscore to help trace data passing across the network and show where it went. [Background.]

 

In addition, since Wikileaks is (and has been) a cast iron target for NSA/GCHQ/etc for a number of years there should be no excuse for them missing data going to any one associated with Wikileaks… Too many words means they don’t have clear evidence of how the data got to Wikileaks.

 

And he stressed:

If the idiots in the intelligence community expect us to believe them after all the crap they have told us (like WMD’s in Iraq and “no we don’t collect data on millions or hundreds of millions of Americans”) then they need to give clear proof of what they say. So far, they have failed to prove anything. Which suggests they don’t have proof and just want to war monger the US public into a second cold war with the Russians. After all, there’s lots and lots of money in that for the military-industrial-intelligence-governmental complex of incestuous relationships…

 

If you recall, a few years ago they pointed to a specific building in China that was where hacks on the US were originating. So, let’s see the same from the Russians. They don’t have it. That’s why they don’t show it. They want to swindle us again and again and again. You cannot trust these intelligence agencies period.

 

And he told Newsweek:

U.S. officials “know how many people [beyond the Russians] could have done this but they aren’t telling us anything. All they’re doing is promoting another cold war.”

Binney … compared allegations about Russian hacks to previous U.S. fabrications of intelligence to justify the invasion of Iraq in 2003 and the bombing of North Vietnam in 1964. “This is a big mistake, another WMD or Tonkin Gulf affair that’s being created until they have absolute proof” of Russian complicity in the DNC hacks, he charged during a Newsweek interview. He noted that after the Kremlin denied complicity in the downing of a Korean Airlines flight in 1983, the U.S. “exposed the conversations where [Russian pilots] were ordered to shoot it down.” Obama officials “have the evidence now” of who hacked the DNC, he charged. “So let’s see it, guys.“

 

NSA either doesn’t have solid evidence of Russian hacking of DNC emails – which means the Russians didn’t do it – or those with the power to demand NSA produce the evidence simply haven’t asked the right questions.”

PREVIOUSLY

WARRANTLESS SPOOFING
https://spectrevision.net/2012/07/06/listening-in/
HOW to RUN a TRACEROUTE (cont.)
https://spectrevision.net/2008/02/18/how-to-run-a-traceroute-cable-cut-conspiracies/
SEXUAL BLACKMAIL in GOVERNMENT
https://spectrevision.net/2016/10/14/blackmail-uber-alles/

INTERAGENCY RIVALRIES

[reposting of videos ≠ endorsing of all views expressed]

FBI, NYPD, INTELLIGENCE AGENTS RELEASE CLINTON FILES
https://vault.fbi.gov/william-j.-clinton-foundation
https://vault.fbi.gov/hillary-r.-clinton/hillary-r.-clinton-part-01-of-04/view
https://www.bloomberg.com/view/articles/2016-11-03/the-fbi-wants-to-make-america-great-again
http://townhall.com/columnists/edklein/2016/11/02/why-comey-reopened-the-hillary-investigation-n2240690
by Ed Klein  /   Nov 02, 2016

“James Comey’s election-shattering decision to revive the investigation of Hillary Clinton’s email server was based not only on what his agents found on Anthony Weiner and Huma Abedin’s laptop. His judgment was also influenced by mounting pressure among mutinous agents in the FBI, including many of his top deputies. “The atmosphere at the FBI has been toxic ever since Jim announced last July that he wouldn’t recommend an indictment against Hillary,” according to a source close to the embattled FBI director, who has known Comey for nearly two decades, shares family outings with him, and accompanies him to Catholic mass every week. “Some people, including department heads, stopped talking to Jim, and even ignored his greetings when they passed him in the hall,” said the source. “They felt that he betrayed them and brought disgrace on the bureau by letting Hillary off with a slap on the wrist.”

According to the source, Comey fretted over the problem for months and discussed it at great length with his wife, Patrice. He told his wife that he was depressed by the stack of resignation letters piling up on his desk from disaffected agents. The letters reminded him every day that morale in the FBI had hit rock bottom. “He’s been ignoring the resignation letters in the hope that he could find a way of redeeming himself in the eyes of his colleagues and the nation,” said the source. “When new emails that appeared to be related to Hillary’s personal email server turned up in a computer used by [her close aide] Huma Abedin and [Abedin’s disgraced husband] Anthony Weiner, Comey jumped at the excuse to reopen the investigation. “The people he trusts the most have been the angriest at him,” the source continued. “And that includes his wife, Pat. She kept urging him to admit that he had been wrong when he refused to press charges against the former secretary of state.

“He talks about the damage that he’s done to himself and the institution [of the FBI], and how he’s been shunned by the men and women who he admires and work for him. It’s taken a tremendous toll on him. It shattered his ego. He looks like he’s aged 10 years in the past four months.” But Comey’s decision to reopen the case was more than an effort to heal the wound he inflicted on the FBI. He was also worried that after the presidential election, Republicans in Congress would mount a probe of how he had granted Hillary political favoritism. His announcement about the revived investigation, which came just 11 days before the presidential election, was greeted with shock and dismay by Attorney General Loretta Lynch and the prosecutors at the Justice Department. “Jim told me that Lynch and Obama were furious with him,” the source said. As I revealed in my latest New York Times bestseller Guilty As Sin, Obama said that appointing Comey as FBI director was “my worst mistake as president.”

SOFT COUPS vs SOFT COUNTER-COUPS
http://www.wsj.com/articles/secret-recordings-fueled-fbi-feud-in-clinton-probe-1478135518
http://www.politico.com/magazine/story/2016/10/how-mike-flynn-became-americas-angriest-general-214362
https://www.theguardian.com/us-news/2016/nov/03/fbi-leaks-hillary-clinton-james-comey-donald-trump
http://www.thedailybeast.com/articles/2016/11/03/meet-donald-trump-s-top-fbi-fanboy.html

by Wayne Barrett  /  11.03.16

“Two days before FBI director James Comey rocked the world last week, Rudy Giuliani was on Fox, where he volunteered, un-prodded by any question: “I think [Donald Trump’s] got a surprise or two that you’re going to hear about in the next few days. I mean, I’m talking about some pretty big surprises.” Pressed for specifics, he said: “We’ve got a couple of things up our sleeve that should turn this thing around.” 

The man who now leads “lock-her-up” chants at Trump rallies spent decades of his life as a federal prosecutor and then mayor working closely with the FBI, and especially its New York office. One of Giuliani’s security firms employed a former head of the New York FBI office, and other alumni of it. It was agents of that office, probing Anthony Weiner’s alleged sexting of a minor, who pressed Comey to authorize the review of possible Hillary Clinton-related emails on a Weiner device that led to the explosive letter the director wrote Congress.

Hours after Comey’s letter about the renewed probe was leaked on Friday, Giuliani went on a radio show and attributed the director’s surprise action to “the pressure of a group of FBI agents who don’t look at it politically. The other rumor that I get is that there’s a kind of revolution going on inside the FBI about the original conclusion [not to charge Clinton] being completely unjustified and almost a slap in the face to the FBI’s integrity,” said Giuliani. “I know that from former agents. I know that even from a few active agents.”

Along with Giuliani’s other connections to New York FBI agents, his former law firm, then called Bracewell Giuliani, has long been general counsel to the FBI Agents Association (FBIAA), which represents 13,000 former and current agents. The group, born in the New York office in the early ’80s, was headed until Monday by Rey Tariche, an agent still working in that office. Tariche’s resignation letter from the bureau mentioned the Clinton probe, noting that “we find our work—our integrity questioned” because of it, adding “we will not be used for political gains.”

When the FBIAA threw its first G-Man Honors Gala in 2014 in Washington, Giuliani was the keynote speaker and was given a distinguished service award named after him. Giuliani left Bracewell this January and joined Greenberg Traurig, the only other law firm listed as a sponsor of the FBIAA gala. He spoke again at the 2015 gala. The Bracewell firm also acts as the association’s Washington lobbyist and the FBIAA endorsed Republican Congressman Mike Rodgers, rather than Comey, for the FBI post in 2013. Giuliani did not return a Daily Beast message left with his assistant.

Back in August, during a contentious CNN interview about Comey’s July announcement clearing Hillary Clinton of criminal charges, Giuliani advertised his illicit FBI sources, who circumvented bureau guidelines to discuss a case with a public partisan. “The decision perplexes me. It perplexes Jim Kallstrom, who worked for him. It perplexes numerous FBI agents who talk to me all the time. And it embarrasses some FBI agents.”

Kallstrom is the former head of the New York FBI office, installed in that post in the ’90s by then-FBI director Louis Freeh, one of Giuliani’s longtime friends. Kallstrom has, like Giuliani, been on an anti-Comey romp for months, most often on Fox, where he’s called the Clintons as a “crime family.” He has been invoking unnamed FBI agents who contact him to complain about Comey’s exoneration of Clinton in one interview after another, positioning himself as an apolitical champion of FBI values.

Last October, after President Obama told 60 Minutes that the Clinton emails weren’t a national security issue, Megyn Kelly interviewed Kallstrom on Fox. “You know a lot of the agents involved in this investigation,” she said. “How angry must they be tonight?” “I know some of the agents,” said Kallstrom. “I know some of the supervisors and I know the senior staff. And they’re P.O.’d, I mean no question. This is like someone driving another nail in the coffin of the criminal justice system.” Kallstrom declared that “if it’s pushed under the rug,” the agents “won’t take that sitting down.” Kelly confirmed: “That’s going to get leaked.”

When Comey cleared Clinton this July, Kallstrom was on Fox again, declaring: “I’ve talked to about 15 different agents today—both on the job and off the job—who are basically worried about the reputation of the agency they love.” The number grew dramatically by Labor Day weekend when Comey released Clinton’s FBI interview and other documents, and Kallstrom told Kelly he was talking to “50 different people in and out of the agency, retired agents,” all of whom he said were “basically disgusted” by Comey’s latest release. By Sept. 28, Kallstrom said he’d been contacted by hundreds of people, including “a lot of retired agents and a few on the job,” declaring the agents “involved in this thing feel like they’ve been stabbed in the back.” So, he said, “I think we’re going to see a lot more of the facts come out in the course of the next few months. That’s my prediction.”

Kallstrom, whose exchanges with active agents about particular cases are as contrary to FBI policy as Giuliani’s, formally and passionately endorsed Trump this week on Stuart Varney’s Fox Business show, adding that Clinton is a “pathological liar.” Kallstrom, who served as a Marine before becoming an agent, didn’t mention that a charity he’d founded decades ago and that’s now called the Marine Corps Law Enforcement Foundation, was the single biggest beneficiary of Trump’s promise to raise millions for veterans when he boycotted the Iowa primary debate. A foundation official said that Trump’s million-dollar donation this May, atop $100,000 that he’d given in March, were the biggest individual grants it had ever received.

The Trump Foundation had contributed another $230,000 in prior years and Trump won the organization’s top honor at its annual Waldorf Astoria gala in 2015. The charity, which Kallstrom has chaired without pay since its founding, says it has given away $64 million in scholarships and other aid to veteran families. Rush Limbaugh is a director and has given it enormous exposure on his show and helped it fundraise. Its executive director also worked at the highest levels of New York Governor George Pataki’s Republican administration, and its vice president is also the regional vice president for Trump Hotels in the New York area. The FBI New York office, the charity’s 2015 newsletter noted, then employed 100 former Marines.

Kallstrom, who first worked with Giuliani when the future mayor was a young assistant prosecutor in the early ’70s, was Pataki’s public safety director for five years after the 9/11 attacks and claims he was the one who recommended Comey to Pataki, who got the Bush White House to name him to Giuliani’s old job, U.S. attorney for the Southern District in 2001. Comey had worked in the Southern District for years, hired as a young assistant in 1987 by Freeh, then a top Giuliani deputy.

Kallstrom’s victory tour this weekend also included an appearance on Fox with former Westchester District Attorney Jeanine Pirro, another close associate of Pataki’s, who complained on air that she’d been the victim in 2006 when word emerged that the U.S attorney and FBI were probing her in the midst of a race she eventually lost to Andrew Cuomo to become New York Attorney General. Her concern about the political impact of law enforcement leaks, though, didn’t extend to Democrat Hillary Clinton. “He couldn’t hold on to this any longer,” Kallstrom said of Comey. “Who knows, maybe the locals would’ve done it,” he added, a reference to leaks that elicited glee from Pirro, who echoed: “New York City, that’s my thing!”

In a wide-ranging phone interview on Tuesday with The Daily Beast, Kallstrom first repeated his claim that he gets hundreds and hundreds of calls and emails but stressed they all came from retired agents, adding that he didn’t “want to talk about agents on the job.” Then he acknowledged that he did interact with “active agents.” The agents mostly contacted him before the recent Comey letter because “in all but two cases,” they agreed with what he was saying in his TV appearances, noting that those two exceptions both thought “I should be more supportive of Comey.”

Kallstrom adamantly denied he’d ever said he was in contact with agents “involved” in the Clinton case, insisting that he didn’t even know “the agents’ names.” He asked if this story was “a hit piece,” and contended that it was “offensive” to even suggest that he’d communicated with those agents. When I emailed him two quotes where he made that claim, he responded: “I know agents in the building who used to work for me. I don’t know any agents in the Washington field office involved directly in the investigation.” Later, though he acknowledged that “the bulk” of the agents on the Weiner case are “in the New York office,” even as he insisted that the “locals” he told Pirro would’ve leaked the renewed probe had not Comey revealed it were not necessarily agents. He declined to explain why Megyn Kelly stated as a fact that he was in contact with agents “involved” in the case. Asked in a follow up email if he suggested or encouraged any particular actions in his exchanges with active agents, Kallstrom replied: “No.”

“Now, I’m supporting Comey,” Kallstrom told me on the phone, adding that he can’t do or say anything else before election day. “He can’t characterize” what the bureau has from the Weiner emails. “The FBI can’t say anything without having all the information,” Kallstrom contends, just after telling me he supports the FBI director who’s under fire for having done just that. And, though he predicted in September that more facts about the Clinton case would soon come out, he told me he was “surprised” by the Comey letter. Calling Giuliani a “very good friend,” who he’s seen in TV studios a couple of times recently when they were both doing appearances, Kallstrom said he thought Giuliani was more likely referring to WikiLeaks revelations or videotapes from Project Veritas when he teased big surprises to come.

Kallstrom said he hasn’t spoken to Trump for months, though he did email Trump’s office the day he endorsed him and got a thank you response from an aide. He says he first met Trump when he solicited a donation from him for a Vietnam Vet memorial and that they’d see each other—usually at public events and dinners—over the years, sometimes as often as two or three times a year. Kallstrom said he’d have breakfast at the Plaza with his wife and visit with Trump and his kids, who he got to know at an early age.

When Trump owned casinos in Atlantic City, he allowed Kallstrom’s organization to hold fundraisers “pro bono” there. Trump became a major supporter of New York’s Police Athletic League, run for decades by Manhattan District Attorney Robert Morgenthau, all moves that endeared him to law enforcement officials in jurisdictions where he did business. Despite his ties to Pataki, Limbaugh, and Trump, Kallstrom says he’s apolitical and has never been involved in a campaign, including Trump’s now. He says he’s a registered independent, and that the people he’s known in the FBI over all his years are as nonpartisan as he is.

But, as quiet as it’s kept, no Democrat has ever been appointed FBI director. Four Democratic presidents, starting with FDR’s selection of J. Edgar Hoover in 1935, have instead picked Republicans, including Obama’s 2013 nomination of Comey, who was confirmed 93 to 1. This tally does not include the seven acting directors, who were named for brief periods over the last 81 years. For the first time in FBI history, the agency is now run by a director who isn’t a Republican, since Comey announced in a congressional hearing this year that though a lifelong Republican, having donated to John McCain and Mitt Romney, he had recently changed his registration (he did not say how he is currently registered).

Six months into his first term in 1993, President Bill Clinton tapped Freeh, a onetime FBI agent who’d worked under Kallstrom, and Freeh spent much of his eight years at the bureau’s helm trying to put Clinton in jail, even dispatching agents to a White House side room to get the president’s DNA during a formal dinner. When Freeh stepped down in 2001, shortly after George Bush replaced Clinton, he went to work for credit-card company MBNA, a giant Republican donor where Kallstrom and another top Freeh FBI appointee were already working. He’s still hunting for the Clintons, though—delivering a speech assailing them at an annual FBI office event in New York last year. It’s not just the man at the top who’s invariably a Republican. Like most law enforcement agencies, the FBI hierarchy and line staff has a Republican bent—it’s a white, male, usually Catholic, and conservative culture.

Giuliani and Kallstrom claim that the agents revolting against Comey’s handling of Hillary Clinton were doing it because they want apoltical investigations, with all targets treated the same. But neither of them, much less FBI brass or agents, were publicly upset when the worst Justice Department scandal in modern history exploded in 2007, with Karl Rove, Attorney General Alberto Gonzales, and the Bush White House swamped by allegations that they’d tried to force out nine U.S. attorneys and replace them with “loyal Bushies,” as Gonzales’s chief of staff put it. Democratic officials, candidates and fundraisers were five times as likely to be prosecuted by Bush’s justice than Republicans.

Then at the top of the polls in the 2008 presidential race, Giuliani had to answer questions about it and said that he thought Gonzales should get “the benefit of the doubt,” calling him “a decent man” a few months before he resigned. “We should try to remove on both sides as much of the partisanship as possible,” lectured Giuliani. He recalled that strict rules were put into place while he was at the top levels of justice in the aftermath of Watergate limiting contact between law enforcement and political figures, a particular irony in view of the fact that he talks freely today about engaging in just such conversations on national television, oblivious to the fact that he is now a “political figure.”

Giuliani’s mentor, Michael Mukasey, who succeeded Gonzales as attorney general, appointed a special investigator to examine the U.S. attorney scandal and she concluded that no laws had been broken. It was later reported that four days before Mukasey named this special prosecutor, a federal appeals court vacated seven of eight convictions in a case she supervised in Connecticut, ruling that the team suppressed exculpatory evidence, including the notes of an FBI agent. Kallstrom contends he didn’t say anything about the blatant partisan interference then because he was “never asked to comment,” though he had been a law enforcement consultant for CBS News in about the same time frame. How he became a frequent Fox commentator now is unclear.

It’s clear enough, though, why when Comey sent a note to FBI staff on Friday explaining his decision to inform Congress about the renewed Clinton probe, the scoop about that internal memo went to Fox News. Why Kallstrom gets booked to talked about the Clintons a “crime family.” Why Clinton Cashauthor Peter Schweitzer, caught in a web of Breitbart and Trump conflicts, would announce on Fox that he was asked in August to sit down with New York office FBI agents investigating the Clinton Foundation (with The New York Times reporting this week that the agents were relying largely on his work when they pitched a fullscale probe). Fox is the pipeline for the fifth column inside the bureau, a battalion that says it’s doing God’s work, chasing justice against those who are obstructing it, while, in fact, it’s doing GOP work, even on the eve of a presidential election.”

PREVIOUSLY

SEXUAL BLACKMAIL in GOVERNMENT
https://spectrevision.net/2016/10/14/blackmail-uber-alles/

the CRIMINAL CLASS

STILL in BUSINESS
http://financialcrimeswalkingtour.crowdmap.com/


“The move by western nations towards bail-in regimes whereby “too big to fail” banks confiscate individual and companies’ deposits has been put in place with very little public discussion or awareness of the risks and ramifications.”



‘EXTRALEGAL COSTS’
http://www.salon.com/2014/12/12/government_by_wall_street_jpmorgan_ceo_whipped_votes_for_spending_bill/
http://wallstreetonparade.com/2014/11/senate-report-scale-of-wall-street-holdings-are-unprecedented-in-u-s-history/
http://dailymorning.net/german-man-locked-up-over-hvb-bank-allegations-may-have-been-telling-truth/
http://www.bloomberg.com/news/2014-11-25/hsbc-goldman-rigged-metals-prices-for-years-suit-says.html
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/12/03/how-the-worlds-biggest-companies-bribe-foreign-governments-in-11-charts/
How the world’s biggest companies bribe foreign governments—in 11 charts
by
Roberto A. Ferdman  /  December 3

“Corruption knows no boundaries, or borders, according to a new study released by The Organization for Economic Cooperation and Development. The OECD analyzed 427 foreign bribery cases that were closed between 1999 and 2014. What the researchers found is a steady stream of illicit money exchanges between multinational businesses and public officials in both poor and rich countries.

citi-ap

“JP Morgan CEO Jamie Dimon made personal phone calls to reluctant members of Congress on Thursday to help ensure that the House passed a massive spending measure that many progressives opposed because it contains an unrelated clause that reverses a key piece of the Wall Street reform packages passed in 2010. The measure was hand-written by lobbyists from Citigroup — 70 of its 85 lines reflect the bank’s preferences, and the two crucial paragraphs were pulled verbatim from the lobbyists’ draft — and had even passed the House as a standalone law. The financial industry as a whole spent nearly $2 million a day on influencing Congress during the most recent election cycle.”

We have learned that bribes are being paid across sectors to officials from countries at all stages of economic development,” the researchers wrote. Corporate leadership is involved, or at least aware, of the practice of foreign bribery in most cases, rebutting perceptions of bribery as the act of rogue employees.” Although the number of foreign bribery cases resulting in a punishment has fallen since its peak in 2011, it remains historically high.

And there have been cases  affects at least 86 countries around the globe.

That should raise an eyebrow. After all, these are business executives and government officials who have actually been caught, meaning that they likely only represent a fraction of the total number involved in under the table cash exchanges. While the report doesn’t name any of the corporations, finding one currently embattled by corruption accusations isn’t hard. Wal-Mart, the world’s largest retailers, is currently being probed for bribery in a number of countries, after the company disclosed potential violations in Mexico. But what is truly unique about the study is the level of detail it uncovers about how the bribes are being paid, where they are being paid, why they are being paid, who is offering them, and to whom they are being offered. Large multinational companies, for instance, appear to be much fonder of offering illicit cash for quiet favors than smaller corporate entities.

There are also certain industries, which appear more comfortable with—or, at least, familiar with—the practice than others. Nearly 60 percent of the foreign bribery cases observed happened in just four sectors: extractive (i.e. mining), construction, transportation and storage, and information and communication.

Senior management—sometimes even very senior management—was aware of, or complicit and even instrumental in more than half of the foreign bribery observed.

There are trends not only among the givers of bribes, but also among the takers. The sorts of foreign public officials who were offered or solicited bribes ranged from employees of state-owned or controlled businesses to customs, health, defense, tax, and transport officials, and even heads of state. Some—namely, the employees of state-owned or controlled businesses—were much likelier to be involved in foreign bribery cases.

While employees of state-owned businesses were also the likeliest to actually accept a bribe, they comprised a much smaller percentage (some 27 percent) of all public workers who pocketed illegal money. Customs officials (11 percent) were second likeliest; health officials (7 percent), third; and defense officials (6 percent) were fourth.

The most common reason observed among the bribes was that companies wanted to gain an advantage landing public contracts with foreign governments—more than half of the time, the bribes were offered to win public procurement contracts. But a significant percentage—some 12 percent—were related to customs clearance—and another 6 percent were offered in exchange for favorable tax treatment.

In all, the bribes—whether merely offered or also accepted—amounted to more than $3 billion. Sometimes the bribes were huge—the costliest foreign bribe observed totaled more than $1.4 billion. Sometimes they were much smaller—the skimpiest was just $13.17. Frequently, however, they significantly increased the cost of business. Bribes, on average, equaled more than 10 percent of the total transaction value and over a third of profits inherent in each transaction. Multinational companies in the extractive (or mining) sector tended to pay largest bribes relative to the value of the related business, according to the OECD’s findings, followed by those in the wholesale and retail sector, and those performing administrative service activities.

These extra (and illegal, for that matter) costs aren’t always shouldered by the company—they can be levied onto the company’s workers too. “In this context, the average of 10.9% of the transaction value spent on bribes means that the bribing individual or company would have to somehow recover or offset those costs,” the researchers wrote. “Some companies might do this by paying employees less in countries with weaker employment laws.” But the costs are also borne by society, more broadly. By bribing officials, multinational companies are in turn perpetuating a system that undermines the relationship between businesses and governments around the world, creating a form of corporate inequality where cash-rich corporations get all the breaks.


In other words, it undermines both democracy and law, and funnels money away from otherwise moral companies and governments, and into the hands of corrupt officials and business owners. There are, of course, significant obstacles in the way of correcting the system, and dissuading both multinational companies and government employees around the globe from offering, soliciting, and, ultimately, exchanging bribes. Among them is the reality that corrupt practices can be part of a culture. “China is an environment where petty corruption is common and tolerated,” Daniel C.K. Chow, a law professor at Ohio State University., told Bloomberg last year, in reference to China’s “bribery culture.” Both Brazil and Mexico, two other developing economies, have also had to face uphill climbs in their bouts with corruption. But it’d be a mistake to assume that bribery affects just developing countries. Nearly half of the bribes observed by the OECD, after all, were paid not to officials in poor countries, but rather to ones in particularly rich nations.

Another part of the problem is that a lot of foreign bribery—and corruption more generally, for that matter—is hard to track, for obvious reasons. In lieu of concrete, reliable data, other organizations, like global corruption watchdog Transparency International, have created corruption indices based on perception, rather than proven reality. As the OECD notes, studies like theirs are but the tip of a much, much larger iceberg. A good deal of the data for even the concluded cases was unattainable. “These preliminary findings indicate that the pressure on governments to step up their enforcement of anti-bribery laws and ensure that penalties for this crime are effective, proportionate, and dissuasive, is well-placed,” the researchers conclude. “There has, indeed, been progress in the fight against foreign bribery, but clearly, much more must be done to be successful in this fight.”

‘CORRUPTION INDEX’ CORRUPTION
http://www.transparency.org/cpi2014/infographic
http://www.telegraph.co.uk/finance/financial-crime/11266664/Mapped-The-worlds-most-corrupt-officials.html
https://www.bcgperspectives.com/Images/Building_the_Transparent_Bank_Dec_2014_tcm80-177814.pdf
http://www.zerohedge.com/news/2014-12-03/178-billion-government-kickbacks-meet-worlds-biggest-organized-crime-syndicate
$178 Billion In Government Kickbacks: Meet The World’s Biggest Organized Crime Syndicate
by Tyler Durden / 12/03/2014

Once upon a time it was the Sicilian, or Russian, or Japanese, or Chinese mob that were some of the biggest sources of funding for corrupt government officials (incidentally, most of them). After all, the government is smart enough to realize that it is more lucrative to “cooperate” with the world’s biggest criminal syndicates than to wipe them out and cut off a major source of funding (of course, when it comes to populist optics and reelection, there is always an easy low-level perp walk every week or so to keep the peasants in place… and Diebold). So while the underlying symbiotic principle between the government and the world’s biggest criminal enterprise remains the same, the counterparty has changed. So who, in simple numeric terms, is the world’s biggest organized crime syndicate? The answer, courtesy of a new report by the Boston Consulting Group, which shows the transfer of some $178 billion in litigation costs into the pockets of government appartchiks in the past 6 years, is clear. Banks.

From the report:

The new era in banking is characterized by a rigorous enforcement of sanctions. As of September 2014, the cumulative litigation costs for EU and U.S. banks since the onset of the financial crisis has reached some $178 billion. Most of the costs originated with U.S. regulators’ mortgage-related claims, and the remaining litigation costs are divided among claims focused on misselling, violations of U.S. sanctions, improper conduct, market manipulation, tax evasion and misrepresentation. Litigation costs of banks headquartered in the U.S. leapt higher in 2011, driven by mortgage-related claims, which continue to dominate.


EU bank costs were kick-started in 2012, beginning with redress payments for misselling payment protection insurance in the UK, followed by market manipulation issues-for example, those related to the London Interbank Offered Rate scandal-as well as improper-conduct litigation, such as anti-money-laundering cases. The current wave of litigation cases has not yet been settled, and potential-still hidden-litigation risks are substantial. Meanwhile, regulators have shifted their view toward more unified and sanction-based supervision, adopting regulations with a stronger focus on business conduct. All of these developments reflect the persistent character and future burden of litigation-a new cost of doing business.

Sure enough: when one is a criminal syndicate, the largest in world history, paying litigation kickbacks in the hundreds of billions to the government is just the cost of “doing business.” And here is the absolute punchline: the Sicilian, or Russian, or Japanese, or Chinese, or any other mob, they all had one or more members thrown in jail for good measure. Just how many bankers have ended up in prison in the past 6 years? This may be a trick question.

‘DERIVATIVES EXPOSURE’
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/11282914/SandP-warns-that-ring-fence-could-turn-UK-investment-banks-into-junk.html
http://theeconomiccollapseblog.com/archives/5-u-s-banks-each-have-more-than-40-trillion-dollars-in-exposure-to-derivatives
5 U.S. Banks Each Have More Than 40 Trillion Dollars In Exposure To Derivatives
by Michael Snyder  /  September 24th, 2014

When is the U.S. banking system going to crash?  I can sum it up in three words.  Watch the derivatives.  It used to be only four, but now there are five “too big to fail” banks in the United States that each have more than 40 trillion dollars in exposure to derivatives.  Today, the U.S. national debt is sitting at a grand total of about 17.7 trillion dollars, so when we are talking about 40 trillion dollars we are talking about an amount of money that is almost unimaginable.  And unlike stocks and bonds, these derivatives do not represent “investments” in anything.  They can be incredibly complex, but essentially they are just paper wagers about what will happen in the future.

The truth is that derivatives trading is not too different from betting on baseball or football games.  Trading in derivatives is basically just a form of legalized gambling, and the “too big to fail” banks have transformed Wall Street into the largest casino in the history of the planet.  When this derivatives bubble bursts (and as surely as I am writing this it will), the pain that it will cause the global economy will be greater than words can describe. If derivatives trading is so risky, then why do our big banks do it? The answer to that question comes down to just one thing. Greed. The “too big to fail” banks run up enormous profits from their derivatives trading.

According to the New York Times, U.S. banks “have nearly $280 trillion of derivatives on their books” even though the financial crisis of 2008 demonstrated how dangerous they could be…

American banks have nearly $280 trillion of derivatives on their books, and they earn some of their biggest profits from trading in them. But the 2008 crisis revealed how flaws in the market had allowed for dangerous buildups of risk at large Wall Street firms and worsened the run on the banking system.

The big banks have sophisticated computer models which are supposed to keep the system stable and help them manage these risks. But all computer models are based on assumptions. And all of those assumptions were originally made by flesh and blood people. When a “black swan event” comes along such as a war, a major pandemic, an apocalyptic natural disaster or a collapse of a very large financial institution, these models can often break down very rapidly. For example, the following is a brief excerpt from a Forbes article that describes what happened to the derivatives market when Lehman Brothers collapsed back in 2008…

Fast forward to the financial meltdown of 2008 and what do we see? America again was celebrating. The economy was booming. Everyone seemed to be getting wealthier, even though the warning signs were everywhere: too much borrowing, foolish investments, greedy banks, regulators asleep at the wheel, politicians eager to promote home-ownership for those who couldn’t afford it, and distinguished analysts openly predicting this could only end badly. And then, when Lehman Bros fell, the financial system froze and world economy almost collapsed. Why?

 

The root cause wasn’t just the reckless lending and the excessive risk taking. The problem at the core was a lack of transparency. After Lehman’s collapse, no one could understand any particular bank’s risks from derivative trading and so no bank wanted to lend to or trade with any other bank. Because all the big banks’ had been involved to an unknown degree in risky derivative trading, no one could tell whether any particular financial institution might suddenly implode.

After the last financial crisis, we were promised that this would be fixed. But instead the problem has become much larger. When the housing bubble burst back in 2007, the total notional value of derivatives contracts around the world had risen to about 500 trillion dollars. According to the Bank for International Settlements, today the total notional value of derivatives contracts around the world has ballooned to a staggering 710 trillion dollars ($710,000,000,000,000). And of course the heart of this derivatives bubble can be found on Wall Street. What I am about to share with you is very troubling information. I have shared similar numbers in the past, but for this article I went and got the very latest numbers from the OCC’s most recent quarterly report.

As I mentioned above, there are now five “too big to fail” banks that each have more than 40 trillion dollars in exposure to derivatives

JPMorgan Chase
Total Assets: $2,476,986,000,000 (about 2.5 trillion dollars)
Total Exposure To Derivatives: $67,951,190,000,000 (more than 67 trillion dollars)

Citibank
Total Assets: $1,894,736,000,000 (almost 1.9 trillion dollars)
Total Exposure To Derivatives: $59,944,502,000,000 (nearly 60 trillion dollars)

Goldman Sachs
Total Assets: $915,705,000,000 (less than a trillion dollars)
Total Exposure To Derivatives: $54,564,516,000,000 (more than 54 trillion dollars)

Bank Of America
Total Assets: $2,152,533,000,000 (a bit more than 2.1 trillion dollars)
Total Exposure To Derivatives: $54,457,605,000,000 (more than 54 trillion dollars)

Morgan Stanley
Total Assets: $831,381,000,000 (less than a trillion dollars)
Total Exposure To Derivatives: $44,946,153,000,000 (more than 44 trillion dollars)

And it isn’t just U.S. banks that are engaged in this type of behavior. As Zero Hedge recently detailed, German banking giant Deutsche Bank has more exposure to derivatives than any of the American banks listed above…

Deutsche has a total derivative exposure that amounts to €55 trillion or just about $75 trillion. That’s a trillion with a T, and is about 100 times greater than the €522 billion in deposits the bank has. It is also 5x greater than the GDP of Europe and more or less the same as the GDP of… the world.

For those looking forward to the day when these mammoth banks will collapse, you need to keep in mind that when they do go down the entire system is going to utterly fall apart. At this point our economic system is so completely dependent on these banks that there is no way that it can function without them. It is like a patient with an extremely advanced case of cancer. Doctors can try to kill the cancer, but it is almost inevitable that the patient will die in the process. The same thing could be said about our relationship with the “too big to fail” banks.  If they fail, so do the rest of us.

We were told that something would be done about the “too big to fail” problem after the last crisis, but it never happened. In fact, as I have written about previously, the “too big to fail” banks have collectively gotten 37 percent larger since the last recession. At this point, the five largest banks in the country account for 42 percent of all loans in the United States, and the six largest banks control 67 percent of all banking assets. If those banks were to disappear tomorrow, we would not have much of an economy left. But as you have just read about in this article, they are being more reckless than ever before. We are steamrolling toward the greatest financial disaster in world history, and nobody is doing much of anything to stop it. Things could have turned out very differently, but now we will reap the consequences for the very foolish decisions that we have made.


“Mother Jones was the first to publish the document showing that Citigroup lobbyists had drafted most of the legislation. Here is a side-by-side of a key section of the House bill”

‘STATE CAPTURE’
http://spitfirelist.com/for-the-record/ftr-327-were-we-controlled/
http://spitfirelist.com/news/seymour-hersh-joint-chiefs-of-staff-dominated-by-knights-of-malta-opus-dei/
http://maxinespeaker.blogspot.com/2012/12/market-crash-day-jfk-died.html
http://www.lemonde.fr/international/article/2014/11/22/revolte-contre-l-etat-mafia-au-mexique_4527691_3210.html
http://www.theguardian.com/world/2014/nov/16/mexicos-murderous-alliance-of-state-army-and-the-drug-cartels

http://www.nytimes.com/interactive/2014/12/07/us/politics/documents-attorneys-general-and-the-energy-industry.html
http://dealbook.nytimes.com/2013/05/23/banks-lobbyists-help-in-drafting-financial-bills/
http://www.thenation.com/blog/192497/congress-poised-hand-wall-street-huge-victory
http://www.theguardian.com/business/2014/dec/10/congressional-budget-big-bank-bailouts

http://www.commondreams.org/views/2014/12/10/wall-street-moves-kill
http://www.motherjones.com/politics/2014/12/spending-bill-992-derivatives-citigroup-lobbyists
http://www.ibtimes.com/shutdown-2014-democrats-vs-citigroup-fight-among-frenemies-1750302
http://www.huffingtonpost.com/2014/12/04/wall-street-government-shutdown_n_6272776.html
Wall Street Demands Derivatives Deregulation In Government Shutdown Bill
by   /  12/04/2014

Wall Street lobbyists are trying to secure taxpayer backing for many derivatives trades as part of budget talks to avert a government shutdown. According to multiple Democratic sources, banks are pushing hard to include the controversial provision in funding legislation that would keep the government operating after Dec. 11. Top negotiators in the House are taking the derivatives provision seriously, and may include it in the final bill, the sources said. The bank perks are not a traditional budget item. They would allow financial institutions to trade certain financial derivatives from subsidiaries that are insured by the Federal Deposit Insurance Corp. — potentially putting taxpayers on the hook for losses caused by the risky contracts. Big Wall Street banks had typically traded derivatives from these FDIC-backed units, but the 2010 Dodd-Frank financial reform law required them to move many of the transactions to other subsidiaries that are not insured by taxpayers.


“US banks are the proud owners of $303 trillion in derivatives (and spare us the whole “net exposure” cluelessness – read here why that is irrelevant when even one counterparty fails)”

Taxpayer insurance helps banks secure higher credit ratings for their derivatives, since taxpayers assume some of the risk, which in turn makes the banks more profitable. Last year, Rep. Jim Himes (D-Conn.) introduced the same provision under debate in the current budget talks. The legislative text was written by a Citigroup lobbyist, according to The New York Times. The bill passed the House by a vote of 292 to 122 in October 2013, 122 Democrats opposed, and 70 in favor. All but three House Republicans supported the bill. Himes was passed over for leadership positions after the 2014 midterm elections, which he said he interpreted as unrest within the Democratic Party over his strong ties to financial elites.


“My guess is, it was a factor, which is disappointing because I think the criticism is way off base,” said Himes, who previously worked at Goldman Sachs. It wasn’t clear whether the derivatives perk will survive negotiations in the House, or if the Senate will include it in its version of the bill. With Democrats voting nearly 2-to-1 against the bill in the House, Senate Majority Leader Harry Reid (D-Nev.) never brought the bill up for a vote in the Senate. President Barack Obama opposed the bill ahead of the House vote, as did former FDIC Chair Shiela Bair, former House Financial Services Committee Chairman Barney Frank (D-Mass.) and Rep. Maxine Waters (D-Calif.), currently the top Democrat on the Financial Services Committee.


“Car dealership in hell after night of arson following #Ferguson grand jury decision”

COMMERCIAL RIOT INSURANCE
http://www.gofundme.com/huw1h0
http://www.theguardian.com/books/2014/nov/27/ferguson-library-donations-michael-brown
http://www.nber.org/chapters/c3625.pdf
http://www.crimethinc.com/blog/2014/12/10/why-break-windows/
http://gawker.com/actually-riots-are-good-the-economic-case-for-riots-i-1663629918

http://www.washingtonsblog.com/2014/11/real-looting-happening-wall-street-ferguson-missouri.html
http://www.rollingstone.com/politics/news/smashy-smashy-nine-historical-triumphs-to-make-you-rethink-property-destruction-20141021
http://www.zerohedge.com/news/2014-12-10/why-us-treasury-quietly-ordering-surival-kits-us-bankers
http://www.bizjournals.com/stlouis/news/2014/08/12/ferguson-crisis-most-business-insurance-covers.html
Most business insurance covers riots
by Jacob Kirn / Aug 12, 2014

The rioting that erupted Sunday night in Ferguson likely caused millions of dollars in damage, but will the affected businesses — some of them locally owned — be covered?
Probably, according to insurance experts. “Most small businesses have what’s known as a businessowners policy (BOP), and BOPs generally cover riot-caused property damage,” according to Insurance Information Institute spokesman Michael Barry. The National Underwriter’s Commercial Property Coverage Guide defines a riot as “any tumultuous disturbance of the public peace by three or more persons mutually assisting one another in execution of a common purpose by the unlawful use of force and violence resulting in property damage of any kind.” (The Los Angeles riots of 1992 caused $775 million in insured losses, according to the Insurance Information Institute.)


Outing rioters? A Vancouverite takes pictures of the post-rioting damage following the Stanley Cup loss on June 15, 2011. (Geoff Howe/Canadian Press)

Brent Butler, government affairs director for the Missouri Insurance Coalition, also said most commercial policies cover riots. Merchandise stolen — not just property damage — would also typically be covered, he said. If businesses’ claims are rejected, insurers have an internal appeals process. If that avenue is exhausted, a business owner could file a formal request with the Missouri Department of Insurance.

In a case involving a lawsuit between the business and its insurer, a court may be asked to offer its opinion, which may include defining “riot” or interpreting an insurance policy. It’s possible insurance companies in the future will raise premiums for the affected area, Butler said. “Companies rate different ways,” Butler said. “Some might say that’s so far and in between that we don’t care.” QuikTrip, which saw its store at 9420 West Florrisant Ave. looted and burned, estimated Monday the damage total to be in the seven figures.

More than a dozen other businesses along West Florissant Avenue were damaged and looted, including Zisser Tire & Auto, Wal-Mart, Taco Bell, St. Vincent de Paul Thrift Store, and Toys R Us. Nu Fashion Beauty, Party City and Boost Mobile were also affected. The unrest spread beyond Ferguson Monday night, as a Shoe Carnival on Gravois near Grand was vandalized and looted.

MEANWHILE



“Their estimated worth was about $3.3 million – and may all be owned by the same person” :http://rt.com/news/207571-moscow-parking-cars-burn/

BANK-OWNED LIFE INSURANCE (BOLI) : ‘DEATH DERIVATIVES’ TRADE SECRETS
http://wallstreetonparade.com/?s=boli
http://spitfirelist.com/news/collateralized-death-obligations/
http://wallstreetonparade.com/2014/12/slain-massmutual-executive-held-wall-street-trade-secrets/
http://wallstreetonparade.com/2014/02/as-bank-deaths-continue-to-shock-documents-reveal-jpmorgan-has-been-patenting-death-derivatives/


http://wallstreetonparade.com/2014/06/profiteering-on-banker-deaths-regulator-says-public-has-no-right-to-details/
http://wallstreetonparade.com/2014/04/suspicious-deaths-of-bankers-are-now-classified-as-%E2%80%9Ctrade-secrets%E2%80%9D-by-federal-regulator/
Suspicious Deaths of Bankers Are Now Classified as “Trade Secrets” by Federal Regulator
by Pam Martens and Russ Martens / April 28, 2014

It doesn’t get any more Orwellian than this: Wall Street mega banks crash the U.S. financial system in 2008. Hundreds of thousands of financial industry workers lose their jobs. Then, beginning late last year, a rash of suspicious deaths start to occur among current and former bank employees. Next we learn that four of the Wall Street mega banks likely hold over $680 billion face amount of life insurance on their workers, payable to the banks, not the families. We ask their Federal regulator for the details of this life insurance under a Freedom of Information Act request and we’re told the information constitutes “trade secrets.”

According to the Centers for Disease Control and Prevention, the life expectancy of a 25 year old male with a Bachelor’s degree or higher as of 2006 was 81 years of age. But in the past five months, five highly educated JPMorgan male employees in their 30s and one former employee aged 28, have died under suspicious circumstances, including three of whom allegedly leaped off buildings – a statistical rarity even during the height of the financial crisis in 2008.

There is one other major obstacle to brushing away these deaths as random occurrences – they are not happening at JPMorgan’s closest peer bank – Citigroup. Both JPMorgan and Citigroup are global financial institutions with both commercial banking and investment banking operations. Their employee counts are similar – 260,000 employees for JPMorgan versus 251,000 for Citigroup.

Both JPMorgan and Citigroup also own massive amounts of bank-owned life insurance (BOLI), a controversial practice that pays the corporation when a current or former employee dies. (In the case of former employees, the banks conduct regular “death sweeps” of public records using former employees’ Social Security numbers to learn if a former employee has died and then submits a request for payment of the death benefit to the insurance company.)

Wall Street On Parade carefully researched public death announcements over the past 12 months which named the decedent as a current or former employee of Citigroup or its commercial banking unit, Citibank. We found no data suggesting Citigroup was experiencing the same rash of deaths of young men in their 30s as JPMorgan Chase. Nor did we discover any press reports of leaps from buildings among Citigroup’s workers.

Given the above set of facts, on March 21 of this year, we wrote to the regulator of national banks, the Office of the Comptroller of the Currency (OCC), seeking the following information under the Freedom of Information Act (See OCC Response to Wall Street On Parade’s Request for Banker Death Information): The number of deaths from 2008 through March 21, 2014 on which JPMorgan Chase collected death benefits; the total face amount of BOLI life insurance in force at JPMorgan; the total number of former and current employees of JPMorgan Chase who are insured under these policies; any peer studies showing the same data comparing JPMorgan Chase with Bank of America, Wells Fargo and Citigroup.


At noon, demonstrators lined the streets of central Kyiv for 30 minutes to hold up mirrors in front of police in commemoration of the Nov. 30 violent dispersal of protesting students from Independence Square.

The OCC responded politely by letter dated April 18, after first calling a few days earlier to inform us that we would be getting nothing under the sunshine law request. (On Wall Street, sunshine routinely means dark curtain.) The OCC letter advised that documents relevant to our request were being withheld on the basis that they are “privileged or contains trade secrets, or commercial or financial information, furnished in confidence, that relates to the business, personal, or financial affairs of any person,” or relate to “a record contained in or related to an examination.”

The ironic reality is that the documents do not pertain to the personal financial affairs of individuals who have a privacy right. Individuals are not going to receive the proceeds of this life insurance for the most part. In many cases, they do not even know that multi-million dollar policies that pay upon their death have been taken out by their employer or former employer. Equally important, JPMorgan is a publicly traded company whose shareholders have a right under securities laws to understand the quality of its earnings – are those earnings coming from traditional banking and investment banking operations or is this ghoulish practice of profiting from the death of workers now a major contributor to profits on Wall Street?

296841_10150409976151253_249220160_n
The eight largest U.S. financial companies (JP Morgan, Wells Fargo, Bank of America, Citigroup, Goldman Sachs, U.S. Bancorp, Bank of New York Mellon and Morgan Stanley) are 100% controlled by ten shareholders and we have four companies always present in all decisionsBlackRock, State Street, Vanguard and Fidelity.

As it turns out, one aspect of the information cavalierly denied to us by the OCC is publicly available to those willing to hunt for it. On March 24 of this year, we reported that JPMorgan Chase held $10.4 billion in BOLI assets at its insured depository bank as of December 31, 2013. We reached out to BOLI expert, Michael D. Myers, to understand what JPMorgan’s $10.4 billion in BOLI assets at its commercial bank might represent in terms of face amount of life insurance on its workers.

Myers said: “Without knowing the length of the investment or its rate of return, it is difficult to estimate the face amount of the insurance coverage. However, a cash value of $10.4 billion could easily translate into more than $100 billion in actual insurance coverage and possibly two or three times that amount” said Myers, a partner in the Houston, Texas law firm McClanahan Myers Espey, L.L.P. Myers’ and his firm have represented the families of deceased employees for almost two decades in cases involving corporate-owned life insurance against employers such as Wal-Mart Stores, Inc., Fina Oil and Chemical Co., and American Greetings Corp. (Families may be entitled to the proceeds of these policies if employee consent was required under State law and was never given and/or if the corporation cannot show it had an “insurable interest” in the employee — a tough test to meet if it’s a non key employee or if the employee has left the firm.)

As it turns out, the $10.4 billion significantly understates the amount of money JPMorgan has tied up in seeking to profit from workers’ deaths. Since Wall Street banks are structured as holding companies, we decided to see what type of financial information might be available at the Federal Financial Institutions Examination Council (FFIEC), a federal interagency that promotes uniform reporting standards among banking regulators. The FFIEC’s web site provided access to the consolidated financial statements of the bank holding companies of not just JPMorgan Chase but all of the largest Wall Street banks. We conducted our own peer review study with the information that was available.

Four of Wall Street’s largest banks hold a total of $68.1 billion in BOLI assets. Using Michael Myers’ approximate 10 to 1 ratio, that would mean that over time, just these four banks could potentially collect upwards of $681 billion in tax free income from life insurance proceeds on their current and former workers. (Death benefits are received tax free as is the buildup in cash value in the policies.) The breakdown in BOLI assets is as follows as of December 31, 2013:
Bank of America $22.7 billion
Wells Fargo 18.7 billion
JPMorgan Chase 17.9 billion
Citigroup 8.8 billion

In addition to specifics on the BOLI assets, the consolidated financial statements also showed what each bank was reporting as “Earnings on/increase in value of cash surrender value of life insurance” as of December 31, 2013. Those amounts are as follows:
Bank of America $625 million
Wells Fargo 566 million
JPMorgan Chase 686 million
Citigroup 0

Given the size of these numbers, there is another aspect to BOLI that should raise alarm bells among both regulators and shareholders. The Wall Street banks are using a process called “separate accounts” for large amounts of their BOLI assets with reports of some funds never actually leaving the bank and/or being invested in hedge funds, suggesting lessons from the past have not been learned.

On May 20, 2008, Bloomberg News reported that Wachovia Corp. (now owned by Wells Fargo) and Fifth Third Bancorp reported major losses on failed gambles with BOLI assets. “Wachovia reported a $315 million first-quarter loss in its bank-owned life insurance program, known as BOLI, because of investments in hedge funds managed by Citigroup Inc. Fifth Third said in a lawsuit filed last month that it had losses of $323 million from Citigroup’s Falcon funds, which slumped more than 50% in the past year as the subprime market collapsed.” Citigroup’s Falcon Strategies hedge fund had lost as much as 75% of its value by May 2008.

SELF-DESTRUCTING VAULTS
http://spitfirelist.com/tag/argentina/
http://spitfirelist.com/books/the-nazis-go-underground/
http://spitfirelist.com/books/martin-bormann-nazi-in-exile/

http://spitfirelist.com/for-the-record/ftr-802-the-luxembourg-connection-what-the-hell-does-dave-emory-mean-by-underground-reich-part-2/
http://spitfirelist.com/for-the-record/ftr-791-they-may-not-know-art-but-they-know-what-they-like/
http://guardianlv.com/2014/02/buenos-aires-firefighters-killed-in-warehouse-fire/

“If arson is found to be the cause, it will be the third time for the Boston-based firm.  Previous fires, in New Jersey in 1997 and London in 2006, were also caused by arson.  The building, in the Barracas barrio of Buenos Aires, was reportedly equipped with a sprinkler system as well as fire-detection devices. The 1997 New Jersey fire destroyed an Iron Mountain Warehouse filled with corporate documents.  Investigators spoke with scores of witnesses who refused to speculate on any theories about motivation for the arson. In July 2006, a six-story warehouse on the outskirts of London went up in flames.  The warehouse held the archives of over 600 customers, including files by several major London law firms.  City fire investigators concluded the fire was caused by arson as well.

http://www.ironmountain.com/Company/Company-News/News-Categories/Press-Releases/2014/February/5.aspx
http://www.zerohedge.com/news/2014-02-05/argentine-banking-system-archives-destroyed-deadly-fire

“While we are sure it is a very sad coincidence, on the day when Argentina decrees limits on the FX positions banks can hold and the Argentine Central Bank’s reserves accounting is questioned publically, a massive fire – killing 9 people – has destroyed a warehouse archiving banking system documents. As The Washington Post reports, the fire at the Iron Mountain warehouse (which purportedly had multiple protections against fire, including advanced systems that can detect and quench flames without damaging important documents) took hours to control and the sprawling building appeared to be ruined.


The cause of the fire wasn’t immediately clear – though we suggest smelling Fernandez’ hands… We noted yesterday that there are major questions over Argentina’s reserve honesty

While first print is preliminary and subject to revision, the size of recent discrepancies have no precedent. This suggest that the government may be attempting to manage expectations by temporarily fudging the “estimate ” of reserve numbers (first print) while not compromising “actual” final reported numbers. If this is so, it is a dangerous game to play and one likely to back-fire. During a balance of payments crisis – as Argentina is undergoing – such manipulation of official statistics (and one so critical for market sentiment) is detrimental to the needed confidence building around the transition in the FX regime.

 

And today the government decrees limits on FX holdings for the banks

Argentina’s central bank published resolution late yday on website limiting fx position for banks to 30% of assets. Banks will have to limit fx futures contracts to 10% of assets. Banks must comply with resolution by April 30

And then this happens… Via WaPo,

“Nine first-responders were killed, seven others injured and two were missing as they battled a fire of unknown origin that destroyed an archive of bank documents in Argentina’s capital on Wednesday. The fire at the Iron Mountain warehouse took hours to control. The destroyed archives included documents stored for Argentina’s banking industry, said Buenos Aires security minister Guillermo Montenegro. The cause of the fire wasn’t immediately clear. 

Boston-based Iron Mountain manages, stores and protects information for more than 156,000 companies and organizations in 36 countries. Its Argentina subsidiary advertises that its facilities have multiple protections against fire, including advanced systems that can detect and quench flames without damaging important documents… “There are cameras in the area, and these videos will be added to the judicial investigation, to clear up the motive of the fire and collapse,” Montenegro told the Diarios y Noticias agency.”

OCCULT HIGH FINANCE
https://archive.org/details/TheVaticanBillions
http://spitfirelist.com/for-the-record/ftr-451-petals-from-the-golden-lily/
http://spitfirelist.com/for-the-record/ftr-689-interview-with-sterling-and-peggy-seagrave/

http://spitfirelist.com/news/parting-shot-from-der-panzerkardinal-keeping-scandal-hidden-under-the-rock-of-st-peter/
http://spitfirelist.com/for-the-record/ftr-775-ratzinger-leaves-the-ship-the-resignation-of-pope-benedict-xvi/
http://spitfirelist.com/news/ratzingers-vatican-benefactor/

http://spitfirelist.com/news/evolution-of-vatican-incorporated-papacys-mussolini-funded-real-estate-empire/
http://www.huffingtonpost.com/2013/02/15/ernst-von-freyberg-vatican-bank_n_2696219.html
http://spitfirelist.com/news/vatican-bank-being-investigated-for-money-laundering/

http://spitfirelist.com/news/roberto-calvi-linked-to-pablo-escobar/
http://spitfirelist.com/reading/unholy-trinity/
http://spitfirelist.com/for-the-record/ftr-688-darkness-in-the-vaults/

‘CRIMINOGENIC NEEDS’
Pope sacks board of Vatican’s financial watchdog
Vatican finds millions of euros ‘tucked away’
http://www.cnbc.com/id/102246046
Prosecutor freezes accounts of ex-Vatican bank heads / 6 Dec 2014

The Vatican’s top prosecutor has frozen 16 million euros in bank accounts owned by two former Vatican bank managers and a lawyer as part of an investigation into the sale of Vatican-owned real estate in the 2000s, according to the freezing order and other legal documents. Prosecutor Gian Piero Milano said he suspected the three men, former bank president Angelo Caloia, ex-director general Lelio Scaletti, and lawyer Gabriele Liuzzo, of embezzling money while managing the sale of 29 buildings sold by the Vatican bank to mainly Italian buyers between 2001 and 2008, according to a copy of the freezing order reviewed by Reuters. The money in the three men’s bank accounts “stems from embezzlement they were engaged in,” Milano said in the October 27 sequester order. Milano’s investigation follows an audit of the Vatican bank by non-Vatican financial consultants commissioned last year by the bank’s current management. The Vatican bank earlier this year also filed a legal complaint against the three men. The men have not been charged. The Vatican spokesman on Saturday issued a statement confirming the freezing but gave no names, amounts or other details.

The Vatican bank said in a separate statement that it had pressed charges against the three as part of its “commitment to transparency and zero tolerance, including with regard to matters that relate to a more distant past“. The bank statement also gave no details, citing “the ongoing judicial enquiry”. The investigation is part of a drive to improve the transparency of the Vatican administration and finances, an endeavour that has accelerated under Pope Francis. The Argentine pontiff was elected in 2013 with a mandate to make the Roman Catholic Church more accountable to its 1.2 billion faithful. Liuzzo, 91, confirmed in a telephone interview that his bank accounts had been frozen. He said the prosecutor’s allegations were “rubbish” and that all money from the sales of the buildings had gone to the bank.  Caloia, 75, did not respond to emailed questions and phone calls to his home and office requesting comment. Scaletti, 88, did not respond to messages left at his home. The period relating to property sales covers seven years, and two papacies, when the Vatican’s administration often operated without oversight.


Influential Bank
John Paul II was incapacitated by illness for years before his death in 2005. His successor, former Pope Benedict, is a theologian who Vatican officials say did not focus on management issues. During these years, the Curia, as the Church’s central administration is known, was marked by feuding among Vatican departments and leaks of papal documents. The tensions were a reason Benedict resigned in early 2013, people close to the former pope say. The bank, officially known as the Institute for Works of Religion (IOR), is the core of Vatican finances, but its influence stretches beyond Holy See walls, because of tight relations between the religious city-state and Italy. In recent years, it has changed management and closed hundreds of accounts in order to comply with international anti-money-laundering and anti-financial crimes laws. Last year, Ernst von Freyberg, a German businessman who ran the bank from March 2013 to July 2014 and worked to apply international financial standards, commissioned an independent audit of the sale of properties that had been owned by the bank.

The audit, which was reviewed by Reuters, details the sales of the 29 buildings, which are largely in Rome and Milan. In the freezing order, Milano said Caloia and Scaletti regularly under-represented the proceeds from real estate sales in the Vatican bank’s official books. The men allegedly received the difference between the real sale prices and the amount officially recorded separately and often in cash, according to the order. Some of the proceeds were deposited in a Rome bank account that was not registered in the bank’s balance sheet, the prosecutor said. An estimated 57 million euros were allegedly siphoned off illegally between 2001 and 2008, he said. Liuzzi, the legal consultant, received part of the funds, the freezing order added. In the phone interview, Liuzzi said he had always acted according to the orders of the bank president and director general. It is not clear whether Milano has finished his investigation. According to a person close to the probe, the prosecutor could seek to involve Italian authorities because most of the sales took place in Italy.