A Devil’s Advocate Rings in a Bad Night for Bankers

-by Skip Kaltenheuser

It was a long hard slog to publish Lucifer's Banker. Had Brad Birkenfeld managed to get his book out say, a year or so earlier, we might not be staring at the political train wreck we are now. It might have changed the political landscape, perhaps the standard bearers. Maybe even elevated different issues for the last lap beyond the cursory checklist now fed us. But I’m glad it’s arrived. This book underscores every lament Bernie Sanders uttered about the gravity of the finance sector's black hole. There's ample material to make Washington insiders lose sleep, plenty to bring out loosely-defined authorities saying move along, nothing to see here. Above it all the central question floats like a banshee-- when a whistleblower revealed the largest systematic American tax fraud to surface, why was the only person to go to prison the whistleblower?

Birkenfeld is that whistleblower, logging long house arrest and thirty-one months of a forty-month sentence to a Federal penitentiary, with the added insult of a thirty-grand fine, never mind his legal expenses. His tale of DOJ's whistleblower smack-down, of its shooting the messenger, makes an entertaining read. But it ought to frighten the hell out of everyone. With dollops of irony, fright is likely the reason behind this whistleblower whacking, a warning to those who might raise curtains on the very rich and very powerful and very, very connected.

Birkenfeld worked for UBS in Switzerland as a private banker serving wealthy American clients. He went to jail on what seems a DOJ engineered Catch-22 that made him vulnerable to a charge of covering for a client, a Russian immigrant in California who hit it big in real estate. After Birkenfeld voluntarily approached the US government in 2007, DOJ sought to replace his whistle with a supersonic one no one could hear. It refused to give him the subpoena he requested that would protect him from prosecution under Swiss bank secrecy laws. Those laws once protected Germans from execution under the Third Reich for slipping money out of Germany. Now they serve darker purpose. Try to imagine the incredible weight of the money and power pushing out of Swiss vaults against DOJ's door.

Birkenfeld went to every other agency he could think of. He got the necessary subpoenas he needed and divulged accordingly, including on that client DOJ claimed he covered for. And he cued in the US Senate in a private hearing. But someone in DOJ couldn't take a joke, and they nabbed him as if what he'd already divulged was done in an alternate universe. Given the profile of the case, Birkenfeld has no doubts the hammer came down from on high.

If you'd like to hear the jaw-droppers from that Senate hearing-- most of which were his answers to Senators’ questions, join the club. The government sealed it and refuses to provide Birkenfeld with a transcript of his testimony.

Plenty of black eyes for plenty of politicians, and in particular for the Department of Justice-- let's just lump DOJ with the politicians. This book shreds that agency's credibility, laying bare once again Eric Holder's real legacy-- smooches to banks. Sadly, it's a legacy he's spreading around, including to his former boss.

I interviewed Birkenfeld awhile back as a component for an essay on the revolving door, (my apologies to the editor for my slow pace). The first thing that rides in on Birkenfeld's earnest, down-home Boston accent is that he isn't someone easily intimidated. He knows the territory, remembers who did what and won't quit shoving his boulders up the hill until credit is given where it's due. Gold stars are not in the offing.

That was underscored at Birkenfeld's book party Tuesday night at the National Press Club. He does have an advantage few of the royally screwed enjoy. After he was released a new law brought him an IRS whistleblower award, $104 million before the tax man's knock. Why not? His revelations enabled the US Treasury to recover $15 billion in back taxes, fines and penalties. They also put in motion international investigations of offshore banking's many misdeeds, and juiced up reformers seeking tougher oversight. Impacts on Swiss private banks-- there are scads of such banks, all shapes and sizes-- include a 2013 tax treaty facilitating the exchange of tax data between countries. This put a hitch in Switzerland's offshore tax haven status that vacuumed money. And plenty of dirt. Alas, though trickier, Birkenfeld says the multitude of nefarious practices requiring secret accounts still have plenty of global options.

Thing is, what the US reaped was a fraction of what could have been garnered had the massive tax evasion been fully brought to heel. That failure only increases the debt load every American carries. Why the lack of DOJ prosecutorial enthusiasm against tax cheats and their enabler bankers?

I don't want to step on too many nuggets, but Secretary of State Clinton stepped in to do the negotiations with UBS. She required UBS to disclose only 4,700 out of 19,000 illegal account holders. Birkenfeld's curious, as we all might be, as to who made the selection and how, and why the names were never made public. Why was the fine so inadequate compared to long-term profits, and why did DOJ so carelessly offer undeclared account holders anonymity and repeated amnesties?

Who are these titans of favoritism? Will the real masters of the universe please stand up?

It brings to mind proposals for excessively reduced corporate taxes for repatriating money sloshing around abroad, but I digress.

In Washington's small world of startling coincidence, before the negotiated deal UBS only contributed sixty grand to the Clinton Foundation. Afterwards, notes Birkenfeld, it went up by a factor of ten. UBS also partnered with the Foundation providing a low-interest thirty-two million dollar loan for a Foundation program. And President Clinton, the First, earned over a million and a half dollars "for a series of fireside chats with the bank's Wealth Management Chief Executive, Bob McCann...Bill Clinton's biggest payday since leaving the office of the Presidency."

I’m not a finance guy, but I’m getting better at the smell test. Ah,well, what's to worry? A legion of editorialists, commentators and spinners assures us there's no quid pro quo. The Trump gun at our temple is a curiosity killer.

In Washington, “pay it forward” is a concept not fully embraced.

Birkenfeld reckons Americans are on the hook for a trillion dollars escaping off-shore, so they ought be making demands.

The book balances entertaining asides and stark realities. One notable is how big players like UBS distribute business and retainers to put major law firms on the shelf as they avoid conflicts of interest. And the inescapable revolving door-- lubricated by so-called public servants sugaring up those they're supposed to ride herd on, while anticipating wildly better compensated employment elsewhere. Birkenfeld expresses particular fondness for DOJ prosecutors who shepherded him through his adventure in criminal prosecution. The lead prosecutor negotiated Birkenfeld’s plea and signed off on his motion for a sentence reduction. Then he sat quietly while a judge nailed Birkenfeld with a much longer sentence than Birkenfeld was led to expect.

Later, Birkenfeld discovered his lead prosecutor signed a secret non-prosecution agreement for the UBS kingpin who oversaw the 19,000 US accounts (including all of the North and South American offshore business), the show-runner for approximately $20 billion in assets. That banker was quietly allowed to go back to Switzerland two weeks later while the US Senate committee was on summer recess.

Birkenfeld's lead prosecutor then left DOJ to partner with a law firm that's now defending a Credit Suisse private banker who also handled US accounts (which Birkenfeld told the DOJ prosecutor about in 2007). The Credit Suisse banker is being prosecuted by another prosecutor, still at DOJ, that also dealt with Birkenfeld. Before leaving DOJ, Birkenfeld's lead prosecutor supervised the indictment of the Credit Suisse banker, which was signed by both prosecutors. The former prosecutor now with the law firm isn’t listed as attorney of record on the case. He’s merely a partner in the firm.

In any case, here’s a September 6th letter Birkenfeld sent to the Federal judge hearing the case regarding the Credit Suisse banker.

No word on the future plans of the prosecutor still lingering at DOJ.

Speaking generally, the revolving door is powered by contacts left behind in government.

His book might not be on the White House wish list, but on Oct. 1st Birkenfeld dispatched Lucifer to President Obama, Attorney General Loretta Lynch and Secretary of State John Kerry. It went with this letter urging action and answers. All members of Congress can look forward to Lucifer coming their way.

Among the questions posed, why was a key UBS official allowed to return to Switzerland after he agreed to cooperate but instead pleaded the Fifth at a Congressional hearing? Why was what Birkenfeld characterizes as a sham prosecution conducted against another top UBS official, who was acquitted and returned home after DOJ refused to call Birkenfeld to testify?

That’s high contrast with the French, Greeks, Canadians and others now eager for Birkenfeld’s assistance, which he’s giving, in government actions against the bank.

Note that UBS US employees have long poured money throughout America’s political system, including considerable largess to President Obama since he was a US Senator.

There's been press on Birkenfeld before, much of it sympathetic, when he blew the whistle, when he went to the hoosegow in 2010 and on his record IRS whistleblower award. He's since had plenty of time to ponder life. His book weaves together new threads connecting what happened and why. The resulting fabric is a brilliant lesson on how the fix is in. Read more at Birkenfeld's site. Can a movie be far behind?

Back to Washington's small world of coincidence. The first Sunday after Birkenfeld was sentenced, President Obama went golfing at Martha's Vineyard. His golfing partner was Robert Wolf, Chairman of UBS Americas.

Cue the Church Lady.

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A quick aside and a disclosure. Not all the levers of power, the finance villains and their aiders and abettors, are on Wall Street or in mega-banks. This writer has regrettable first-hand knowledge of the impacts on individual families from government indifference to, if not complicity with, people who in my view were financial predators on my mom, at the so-called community bank level. In my view, there was even a well-wired US Attorney-- with a conflicted background - running interference against my efforts to get government to focus on what in my view was glaring bad faith and deception. Confronted, that US Attorney refused multiple opportunities to comment.

In my opinion, we were also treated to a self-serving "trustee" in the DOJ administered bankruptcy system. When I spoke with the top supervisor in the region she asked if I was going to the FBI or planned to try and have him disbarred, warned about liability if I went public with what happened, and was basically told resistance is futile. But she refuses to put in writing that everything the trustee did was hunky-dory.

The saga ultimately cost my 99 year old mom her Iowa family farm and much more, most of it avoidable if, in my view, the trustee had not primarily been self-serving his interests at our expense, in my view to keep his gravy train rolling even if it meant destroying asset value. No matter how high I push it, the FBI won't even acknowledge my complaint. Nor will DOJ’s Office of Professional Responsibility, famed as a burnout system. I have a legal background and once served as an asst. AG for the state of Kansas. I can't begin to describe my disillusionment with what has happened to justice, and about what I believe to be happening to people across the country who are theoretically less armored.

After reading Birkenfeld's book, and speaking with an FBI whistleblower at the launch party, I have to laugh at my quaint notion that government waits eager to ride to the rescue of the little guy, to champion even those dwelling far beneath potential headlines with political mileage. Nothing to do now but to try and tell the story. No payouts in cases like mine. But if Birkenfeld's book inspires the aggrieved to find voice, to tell their own stories of injustice at the ground level, they may awake others to the peril slack government places us in. That alone would make the book worth its ink.

SK

The Insider Game — Clinton Intervenes with IRS for Swiss Bank UBS. Bill Books Some Speeches.

For purposes of this story, notice the UBS entry. Source is a WSJ article (subscr. required).

by Gaius Publius

Here's just one more look at the insider game that Sanders is threatening to break up. There aren't so many dots here that you can't follow them. Note, this is not about Clinton. This is about Sanders and the opportunity you have to say no to all this.

Conor Friedersdorf wrote a piece for The Atlantic entitled:

Of Course Hillary Clinton Exemplifies the Establishment

Aspects of that piece were discussed in this space earlier. Here I want you to notice what "exemplifies the establishment" means in practice, and how well it pays.

Friedersdorf:

“A few weeks after Hillary Clinton was sworn in as secretary of state in early 2009, she was summoned to Geneva by her Swiss counterpart to discuss an urgent matter. The Internal Revenue Service was suing UBS AG to get the identities of Americans with secret accounts,” the Wall Street Journal reported. “If the case proceeded, Switzerland’s largest bank would face an impossible choice: Violate Swiss secrecy laws by handing over the names, or refuse and face criminal charges in U.S. federal court. Within months, Mrs. Clinton announced a tentative legal settlement-- an unusual intervention by the top U.S. diplomat. UBS ultimately turned over information on 4,450 accounts, a fraction of the 52,000 sought by the IRS.”

Later UBS paid her husband seven figures in speaking fees.

The IRS sued Swiss banking giant UBS because it suspected (or knew) that as many 52,000 Americans — a list that may have included Mitt Romney, recall — could be using the bank to defraud the U.S. government of taxes.

So Secretary of State Clinton negotiated a deal between the IRS and UBS that (a) kept UBS out of U.S. court; (b) exposed just one-tenth of the suspected Americans to IRS scrutiny; and (c) prevented all American names from being revealed to the public, since no one was exposed to the public scrutiny of a trial.

After which "UBS paid her husband seven figures in speaking fees" — the actual total is $1,500,000 — for a group of high-level question-and-answer sessions.

Hillary Clinton solved a problem for UBS. UBS became Bill Clinton’s largest source of speaking income reports @WSJ http://t.co/E14dU2mxzN

— David Frum (@davidfrum) July 30, 2015

In addition, UBS donations to the Clinton Foundation increased ten-fold, from less than $60,000 to about $600,000 (WSJ; subscr. required).

And that's the insider game. Care to break it up? Read on.

Blue America has endorsed Bernie Sanders for president. If you'd like to help out, go here; you can adjust the split any way you like at the link. If you'd like to "phone-bank for Bernie," go here. You can volunteer in other ways by going here. And thanks!

GP

The Game That Goes On And On-- A Swiss Bank, A President, And The Permanent Government

Russ sent this teaser for his latest investigative piece at WhoWhatWhy a couple of days ago, and we both thought it would be appropriate to run it while the SEC fraud suit against Goldman Sachs is still fresh in everyone's mind.

Neither Phil Gramm nor Rahm Emanuel is anywhere in sight, but the buggy driver is Wolf in golfer's clothing

-by Russ Baker

A little-noted presidential golf outing opens the door to an intrigue-filled world of financiers, murky international interests, money-laundering, tax evasion, and politics as not-so-usual.

Last August, the presidential press corps followed Barack Obama and his family to Martha's Vineyard for their brief vacation. The coverage focused on summery fare-- a visit to an ice cream parlor, the books the president had brought along. Nearly everyone mentioned his few rounds of golf, including his swing, and the enthusiasm of onlookers. What caught my eye, though, was the makeup of his foursome. The president was joined by an old friend from Chicago; a young aide; and Robert Wolf, Chairman and CEO, UBS Group Americas. In a decidedly incurious piece, a New York Times reporter made light of Wolf's presence:
 
"The president has told friends that to truly relax he prefers golfing with young aides... But he departed from that pattern Monday when he invited a top campaign contributor, Robert Wolf, president of UBS Investment Bank, to join him for 18 holes. Call it donor maintenance."
 
Wolf, however, is hardly-- as the Times suggested-- just another donor. For one thing, he is a leading figure in an industry that almost brought down the entire financial system-- and then was the recipient of astonishing government largesse. UBS, along with other banks, benefited directly from the backdoor bailout of the insurance giant AIG.

But UBS stands alone in one rather formidable respect-- it was the defendant in the largest offshore tax evasion case in U.S. history, accused of helping wealthy Americans hide their income in secret offshore accounts. To settle a massive investigation, UBS forked over $780 million to the US treasury. This settlement came shortly before Wolf rounded out Obama’s golfing party. Given this rather problematical situation, why then would the President choose UBS’s Wolf of all people for this honor?

Wolf declined a request for an interview about his relationship with the President, so it was not possible to pose that question to him. This hardly matters, though, for the story goes far beyond Wolf and UBS. It involves Republicans as well as Democrats, the Bush Administration as well as Obama’s. More importantly, behind the trivialized golf outing on Martha’s Vineyard, lie the interests that increasingly set the course for every administration. And that now game the system so well that the rest of us-- wherever we live in the world-- are kept fighting for the scraps...

The rest of the piece can be found here.

Flagrant Paranoia On The Far Right-- And The Delusion That Tax Evasion Is A Right

If you think that the disruptive teabagger nuts only run around chanting "Liar, Liar" and "Read the bill" (the Glenn Beck/Rush Limbaugh version of "the bill," not the actual bill, of course) you'd only be half right. They have other, more arcane chants that pop up at all the town halls across the country-- like sudden coordinated shouting for "tort reform." Yesterday, in the account of the highly successful-- if not quite as entertaining as Barney Franks'-- town hall event Alan Grayson held in Orlando, I noticed one of the self-righteous and ill-informed cranks was whining that he opposes health care reform because it'll "usher in socialism" and "expose his bank accounts to government scrutiny." I heard a lot of the wingnuts grousing about that government-poking-into-bank-accounts stuff at the teabagger event I went to as well.

It's one of their memes. Knowing what a stickler he is for facts and never letting anything slip by, I called Alan Grayson last night and asked him what the hell they're carrying on about. He told me it was more of their flagrant paranoia, and he said he looked into it to make sure he understood what they're actually referring to. "There was a lot of faux specificity... shouting about page 59, lines 21-24, so I went back and went through it carefully. The lines refer to a provision that encourages health care providers to arrange to receive payments electronically (ACH) rather than by paper checks. It's just a cost cutting provision with no nefarious undertones." Yep... right-wing paranoia, stoked by Glenn Beck, Rush Limbaugh, Bill O'Reilly and irresponsible Republican politicians earning their keep from their Insurance Industry paymasters.

Now, on the other hand, there are a group of Americans who should be very much afraid of the power of the federal government. Perhaps you noticed that yesterday quite a few multimillionaires who haven't been paying their taxes-- by stashing their money offshore-- are actually about to really get the government poking around in their bank accounts. The IRS made a deal with UBS (a crooked Swiss bank) which is resulting in UBS turning over 4,450 names of willful tax evaders.

Switzerland's largest bank, UBS AG, is set to give the U.S. government information on 4,450 accounts suspected of hiding money from the IRS. In June, the U.S. and Swiss governments came to an information-sharing agreement after a six month battle over how much the bank would divulge. The Swiss government says it will fulfill a request for the information within a year.

Back in February, UBS admitted to participating "in a scheme to defraud the U.S.," paid a $780 million fine, and gave the IRS the names of 250 American clients who hid assets. The IRS then sued the bank for information on 52,000 accounts. UBS argued that disclosing more information would violate Switzerland's banking confidentiality laws but eventually agreed to hand over information related to 4,450 accounts that were of "the greatest interest" to the IRS.

Since UBS admitted its part in the scheme, four of its clients have agreed to plead guilty to failing to report their offshore bank accounts. Thousands of other clients have avoided penalties by sharing their accounts with the IRS under a special voluntary program that ends in September.

About $18 billion was being hidden, and there will be stiff fines and possible prison sentences coming soon. Teabaggers and wingnuts who I've spoken to actually seem to believe that they have the right to evade taxes. Hopefully the government will deal with them the way they need to deal with all serious lawbreakers.

The End Of Tax Havens? Not Until The Far Right Is Wiped Off The Face Of The Earth

Well, I wish I could report that the primary author of the worldwide economic meltdown, political hack-turned-Swiss bankster, Phil Gramm, has been arrested and carted off to prison but... rarely is there that much justice in the world. Instead we find out that the company he worked for and helped to rip off the U.S. government to the tune of billions of dollars, UBS, has agreed to pay a fine of $780 million for "facilitating" American criminals-- wealthy corporate ones-- avoid taxes on billions of dollars. And the first of UBS' crooked clients, Steven Rubinstein, has been arrested. Set-ups like UBS-- which was caught smuggling diamonds in toothpaste tubes for rich Americans clients-- hold as much as $10 trillion shielded from the tax man.

The arrest is the first of an American client of UBS, which has been under criminal investigation for helping scores of wealthy Americans evade taxes through secret offshore accounts that went unreported to the Internal Revenue Service. It signals that federal authorities are making good on a promise to pursue American clients suspected of tax evasion, and in some cases to make indictments.

UBS admitted in February to conspiracy to defraud the I.R.S. by helping scores of wealthy Americans hide nearly $20 billion overseas.

The bank paid $780 million to settle the charges, but it remains under investigation, as do its American clients. The admission has helped to open the world of offshore banking and dealt a death blow to Swiss financial secrecy.

But Swiss banks, which, like UBS, helped the German Nazis pillage Europe-- and get away with it for decades after the war was won-- are hardly the only places where those eager to avoid anyone knowing about their income-- from drug deals and Third World dictators to garden variety Republican tax cheats. UBS alone was working for 52,000 American crooks.

You may have heard me complaining this week about how dismayed I was that Obama didn't seem to be on board with the Franco-German regulatory demands, one of which was to shut down the off shore tax havens. Under immense pressure from the wealthiest families in the country not to cooperate, it looks like Obama has bucked the establishment after all and agreed to cracking down on tax cheats. I'll believe it when I see it though.

For as long as I've been alive make believe countries like Andorra, Liechtenstein and Monaco, not to mention Vatican City, the worst of them all, have been functioning as what is known in international law enforcement as uncooperative tax havens. More recently they've been joined by a gaggle of island mini-states in the Caribbean, like Antigua, and the Pacific, like Vanuatu, all dedicated to hiding tainted money for wealthy clients. The racket accounts for 13% of Switzerland's GDP and even a higher proportion for the organized crime principality of Liechtenstein.

The G-20 has decided to "blacklist" uncooperative tax havens and possibly even apply sanctions. Of the 4 named as the world's worst, two immediately promised to mend their ways, the Philippines and Uruguay. That leaves Costa Rica and Labuan (part of Malaysia) on the top of the list of rogue states. It's unclear exactly what's going on with other shady financial centers, like Switzerland, Luxembourg, Macao, Hong Kong, Singapore, Iceland, the Cayman Islands, Vatican City, and the 2 British nests of tax evasion, the Isle of Man and Jersey.

The Group of 20 industrialized and developing nations at an economic summit here Thursday agreed to end "an era of banking secrecy," rooting out hundreds of billions of dollars estimated to be hidden from tax authorities in offshore banks. Faced with the prospect of penalties making it harder for their companies to do business overseas, Austria pledged to comply "without delay." The Philippines swore to take "the necessary steps" and Monaco promised to be off the list by "by the end of the year."

...The list, published by the Organization for Economic Cooperation and Development, a Paris-based group of wealthy nations, in coordination with the G-20, singled out four countries as the worst offenders: Costa Rica, Malaysia, the Philippines and Uruguay. Another 38 countries and territories, including the Cayman Islands, Panama, Bahamas and Liechtenstein, were listed as less serious offenders.

Billionaires and the shills who make a living by scraping and bowing before them and faithfully serving their interests-- like the Republican Party and GOP front groups like the American Heritage Institute, Fox News and the Cato Institute-- are hardly giving up and will fight a battle to persuade gullible Americans that tax cheats are true patriots. This video by Republican Party astroturf group, the Center for Freedom and Prosperity Foundation explains, with a straight face, how absolutely fabulous tax havens are. This isn't a spoof; it's real (I swear):

You Take Your Happiness Where You Can Find It And Today It Was At The Sentencing Of A UBS Swindler

A self-styled UBS master of the universe goes to prison

I went to the premier of Oliver Stone's movie, W and when I walked out a camera crew grabbed me and asked me what I thought. I said it was pretty good and that I enjoyed it. The interviewer wasn't happy with that. He wanted to know if I thought it would influence the election. "No," I don't think so," I said. Bush isn't running again and people sharp enough to realize that McCain would simply be another 4 year extension of his agenda have already made up their minds." That wasn't good enough for him either and he wanted to know how I would have changed the movie. Roland was starting to signal me that it was time to go and that he was hungry. "Well, if it was my movie and my world, Bush and Cheney would have been tried and the last scene would be the two of them walking up the steps to the gallows." That ended the interview... to Roland's satisfaction.

I know I'll never be completely happy but tomorrow I plan to revel in the good news as it come sin. Obama, of course, even if that means we get the baggage-- the Bidens and Emanuels and all kinds of horrible crap you can expect to hear Ken and I complaining about in the next few months-- but also the great news we expect to hear about Tim Walberg and Joe Knollenberg being defeated in Michigan, about the end of Ted Stevens' disgraceful career, about bona fide progressive leaders like Darcy Burner, Alan Grayson and Jared Polis being elected to the U.S. House of Representatives where I expect them to do a lot more than take their seats and vote well, and maybe about some close calls coming through, like Jeff Merkley, Tom Perriello, Jim Himes, Joe Garcia, Martin Heinrich... maybe even some genuine miracles like Dennis Shulman, Debbie Cook, Larry Joe Doherty...

But for today, I'm looking for my bits and pieces of celebratory news elsewhere-- and I don't even mean the final poll numbers showing Obama expanding his lead over McCain, ahead in Ohio, Florida and Pennsylvania and even leading with a crushing margin in Fox's own silly biased polls. Sure I'm taking a great deal of pleasure seeing the ignorant assholes who inflicted 8 years of Bush on the rest of us depressed and disheartened and in no mood to even bother cheering on McCain's dying or dead campaign. I hope they don't bother voting tomorrow so all their down-ballot rubber stamp candidates lose as well. And, yeah, I'm delighted to know that when cell phone users are counted properly, Obama's polling numbers shoot up, and I'm delighted to see that McCain's negative and vicious smears-- like the scurrilous Dole attacks on Hagan we discussed this morning-- backfired and helped wreck his miserable, vile campaign.

But for me the best news so far, news I hope is a harbinger of things to come, concerns a prison sentence. Now, it could have been longer and it could have been for his colleague Phil Gramm, but it's a first step to see a former USB executive sentenced to six and a half years in prison after an insider trading conviction. Mitchel Guttenberg is very lucky I wasn't the judge.

In handing down the sentence, which includes three years of supervision after his release, Judge Deborah Batts of U.S. District Court in Manhattan said, "from the moment he joined the (UBS) investment review committee he planned to give that information to others to use illegally."

Batts did not fine Guttenberg, who expressed his remorse to his family, the court and his former employer. His lawyer Sean O'Shea described Guttenberg as "a broken man" whose wife had left him, and he was living in his sister's apartment.

Guttenberg was among 13 people, including former employees of Wall Street firms such as Bank of America Corp, Morgan Stanley and Bear Stearns Co Inc, who were criminally charged last year in an insider trading ring.

Guttenberg admitted in court that on numerous occasions between 2001 and 2006 he told two traders about upcoming analyst stock recommendations, including those for Caterpillar Inc and Goldman Sachs Group Inc shares.

The information about upcoming UBS analysts' upgrades and downgrades was used to execute hundreds of transactions, netting more than $17.5 million, prosecutors said.
In court on Monday, Assistant U.S. Attorney Andrew Fish told the judge that the securities industry is "full of people like Mr. Guttenberg. They have access to information they can use to make millions."

I wonder if anyone has thought about looking into how Rahm Emanuel became a multimillionaire so fast when he took a couple years off from politics to work on Wall Street. Anyway, is a new day coming? We'll have to see how much Obama really wants to make some changes and how many Jeff Merkelys and Darcy Burners and Alan Graysons get elected as opposed to status quo hacks like Bruce Lunsford, Bobby Bright and Mike McMahon.

Today I saw a piece in a magazine that made me want to throw up as if I was Michele Bachman at a St Patrick's Day party. People are losing their homes and their jobs and their children are losing their opportunities to go to college and the end of the Bush era leaves us designers talking about "following up their latest project with Louis Vuitton (a Hong Kong store in which shoes on conveyor belts drift past iPod bars and Martha Sturdy furniture) with a new restaurant idea. It's 'a first for the fashion house,' explains Yabu. 'We want to bring back the romance of the picnic, wherein the leisure class from days gone by had their Louis Vuitton picnic trunk-- fully equipped with silver, crystal and bone china-- and took it on the road.'"

When Obama talks about taxing that 5%, I hope he has this "leisure class" with their bone china in mind. Yesterday my friend Helen called me and asked me if I thought a company that charges several thousand dollars to put up and take down your Christmas lights would survive. But maybe they can repurpose into an industry that teaches ex-Wall Street executive how to be plumbers like McCain's pal Joe.