The Strange Case Of Bernie Madoff

The biggest financial fraud in history continues to slowly unravel in an unusual way. The strange case of Bernie Madoff becomes only more bizarre with each passing day.

This strange case actually started with Bernie Madoff outing himself. As a result, there is no sense in talking about the $50 billion dollar Madoff Ponzi scheme as an "alleged" fraud, when the main allegations about the crime actually come from the person who will eventually be the defendant in the case.

Soon after his arrest, Bernie Madoff's bail was set at $10 million dollars with the requirement of 4 co-signers on the bond but Madoff could not get four people in the entire world to sign his bail bond.

So, he did not meet the conditions of his bail. However, his punishment for not making bail has certainly been strange. Madoff was not sent to jail but only confined to his palatial apartment at 133 East 64th Street.

As a result, its very odd that while the U.S. Congress and prosecutors sort out the greatest financial hoax in history, the mastermind of the Ponzi Scheme continues to enjoy a life of luxury made possible by his fraud.

Its also strange that while the government searches for an accounting of $50 billion missing dollars, that Bernie Madoff has the ability to continue to access personal records and computers that may become important to the fraud investigation.

Madoff's Ponzi scheme ripped off widows and orphans, philanthropies, rich people, global banks and hedge funds. It is strange that one man managed to steal $50 billion dollars for decades from some of the most sophisticated financial people and institutions in the world within the confines of the regulated environment of financial investments.

Certainly, it is strange that starting in 1992, federal regulators on at least eight different occasions examined various aspects of Bernard Madoff's business operations and never turned up anything about the $50 billion Ponzi scheme that led to Madoff's arrest last month.

Bernie Madoff showed up last week at a bail hearing wearing a bullet proof vest. The bail hearing was called because Madoff was in violation of a condition of his bail agreement not to dispose of any of his assets.

Sadly, it was discovered that sixteen watches, including diamond-encrusted timepieces from Tiffany and Cartier, four diamond brooches, two sets of cuff links, and an emerald ring were sent to Madoff's sons and brother. The value of the jewelry was estimated to be more than one million dollars.

The result of the bail hearing once again did not send Bernie Madoff to jail. He was again ordered to return to the comfort of his $7 million dollar penthouse apartment. Even though it may be hard to believe, this story is not bad fiction. Unfortunately, the strange case of Bernie Madoff is reality TV.

A Case Of Injustice For Compean And Ramos

The Associated Press is reporting that President George W. Bush has granted pardons to 14 individuals and commuted the prison sentences of two others convicted of misdeeds ranging from drug offenses to tax evasion, from wildlife violations to bank embezzlement.

The crimes committed by those on the pardon list also include dubious offenses involving hazardous waste, food stamps, and the theft of government property.

Meanwhile, as fourteen people are granted pardons by the president, border patrol agents, Jose Compean and Ignacio Ramos sit in solitary confinement, in a medium security federal prision serving time for just trying to do their difficult jobs in securing the United States border with Mexico.

The fact is that Border Patrol Agents Ignacio Ramos and Jose Compean are currently serving terms of 11 and 12 years respectively on their outrageous convictions for shooting an illegal alien drug smuggler.

The agents were guarding the United States border near El Paso, Texas on February 17, 2005. Checking on a tripped sensor near the river, Border Agent Compean discovered footprints and drag marks, a tip-off that a load of drugs has just been smuggled across the river. Spotting a vehicle leaving the scene, Compean radioed the vehicle's description to agents covering the road ahead.

Realizing he's been spotted, the smuggler turned around and headed back toward Compean. When the smuggler bailed out of his van to make a run for the river, he failed to obey Compean's numerous commands to stop. After a brief physical struggle with the Agent, the smuggler began running toward the river again.

When the smuggler turned around and pointed something shiny at Compean, the agent believing his life was in danger opened fire. Agent Ramos, hearing gunshots, came to Compean's aid. He, too, shouted for the smuggler to stop, but the man once again turned around and pointed at Ramos. Ramos fired one shot at the smuggler.

He appeared to miss, and his target turned and disappeared into the bank of the Rio Grande. Later it was discovered that the drug smuggler was wounded in the buttock by the shot. The Border Patrol agents returned to the suspicious van and looked inside at almost 800 lbs. of marijuana, worth about $1 million on the street, in the cabin.

U.S. Attorney Johnny Sutton would later decide that the illegal alien drug smuggler was the real victim in the case and he filed attempted murder charges against the two border agents. He never brought charges against the drug smuggler. Instead, Sutton granted the known illegal alien drug smuggler immunity and a temporary visa in his effort to prosecute the two agents.

On March 8, 2006, a federal jury convicted the two agents of assault with serious bodily injury, assault with a deadly weapon, discharge of a firearm in relation to a crime of violence and civil rights violations.

However, that jury verdict was in question as well. According to the National Border Patrol Council, "Three of the 12 jurors later submitted sworn affidavits alleging that they had been misled into believing that there could be no dissent in the decision of the jury, and that the minority would have to accede to the will of the majority. Despite this cloud over the propriety of the process, the judge refused to overturn the verdict."

On appeal, the 5th Circuit Appeals Court upheld a mandatory minimum 10-year prison sentences for “discharging a firearm during the commission of a crime of violence.” This law, known as Section 924(c) of the U.S. Code, has always been interpreted to apply to criminals, not law enforcement officers engaged in their official duties.

The cases of Ignacio Ramos and Jose Compean are now before the DOJ’s Pardon Attorney Donald Rodgers, who works in consultation with the attorney general’s office to assist the president. The president has sole power of clemency in federal cases under the Constitution, and will make the decision, no matter what the Office of Pardon Attorney recommends.

As for the alleged victim in this case, illegal alien and drug smuggler, Aldrete-Davila. Well, he pleaded guilty last May in federal court to multiple drug charges. All were crimes that occurred after the above episode, and thus are not covered by the immunity agreement. Aldrete-Davila was charged with two counts of possession with intent to distribute a controlled substance, one count of conspiracy to import a controlled substance and one count of conspiracy to possess a controlled substance with intent to distribute.

This case of injustice for Compean and Ramos has gone on long enough. These two border patrol agents need to be pardoned by President Bush. They are the real victims in a case that compromises the integrity of United States Homeland Security as well as the American Legal system.

Bailing Out Of This Government Bailout

It is hard to believe that the United States Congress has given the Treasury Secretary control over trillions dollars of taxpayer money without any current oversight.

Henry Paulson controls assets equal to the 19th largest global economy and he is not even an elected official.

Of course when the Treasury Asset Relief Program (TARP) was passed, oversight that taxpayer's money would be spent wisely was a Congressional assurance given to a skeptical public.

So is the money being spent wisely? Nobody really knows, but Bloomberg News is at least trying to find out. They have requested details of Federal Reserve lending under the U.S. Freedom of Information Act and filed a federal lawsuit on Nov. 7 seeking to force disclosure. Give Bloomberg News credit, they are doing actual journalism in the real world.

Unfortunately, the same cannot be said for the rest of the media. MSNBC, is currently running promos that say: "Barack Obama, America's 44th president. Watch as a leader renews America's promise." People Magazine 's Cover "The Obamas' New Life!" will not win any Pulitzer for investigative journalism either. U.S. Weekly goes with a new Obama quote for its latest edition: "I Think I'm a Pretty Cool Dad." Meanwhile, the Chicago Tribune opines that Michelle Obama "is poised to be the new Oprah and the next Jacqueline Kennedy Onassis combined!" for the fashion world.

So, 350 billion of taxpayer's money has already been spent and nobody knows where it went and only Bloomberg News really cares enough to find out under the Freedom Of Information Act. The New York Post calls all the current Presidential media hype and attention, "BamALot" and if it continues, it is going to cost the average American taxpayer "QuiteALot".

Now, consider that the need for the remainder of the bailout bill was brought into question last week. Treasury Secretary Henry Paulson changed direction on the need for the money. He announced that the government would not use any of the $700 billion to buy toxic mortgages and other bad assets from banks. That had been the centerpiece of the bailout plan when Paulson and Bernanke first pitched it to lawmakers two months ago.

Meanwhile, CNBC, has been keeping a running tally of the total amount of spending the federal government is doing due to this financial crisis as well as all its other bail out commitments. The amount as of November 13, 2008 is reported to be $4.28 trillion dollars. About sixty eight percent of the sum falls under the Federal Reserve's umbrella, while the another 16 percent is under TARP, as defined under the Emergency Economic Stabilization Act, signed into law in early October.

As a result of the lack of transparency and the staggering dollar amount, Senators, James Imhofe and Bernie Sanders, now plan to introduced legislation to bailout Congress from the 350 billion dollars that remains to be spent on TARP.

The truth is that the entire regulatory regime of the US financial community will require the largest overhaul since the Great Depression. Many regulations that have been repealed need to be put back into place.

However, since so many new financial instruments have been developed, the whole system is in need of review. This should include the Fed, Treasury, SEC, FDIC, the GSEs, and the governmental housing agencies (GNMA, the FHA).

In the meantime, bailing the taxpayer out of this government bailout has become a priority for everyone before all the money is gone and nobody knows what happened, except for a few insiders in the beltway in Washington, D.C.

The Crisis Presidency Of George Walker Bush

President George Bush said in his televised speech to the nation last night: "We are in the midst of a serious financial crisis and the federal government is responding with decisive action."

Of course, the decisive action he is talking about is trying to convince skeptical members of Congress to give away 700 billion taxpayer dollars to bailout the financial services sector.

The problem for George Bush is credibility due to the fact that the word "crisis" has appeared in his speeches very frequently during the last eight years.

There was the crisis of the terrorist attacks of September 11, 2001. The crisis of Osama Bin Laden and the Taliban leading to the war in Afghanistan. The crisis of weapons of mass destruction that were never found in Iraq. The crisis of an internal civil war in Iraq that could have lead to American failure. The crisis of the subsequent troop surge in Iraq to prevent the crisis of failure in that country. The crisis of Iran and their acquisition of a future nuclear capability that apparently will not be handled under this Administration's watch.

Indeed, the list goes on and on: The crisis concerning the handling of Hurricane Katrina, the economic crisis of deep recession that led to those tax rebate checks drawn from the Federal Treasury several months ago, and now finally this serious financial crisis involving sub-prime mortgage loans.

The Bush solution to all of these crisis events is usually the same. Throw billions and billions of taxpayer dollars at the problem and try and make it all go away. Unfortunately, it is the solution of the reactive manager, not the proactive planner.

In retrospect, many of these crisis could have been avoided. The war in Iraq lacked proper planning ( See : "There never Was An Iraq Exit Strategy" on eWorldvu.com) and the success of the troop surge confirmed that there were not enough "boots" on the ground from the beginning. Afghanistan is a mess and soon will become the next crisis, because it was left to an ineffective NATO and subsequently ignored.

Today's financial crisis and the problems of Hurricane Katrina were really failures of government oversight and leadership. Henry Paulson was hired to lead the Treasury from Goldman Sachs two years ago but never saw this crisis that would lead us to the brink of the financial abyss.

Also, Paulson's reaction to this crisis over the last several weeks has been to guarantee a bailout of Bear Sterns, refuse to bail out Lehman Brothers,and then to bailout Aig, Fannie Mae and Freddie Mac. Finally, with his 700 billion dollar plan , he now wants the taxpayer to bail out everyone. It certainly can be argued that Paulson's erratic policy led to so much confusion and uncertainty in the Financial markets that confidence in the Treasury was lost.

In addition, it was only one week ago that John McCain said he would fire Securities and Exchange Commission Chairman Christopher Cox and accused government regulators of being "asleep at the switch'' during this market turmoil. It should be remembered that Cox took over from the previous SEC Chairman Harvey Pitt. Both Pitt and his predeccesor, Arthur Levitt were in charge of the SEC during the Enron fiasco of several years ago.

We need to remember that a Senate investigation would accuse the SEC and Wall Street research analysts of allowing "the greed of a few" at Enron to go "unchecked and unchallenged. The investigation revealed a story of "systemic and catastrophic failure, a failure of all the watchdogs to properly discharge their appointed responsibilities". This is the SEC that Cox would inherit in 2005. It doesn't really seem to have changed very much , does it? Only now the scale of the problem may be much larger.

An effective President should hire the people necessary to set a proactive, agressive tone in managing the day to day business of the federal government. A reactive firefighter to put out the latest crisis is not what this country needs in the Oval office.

A President' slogan like any competent executive should be that the best crisis is the one that you can manage to avoid.

A Security Ring Of Steel in New York City

The plan known as Operation Sentinel is a Civil Libertarian nightmare. The complaints have already begun. Consider this quote from Christopher Dunn of the New York City Civil Liberties Union, "I don't think it's hyperbole to call this Big Brotherish. The New York City Police Department is creating a huge computer database of the movement of everyone in a vehicle in Manhattan."

Indeed, the NYPD intend to monitor and track everything entering Lower Manhattan. In fact, they are calling it a surveillence "ring of steel". There will be 3000 operational cameras that will monitor the area throughout each day. Meanwhile, 600 police officers will be assigned to patrol the zone. When a car enters lower Manhattan, its license plate will be captured and stored in a police database for at least a month. Every movement will be monitored.

As part of the plan the NYPD is creating a huge buffer zone, working with police in a 50-mile radius of the city. Officials in New Jersey, Connecticut, Pennsylvania, and Long Island are being given radiation detectors to stop terrorists as far away from New York City as possible.

"New York City is something special," Mayor Michael Bloomberg said Tuesday. "It's not just a very big city in this world. It is, in many senses, the iconic city. It represents Western Democracy. "

All true, Mayor Bloomberg, but do we really need to make an Orwellian security fortress out of the city that represents Western Democracy? This level of security sounds too much like a terrorist victory to me.

Illegal Immigration Report Shows Why Laws Should Be Enforced

The latest report just released on illegal immigration from the Center of Immigration Studies shows a dramatic drop in New York and other States. The report called Homeward Bound indicates that illegal immigration plunged nationwide by eleven percent in the last year.

Of course about a year ago, after the immigration reform law co-sponsored by John McCain and backed by the White House was abandoned due to overwheming public pressure, the federal government actually began enforcing the illegal immigration laws already on the books.

The fact that immigration laws were not enforced for many years can be seen just by looking at the enforcement results of the Immigration Reform and Control Act of 1986. This law provided for penalties against companies that hire undocumented workers. In 1999, under the Clinton Administration, the U.S. government collected a meager $3.69 million from 890 companies in fines. By 2004, under George Bush, the amount collected in fines from companies hiring undocumented workers was zero.

In addition, the border with Mexico has never been properly secured, with only 9500 border agents trying to police an eight thousand mile border until 2005. As a result, it is estimated that in the year 2004 alone, three million illegal immigrants entered the United States.

So, a lack of border security and a lack of illegal immigration law enforcement has resulted in the fact that eleven million illegal immigrants still remain in the United States even after the 11% drop of the last year (according to the Center of Immigration Studies Report).

George Bush's low approval rating (now below 30%) began its steep descent in the spring of 2006 when illegal immigrants were marching in the streets demanding their rights. Its hard to understand in an age of terrorism, how the American public can feel secure with more than eleven million people running around the country that are not here legally.

If people want to change the current immigration laws, there is a way to do that since we have representative government. In the meantime, the country's existing laws should be properly enforced. The data from the recent Center of Immigration Studies Report shows why.