Eideard

Pentagon policy on issuing contracts for Iraq reconstruction

The U.S. Defense Department cannot account for about $2 billion it was given to cover Iraq-related expenses and is not providing Iraq with a complete list of U.S.-funded reconstruction projects, according to two new government audits…

The Iraqi government in 2004 gave the Department of Defense access to about $3 billion to pay bills for certain contracts, and the department can only show what happened to about a third of that, the inspector general says…

Although the Department of Defense had “internal processes and controls” to track payments, the “bulk of the records are missing,” the report says, adding that the department is searching for them. Other documents are missing as well, including monthly reports documenting expenses, the audit says.

“From July 2004 through December 2007, DoD should have provided 42 monthly reports. However, it can locate only the first four reports…”

Sounds like the Pentagon performed exactly up to the standards required by Bush and Cheney. Which means none at all.

Separately, the inspector general’s office sent a letter Sunday to the U.S. ambassador to Iraq complaining that the U.S. government is not providing Iraq with a complete list of reconstruction projects…

The Office of the Special Inspector General for Iraq Reconstruction was created in 2004 to continue oversight of Iraq reconstruction programs.

In some nations, civil servants and bureaucrats are part of an honorable profession. They exist and function on behalf of the best interests of the country.

The tradition in much of our local, state and federal bodies is to either have a safe, secure job offering a better life of retirement than private industry – or to have a safe, secure job offering an easy way to steal.

Ellis claims this guy stole his tax credits

A federal judge has ordered a California man to stop promoting what the U.S. Justice Department calls a scheme to sell billions of dollars in bogus tax credits.

The Justice Department said in a release Wednesday that Lamar Ellis of Brea has been permanently barred from claiming to have billions of dollars in federal research tax credits supposedly granted him for purported scientific breakthroughs.

The federal officials alleged Ellis advertised the sale of the credits on the Internet and issued phony documents to people who were led to believe they would reduce their tax obligations. Federal officials also alleged Ellis teamed with the non-profit Southwest Louisiana Business Development Center in Jennings, La., to try to sell $24 billion of the fictitious credits.

The civil injunction order requires Ellis to provide the federal government with the names, addresses and Social Security or tax identification numbers of everyone to whom he purported to distribute tax credits.

It’s just a guess. I think Mr. Ellis gets to spend a little time in a federal courtroom – and a larger chunk of time in the federal slammer.

If you don’t stick to the script I’ll let Cheney have you!

BONN, Germany — As dozens of nations and organizations met here on Monday to plan a transition beyond the withdrawal of American and other international forces from Afghanistan in 2014, the Afghan government had a new deadline in mind: 2024.

President Hamid Karzai and other Afghan officials here called for political and military support for at least another decade — and financial assistance that would not end until 2030. That would be nearly three decades after the terrorist attacks of Sept. 11 that led to the international intervention in Afghanistan.

While Mr. Karzai and others celebrated the strides made in Afghanistan since the fall of the Taliban — 60 percent of Afghans now have mobile phones, he said, compared to none — the conference highlighted the multiple challenges facing a fragile government undermined by corruption and threatened by a resilient insurgency…

Instead, as the months have passed, the tempo of the war has shown little sign of winding down, despite an optimistic assessment from NATO that it had reversed the momentum of the Taliban insurgents…

Even though President Obama and other NATO leaders created a timetable for withdrawal by 2014, few officials now expect any reconciliation talks to even begin by then. That has raised questions about security and the stability of Mr. Karzai’s government once international troops steadily begin to withdraw.

Mr. Karzai’s government presented a paper to the conference outlining Afghanistan’s plans for developing an economy now almost entirely dependent on international military and development spending…

…Just meeting the cost of Afghanistan’s military forces — which by 2014 are expected to total 400,000 soldiers — is estimated to cost $3.5 billion to $6 billion a year. By then, Afghanistan, the world’s 40th largest country, would have the world’s 12th largest military.

Thanks, George.

Please, let us remember come Election Day how many lies we listened to over the years from the cesspool of corruption that is political Washington.

Reuters found a Japanese banker who is a key figure in the Olympus Corp accounting scandal at a luxury apartment block in Hong Kong on Sunday, where he exploded in anger at finally being tracked down.

Akio Nakagawa’s boutique U.S. investment firm earned a $687 million fee from Olympus for a 2008 deal that made it the biggest advisory payment in history, and which the Japanese camera maker now admits was used to hide investment losses.

The whereabouts of the former PaineWebber banker had been unknown until Sunday. Nakagawa looked startled when a reporter introduced himself outside the building, located in a high-priced area near the financial district on Hong Kong island.

“Get out of here. Get out of here,” Nakagawa yelled in English at the Reuters reporter who approached him. The banker, who appeared in his 60s and was with a middle-aged woman, was walking into the marbled foyer with some grocery bags.

“I don’t want him here,” Nakagawa said, turning to a concierge, when asked to answer questions about the scandal, which has brought the once venerable maker of endoscopes and cameras to its knees.

Nakagawa was tanned, tall and slim. He wore large, dark round glasses and a sky-blue polo shirt and carried two plastic shopping bags with Japanese writing on them.

When asked about the advisory fee, he told the concierge: “Please contact the police…”

It is the first time Nakagawa has been found and asked by the media for his side of the story since former Olympus chief executive Michael Woodford blew the whistle last month on the advisory fee and several other dubious deals…

Sources have told Reuters that Nakagawa had business ties with Olympus stretching back three decades, including his time at PaineWebber in the 1990s when he helped the firm temporarily shuffle securities losses off its books in a practice known as “tobashi” that was common in Japan at the time.

Tobashi roughly translates as “to make fly away.”

Terrific job by James Pomfret and Reuters. I expect business news reporters – even some of the crappola mainstream networks – to be buzzing about this tomorrow morning.

Wonder how many will credit the Reuters crew?

Rumsfeld at meal run by Bush’s favorite concierge – KBR

The US government has wasted more than $30bn on private contractors and grants in Iraq and Afghanistan over the past decade – more than 15% of the total spend – according to a bipartisan group charged with examining the issue.

The figure, described as “sobering but conservative”, illustrated the need for significant law and policy changes to avoid such waste in the future, the Commission on Wartime Contracting in Iraq and Afghanistan said.

The body, set up by a Senate vote in 2007 to mimic the work of a post-second world war commission that investigated waste, will submit its report to Congress on Wednesday. Submitted to the same people who approved the expenditures in the first place…

At least another $30bn could be wasted if the governments of Iraq and Afghanistan are unable to keep US-run projects running after the US withdraws or simply choose not to do so, Christopher Shays, an ex-Republican congressman, and Michael Thibault, a former deputy director of the Defence Contract Audit Agency, wrote.

“Tens of billions of taxpayer dollars have been wasted through poor planning, vague and shifting requirements, inadequate competition, substandard contract management and oversight, lax accountability, weak inter-agency co-ordination, and subpar performance or outright misconduct by some contractors and federal employees. Both government and contractors need to do better,” they said…

In a separate report, released on Monday, the independent Centre for Public Integrity thinktank said $140bn in defence contracts were awarded without competitive tendering last year – almost triple the sum in 2001…

The report will include 15 recommendations…most of which will be useless crap if Congress maintains business as usual – rubber stamping anything that has the words Homeland Security, Pentagon or Military in the title.

Why should the young men and women of America be required to risk life and limb, take a general pay cut, to go off and fight useless wars – while America’s corporations are guaranteed not only profits but super-profits for supplying the matériel to support the physical structure of those wars, create fresh death and destruction?

Education Management Corp. (EDMC), the second-largest U.S. for-profit college chain, used improper recruitment practices to secure more than $11 billion in U.S. student aid, prosecutors said in a civil lawsuit.

Education Management, 41 percent owned by Goldman Sachs, illegally paid recruiters based on the number of students signed up, a violation of rules for colleges that get U.S. student grants and loans, the Justice Department said today in a complaint filed in federal court in Pittsburgh.

Prosecutors spelled out their case against the company for the first time since May, when the Justice Department joined an employee whistleblower suit. Colleges that receive federal aid are barred from paying recruiters incentives tied to enrollment because it may encourage companies to register unqualified students. The government claimed Education Management enrolled students who appeared to be under the influence of drugs.

Education Management “fraudulently induced” the Education Department to make the company eligible for more than $11 billion in federal grants and loans since 2003, according to the complaint. “Each and every one of the claims it submitted or caused a student to submit violated” the U.S. False Claims Act, the government said…

The company, which enrolls almost 140,000 students, operates the Art Institute chain, Argosy University, Brown Mackie College and South University. The company reported $2.89 billion in revenue in the year ended June 30…

The Education Department in July moved to make all incentive compensation for college recruiters illegal, removing 12 types of exemptions or “safe harbors” that were put into place under President George W. Bush.

Ah, yes – the Education President. Or at least the president who helped make education profitable regardless of sleazy practices.

The problem isn’t a new one. Nor is failure to regulate and maintain standards that inhibit defrauding people who can’t afford to attend a mainstream university.

Federal criminal authorities are investigating whether a former U.S. securities regulator inappropriately represented alleged fraudster Allen Stanford after he left the agency in 2005.

Spencer Barasch, former head of enforcement for the U.S. Securities and Exchange Commission in Fort Worth, Texas, is being probed by the U.S. Attorney’s Office and the FBI…

The criminal probe follows SEC internal findings that Barasch made numerous requests after he left the SEC to represent Stanford and was turned down each time.

Barasch persisted in his requests even though he directly dealt with Stanford matters while at the SEC and was partly responsible for ignoring repeated red flags SEC examiners raised about Stanford as early as 1997, Kotz found in a 2010 report. He later eventually did provide some legal counsel to Stanford in 2006, the report found…

The agency finally filed civil charges against Stanford in February 2009. Stanford was arrested in June 2009 and criminally charged with fraud in connection with a $7 billion scheme linked to certificates of deposit issued by his Antigua-based banking company…

The testimony about Barasch came on the same day the Project on Government Oversight, a government watchdog group, issued a report about the “revolving door” at the SEC. It found that 219 former officials at the SEC have left since 2006 to help clients with business before the agency.

Some members of Congress are calling for tighter rules. Not bad idea. But, for decades there was little enforcement of existing rules. Why should we expect that little bit of change to continue – if Congress hasn’t changed essential views about oversight and regulation?

HMS Astute aground off Skye for several days

The Royal Navy’s latest £1.2 billion nuclear submarine, HMS Astute, has been towed back to base after a malfunction which could have killed the entire crew, the Sunday Herald can reveal.

The hi-tech stealth vessel was taken to the Faslane Naval Base on the Clyde late on Friday when it suffered “a technical issue with hydraulics”, according to a Ministry of Defence (MoD) source…

Experts say that the boat’s hydroplanes, which enable it to dive or surface, are hydraulically controlled. If they fail, the boat could be lost, along with its entire crew of 98.

The ill-fated HMS Astute is infamous for being the scene of a fatal shooting a month ago when it was docked in Southampton, and for accidentally running aground off the Isle of Skye last October. The boat has been plagued by a series of other mishaps, including a fire, being hit by a falling ramp and problems with its toilets.

HMS Astute left Faslane on Wednesday for sea trials, but returned soon after just two days. One insider told the Sunday Herald that the captain, Commander Iain Breckenridge, had “no confidence in the performance of the vessel”.

The nuclear consultant, John Large, who has advised governments on submarine safety, pointed out that the hydraulics that controlled the hydroplanes were “a fundamental safety system that can’t be ignored”.

He said: “If you don’t have the hydraulics, the boat could sink with all hands on board. It’s a serious problem.”

The danger that submarines like HMS Astute could have difficulties surfacing was highlighted in a secret report…that warned that there was a “risk of multiple fatalities resulting from loss of depth control”.

The report was released under freedom of information law with large sections blacked out. But researchers discovered that the censored text could be read simply by cutting and pasting it into a new document.

This revealed that British submariners were more likely to drown than their American counterparts if the reactor that powered their boat failed while they are under water. British submarines “accept a much lower reliability from the main propulsion system” and the back-up system “will not provide sufficient dynamic lift”, McFarlane said.

Back in the day I was US sales manager for a British firm. For eight months.

No, it wasn’t the submarine building industry; but, it sounds as if the same culture of “sorting out” incompetent design standards hasn’t gone away.

This week, a federal jury in Virginia convicted mortgage executive Lee Farkas on fraud and conspiracy charges that could send him to prison for life.

Authorities say Farkas tried to defraud banks out of almost $3 billion, in one of the biggest cases to come out of the mortgage crisis. And that, critics say, is the problem. Almost three years after the economy nearly collapsed, most top Wall Street banks and their executives have emerged with no criminal trouble. And that’s making people angry.

The argument that prosecutors have gone light on the nation’s largest banks for their role in the financial meltdown has become really popular — even if it’s not true.

Not so for Farkas, 58, who cut a larger-than-life figure in his north Florida community. In his heyday, Farkas collected cars — including a 1963 Rolls Royce and a Ford Model A. He served caviar in the dining room at his mortgage lending company Taylor Bean and Whitaker, or TBW…

“Farkas was really the mastermind of one of the largest bank fraud schemes in history,” says Lanny Breuer, who runs the criminal division at the Justice Department. “What he did led not only to the downfall of TBW, perhaps the second largest mortgage lending company in the United States, but also led to the failure of one of the country’s largest commercial banks, Colonial.”

Late Tuesday, a federal jury in Virginia convicted Farkas of all 14 charges against him. A judge immediately ordered Farkas into custody. He could get life in prison when he’s sentenced July 1…

Breuer of the Justice Department says public opinion doesn’t influence his decisions.

“When we believe we have a criminal case where we can prove each of the elements beyond a reasonable doubt, we’re going to do it,” he says. “When we don’t believe we can prove a case beyond a reasonable doubt, we’re not going to do it, no matter … how popular it would be.”

Two parts of the same problem. The lawyers who seem to set the standards for judges and legal beagles alike have slowed down the system of justice so radically that you could die of old age before you have a chance at justice in America. And the bits and pieces that fade away over time diminish the likelihood of a conviction.

Probably little need to note lobbyists paid by Wall Street who carry the message to an outraged Congress – whose wallets are as open as their mouths. They’re most often a subset of the same group of lawyers chartered and funded by corporations to rebuild that edifice in the image of corruption and shame.

If Peter Budetti gets his way, the criminals who gorge on the U.S. healthcare system, bilking the government out of billions of dollars a year, will soon be on a much leaner diet.

As Washington’s point man on healthcare fraud, the 66-year-old Budetti knows there are no quick fixes to a mind-boggling mess that ranks as one of America’s top crime problems. But he has been working to develop new technological tools and a comprehensive, long-term strategy to rein in fraud since his appointment as director of Program Integrity at the Centers for Medicare and Medicaid Services (CMS) last year.

Although fraudsters have had the run of the place for some two decades, life is about to get “an awful lot tougher” for them, Budetti told Reuters in a recent interview. He promised new measures to curb waste and fraud in Medicare and Medicaid, the massive federal programs that provide healthcare for America’s elderly and poor, will soon pay big dividends…

Budetti, who is focusing as much on prevention as he is on detection, appears confident about clamping down on scammers. New computer programs and sophisticated “data detective” work are beefing up the arsenal of weapons to fight fraud, he said…

No state comes close to matching Florida as a haven for crooked healthcare businesses. Long known for its unsavory links with drug cartels, money launderers and swampland real estate deals, Florida is an obvious magnet for Medicare scammers since so many elderly Americans have retired to end their days in its famous sunshine.

As it happens, Florida is also leading a legal challenge by 26 states to overturn President Barack Obama’s healthcare reform. And Republican Governor Rick Scott, a fierce opponent of the law, has a controversial past as chief executive of a healthcare corporation that paid a record $1.7 billion in fines for defrauding Medicare and other federal programs. [No surprise to me]

A senior federal agent highlighted Florida’s role as “ground zero” for the crime in congressional testimony last month, saying it was now “accepted as a safe and easy way to get rich quick” in the state…

“The money involved is staggering. We see business owners, healthcare providers and suppliers, doctors, and Medicare beneficiaries participating in the fraud. We also see drug dealers and organized criminal enterprises defrauding the system…”

Senate Finance Committee Chairman Max Baucus said last month tougher enforcement was already starting to pay off with $4 billion recovered last year.

Overdue. RTFA. Several pages detailing the corruption – which IMHO cannot exist without collusion from state politicians. With a creep like Governor Rick Scott running things, I foresee a heckuva battle between Feds trying to close down the crime – and Scott working to protect his country club buddies.