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The Mayor Who Didn’t Want To Know

The Mayor Who Didn’t Want To Know — And the Whistleblowers Who Tried To Alert Him 

Perhaps the fairest way to judge the competence, integ­rity, and character of a government is how it responds when credible information about misconduct is brought to its attention. Any adminis­tration can suffer a scandal, because the susceptibility to temptation has been part of human na­ture since the serpent in the Garden of Eden. Any of us can be fooled or betrayed by a subordinate. Even Rudy Giuliani had to prosecute one of his own assistants who had become corrupt.

The fundamental question about the Koch administration is no longer why the mayor gave power to so many crooks, but exactly what happened years ago when whistleblowers, law enforcement investiga­tors, and private citizens first tried to warn him of questionable contracts and commissioners who smelled of graft. Nothing reveals the heart of the Koch administration better than its treatment of these prophetic individuals who discov­ered clues to criminal or unethical prac­tices, spoke out, and were punished or crushed for their idealism and honesty.

Over the past month I have interviewed a dozen people, including a former high city official who was fired while investigat­ing former transportation commissioner Anthony Ameruso; a city contract manag­er who was demoted for trying to audit a suspicious boondoggle; a woman harassed out of the taxi industry after she went on TV to call for an investigation of the Taxi and Limousine Commission chairman Jay Turoff; a cable TV businessman who went bankrupt after refusing to pay a bribe to Donald Manes; and three former prosecu­tors who were prevented from setting up a sting operation to catch Manes in 1982.

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These people provided new evidence of just how serious and broad an effort was made between 1982 and 1985 to warn Mayor Koch of corruption within his ad­ministration. Together, they paint a pic­ture of a mayor and an administration willfully indifferent to vital informa­tion — almost Reaganesque in not want­ing to know.

(These are not the witnesses discov­ered by the Martin Commission, who vol­unteered significant leads in 1982 about corruption in the Parking Violations Bu­reau — and were ignored. Those highly credible whistleblowers included a police officer and James Rose, the PVB comptroller.)

Gordon Haesloop, the former city dep­uty investigations commissioner, was ordered to stop a productive investigation into transportation commissioner Am­eruso in early 1985 and then was fired a few weeks later. Department of Environ­mental Protection whistleblower Edward Nicastro, a contract manager, suffered a demotion, harassment, was almost fired, and then was reassigned to the equivalent of a gulag — a garage in Queens — by a Friedman crony after seeking permission to audit a Friedman client.

To understand more fully the political, bureaucratic, psychological, and moral context of these five stories of rejected early warnings, it is useful to first summarize some recent history. It is helpful to recall all the signals and messages that the highly popular mayor was sending at the time to his commissioners, to the political culture, to the opinion makers, and to those seeking city contracts.

• To become mayor in 1977, Koch reached an accommodation with Brook­lyn Democratic Party leader Meade Esposito. In his second book, Politics, Koch explained that part of his deal was that Esposito, whom Koch knew to be a friend of racketeers, must keep his per­sonal backing a secret. Koch wrote: “We made it clear that one thing we didn’t want him [Esposito] to do was endorse me in any public way … he agreed to pull strings very discreetly … I must say he has always been very helpful to me.”

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In return for this covert institutional and financial backing, Koch gave Espo­sito hundreds of jobs for clubhouse hacks exempt from civil service merit exams. He also gave Esposito at least two com­missioners: Jay Turoff and Anthony Ameruso. The Ameruso appointment was the very first message Koch sent to all of us, even before he was sworn in. Esposito wanted Ameruso, his personal protege, who had been the mediocre highways commissioner in the Beame administra­tion, to be promoted to transportation commissioner by Koch. When an independent screening panel of transit ex­perts, including Sally Goodgold, Joel Harnett, and Theodore Kheel, recom­mended six other people and found Ameruso unqualified, Koch immediately dissolved and denounced the screening panel and named Ameruso, saying, “I be­lieve he will prove that my judgement is right.” (Ameruso is now under indict­ment for perjury by Manhattan district attorney Robert Morgenthau.)

• In 1985, the mayor’s own Depart­ment of Investigations released a report that concluded that Staten Island bor­ough president Ralph Lamberti had vio­lated the conflict-of-interest provisions of the City Charter, and had committed five misdemeanors. The next day Koch held a press conference, endorsed Lamberti for reelection, and called him an “honest man” and “a partner.”

• Koch gave Donald Manes and Stan­ley Friedman control over hundreds of patronage jobs and let them convert low-­visibility city agencies into clubhouse fiefdoms. As a favor to Manes, Koch ap­pointed Geoffrey Lindenauer deputy commissioner of the Parking Violations Bureau in July 1980, despite Linden­auer’s lack of qualifications and sordid past as a phony sex therapist. Koch al­lowed Manes to control the bidding pro­cess for cable television in Queens — an abdication that created backroom deals and an opportunity for extortion.

• Koch gave Friedman the Citisource contract for hand-held computers that was worth $2 million to Friedman. He appointed Friedman’s law partner, Ted Teah, to the City Planning Commission; he named Friedman crony Paul Victor to the Conciliation and Appeals Board; he authorized $15 million in city contracts to groups under the control of poverty blimp Ramon Velez; and he named Fred Carfora deputy commissioner of the De­partment of Environmental Protection, in which position Carfora demoted and then tried to fire whistleblower Edward Nicastro.

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Koch hired Friedman’s wife, Jackie, for a City Hall job exempt from civil service requirements and invited Friedman to be one of a dozen guests at his private swearing-in on’New Year’s Eve of 1985 — a signal of intimacy that city contractors surely noticed.

When publisher/gadfly Jim Smith questioned Koch at the City Club in Oc­tober 1984 about the legalities of Fried­man’s assetless company getting the prof­itable no-bid hand-held computer contract, Koch insulted Smith, defended Friedman, and said: “How dare you say those terrible things about him … It’s so easy to libel people.”

Ambition drove Koch to make a deal with a steep price. The political structure kept its bargain. It gave Koch a working majority on the Board of Estimate and loyalty on election day. And Koch gave the clubhouse system patronage and con­tracts. Koch got what he wanted: power, a stage, celebrity. And the rulers of the system got what they wanted: wealth and power.

For eight years, almost everyone was satisfied — the buyer, the seller, the pub­lic, the media. Just by doing their jobs, the whistleblowers were a threat to this sordid compact against the public interest.

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EDWARD NICASTRO WAS THE DIREC­TOR of procurement and contract manager for the Department of En­vironmental Protection in 1984. He was everything the public, and the mayor, could want a city employee with a responsible job to be. He was a graduate of St. John’s University and the Universi­ty of Bridgeport Law School. He was an expert at modernizing and administering contracts. He had a profound sense of civic virtue, partially rooted in his desire to repay a debt of gratitude fo the city that sheltered his father from Sicily.

Nicastro had been given the highest possible job ratings by his supervisors, and about 30 employees worked under his supervision. His staff had saved the city hundreds of thousands of dollars when it discovered padded bills and underweighted deliveries from asphalt contractors. He was also a true believer in Ed Koch as an honest, independent mayor; Nicastro’s wife had been a full-time worker in Koch’s victorious 1977 campaign for mayor, and she knew Koch personally.

Early in 1984, Nicastro became suspi­cious of waste and bid-rigging in the con­struction of City Water Tunnel Number Three, being built between Manhattan and Queens, which, has now become the focus of a major investigation by U.S. attorney Rudy Giuliani. All Nicastro knew in 1984 was that there were mil­lions of dollars in cost overruns, apparent collusion in the bidding by two consor­tiums, and that no independent audits were being conducted, because his office was being excluded from the review pro­cess. He could see that there was no ac­countability for the bids and contracts on the biggest project ever done by the DEP.

Motivated more by a conscientious concern for cost-effective management than by any dramatic thoughts of a con­spiracy, Nicastro politely expressed his concerns to his two immediate superiors in March 1984. They were deputy com­missioners Jeffrey Sommer and Fred Carfora. He told them his office should be analyzing the water tunnel bidding procedures and billing practices and that the exemption of such contracts from re­view was a direct violation of city rules. He warned Sommer and Carfora that the absence of accountability could lead to corruption.

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Carfora assured Nicastro that he would get his oversight authority by the end of the fiscal year, in June 1984. When this did not occur as promised, Nicastro car­ried his warnings to the Department of Investigations in October 1984, when Patrick McGinley was commissioner.

“DOI was polite, but they never did anything,” Nicastro says now. “Four or five months after I went to them, I called them up to find what was happening with the investigation. That’s when they told me the the case had already been closed.”

Nicastro was aware that Sommer and Carfora were both clubhouse appointees loyal to Bronx Democratic boss Stanley Friedman. He knew Sommer had worked for Friedman when Friedman was deputy mayor, and he had heard that Carfora’s mother had been a Bronx district leader, and that Carfora had gotten his job through the party organization. And as someone experienced in politics himself, Nicastro was aware of Friedman’s power to control jobs and contracts in the Koch administration.

What he did not know until much later was that Friedman was also the lawyer who was being paid a six-figure fee to represent a consortium of companions with 90 per cent of the contracts to build Water Tunnel Number Three. And that one of Friedman’s clients he had wanted to audit had already paid almost $5 mil­lion in fines for bid-rigging outside of New York.

Nicastro is a self-described “tough Si­cilian,” and he did not back off from his position that the water tunnel needed to be audited, since it already had $31 mil­lion in cost overruns, and was 20 years behind schedule.

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That’s when the attempt to crush Ni­castro began. His job performance ratings mysteriously began to decline from “out­standing” to “marginal.” In October 1984, deputy commissioner Carfora tried to fire him, falsely claiming that Nicastro had submitted fraudulent time sheets. At that point, Nicastro told the DOI he was being  fired because he was a “whistleblower,” and Carfora put his request to fire Nicas­tro on hold. In November, Carfora trans­ferred Nicastro to the agency’s gulag — a garage in Maspeth, in a dead-end job as purchasing agent in which he didn’t begin to utilize his skills.

On November 15, 1985, Nicastro sent a registered letter to Koch, with a copy to deputy mayor Stanley Brezenoff, explain­ing in detail what was being done to him, and repeating his “concern about DEP’s contract procedures, which violate City Charter rules as well as controller’s directives.”

Nicastro’s letter to Koch reminded him: “Your Mayoral Memorandum of May 2, 1984, clearly states that all retal­iatory actions [against whistleblowers] are to be investigated.”

On November 22, Nicastro received a reply from Dean Silverberg, then deputy counsel to the mayor, saying: “I have forwarded your materials to the Depart­ment of Investigations for their review of your concerns.”

Nicastro was now in the realm of Kaf­ka, where faceless bureaucrats toyed with his future. On December 2, 1985, he was informed that his salary was being re­duced by $1000 retroactively to the previ­ous August. At the same time, other man­agers in DEP were getting $4000 raises. Nicastro was told that this punishment had been authorized by Joe DeVincenzo, the mayoral assistant officially in charge of “salaries and job classifications” but unofficially the patronage liaison to the Democratic county leaders, including Friedman.

Nicastro was in despair working in the Maspeth garage for less money, and con­stantly trying to explain to his coworkers that he was right and his bosses were wrong.

He went through a trauma that scars many whistleblowers forever. David Durk and Frank Serpico went through the same kind of experience when they were trying to expose police corruption in the late 1960s and no one was listening. In retrospect, people like Durk, Serpico, and Nicastro might look like steadfast heroes. But they pay a large psychic price in fear, anger, and depression before they are ab­solved by history. And sometimes by a movie.

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During 1985, Nicastro was drinking a lot and coming home after his two young children went to sleep. There were severe strains on his marriage.

“I was very unhappy and I felt like my life was coming apart,” he recalls now. “I became a different person. I was in a rage all the time. I thought I was being fol­lowed and I worried about my family’s safety.”

On December 2, 1985 — the day his sal­ary was cut — Nicastro’s wife, Alice Horo­witz, feeling that all other options were exhausted, wrote a personal letter to Koch. It began:

“Back in 1977 during your first mayor­al campaign, if you recall, I was your advance person. I advanced you all over the entire city and became a dedicated follower of yours; I believed in your policies.”

Alice Horowitz-Nicastro’s letter then went on to inform the mayor of her hus­band’s fate as a whistleblower: his de­grading demotion for trying to save the public money and alert his supervisors to potential fraud and bid-rigging. The let­ter ended with a personal appeal to the man she admired and had helped elect:

“Ed, is this the way a man is rewarded for his honesty and dedication? My hus­band loves working for the city. In his years with the Department of Environ­mental Protection he has saved the city hundreds of thousands, if not millions of dollars, because of his honesty.

“This constant harassment has not only taken a monetary toll on him, but a mental and physical toll on him and the rest of us, including my children, who are too young to understand why their daddy is always so angry.

“Please, Ed, please help me. It has tak­en me a very long time to write this letter. I really hoped it would not get to this, but the survival of my family de­pends on it.

“Thank you for your precious time.”

On December 17, 1985, Alice Horowitz­-Nicastro got an impersonal, one-para­graph letter back from Dean Silverberg. It said:

“Your December 2nd letter has been referred to me. I anticipate that your husband will be contacted shortly by the Department of Investigation.”

On March 24, 1986 — 10 days after the suicide of Donald Manes, with a new moral climate in the media, and in the city — Edward Nicastro’s story was told in Newsday by reporter Leonard Levitt. The article was accompanied by a lengthy, well-documented exposé of the cost overruns and collusive bidding prac­tices on Water Tunnel Number Three.

In July 1986, after a thorough review by a new investigations commissioner­ — Kenneth Conboy — Carfora was demoted for unlawfully harassing and trying to fire Nicastro, and making false charges against him. His salary was cut from $71,000 to $60,000. Carfora resigned rather than accept this mild sanction.

Today Edward Nicastro has a dull job in DEP that has nothing to do with his proven career expertise: monitoring con­tracts, a skill the Koch administration would seem to need.

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GORDON HAESLOOP WENT TO WORK for the city Department of Inves­tigations in 1979 as general coun­sel. From May 1981 until the spring of 1985 he was the depart­ment’s deputy commisioner. Like most able investigators, he has a stubborn, in­dependent temperament. He supervised five or six staff attorneys and several detectives. He had been in charge of the undercover project that led to the convic­tion of Brooklyn city councilman Louis Olmedo.

In February 1985, Haesloop was con­ducting a multifaceted investigation of transportation commissioner Anthony Ameruso. DOI had a sworn deposition from a Transportation Department em­ployee, given in September 1984, charg­ing that Ameruso had taken “envelopes stuffed with cash” and that he had per­formed “special [parking] favors for Ma­fia restaurants.” A city contractor had complained to DOI that Ameruso was harassing his armored car company and showing favoritism in awarding parking meter collection contracts to a competi­tor, which had no gun permits or insur­ance and had organized crime ties. There were also several allegations that Amer­uso was secretly living outside the city, in violation of Section 3 of the Public Offi­cers Law, even though he had given City Hall a Brooklyn phone number at which to reach him in case of emergencies.

Moreover, by the winter of 1985, Haes­loop was convinced that PVB was mis­managed and probably corrupt, and since PVB was part of Ameruso’s responsibility as transportation commissioner, he sus­pected that Ameruso might become part of the PVB inquiry as well. One reason Haesloop felt something was rotten at PVB was quite personal. He had received a dunning letter from Bernard Sandow’s collection agency, demanding $2000 for parking tickets he had paid a long time before.

So, approximately in February 1985, Haesloop assigned DOI detectives to begin a surveillance of Ameruso, primarily to develop evidence of his violation of the residency law. Haesloop recalled:

“Such types of surveillance usually last for about two weeks. With Ameruso, after three or four days of tailing him, we es­tablished that he lived on Roslyn, Long Island. Each morning his son would drive him along the service road to the city line at Queens. At that point Ameruso would get into his waiting city car, and his city driver would take him to work. This fact by itself could have warranted his being fired by the mayor.”

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Haesloop continued:

“Next I wanted to install a pen register on Ameruso’s Brooklyn phone — a device that does not require a court order or a search warrant — that would track phone calls and prove if he had a Call Forward­ing device on the Brooklyn number to his Long Island home. Pen registers were a routine investigative tool in the office. We had installed about 15 of them — some in noncriminal investigations — over five years … [DOI senior staff attorney] Su­san Ross and I together told Commis­sioner McGinley that Ameruso was vio­lating the residency rule and that I wanted to install the pen register. But McGinley ordered me not to use it and ordered me to terminate the surveillance. He never gave me a reason. McGinley fired me about four weeks later.”

(McGinley has denied he was told Ameruso was living outside the city, but Susan Ross has verified that McGinley was informed of that fact. A third former DOI official has also confirmed Haes­loop’s recollections.)

When I asked Haesloop why he didn’t go directly to the mayor when the investi­gation was halted, he replied:

“There was a general perception in city government that Ameruso was favored and protected at City Hall. On top of that, I felt that Koch fired deputies who went to him to complain about their  bosses …

“In June 1985, after I was fired and just before I left the office, I did speak to McGinley. I asked him to tell the mayor that something fundamental was wrong with PVB and the Department of Trans­portation, and that Ameruso was a po­tential embarrassment to the mayor. McGinley didn’t say if he would commu­nicate that message for me …

“The separate PVB investigation was in my mind. I couldn’t understand how the mayor, even at that point, wasn’t doing more to hold Ameruso accountable for all the embarrassing problems at PVB. The city was losing millions of dol­lars on the percentages the collection agencies were keeping on their con­tracts — 40 per cent on some. The place was badly mismanaged. I just sensed that Ameruso was protected, and I would be perceived as disloyal.”

I asked Haesloop, who is now in pri­vate practice, if he had been upset about being dismissed by McGinley.

“No, I was happy to go. I was fed up arresting some poor inspector for taking $100 just before he became eligible for his pension. I felt demoralized that I could only go after the small fish. I was frus­trated I couldn’t investigate a full com­missioner like Ameruso. If I couldn’t pur­sue an Ameruso case, then I didn’t want to work there anymore.”

The mayor’s durable faith in Ameruso was indeed extraordinary. Even when Ameruso resigned in January 1986, after the PVB corruption was becoming known, Koch said at Ameruso’s farewell press conference: “He’s impeccable. I rec­ommend him without reservation.”

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BARBARA MEYERS GREW UP IN THE East New York section of Brook­lyn and graduated from Thomas Jefferson High School in 1959. During the 1960s, she was a nurse and a self-described “hippie antiwar marcher.” By 1975, after working in the shipping industry for a few years, she was contemplating a career change and decid­ed to drive a taxi while doing her thinking.

Meyers found she enjoyed driving a cab. “I loved the variety of experience, the sense of freedom, the interaction with other people, the sense of adventure,” she says. By 1976, she had borrowed money, purchased two taxi medallions for $23,000 each, and started running the Silver Eagle Cab Company. Gradually, Meyers became a reformer within the taxi industry, a vocal defender of her rights, and a critic of the taxi commission.

On April 7, 1982, Barbara Meyers par­ticipated in a taping of the Eyewitness News Conference on ABC-TV, with re­porter Milton Lewis and Richard Smith, who had authored a report for the mayor on the taxi industry. The show was to be aired on Sunday, April 10, 1982.

During the taping, Meyers charged that the taxi commission was “corrupt,” and that the giving out of 100 free taxi medallions for a diesel fuel experiment was “a fraud.” (The number of medal­lions had been frozen at 11,700 since the 1930s.) She also criticized Mayor Koch and Taxi and Limousine Commission chairman Jay Throff in harsh terms.

“I did it because I needed help,” Mey­ers says now. “I was looking for the pow­er of the press to help me clean up the industry. I didn’t have the specific evi­dence to prove a criminal case, but I knew something was rotten, and I knew where to look … I remember when I said the word ‘corruption,’ the moderator [Lewis] interrupted me and asked if I realized what I was saying. I told him I did.”

The day after the taping — two days before the show went on the air — Barbara Meyers was called by Ronald Russo, deputy commissioner of the Department of Investigations.

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“He approached me in a very hostile way,” Meyers says. He tried to intimidate me and make me feel like I was the prob­lem. He said that what I said about Tur­off at the taping was inflamatory. He said I’d better come down to his office, and if I didn’t that he would subpoena me. I felt like I was the criminal and Throff was the whistleblower.”

On April 14, 1982, four days after her criticism of Turoff was on television, Meyers was the victim of Taxi and Lim­ousine Commission harassment.

“Three TLC inspectors stopped my cab, ripped the medallion off my hood, and gave me three tickets for no reason,” Meyers told me. “I won my appeal against the tickets, but I lost a few days of work. I felt it was an obvious reprisal. I also started to get threatening phone calls at home saying I knew what happens to rats.”

On May 6, 1982, Meyers testified for two hours under oath to the Department of Investigations, with a stenographer present. She made a clear case for further investigation of the way the 100 medal­lions were given to a few favored fleets on the basis of the fraudulent diesel experiment.

She said: “There are 100 medallions in the street earning enormous amounts of money, amounting to millions, in a very favored way for the operator of those medallions … I want to know why, why not me? I would be happy to participate in an experiment of that nature … How were they chosen? What arrangements?”

(What Meyers didn’t know at that point was that the 100 medallions were awarded to the Research Cab Corpora­tion, and other companies owned by Donald Sherman and represented by Stanley Friedman as a lawyer-lobbyist.)

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Meyers risked her career by going on television and giving a deposition to the Department of Investigations. As a re­ward, her attorney received a letter from investigations commissioner McGinley, dated August 2, 1982, scolding Meyers. The letter said:

“Ms. Meyers presents herself to the public as a highly responsible taxi-owner operator … In view of this, I consider her deliberate and public use of terms like ‘corruption’ and ‘corrupt’ to have been unhelpful to say the least.”

McGinley now claims he did not write this letter, that it was written for him by his former first deputy commissioner, Ronald Russo. But Russo told me:

“McGinley is not telling the truth. I did not write that letter. I left the Depart­ment of Investigations on July 9, 1982. I opened my private practice on July 12, 1982. I was not there in August. McGinley is looking for scapegoats.” Russo refused to comment on the record about his conversation with Meyers.

On April 10, 1986, the State Investiga­tions Commission (SIC) held a public hearing on corruption at the TLC. It was four years to the day that Barbara Mey­ers had gone on ABC television urging the world to notice the diesel-medallion hoax. The hearing began with SIC chair­man David Trager making a formal statement:

“Our investigation has led us to the firm conclusion that the diesel test pro­gram was, from its inception, a fraud designed to provide medallions worth more than $3.7 million per year to Re­search Cab … Former TLC chairman Jay Turoff played a central role in exe­cuting this scheme … He acted to con­ceal, steal, or destroy records of the TLC relating to medallions issued to Research Cab. He personally directed that 123 me­dallions — 23 more than authorized — be issued to Research Cab.”

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During the April 10 hearing, Robert Mackasek, the inspector general for the TLC, testified. He admitted that after Meyers made her original charges on tele­vision, his entire investigation consisted of asking his boss, Jay Turoff, if they were true. Turoff had said the charges were rubbish. Mackasek also conceded that Turoff helped arrange for him to received a $71,000 loan from the HYFIN credit union — a loan cosigned by Turoff.

Finally, Mackasek admitted that he had gone to Stanley Friedman’s law of­fices, and tipped Friedman that his cli­ent — Research Cab — was under investi­gation by the SIC. Mackasek testified that Turoff — who set up the meeting­ — and Research Cab Corporation president Donald Sherman were also present when he told Friedman everything he knew of the investigation.

One of the last questions the State Investigations Commission asked Macka­sek was whether he was active in politics. He said that in 1985, when he was in private practice, Turoff had called him, and in response he had raised money for Koch from taxi industry companies, and lined up cabs to transport pro-Koch vot­ers to the polls on election day.

Unwittingly, Barbara Meyers had chal­lenged the nexus of power in New York City in 1982. She was shining a light into the eye of the tiger. Jay Turoff owed his job to Meade Esposito. Turoff was per­forming significant money-making favors for Stanley Friedman’s clients. And Tur­off was raising substantial sums of cam­paign money for the mayor from the in­dustry he was supposed to be regulating.

Turoff’s trial on felony bribery and fraud charges begins February 17 in fed­eral court.

Barbara Meyers is now out of the taxi business. She has written a book for children on how to deal with the death of a pet, and runs a car service that trans­ports pets that are sick.

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IN THE LAST FEW MONTHS, THREE Queens power brokers have been in­dicted on charges involving manipula­tion of the cable television franchise in Queens: administrative judge Fran­cis Smith, realtor John Zaccaro, and po­litical consultant Mike Nussbaum. All three were charged with acting in concert with Donald Manes to extort bribes from bidders seeking to wire Queens for cable. In addition, U.S. attorney Rudy Giuliani is now in the final stages of his investiga­tion into the Bronx cable TV franchise, where the targets of the grand jury in­clude Stanley Friedman, Ramon Velez, Frank Lugovinia, and Tod Tuah.

Queens businessman Al Simon had been trying to warn the proper authori­ties since at least 1981 that the way the city was awarding cable TV franchises was a process designed to be corrupt, because it was secretive, immune to mer­it, and controlled by Manes in Queens and Stanley Friedman in the Bronx. But the mayor insisted the system was “fair and open,” and nobody paid much notice to Al Simon, even when his company, Ortho-Vision, went bankrupt in 1983. He was treated as just another civic crank.

Al Simon, now 54, grew up in Wil­liamsburg, dropped out of high school, went into the army, and then attended the NYU School of Commerce at night for six years.

He became a kind of cable television visionary, and first applied to the city for a cable franchise back in 1972. In 1977, Simon’s company submitted a bid for the Queens franchise, but lost out to the Knickerbocker Communications Corpo­ration, a subsidiary of Time Inc. with power broker lawyers, publicists, and consultants. Simon filed a taxpayer’s suit that alleged Knickerbocker’s franchise was illegal because the contract differed materially from its petition for the con­tract. Simon won his lawsuit, and the franchise was withdrawn.

In 1981, the fight was on to wire Queens. Cable was a hot, futuristic indus­try, with everyone thinking gigantic prof­its were inevitable. Simon, viewed as an outsider and maverick entrepreneur, was competing against corporate giants like Warner-Amex, which was paying power­broker lawyer Sid Davidoff more than $150,000 in legal fees. Simon wrote up proposals, went to community planning boards, and convinced several of them to pass resolutions supporting his native Queens company. But Davidoff was Don­ald Manes’s best friend. He could walk into Boro Hall and act like he was co­-borough president. The corporate chair­man of Warner’s was Steve Ross, another friend of the borough president’s.

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In October 1981, Simon says he was visited by Mike Nussbaum, a political consultant who had managed most of Donald Manes’s campaigns and was one of the four or five people closest to Ma­nes. Nussbaum reportedly asked Simon for a $250,000 cash bribe. He said he was relaying a message from Manes through Manes’s deputy, Richard Rubin. He as­sured Simon that if the money was paid, he would get a portion of the Queens market.

“I told him no,” Simon says. “I thought I could win it on my own, on the merits. I never realized that when I wouldn’t pay off, they would freeze me out completely, and force me out of business.

“I was naïve. I never believed Koch would let Manes control the whole deci­sion. There were two years of public hearings, hundreds of meetings, docu­ments, minutes, records, and I never thought Manes by himself could wipe me out because I wouldn’t commit a crime. But Koch let it happen that way.”

(Simon finally told the bribe story to a Queens grand jury last year and Nuss­baum is now under indictment.)

1987 Village Voice by Jack Newfield article on ways Mayor Koch silenced whistle-blowers

In 1982, with the bidding process still going on, and Simon still thinking he would get fair treatment in an open pro­cess, he was asked to fill out a questionnaire by the city’s Department of Investi­gations. In a cover letter accompanying his completed questionnaire, Simon wrote a subtle request for a serious inves­tigation into the bidding process:

“It is interesting to note,” he wrote to commissioner Stanley Lupkin, “that the mandate from the Board of Estimate is limited to a background review of the applicants, and does not request a review of the process by which these applicants were targeted. Especially in light of a number of unanswered questions regard­ing the results to date.”

Simon never received a reply to his letter, which was dated February 12, 1982.

When asked why he didn’t report the Nussbaum-Manes extortion attempt at that point, Simon says: “I was afraid. I was also naïve. I thought I could get the franchise on my own. I lived in Queens. I had been in the cable television business since 1963. A couple of planning boards had voted for me. I had the necessary financial resources. I kept thinking I would get something on the merits … ”

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In 1983, the Board of Estimate, at the direction of Manes, divided the Queens market, with Warner-Amex getting all the best middle-class and and upper-mid­dle-class neighborhoods as part of its prize franchise. And Al Simon’s company went broke. He gave interviews pointing out the conflict of interest between Ma­nes and Davidoff, but few stories were written.

On October 8, 1984, Simon filed a law­suit against Manes, Warner-Amex, and the rest of the Board of Estimate. Al Simon’s legal papers were a cry of, “Stop, Thief.” They said:

“The office of borough president [Ma­nes] was an active participant along with defendant [city franchise director] Mor­ris Tarshis in perpetuating on the public the fraud that the cable franchise selec­tion and negotiation process was based on the merits … Tarshis and the bor­ough president’s office knew that the po­litical process was more important than all the paper and all the promises and all the public hearings. Both acted to pre­serve the political process and to subvert the public hearing and the airing of the contracts. They wanted to reassert politi­cal control over the granting of lucrative franchises in the City of New York …

“Public hearings were held on the irrel­evant proposals, but the contract itself was kept from the local community boards … Defendants Tarshis and the borough president were determined that the only meaningful negotiation process should be the one they personally con­ducted. The office of borough president selected the cable companies that were targeted for negotiations. The decision was rubber-stamped by the mayor, comp­troller, and City Council president.”

When the lawyers at the city corpora­tion counsel’s office, and the lawyers at City Hall, read the blunt claim of civic fraud in Simon’s brief, they did not start an investigation and they did not contact Al Simon. They went into court and op­posed Simon’s lawsuit. Simon wants to reopen the bidding in Queens, and the Koch administration, despite three in­dictments, is opposing that effort in liti­gation now pending before the Appellate Division, First Department.

Steve Kramer, who is representing the city against Simon’s suit, says: “Simon is a disgruntled bidder. This was a com­pletely open process.”

But Al Simon remembers the extortion attempt: “Nussbaum wouldn’t talk in my office. So we walked around the block of my office in Astoria, down Thirty-Sev­enth Avenue and up 32nd Street. Nuss­baum said Donald wanted $250,000 up front. I would have to have it in an at­taché case, or there might be a Swiss bank account involved. He said the mon­ey would guarantee me the franchise. He said the message was coming from Ri­chie, who was speaking for Donald.”

[related_posts post_id_1=”713710″ /]

IN MARCH 1982, HERB RYAN WAS A member of the city’s Taxi and Limou­sine Commission. He had been an aide to Donald Manes and president of Manes’s home political club, named after Adlai Stevenson. He had been appointed to the taxi commission on Ma­nes’s recommendation.

On March 12, 1982, Ryan took a bribe from the legendary undercover detective Eddie Gruskin, who was posing as a crooked car service dealer. The payoff was made in a parked car, and was audiotaped and videotaped by law-enforcement agents. During the transaction with Gruskin, Ryan said: “I want to introduce you to Donald. I want you to get to know Manes because he is running for mayor.”

(At that point Koch was running for governor with Manes’s backing and was the favorite to defeat Mario Cuomo in the primary. If Koch had won, Manes would have run for mayor.)

On March 20, 1982, Ryan took a sec­ond bribe from Gruskin in a meeting that was also recorded. Ryan was a small fish caught in a wide net. The prosecutors wanted the higher-ups.

In late March there was a meeting be­tween United States attorney Edward  Korman (now a federal judge); Stanley Lupkin, the city’s commissioner of inves­tigations; and Tom Puccio, then the chief of the organized crime strike force. All three agreed that Ryan might lead them to Manes in a brief period. Law enforce­ment agencies only had suspicions about Manes at the time, although evidence in­troduced at Stanley Friedman’s trial in New Haven showed that Manes had been extorting bribes since at least 1979 and was a thoroughly corrupt public official in 1982.

Korman, Lupkin, and Puccio agreed that Ryan should either be reappointed by the mayor or kept in a holdover posi­tion for a brief period so that the under­cover agent could get a face-to-face meet­ing with Ryan’s mentor, Donald Manes.

[related_posts post_id_1=”713066″ /]

Lupkin presented this unanimous rec­ommendation by three law enforcement officials to Mayor Koch in early April. He informed the mayor that Manes had been named on the undercover tape. But the mayor terminated the investigation by refusing to allow Ryan to remain in a holdover position, in which he already had been serving since January 31. Koch insisted that Ryan be arrested at once.  (In April 1982, Koch was running for governor against Mario Cuomo and Ma­nes was supporting Koch even though Cuomo was a native son of Queens.)

In February 1986, as the Manes scandal was unraveling, NBC-TV reporter John Miller played on the air a portion of the undercover videotape of Ryan taking the bribe and boasting of his ties to Ma­nes. The next day Lupkin, now a lawyer in private practice, told reporters he was “disappointed” that Koch had refused to permit the sting to proceed. He said he had argued with the major that Ryan should be kept in place.

At first, Koch responded by claiming to reporters that no one had ever told him that Manes’s name had come up, or that Manes was in any way considered a po­tential target of the investigation. The next day he improved his recollection and conceded that he had been informed by Lupkin that Manes’s name had been used by Ryan on the tape.

Herb Ryan never cooperated with prosecutors. He was arrested, pleaded guilty, and served four months of a lenient, six­-month sentence, imposed on him by U.S. district judge Mark Costintino.

After Ryan got out of prison, he re­mained close to Manes. Manes’s phone logs, placed in evidence in New Haven, showed that Ryan left 57 phone messages for Manes during 1984 and 1985.

If Ed Koch had really wanted to know if the immense trust he placed in Donald Manes was justified, he would not have aborted the Herb Ryan sting, and he would not have overruled three law enforcement professionals.

ED KOCH IS THE MAN WHO ACTED naive out of cynicism. He is the man who chose to gaze into a mirror instead of out the window. He is the man who didn’t want to know. ■

 

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Gary Ackerman’s phony bluster: He and Congress pals deserve blame; his own district hard hit by Bernie Madoff

It’s time to stop pinning the “news” tag on Gary Ackerman‘s angry outburst at the SEC yesterday for not stopping Bernie Madoff.

Perhaps the most entertaining part of the House hearing, yes. But while the New York Democrat yelled at the SEC, whistleblower Harry Markopolos spoke more softly but cut deeper the day before.

Ackerman’s five minutes of fame passed the audio-visual test, but not the smell test.

The SEC deserves harsh criticism. But when it comes to the Madoff scandal — and the role of the SEC in trying to control Wall Street’s conniving bankers — Congress stinks it up too by consistently undermining the SEC.

More on that in a minute, but first, more on Ackerman:

There are 14,000 brokerage accounts that make up the latest list of Madoff’s victims — “Swindler’s List,” as L.A.’s Jewish Journal and others call it — and 2,000 of them are Long Island-based, Newsday reports. That’s one in seven, and the largest cluster of Long Island suckers — 600 of them — is in Great Neck. And Great Neck is one of the most influential towns in Ackerman’s Congressional district, which stretches along Long Island Sound’s “Gold Coast” of rich people. Nassau County itself is the nation’s 10th-richest county.

Yesterday, I pointed out Ackerman’s standing as an ardent loyalist of the Jewish lobby AIPAC loyalist (and a past recipient of campaign money from Madoff). And Madoff, as we well know, leaned heavily on his own Jewishness.

Philip Weiss (the former Observer columnist who got hounded out of there because he dared to write provocatively about Israel) noted that in December 2008 in “Madoff and the Israel lobby.” Weiss quoted one of his readers as remarking that “the Madoff event may be the greatest example of intelligent people being blinded by ethnocentrism I’ve ever seen.”

It’s no wonder that Ackerman was so pissed off at the SEC. He couldn’t blame Madoff’s wealthy victims, who, after all, are his constituents. He may not have known that Madoff himself was a monumental goniff, but he and other Jewish Democrats knew very well who the prominent party fundraiser was. No-brainer that Ackerman put on a good TV show; no brains if you think it’s consequential news.

Instead of looking at the cameras, Ackerman should be looking in the mirror, notes Seeking Alpha, the largest stock-market blog (and hailed in 2007 by Time as one of the top 50 websites).

The New York-based outlet aimed at investors puts the blame where much of it should be. In “Congress Should Look in the Mirror Before Attacking the SEC,” GT McDuffy notes:

It’s far too easy to blame the SEC for the Bernie Madoff fiasco — or anything else. In fact, it’s way too convenient. And, Rep. Gary Ackerman (D-N.Y.) yesterday blaming the SEC for undermining the confidence Americans have in the financial markets is outrageous.

Mr. Ackerman, how dare you.

It is the SEC’s job to investigate and enforce — yet they do so under, and within, the laws and regulations set forth by Congress. Period.

McDuffy is just getting warmed up. And I’m going to include a lengthy excerpt. Just as James Lieber‘s must-read “Up in Smoke: What Cooked the World’s Economy?” in my own paper probed and poked at Wall Street’s machinations, McDuffy jabs at Congress for its role in the fiasco.

The differing perspectives of the two pieces sketch a good portrait of the Wall Street crime scene. Ackerman’s incredulity was phony, as McDuffy’s credible screed points out. Hence, this long excerpt from McDuffy:

It is Congress that has allowed generations of Wall Street executives and lobbyists to operate, unchecked, within a culture of greed and arrogance — arrogance that allowed the monolithic investment firms to gamble with the taxpayers’ money and lose billions due to incompetent trading and reckless investment decisions- only to then have these same firms come running back to the same taxpayers to be bailed out — and using their insider proxies on the Hill to do so.

It is Congress that, to this day, has never provided the SEC with sufficient funding and manpower to be able to effectively investigate and enforce the markets.

It is Congress that set up the rules for the mortgage market — and let their own mortgage children, Fannie Mae and Freddie Mac, wield havoc within the mortgage industry right under their noses.

It is Congress that let hedge funds run wild, manipulating every market on the planet. And continue to do so.

It is Congress that failed to regulate the un-Godly dark world of the derivatives market.

It is Congress that seems to only tackle any or all of the above once it becomes politically-correct to placate their tax-paying constituents — and only seems to even begin making a legitimate attempt at it — if there is a “TV-op” attached in the process.

And, it is Congress which loves to grand-stand on national television before taxpayers and levy blame on everyone but themselves for what is wrong.

You don’t have to be Jewish to understand where much of the blame for the Madoff scandal and other Wall Street shenanigans should be levied.

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Fossils still bite: Bernie Madoff and prehistoric snakes

Good for the New York Times! Always trying to take a broad view (even when one doesn’t exist, as Jack Shafer often points out), the paper weighs in on how the plight of Bernie Madoff‘s white-haired victims gives us valuable insights about the global meltdown with this morning’s “Fossils of Largest Snake Give Hint of Hot Earth.”

Good info that the “prehistoric snake” was “a giant relative of today’s boa constrictors.” The elderly Madoff wasn’t the first, nor will he be the last, snake to swallow your money. Wall Street is really is a dangerous place, even for celebrities — see the latest list of Madoff’s victims.

Madoff whistleblower Harry Markopolos‘s testimony yesterday on Capitol wasn’t quite as colorful, but the bookish-yet-tigerish accountant was pretty damn intense, as I previously noted.

Among other fascinating details, Markopolos told the dazed House members that he planned to deliver to the SEC today a “mini-Madoff.” The agency is sure to accept this silver platter with respect and care.

President Barack Obama, on the other hand, is showing me no respect with his $500,000 limit on CEO pay ( VIDEO). To get a bailout, I have to limit my pay? I don’t think so.

While I wait for my manservant to dress me, I’ll also point out that the Times story “Daschle’s Ambitions Collided, Friends Say” does little more than say what I already said yesterday. The Times was more polite.

Please click on these items. Pretty please…

NO PARTICULAR ORDER:

CNN: ‘Toyota shuts down all but one assembly line’

N.Y. Post: ‘BANKS’ MONEY WELL SPENT’

New York’s top banking firms went on a multimillion lobbying spree late last year — just as the feds were crafting a $700 billion rescue plan for struggling banks.

The banks got an extraordinary return on their investment, as they got federal cash injections that were thousands of times larger than what they spent trying to influence Congress and the administration – which doled out the cash.

Newsday: ‘Drilling leases on Utah land scrapped’

In a high-profile reversal of the Bush administration, Interior Secretary Ken Salazar said yesterday the government is scrapping the leases of 77 parcels of federal land for oil and gas drilling in Utah’s redrock country.

N.Y. Daily News: ‘Twins’ rage: Coward could never face our father’

N.Y. Times: ‘Senate Adds Homebuyer Tax Credit to Stimulus Bill’

N.Y. Post: ‘O WARNS OF “CATA$TROPHE”: URGES STIMULUS OK AMID MOUNTING RESISTANCE’

Wall Street Journal: ‘Forget Golf: Street Junkets Get Junked’

CNN: ‘Overseer calls for bank bailout makeover’

Special inspector general for Treasury’s $700 billion financial sector bailout said program needs tighter regulation and a better investment strategy.

Financial Crisis Update: ‘SEC Official Endorses Central Counterparty for Credit Default Swaps as Global Consensus Grows’

N.Y. Times: ‘Daschle’s Ambitions Collided, Friends Say’

N.Y. Times: ‘Science Found Wanting in Nation’s Crime Labs’

N.Y. Post: ‘ON WALL STREET: WHO COULD LIVE ON $500K?’

Wall Street Journal: ‘Study: 9/11 Lung Problems Persist Years Later’

N.Y. Daily News: ‘Cops on hunt for suspect in brutal rape in East Harlem laundromat’

N.Y. Times: ‘Boo Hoo in the Boardroom’

Wall Street Journal: ‘Faith-Based Program Gets Wider Focus’

When President Barack Obama launches his version of the faith-based initiative Thursday, he will expand the mission to include abortion reduction and outreach to the Muslim world. He will also try to avoid the thorniest constitutional issues that beset the program for years under his predecessor.

Mr. Obama’s approach to the federal faith office reflects his search for common ground on contentious social issues, and his willingness to dial back some of his campaign positions.

N.Y. Post: ‘AMAZIN’ AMBUSH! SHAMSKY’S ANGRY EX POUNCES’

N.Y. Daily News: ‘Cheney: Beware nukes’

Wall Street Journal: ‘Gaza’s Isolation Slows Rebuilding Efforts’

N.Y. Times: ‘Societal Cost of Meth Use Is Gauged in New Study’

Bloomberg: ‘”Failed” Wall Street Forces Biggest Rewrite of Rules’

N.Y. Post: ‘PLAYBOY’S ROCKER SCRIBE RIFFS ON STREET ROGUES’

N.Y. Daily News: ‘The great Big Apple sports broadcaster debate’

N.Y. Post: ‘SMOKING FEATHER OF FLIGHT 1549’

N.Y. Daily News: ‘Lehman judge charged with hitting wife gets lawyer’

A federal judge charged with slapping his wife hired a big shot defense attorney as he faces a misdemeanor charge that could land him in the clink.

James Peck, 63, the bankruptcy judge overseeing the breakup of Lehman Brothers, hired Barry Bohrer, a prominent criminal defense lawyer whose clients have included Sam Israel, the hedge fund swindler who went on the lam last summer after faking his own suicide to avoid a 20-year jail term.

Peck, who was briefly assigned to handle the Bernard Madoff bankruptcy until he recused himself in December, told cops when they came to his Park Ave. apartment Saturday afternoon that “I was defending myself.”

He said his wife, Judith Peck, 64, was late in returning to the city from their home in the Hamptons and then they argued over a ladder that she had put in his closet.

“I was moving the ladder out. She slapped me in the face,” he told cops. “I put the ladder down and slapped her back. We slapped each other back and forth.”

Bloomberg: ‘Soros Imitators Reap Riches in Financial Whirlwind on Global Macro Funds’

Forbes: ‘Buffett Sinks Billions Into Swiss Re’


‘Sandy Koufax, John Malkovich among Bernie Madoff victims as court filings are released’

From the Daily News:

…Other victims were identified as Ground Zero developer Larry Silverstein, the estate of late singer John Denver, actor John Malkovich, former Mets second baseman Tim Teufel and even Madoff’s lawyer Ira Sorkin. The 163-page list also includes hundreds of trust funds, charities, pension plans and unions, as well as entries for Madoff’s grandchildren. [FULL LIST]

Boston Globe: ‘The whistleblower: Dogged pursuer of Madoff wary of fame’

U.S. News & World Report: ‘5 Things to Know About Whistleblowing’

Bloomberg: ‘Madoff Said Only Brother Could Do Audit, Witness Tells Congress’

Whistleblower Lawyer Blog: ‘Whistleblower Protections Added to Economic Stimulus Bill Passed by House’

N.Y. Daily News: ‘Photo gallery: Madoff’s victims’

N.Y. Post: ‘DIVORCEE BIDS TO ‘EX’-TEND MADOFF PAIN’

Whistleblower Lawyer Blog: ‘Hedge Funds Face Regulation & Oversight by SEC–Will There Be Another Compliance Tool in Addition to IRS Whistleblower Program?’

Fortune: ‘Did Madoff’s feeder fund shop for friendly audits?’

Whistleblower Harry Markopolos testifies that Fairfield Greenwich switched auditors three times in three years.

AP: ‘[Massachusetts] pension fund fires 2 managers’

Two managers of the Massachusetts state pension fund have been fired for poor performances, including one who lost $12 million investing with accused Ponzi scheme mastermind Bernard Madoff.

N.Y. Daily News: ‘$1B of swindled funds uncovered, Madoff’s alleged vics to get paid “in the near future”‘

N.Y. Post: ‘HOW SEC BOZOS BLEW IT: WHISTLEBLOWER RIPS DO-NOTHING FED “FLEAS”‘

N.Y. Daily News: ‘Car dealer hopes to say, “I Madoff with 100G”‘

N.Y. Daily News: ‘GM Omar Minaya says Mets will not go after Manny Ramirez’

Chief operating officer Jeff Wilpon computed the Mets’ 2009 payroll at $143 million when factors such as Freddy Garcia‘s probable salary with bonuses, the $1.6 million owed to the Diamondbacks for Scott Schoeneweis and $2.25 million owed to Willie Randolph are included. Wilpon handed Minaya that budget early in the offseason, before Wilpon learned his family had lost money in the Bernie Madoff scandal. Wilpon declared that the Mets had accomplished their winter objectives, mentioning the acquisitions of Francisco Rodriguez and J.J. Putz and “addition by subtraction” with trades that shipped out players such as Aaron Heilman and Schoeneweis.

 

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Markopolos bombshells: ‘I’ll deliver a mini-Madoff tomorrow!’ and ‘Arm SEC with Bloomberg machines!’

After only part of this morning’s House hearing starring Harry Markopolos, there’s little doubt that Bernie Madoff‘s true identity is Dr. Evil.

What else can one think when House members wondered aloud whether there are “mini-Madoffs” or “medium-size Madoffs” lurking in the Wall Street wastelands.

Markopolos answered in the affirmative and said he plans to “deliver a mini-Madoff to the SEC tomorrow,” adding, “Hopefully they listen to me this time.”

The House Financial Services Committee members agreed that this time the SEC will probably listen to Markopolos. There’s no hint, however, of who Markopolos is talking about.

A mini-Madoff! Like Mini-Me! Cool!

But speaking of Dr. Evil, Markopolos also pointed out (as I and some others have) that Wall Street’s fraudsters couldn’t pull off their schemes without Mayor Mike Bloomberg‘s proprietary sophisticated hardware/software machines.

There’s no other way, many say, to conjure up the increasingly sophisticated financial instruments that ruined Wall Street and will no doubt ruin it again during the next bubble.

Bloomberg is supposedly the biggest philanthropist in America; he got the money from the sale of his machines on Wall Street.

Which leads to the question: How could Mayor Bloomberg not have known the various nefarious uses to which his machines could be put? Of course he knows.

Which leads to this: Wall Street’s meltdown happened on his watch, and it was created by his pals — his customers — at the Street’s big banks. So why didn’t he stop it or at least see the signs of an impending disaster?

If not him, who? If not then, why not?

And now he wants another mayoral term to keep our streets supposedly safe when the only street he knows — Wall Street — has become the most dangerous stretch of pavement in the country?

Just wondering.

Markopolos didn’t make that point, but he did say that the SEC operates at a tremendous disadvantage in trying to understand the complex schemes of the Street’s white-shoed gangsters by not having nearly enough Bloomberg terminals. Give the SEC more Bloomberg terminals, he told the House panel, because the fraudsters and scamsters have them.

Wild-eyed Harry also has a beef with the press: He contended that a Wall Street Journal reporter (whom he didn’t name) was very interested three years ago and was willing to fly to Boston to meet with Markopolos but that the reporter’s editors were scared off by Madoff’s power and reputation and nixed it. (For more on that, see Gary Weiss‘s post on Seeking Alpha.)

Treated with extreme deference, Markopolos is surely one of the most brash witnesses to testify on Capitol Hill in quite a while. And well-prepared — browse his lengthy (but entertaining) written testimony if you can’t wait for the sound bites later today.

Of course, he can back it up, having warned a decade before Madoff confessed to his sons that Bernie was a fraudster.

At least, Markopolos can back it up for now. His hubris, his zealotry, his sense of certainty — they make you wonder whether Markopolos, like Madoff’s scheme, is too good to be true.

Anyway, Markopolos’s halo — or is it his intense eyes? — cast an eerie glow for now on the scene of perhaps capitalism’s all-time worst disaster.

California Democrat Brad Sherman noted that Markopolos isn’t just some “wild-eyed populist.” Sherman was half-right. Markopolos is definitely wild-eyed — he has the look and tone of a zealot — but he’s also the staunchest defender of capitalism one could imagine, and that includes Ayn Rand.

And imaginative, too. Markopolos raised the intriguing notion that retired Wall Street bigwigs, people with little or no hair, as he put it, should be hired by the SEC to replace the young whippersnappers who now infest the agency’s lower ranks.

Markopolos reasons that veterans won’t have to do it for the money, because they’ve already made theirs and that they would be foxes able to sniff out the rotten eggs in the henhouse.

This probably won’t happen, unless these Wall Street veterans are suddenly imbued with that sense of civic responsibility that Barack Obama mentioned in his inaugural address.

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Say It Ain’t So: George Carlin Dies

How many TV news orgs will say the seven words?

George Carlin is dead, but his words live on. Especially his big seven from his monologue “Seven Words You Can Never Say on Television” on the 1972 album Class Clown:

Shit

Piss

Fuck

Cunt

Cocksucker

Motherfucker

Tits

Courtesy of Justin R. Erenkrantz, here’s a transcription of that complete routine:

“I love words. I thank you for hearing my words. I want to tell you something about words that I uh, I think is important. I love..as I say, they’re my work, they’re my play, they’re my passion. Words are all we have really.

“We have thoughts, but thoughts are fluid. You know, [humming]. And, then we assign a word to a thought, [clicks tongue]. And we’re stuck with that word for that thought. So be careful with words. I like to think, yeah, the same words that hurt can heal. It’s a matter of how you pick them.

“There are some people that aren’t into all the words. There are some people who would have you not use certain words. Yeah, there are 400,000 words in the English language, and there are seven of them that you can’t say on television. What a ratio that is. 399,993 to seven. They must really be bad. They’d have to be outrageous, to be separated from a group that large. All of you over here, you seven. Bad words. That’s what they told us they were, remember? ‘That’s a bad word.’ ‘Awwww.’ There are no bad words. Bad thoughts. Bad Intentions.

“And words, you know the seven don’t you? Shit, Piss, Fuck, Cunt, Cocksucker, Motherfucker, and Tits, huh? Those are the heavy seven. Those are the ones that will infect your soul, curve your spine and keep the country from winning the war.

Shit, Piss, Fuck, Cunt, Cocksucker, Motherfucker, and Tits, wow. Tits doesn’t even belong on the list, you know. It’s such a friendly sounding word. It sounds like a nickname. ‘Hey, Tits, come here. Tits, meet Toots, Toots, Tits, Tits, Toots.’ It sounds like a snack doesn’t it? Yes, I know, it is, right. But I don’t mean the sexist snack, I mean, New Nabisco Tits. The new Cheese Tits, and Corn Tits and Pizza Tits, Sesame Tits Onion Tits, Tater Tits, Yeah. Betcha can’t eat just one. That’s true I usually switch off . But I mean that word does not belong on the list.

“Actually, none of the words belong on the list, but you can understand why some of them are there. I am not completely insensitive to people’s feelings. You know, I can dig why some of those words got on the list…like cocksucker and motherfucker. Those are…those are heavy-weight words. There’s a lot going on there, man. Besides the literal translation and the emotional feeling. They’re just busy words. There’s a lot of syllables to contend with. And those K’s. Those are aggressive sounds, they jump out at you. CocksuckerMotherfuckerCocksucker. It’s like an assault, on you. So I can dig that.

“And we mentioned shit earlier, of course. Two of the other 4-letter Anglo-Saxon words are Piss and Cunt, which go together of course. But forget about that. A little accidental humor there. Piss and Cunt. The reason Piss and Cunt are on the list is that a long time ago certain ladies said ‘Those are the two I am not going to say. I don’t mind Fuck and Shit, but P and C are out. P and C are out.’ Which led to such stupid sentences as ‘OK, you fuckers, I am going to tinkle now.’

“And of course the word Fuck. The word Fuck, I don’t really…well, this is some more accidental humor, but I don’t really want to get into that now. Because I think it takes too long. But I do mean that. I mean, I think the word fuck is an important word. It’s the beginning of life, and, yet it’s a word we use to hurt one other, quite often. And uh, people much wiser than I have said, I’d rather have my son watch a film with two people making love than two people trying to kill one other. And I of course agree. I wish I know who said it first, and I agree with that. But I would like to take it a step further. I would like to substitute the word fuck, for the word kill in all those movie cliches we grew up with. ‘Okay Sheriff, we’re gonna fuck ya now. But we’re gonna fuck ya slow.’ So maybe next year I’ll have a whole fuckin’ rap on that word. I hope so.

“Uh, there are two-way words, but those are the seven you can never say on television. Under any circumstances you just can not say them ever, ever ever, not even clinically. You can not weave them in the panel with Doc and Ed and Johnny, I mean it’s just impossible, forget those seven, they’re out.

“But, there are some two-way words. There are double-meaning words. Remember the ones your giggled at in sixth grade? ‘And the cock crowed three times.”Hey, the cock the cock crowed three times. It’s in the bible.’ There are some Two-way words, like it’s okay for Curt Gowdy [mis-spelled in original transcription. -ed.] to say ‘Roberto Clemente has two balls on him.’ But he can’t say, ‘I think he hurt his balls on that play Tony, don’t you? He’s holding them. He must have hurt them by God.’ And the other two-way word that goes with that one is prick. It’s okay if it happens to your finger. Yes, you can prick your finger, but don’t finger your prick. No, no.”

 

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America’s Suicide Bomber

Ralph Nader, the newest entrant in the presidential race, is sure to implode, but not before he wreaks some panic among Democrats. He’s our own homegrown suicide bomber of politics.

Suicide bombers elsewhere are exploding, not imploding. Yesterday, on the road from Baghdad to Karbala, one of the schmucks killed a couple of dozen of pilgrims at a rest stop:

A suicide bomber on Sunday attacked a crowd of Shiite pilgrims heading toward the city of Karbala to visit the Shrine of Imam Hussein, killing at least 40 people and wounding at least 100, Iraqi officials said. The American military said that at least 60 people had been wounded.

And in Pakistan, one of Nader’s kissing-of-death cousins targeted a cop:

A suicide bomber struck Pakistan’s military headquarters in Rawalpindi Monday, killing at least eight people, including the army’s top ranking medical officer, military officials said.

Nader, however, is the only suicide bomber who publicly announces his intentions:

Nader announced his candidacy on NBC’s Meet the Press, as he did four years ago. He said he is running to draw attention to issues ignored by the major candidates in both parties, citing corporate crime, workers’ rights, military spending and foreign policy.

“You take that framework of people feeling locked out, shut out, marginalized and disrespected,” he said. “You go from Iraq to Palestine to Israel, from Enron to Wall Street, from Katrina to the bumbling of the Bush administration, to the complicity of the Democrats in not stopping him on the war, stopping him on the tax cuts.”

Sounds as if Nader’s the one who’s feeling locked out, shut out, marginalized, and disrespected.

The latest episode of HBO’s The Wire, the best piece of investigative entertainment ever seen on TV, is once again instructive. Detective Jimmy McNulty‘s “serial killer” — a fake murderer springing only from McNulty’s imaginative scam to get more money for police work — warranted an FBI profile. And McNulty himself fits the profile — especially the part about the “killer” feeling superior to everyone else.

Back to reality: For once, the New York Times put perspective in a political story — probably because Adam Nagourney didn’t write it:

On Sunday, Mr. Nader officially announced that he would seek the presidency as a third-party candidate one more time — driven in part by his frustration over the efforts to thwart his last run.

“If there was no other reason to run — other than the civil liberties, civil rights issue of ballot access — it’d be worth it,” Mr. Nader said in a telephone interview after announcing his candidacy on “Meet the Press.”

Worth it for whom? Nader’s quixotic quests for the presidency are reminiscent of Harold Stassen‘s. Only no one’s laughing, except for the Republicans. If McCain‘s people are smart, they’ll start siphoning campaign funds to Nader. So far, the only campaign contributor to Nader in the past six months appears to be one Patricia Gilmartin of Homewood, Illinois, according to federal campaign records. And, schizophrenically, she also has given money to Barry Obama.

Nader came to fame with his auto exposé, Unsafe at Any Speed. But he just can’t seem to take his pedal off the metal. Take it out of first gear, Ralph. Your whining is annoying.

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A Doer in the Headlights

The presidential contenders — a gaggle of self-styled New England patriots, at least temporarily — are hunkered down right now in New Hampshire waiting to see who’s going to be voted off the continent.

At the last minute, trailing Barack Obama, Hillary Clinton swore that she is a “doer.” Yeah, a doer in the headlights. Her eyes welled up with tears, so the stories say, and though it’s more likely that they were crocodilian and that she was cynically playing the stereotypical-female card (or the press was), columnist Errol Louis of the New York Daily News says he thinks those tears were 100 percent saline:

Cynics will say Hillary Clinton’s emotional response to a voter’s question in New Hampshire was a calculated bid for sympathy, right down to the choking voice and eyes welling with tears, as she spoke about how high the personal and political stakes are in the presidential race.

I think every word was genuine and in no way a negative reflection on Clinton’s fitness to be commander in chief. It’s not an example of the age-old dilemma that powerful women face when trying to appear commanding and caring at the same time – a tightrope Clinton has always walked nicely, by the way.

But I’m also positive that such appeals can’t possibly trigger the last-minute change of mind among voters it would take to save Clinton from losing today’s primary to Barack Obama.

Meanwhile, we sit back haplessly and see this tiny — beautiful but really tiny — state decide for the rest of the country who we’re going to be stuck with to follow the disastrous Bush regime.

And isn’t it fitting that New Hampshire, whose population is 1.1 percent black in a nation whose overall population is 12.8 percent black, may decide the fate of the most viable black presidential candidate ever?

This is democracy? It’s like Pakistan, only colder. New Hampshire’s state motto is particularly apt: “Live free or die.” After the primary results are in, several of these candidates will probably have to exit, ending their free ride of matching campaign funds and potential Secret Service protection and future taxpayer-funded royal living.

As the wife of a former president, Clinton will continue to live high with free protection from the commoners, but today still may turn out to be a black moment for her.

There’s nothing wrong with weeping — it’s only human — but if she cries tonight, those tears will be believable.

The one piece of truthtelling yesterday came from, of all people, Roger Clemens. The pitcher injected at least a little honesty into his Monday press conference when, acting like a ‘roid rage driver after a fender-bender, he angrily said, “I put my butt on the line and I worked my tail off . . .”

Yes, he did put his butt on the line so his trainer, Brian McNamee, could inject something into it.

We’re still waiting for Clemens’s first bout of crying.

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Tally Ho!: The GOP’s Hounding of Voters

Rehnquist is dead, but his spirit lives. The Supreme Court and Rove’s man at the FEC pump life into “voter fraud” scheme.

A snapshot of current American electoral politics is one of the ugliest pictures of the year, now that the increasingly conservative Supreme Court has decided to hear a major voter-fraud/national photo ID case before next year’s elections.

The GOP-engineered presidential-vote debacle in 2000 has developed into what may become a major scandal involving the use of photo IDs, which the GOP has been trying to engineer in time for next year.

“Voter fraud” — a purported invasion of polling places by illegitimate voters — is the battle cry of Republican officials hoping to stem turnout by likely Democratic voters in battleground states.

And “voter fraud” is right: The requirement that voters present photo IDs is their scheme, and Hans von Spakovsky is their standard-bearer at the Federal Election Commission. That uncomfortable sensation felt by small-d democrats is their cherished poll being shoved up a place where the sun don’t shine.

Who said Karl Rove left the building? Coupled with the appointment of Michael Mukasey to oversee the Justice Department and its Civil Rights Division, the GOP is setting itself up well for ’08, fighting a winnable war against U.S. voters while it fights an impossible war overseas. Rove’s fingerprints are all over this, whether or not he’s still using his White House keyboard.

Iraq has left the Republicans flaccid, but their “voter fraud” canard and accompanying strategy threaten to give the GOP yet another election.

Shades of Bill Rehnquist! Before he was chief justice of the U.S., Rehnquist personally blocked black people from voting in Phoenix in 1964, using “voter fraud” as his excuse. I wrote about that in September 2005 (“Rehnquist Death Gives Bush Chance to Deepen American Crisis”), recalling Dennis Roddy‘s riveting column in the Pittsburgh Post-Gazette that itself recalled Rehnquist’s totalitarian behavior in Arizona as a GOP operative.

Rehnquist died in September 2005, but that didn’t help because John Roberts, who favors corporate citizens over human citizens, took his place. An event that may turn out to be equally vital to the GOP occurred three months later, when Bush made a recess appointment to the FEC of von Spakovsky, a former Republican county chairman in Georgia. Before his FEC appointment, von Spakovsky was the chief civil-rights violator in the Justice Department’s civil-rights division, leading the move to suppress minority and poor voters.

Von Spakovsky is up for confirmation to another FEC term. And the Roberts Supreme Court announced yesterday that it will hear the issue involving national photo IDs and voting — just in time for next year’s election. This is dangerous, because it will likely bollix up ’08 voting in key states.

There’s plenty to read on this topic. From Paul Kiel at Talking Points Memo this past June:

A group of former voting rights attorneys in the Division put it most succinctly in a letter to Sen. [Dianne] Feinstein … urging rejection of his nomination: von Spakovsky was “the point person for undermining the Civil Rights Division’s mandate to protect voting rights.” Von Spakovsky reported to [the division’s Bradley] Schlozman, and the two worked together to purge voters from the rolls, ensure that voter ID laws were approved with no fuss, and punish lawyers who did not toe the line.

Kiel refers to a 2004 piece by Jeffrey Toobin in the New Yorker whose headline says it all: “Poll Position: Is the Justice Department poised to stop voter fraud — or to keep voters from voting?”

See Lou Dubose‘s 2006 account of how von Spakovsky collaborated with Rove to scheme Tom Delay‘s crooked redistricting in Texas earlier this century. More to the current point, Dubose noted at the time:

The White House human resources shop found [von Spakovsky] on a county board overseeing elections in Atlanta and appointed him director of the Civil Rights Division at the Department of Justice.

He had additional voting rights experience that qualified him for his DOJ job. He had served on the board of the Voting Integrity Project, a regional franchise in the Republican Party’s national voter-suppression ancillary operation.

In 2000, while von Spakovsky was on the board of Voting Integrity, the group worked to cleanse Florida voting roles of African-American “felons.” Unfortunately, their felons list included the names of thousands of innocent people.

Dahlia Lithwick‘s piece two days ago in Slate is also vital for understanding the back story on von Spakovsky.

Legal beagles can parse Bob Bauer‘s analysis yesterday of the politics swirling around the vote case the Supreme Court has now agreed to hear.

For a very recent story hinting at the bad smell emanating from the Justice Department, see “The Stooge,” by David Martin of Kansas City’s The Pitch.

As for following this issue, though, nothing beats wonk lawyer Rick Hasen‘s Election Law site, though Hasen is perhaps too hopeful that the high court will protect the rights of voters.

As I’ve pointed out before, in a September 2004 piece about dubious electronic-voting machines, Hasen is always a captivating and current legal-news live wire.

Those who can’t live without the New York Times can learn some things from an April 12 story, “In 5-Year Effort, Scant Evidence of Voter Fraud,” co-bylined by Ian Urbina, whose copy I used to have the pleasure of editing.

But you must keep clicking on the excellent McClatchy home page (formerly the Knight-Ridder D.C. Bureau), and definitely read Greg Gordon‘s story last April, “Administration pursued aggressive legal effort to restrict voter turnout.” Gordon noted:

For six years, the Bush administration, aided by Justice Department political appointees, has pursued an aggressive legal effort to restrict voter turnout in key battleground states in ways that favor Republican political candidates.

The administration intensified its efforts last year as President Bush’s popularity and Republican support eroded heading into a midterm battle for control of Congress, which the Democrats won.

Facing nationwide voter registration drives by Democratic-leaning groups, the administration alleged widespread election fraud and endorsed proposals for tougher state and federal voter identification laws. Presidential political adviser Karl Rove alluded to the strategy in April 2006 when he railed about voter fraud in a speech to the Republican National Lawyers Association.

 

Next year those of you who can vote might want to vote early and vote often.

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Open Secret: Corruption in Iraq

Still secret: Corruption in the White House.

Over at Secrecy News, the indefatigable Steven Aftergood has posted a heretofore secret study of Iraqi government corruption.

Even though the Nation‘s David Corn already wrote about the study, I can’t say it would be much of a surprise anyway: The investigating agency, the U.S. Embassy in Baghdad, knows a lot about corruption.

Anyway, the report notes:

The Prime Minister’s Office has demonstrated an open hostility to the concept of an independent agency to investigate or prosecute corruption cases.

Sounds like the White House. U.S. congressmen and various public-interest groups got nowhere when they tried to probe Dick Cheney‘s “energy task force” early in the Bush regime.

And the White House has continually tried to call a halt to the excellent investigative work by Stuart Bowen on corruption in Iraq.

It took a British NGO, Christian Aid, to break the news a few years ago that Jerry Bremer, the Barney Fife of Baghdad, couldn’t explain why $9 billion in Iraqi oil revenue was missing.

Besides that oil-for-slush scandal, we’re still waiting to see those millions of White House e-mails the regime is withholding that relate to various scandals. Then there are the missing-weapons scandal and the various KBR scandals — you get the picture.

In any case, this new report on corruption inside Iraq’s puppet government is still worth reading. It turns out that we really have planted a seed of our own form of democracy over there.

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Taking Iraq’s Temperature

This may hurt.

A new GAO report stops the White House spin on Iraq in its tracks. Golly, why couldn’t the Washington Post wait until the White House massages General David Petraeus‘s info into a suitable “progress report” to be released on 9/11?

Iraq is still unreasonably hot, and the White House is still blustery. I know, you don’t need a weather man to know which way the wind blows, but getting your hands on a GAO report draft helps. Here’s this morning’s story by Karen DeYoung and Thomas E. Ricks:

Iraq has failed to meet all but three of 18 congressionally mandated benchmarks for political and military progress, according to a draft of a Government Accountability Office report. The document questions whether some aspects of a more positive assessment by the White House last month adequately reflected the range of views the GAO found within the administration.

The strikingly negative GAO draft, which will be delivered to Congress in final form on Tuesday, comes as the White House prepares to deliver its own new benchmark report in the second week of September, along with congressional testimony from Army Gen. David H. Petraeus, the top U.S. commander in Iraq, and Ambassador Ryan C. Crocker. They are expected to describe significant security improvements and offer at least some promise for political reconciliation in Iraq.

And how’s that “surge” working for you?

The draft provides a stark assessment of the tactical effects of the current U.S.-led counteroffensive to secure Baghdad. “While the Baghdad security plan was intended to reduce sectarian violence, U.S. agencies differ on whether such violence has been reduced,” it states. While there have been fewer attacks against U.S. forces, it notes, the number of attacks against Iraqi civilians remains unchanged. It also finds that “the capabilities of Iraqi security forces have not improved.”

The best news is that the number of whistleblowers in D.C. is increasing. That may slow the Bush regime’s spin enough that we can see what’s actually going on in Iraq. The story notes:

A GAO spokesman declined to comment on the report before it is released. The 69-page draft, a copy of which was obtained by The Washington Post, is still undergoing review at the Defense Department, which may ask that parts of it be classified or request changes in its conclusions. The GAO, the investigative arm of Congress, normally submits its draft reports to relevant agencies for comment but makes its own final judgments. The office has published more than 100 assessments of various aspects of the U.S. effort in Iraq since May 2003.

The person who provided the draft report to The Post said it was being conveyed from a government official who feared that its pessimistic conclusions would be watered down in the final version — as some officials have said happened with security judgments in this month’s National Intelligence Estimate on Iraq. Congress requested the GAO report, along with an assessment of the Iraqi security forces by an independent commission headed by retired Marine Gen. James L. Jones, to provide a basis for comparison with the administration’s scorecard. The Jones report is also scheduled for delivery next week.

Get ready for a mid-August rain of propaganda.