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Bernard L. Madoff, a legendary trader who’s towered over Wall Street for nearly 50 years, was arrested by federal agents Thursday and charged with running a $50 billion Ponzi scheme—perhaps the biggest fraud in Wall Street’s history. The former chairman of the Nasdaq Stock Market reportedly told colleagues on Wednesday that his investment advisory business was "all just one big lie” that was “basically, a giant Ponzi scheme.” According to one official for the SEC, the case involved “a stunning fraud that appears to be of epic proportions.” Of more than $17 billion in assets under management by Madoff’s firm at the beginning of 2008, all is missing, according to the SEC. Madoff's investment advisory business had "deceived investors by operating a securities business in which he traded and lost investor money, and then paid certain investors purported returns on investment with the principal received from other, different investors, which resulted in losses of approximately billions of dollars,” according to the FBI.
Barack Obama hosted a press conference today to introduce Tom Daschle as the new Secretary for Health and Human Services, but the press corps was fixated on Rod Blagojevich. "What I am absolutely certain of is that my office had no involvement with any deal-making around that senate seat," Obama said. He added that he would provide a complete account of staffers' contact with the governor in the coming days. As further evidence of his distance from Blagojevich, Obama pointed out that the Illinois governor had some choice words for him in the FBI transcripts released on Tuesday. "I won’t quote back some of the things that were said about me," Obama said, "This is a family program, I know."
Federal investigators have subpoenaed documents from The Chicago Tribune in the investigation of Gov. Rod Blagojevich. According to a company spokesman, The Tribune will fully cooperate with the investigation. Blagojevich is accused of threatening to withhold state money for Wrigley Field, which is owned by the Tribune Company, if the newspaper didn't fire its Deputy Editorial Page Editor and other unnamed writers who had suggested that the governor be impeached. Yesterday The Tribune released a statement saying that "the actions of the company, its executives, and advisors working on the disposition of Wrigley Field have been appropriate at all times. No one working for the company or on its behalf has ever attempted to influence staffing decisions at The Chicago Tribune or any aspect of the newspaper’s editorial coverage as a result of conversations with officials in the governor’s administration."
When Belgian police arrested 14 terrorists yesterday as part of an operation to thwart a planned terror attack, an "al-Qaeda living legend" was among them. Malika El-Aroud is a female Al Qaeda recruiter known for her ability to use the internet to draw men and women into jihad. Belgian police said that they aimed to prevent El-Aroud from moving to Afghanistan where she would have played a role fighting coalition forces. Her late husband, Abdessater Dahmane, was one of two men who assassinated Afghanistan's key anti-Taliban commander Ahmed Shah Massoud two days before 9/11. In 2006 El-Aroud professed her love for Osama bin-Laden to CNN: "Most Muslims love Osama. It was he who helped the oppressed. It was he who stood up against the biggest enemy in the world, the United States. We love him for that."
It looks like the auto bailout faces a rough road in the senate. Minority Leader Mitch McConnell said today “this proposal isn’t nearly enough,” He demanded stricter reforms, but his opposition is ideological. “A government big enough to give us everything we want is a government big enough to take everything we have,” he said. If other Republicans follow McConnell’s lead, it’s unlikely that Democrats will reach the 60 votes necessary to pass the bailout. Last night, the House passed the bailout bill 237 to 170.
Authorities have discovered skeletal remains that may be Caylee Anthony, the three-year-old who has been missing since June. A small child’s skull was found buried near the Orange County, Florida, home of Anthony’s grandparents. Anthony’s mother, Casey, had already been arrest for first-degree murder. “Bottom line, it's real simple, folks," said Orange County Sheriff Kevin Beary. "We've recovered this human skull, it appears to be that of a small child, and now the investigation continues.
Last night, Belgian police arrested 14 terrorist suspects in a suicide-bombing plot. According to The Telegraph, the suspects were arrested before E.U. leaders arrive in Brussels for an economic and climate-change summit. The man who is suspected of being the actual bomber is a Belgian citizen, and just returned from Afghanistan with two other plotters, where they are believed to have received orders from Al Qaeda commanders. It’s unclear where, exactly, the attack was to take place—it could have been in Afghanistan or Pakistan, but, said Belgium’s federal prosecutor, “it can't be ruled out that Belgium or Europe could have been the target."
The environmental crusaders in California are at it again. In a unanimous vote, the state’s Air Resources Board has passed the nation’s first comprehensive plan to slash greenhouse gases. The ambitious plan, which lays out targets for almost all sectors of the economy, from automobiles to landfills, would cut greenhouse gases by 15% over the next 12 years. It would also require a third of the state’s electricity, more than any other state in the nation, to come from solar power, wind power and other renewable sources. "When you look at today's depressed economy, green tech is one of the few bright spots out there," said Gov. Arnold Schwarzenegger. He added that the plan would "unleash the full force of California's innovation and technology for a healthier planet." California is expected to offer the comprehensive blueprint to Barack Obama as a model for a nationwide effort to fight global warming.
More bad economic news: The number of American workers claiming unemployment benefits reached a 26-year high last week. New claims for state unemployment benefits jumped 58,000 to 573,000. Continuous unemployment claims also surged by 338,000 to about 4.5 million in the week ending November 29. A Citigroup economist predicted that the unemployment rate will exceed 7 percent before the year’s end.
Golden Globe nominations were announced this morning and no single film clearly leads the pack: The Curious Case of Benjamin Button, Frost/Nixon, and Doubt all received five nominations. Best drama nominees are Button, Frost/Nixon, The Reader, Revolutionary Road, and Slumdog Millionaire. At The Carpetbagger, David Carr writes “Hollywood will focus as much on what was shut out, and there were several surprises.” Doubt, despite its five nods, was shut out of best drama, as was Milk. And Australia, which stars Hugh Jackman and Nicole Kidman, was excluded from the major categories altogether.
What better way for the GOP to boost low morale than to pretend it is still in the Nineties? Senate Republicans are considering demanding Bill Clinton testify at Hillary’s confirmation hearings to explain potential conflicts of interest regarding his charitable work. Usually, only the nominee testifies at such hearings, but Republicans are exploring ways to grill their old foe. According to Politico, one senator particularly keen on doing so is David Vitter—the Louisiana senator whose main claim to fame was being listed as a customer of the D.C. Madam. Democratic aides to Clinton say concerns over him can be handled "in private" or by Hillary herself.
Obama’s campaign promise to withdraw from Iraq is meeting the cold reality of politics on the ground. After an interview with Defense Secretary Robert Gates, George Will writes: "Regarding Iraq, Gates is parsimonious with his confidence, noting that 'the multi-sectarian democracy has not sunk very deep roots yet.' He stresses, however, that there is bipartisan congressional support for 'a long-term residual presence' of perhaps 40,000 U.S. troops in Iraq, and that the president elect's recent statements have not precluded that. Such a presence 'for decades' has, he says, followed major U.S. military operations since 1945, other than in Vietnam. And he says, 'Look at how long Britain has had troops in Cyprus.'" Gates also foresees a long stay in Afghanistan.
This week, Argentinians are celebrating the 25th year of democratic rule. But they also got a gruesome reminder of the past. Forensic experts have just announced the discovery of more than 10,000 fragments of burnt bones and an execution wall that has more than 200 bullet impacts in what once was the Pozo Arana detention camp. Hundreds of "disappeared" citizens were executed, incinerated, and buried in mass graves within the military compound.
The US armed forces have long used ear-splitting music as a method of torture. For example, it is a routine used against recalcitrant prisoners in Guantanamo Bay. In the past Bruce Springsteen has ask the military to stop using his anthem "Born in the USA" to pummel prisoners. Now a collective of musicians—among them Massive Attack, Elbow, and Rage Against The Machine's Tom Morello—are demanding America cease and desist using their music as an instrument of war. The British legal charity Reprieve says the songs most frequently used include "Enter Sandman" by Metallica, "Shoot to Thrill" and "Hells Bells" by AC/DC and "I Love You" from the Barney & Friends children's TV show.
Shin Dong-hyuk was born in a North Korean concentration camp. He was tortured with fire after his mother tried to escape (she was hanged) and the top of his right middle finger was chopped off after he accidentally dropped a sewing machine. His cousin was raped, a young girl was beaten to death in front of him, and he was once so hungry he scavenged for food in cow dung. Shin recounts this is in a new book called Escape to the Outside World, reported in The Washington Post. In 2005, Shin escaped the camp by using the dead body of a friend to insulate himself from the killing current of an electrified fence. Of the 14,000-plus North Korean defectors now living in South Korea, Shin is the only one known to have escaped the concentration camps, where 150,000 to 200,000 people are held.
Yesterday in Athens, hooded youths firebombed the main courthouse and a strike by 100,000 workers shut down most transportation, hospitals, and banks. Rioting began on Saturday, when police shot a 15-year-old boy, and the Los Angeles Times reports that it has left Greece's fragile center-right government fighting for survival." Gangs have burned and vandalizes stores throughout the capital, and opposition parties have begun calling for early elections. Greeks are frustrated with the country's stagnant economy and political corruption. The cop who shot the 15-year-old, who was part of a gang that threw rocks at the cop car, is being charged with murder.
Perhaps the largest stain on Obama's record so far reeks of tobacco: The president-elect is a recidivist smoker, mostly by cadging other people’s cigarettes. Some argue that, as a role model, Obama should quit for good, but today in Slate, Ron Rosenbaum asks, "Do you want Barack Obama, the guy who has his finger on our nuclear trigger, notorious nicotine addict, to be dying for a smoke?" He wonders "whether some of Obama's finer qualities aren't bound up in his alleged nicotine sins. That contemplative self-possession that so many admire him for. It might come from Obama's ability to sit back, inhale a puff or two, slow down and think—meditate, cogitate—before acting." Obama's addiction humanizes him and cuts across his image as a Whole Foods-loving liberal, he argues. It may be best, in the end, to just let the president pick his poison. After all, "Did George W. Bush make great decisions as a president while abstaining from alcohol?"
Beverley Garland's life was studded with alligator people and giant cucumbers. Her credits include such 1950s B-films as Swamp Women, Curucu Beast of the Amazon, The Alligator People, and It Conquered the World. Though she received most fan mail for her spunky roles in ridiculous cheapo horrors, she also starred in the 1950 noir classic DOA and earned an Emmy nomination in 1955 for her performance as a leukemia patient in Medic. In the TV series Decoy (1957-59), she played the lead cop in the first show to feature a female protagonist. She also appeared in Perry Mason, Gunsmoke, Rawhide and My Three Sons. She died on December 5 at age 82.
No gay sex please, we’re Italian. The Italian national broadcaster RAI TV has run into a storm of protests after it aired Brokeback Mountain sans a key plotline kiss between Heath Ledger and Jake Gyllenhaal, The Telegraph reports. RAI said it aired the cut version by mistake, but gay activists and newspaper editorial writers were outraged nonetheless. In an editorial slapped across the front page of La Stampa, Massimo Gramellini said, “I would like to understand why a kiss between two gays…should offend our sensibilities more than scenes of heterosexual sex or bloodthirsty violence.” It’s a question worth asking, especially as Italian TV routinely broadcasts shows featuring stripping housewives and violent and saucy movies are screened uncut.
Amidst all the news of declining endowments, more distressing news from the Ivy League: Princeton has settled a dispute with the heirs of the A&P supermarket fortune. The University will pay the Robertson family $100 million—"the largest donor-intent settlement in history," according to the plaintiff—and in return will gain full control over the family's $700-900 million endowment. The Robertsons originally gave $35 million to Princeton in 1961, but the descendants of the original donors complain that Princeton did not use the money for its intended purpose: to train graduate students to serve in federal government. $50 million of the settlement will be distributed by the Robertsons to other universities, while $40 million will go toward the family's legal fees.
Obama announced his energy team yesterday, nominating Nobel physicist Steven Chu to head the Department of Energy, former-EPA administrator Carol Brower to a new White House position overseeing environmental, energy, and climate policies, and Lisa P. Jackson, chief of staff to New Jersey Governor John Corzine, to head the EPA. Marc Ambinder notes that Chu is "untainted by Washington's caution on climate change" and "the left loves him." There is a wider picture showing Obama is changing the way the White House monitors government departments. Whereas Bower's duties may have traditionally gone to a domestic policy adviser, Ambinder notes, Obama has divided domestic issues between environment, to Bower, health care, to Tom Daschle, and the economy, to Larry Summers. "These positions will probably become equivalent in function to their respective policy areas as national security adviser's role in national security."
Former senator and Vietnam veteran Bob Kerrey, who ran to become the Democratic presidential nominee in 1992, has survived a no confidence vote brought by senior members of faculty at the New School in New York, where he is president and has been introducing reforms. The censure vote was by just 74 of the university’s 333 full time and 1,733 part time faculty and resulted from Kerrey appointing himself the New School’s provost. (The previous provost has joined Obama’s transition team.) The School’s board of trustees promptly gave Kerrey a unanimous vote of confidence. “I don’t fear any vote that the faculty could take,” said Kerrey. “The problem at the New School is not necessarily with me.”
The Peruvian government has filed a federal lawsuit against Yale claiming the university is illegally holding treasures taken from the lost Inca city of Machu Picchu. The mummies, human bones, pottery, utensils and art were dug up by Hiram Bingham III in 1911 and taken to Yale on condition they would be returned to Peru. "The most valuable and archaeologically significant artifacts ... were never returned to Peru and remain in the custody of Yale," the lawsuit states. In 2007, Yale agreed to recognize Peru's ownership of the artifacts and promised to return 300 museum-quality pieces. But a dispute over bone fragments and other items Yale wants to keep for scientific study for up to 99 years prompted the suit filed in Washington DC.
The proprietor of the Chicago Tribune, Sam Zell, says he has been interviewed by the Feds about indicted Illinois governor Blagojevich’s attempts to have editorial writers critical of him fired. "I'm not personally familiar with any of that and considering the fact that this is an ongoing criminal investigation, I would feel reticent to comment accordingly," Zell told CNBC. The FBI said that during a bugged call last month, Blagojevich's chief of staff, John Harris, told Blago he met with a financial adviser to the Tribune CEO who said Zell "got the message and is very sensitive to the issue." Asked whether the FBI was looking for evidence of pressure being put on Tribune staff, Zell told CNBC: "I think they're asking questions. As far as my knowledge is concerned the Tribune did not respond at all." When asked if any pressure was put on the Tribune staffers to change coverage, he said: "I certainly can't speak to that."
Rod Blagojevich was not alone in his expletive-ridden rages against his political enemies. He was egged on by his foul mouthed wife Patti, daughter of Richard Mell, a longtime Chicago alderman, who got his son in law into politics before they spectacularly fell out with each other. A mother of two daughters, Patti, 43, has a BA in economics and runs a lucrative real estate company, three quarters of whose clients won state contracts or made contributions to the governor. Among them was Obama’s convicted friend and donor Antoin “Tony” Rezko, currently awaiting sentencing for fraud and influence peddling. But it is her expletive ridden exchanges with her husband that stand out from the complaint. In one barely decipherable tirade, she yells to Blago he should “hold up that [expletive] Cubs [expletive] ... [expletive] them.” According to the indictment, Patti hoped to sell off Obama's senate seat for placement on paid corporate boards.
Obama says indicted Illinois governor Rod Blagojevich should stand aside while the investigation continues into allegations he tried to sell the president elect’s Senate seat. But he has failed to condemn him. A statement from his transition team said, "The president elect agrees…that under the current circumstances it is difficult for the governor to effectively do his job and serve the people of Illinois" and should therefore resign. And U.S. Rep. Jesse Jackson Jr., a frontrunner for the vacant Senate seat, admitted he was the unnamed Senate Candidate 5 mentioned by federal prosecutors as one of the hopefuls Blagojevich allegedly sought to squeeze in a plot to sell the Senate seat vacated by Obama, but denied directing emissaries to negotiate with Blagojevich. A letter to Blagojevich from the 50 members of the Senate Democratic Caucus, signed by the No. 2 member in Democratic leadership, Sen. Dick Durbin of Illinois, also urged him to resign and not name a successor to Obama "for the good of the Senate and our nation." If he does, they threatened to refuse to allow a Blagojevich appointee to take the seat.
Obama has worked out a plan for how to consult the 13 million online supporters he gathered during his campaign. While unofficial crowdsourcing sites FixThisBarack.com and WhiteHouse2.org already have users weighing in on what Obama’s top priorities should be, the Obama transition team, which includes a Google exec, has other ideas. They intend to post legislation for five days of comment before Obama signs it, stream live video of public hearings, and post applications to the patent office so experts can weigh in on them.
Here’s an approval rating that would make even President Bush blush: Illinois Gov. Rod Blagojevich’s approval rating now sits at 7 percent. The same poll shows 70 percent of Illinois voters wanting Blagojevich to immediately resign, with only 25 percent thinking he should wait until found guilty. Thirteen percent of Democrats approved, as well as 20 percent of African American voters, who have been his strongest supporters. “There are no bright spots for Governor Blagojevich in these numbers,” said the CEO of the polling group. Well, no.
The tony Connecticut girls’ school Miss Porter’s, annual fees $42,000, alma mater of Jackie Kennedy, has been accused of expelling a girl who was relentlessly bullied by a secret society of posh girls who didn’t like the way she was planning an end of term prom. The Oprichniki, named after Ivan the Terrible’s secret police, didn’t like the girl’s suggestion that the prom invite other schools to take part and waged a bullying campaign against her on Facebook and through text messages, according to a lawsuit brought by her parents. The girl went into such a meltdown, the suit reports, she cheated on an art history exam, then immediately reported her misdoings to teaching staff. Although her deceit was atypical and brought on by the bullying, the suit says, she was shown no mercy by the school. When her parents arrived to collect her they found her clothes thrown in a heap in the corner of a dormitory with a “For Rent” sign hanging on her bed.
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