Douglas Caddy

Private Lives of Kennedys, Played Out in Public By PETER APPLEBOME The New York Times July 16, 2012 BEDFORD, N.Y. — These days, Cheever Country is feeling a lot more like Kennedy Country. When Kerry Kennedy, the former wife of Gov. Andrew M. Cuomo, was arrested and charged with driving while impaired by drugs on Friday, it was just the latest in a distressing series of stories involving Kennedy family members living in the leafy quarters of affluent northern Westchester County, where suburban and exurban blend together. Most conspicuous has been the fallout surrounding the suicide of Mary Kennedy, the estranged wife of Kerry Kennedy’s brother, Robert F. Kennedy Jr., who hanged herself May 16 in a barn by the couple’s home here. But if John Cheever, who lived in nearby Ossining, captured the private dysfunction beneath the placid surface of the “Mad Men”-era Westchester, the Kennedys seem to be offering an increasingly public view of a more contemporary version. Among the many differences is that while Cheever captured the genteel dislocations in a world of country-club Republican suburbia, northern Westchester has become the residence of choice for the state’s most powerful Democrats, including Bill and Hillary Clinton in Chappaqua, Mr. Cuomo in Mount Kisco, and various Kennedy family members scattered about the landscape. Ben Cheever, the writer and John Cheever’s son, who lives nearby in Pleasantville, said that despite different times with different rules, the rot behind the lace curtains that his father captured in fiction remains relevant. “He wrote about hypocrisy,” Mr. Cheever said. “The idea was that in every fine home of every apparently successful person, there was living some secret life, that hiding beneath the surface was some terrible passion or infidelity. And to that extent, it exactly mirrors what we see of the Kennedys today.” The woes, routine and tragic, of Kennedy family members are familiar here. Ms. Kennedy, 52, was arrested Friday when her 2008 Lexus hit a tractor-trailer at around 8 a.m. She kept driving and left the highway, despite the damage to her vehicle, including a flat tire, according to the police report. Through a spokesman, she denied the charge, saying she voluntarily took Breathalyzer, blood and urine tests — which showed no drugs or alcohol. Another source close to the family said on Sunday that Ms. Kennedy, who was on the way to her gym when the accident occurred, might have had a seizure. He said that after the accident, Ms. Kennedy told police that she wondered whether she perhaps took Ambien by accident instead of her thyroid medication. Ambien, a powerful prescription sleeping pill, has sometimes been linked to erratic behavior. It is not clear if that would have shown up in tests. The accident happened amid the continuing fallout from the suicide of Ms. Kennedy’s sister-in-law and longtime best friend, Mary Kennedy, after it was revealed that she had been reburied in a Cape Cod cemetery 700 feet from her original grave near other Kennedy family members. Recently, a sealed affidavit, signed by Robert Kennedy Jr. during their divorce proceedings and made public afterward, alleged numerous instances of instability, violence and substance abuse. Douglas Kennedy, another child of Robert F. Kennedy, the senator from New York who was assassinated in 1968, faces charges, two counts of harassment and one of endangering the welfare of a child, a misdemeanor, in connection with a scuffle he had with two nurses in January. The incident began when he tried to take his newborn son, despite their instructions, out of Northern Westchester Hospital, where Ms. Kennedy was taken after her accident Friday . Other incidents have become a familiar part of the local news. Robert Gottlieb, a lawyer for Kerry Kennedy and Douglas Kennedy, said that being a Kennedy could lead to a harsher response and more news media attention than others would have received. The two nurses who insisted that the episode involving Douglas Kennedy be prosecuted were “simply trying to make money off the Kennedy name,” Mr. Gottlieb said. He added: “Every case is different, but you certainly have to be aware of the impact and the burden that the Kennedys carry because of their name.” William O’Shaughnessy, a northern Westchester native and longtime radio executive, said that unflattering behavior hardly began with the Kennedy family, but that it was more public and involved a broader pharmacopoeia than was common in an earlier era when substance abuse was limited largely to gin, Manhattans, whiskey sours and martinis. “It may be more of the same, but with less class,” he said. Mr. Cheever said one lesson of the Kennedys’ travails was true in his father’s time, too: Money and fame can create as many problems as it solves. “The simple lesson I take from the Kennedys and a lot of other people who live around here is that success and notoriety are very hard to deal with,” he said. “I really think to a large extent fame is toxic, and it takes a very strong and canny person to survive it.” Still, he said, a huge difference is what sort of behavior becomes known today. “It was much easier to keep a secret 50 years ago, and a huge amount of misbehavior was never reported,” he said. “If someone committed suicide, you didn’t put it in the paper. If someone had a string of whores, you didn’t put it in the paper. Now, we the audience are the powerful people, and we love to pity the famous.”

http://www.businessweek.com/printer/articles/61700-how-the-mormons-make-money

July 14, 2012, 9:00 pm U.S. Is Building Criminal Cases in Rate-Fixing By BEN PROTESS and MARK SCOTT The New York Times As regulators ramp up their global investigation into the manipulation of interest rates, the Justice Department has identified potential criminal wrongdoing by big banks and individuals at the center of the scandal. The department's criminal division is building cases against several financial institutions and their employees, including traders at Barclays, the British bank, according to government officials close to the case who spoke on the condition of anonymity because the investigation is continuing. The authorities expect to file charges against at least one bank later this year, one of the officials said. The prospect of criminal cases is expected to rattle the banking world and provide a new impetus for financial institutions to settle with the authorities. The Justice Department investigation comes on top of private investor lawsuits and a sweeping regulatory inquiry led by the Commodity Futures Trading Commission. Collectively, the civil and criminal actions could cost the banking industry tens of billions of dollars. Authorities around the globe are examining whether financial firms manipulated interest rates before and after the financial crisis to improve their profits and deflect scrutiny about their health. Investigators in Washington and London sent a warning shot to the industry last month, striking a $450 million settlement with Barclays in a rate-rigging case. The deal does not shield Barclays employees from criminal prosecution. The multiyear investigation has ensnared more than 10 big banks in the United States and abroad. With the prospects of criminal action, several firms, including at least two European institutions, are scrambling to arrange deals, according to lawyers close to the case. In part, they are trying to avoid the public outcry that stemmed from the Barclays case, which prompted the resignation of top executives. The criminal and civil investigations have focused on how banks set the London interbank offered rate, known as Libor. The benchmark, a measure of how much banks charge one another for loans, is used to determine the borrowing costs for trillions of dollars of financial products, including mortgages, credit cards and student loans. Cities, states and municipal agencies also are examining whether they suffered losses from the rate manipulation, and some have filed suits. With civil actions, regulators can impose fines and force banks to overhaul their internal controls. But the Justice Department would wield an even more potent threat by bringing criminal fraud cases against traders and other employees. If found guilty, they could face jail time. The criminal investigations come at a time when the public is still simmering over the dearth of prosecutions of prominent executives involved in the mortgage crisis. The continued trouble in the financial sector, including the multibillion-dollar trading losses at JPMorgan Chase, have only further fueled the anger of consumers and investors. But the Libor case presents a potential opportunity for prosecutors. Given the scope of the problems and the number of institutions involved, the rate-rigging investigation could provide a signature moment to hold big banks accountable for their activities during the financial crisis. "It's hard to imagine a bigger case than Libor," said one of the government officials involved in the case. The Justice Department has jurisdiction over the London bank rate because the benchmark affects markets in the United States. It could not be learned which institutions the criminal division is chasing next. According to people briefed on the matter, the Swiss bank UBS is among the next targets for regulatory action. The Commodity Futures Trading Commission is pursuing a potential civil case against the bank. Regulators at the agency have not yet decided to file an action against the bank, nor have settlement talks begun. UBS has already reached an immunity deal with one division of the Justice Department, which could protect the bank from criminal prosecution if certain conditions are met. The bank declined to comment. The investigation into the global banks is unusually complex and it could continue for years, and ultimately end in settlements rather than indictments, said the officials close to the case. For now, regulators are building investigations piecemeal because the facts of the cases vary widely. That could make it difficult to compile a global settlement, although some banks would prefer an industrywide deal to avoid the harsh glare of the spotlight, said a lawyer involved in the case. American authorities face another complication as they build cases. Investigators still lack access to certain documents from big banks. Before gathering some e-mail and bank records from overseas firms, the Justice Department and American regulators need approval from British authorities, according to the people close to the case. But officials in London have been slow to act, the people said. At times, British authorities have hesitated to investigate. By contrast, the Justice Department and the Commodity Futures Trading Commission have spent two years building cases together. Lanny Breuer, head of the Justice department's criminal division, has close ties with David Meister, the former federal prosecutor who runs the commission's enforcement team. In the Barclays case, the British bank was accused of reporting false rates to squeeze out extra trading profits and fend off concerns about its health. During the crisis, banks feared that reporting high rates would suggest a weak financial position. Lawmakers in London and Washington are examining whether regulators looked the other way as banks artificially depressed the rates. On Friday, it was disclosed that a Barclays employee notified the Federal Reserve Bank of New York in April 2008 that the firm was underestimating its borrowing costs. Despite the warning signs, the illegal actions continued for another year. But in April 2008, a senior enforcement official at the Commodity Futures Trading Commission, Vincent McGonagle, opened an investigation. He directed the case along with another longtime official, Gretchen Lowe. At first the case stalled as the agency waited months to receive millions of pages of documents when Barclays pushed back against the American regulators, according to the officials close to the case. By the fall of 2009, the trading commission received a trove of information, providing a broad view into the wrongdoing. A series of incriminating e-mail and instant messages, regulators say, laid bare the multiyear scheme. In one document, a Barclays employee said the bank was "being dishonest by definition." The case gained further traction in early 2010, when the agency's enforcement team engaged the Justice Department. The department's criminal division, led by Mr. Breuer, agreed that regulators had a strong case. The investigation continued until January 2012, when the trading commission notified Barclays lawyers that they were entering the final stages before deciding about an enforcement action. As part of the deal, regulators pushed the bank to adopt new controls to prevent a repeat of the problems. Among other measures, the bank must now "implement firewalls" to prevent traders from improperly talking with employees who report rates. The bank says that it provided extensive cooperation during the three inquiries, and has spent around $155 million on its own three-year investigation. Because it agreed to settle with British authorities, Barclays received a 30 percent fine reduction. In the United States, Barclays offered to pay a fine of $200 million to the C.F.T.C., slightly below the initially proposed range, according to government officials close to the case. Mr. Meister's team soon accepted the offer, securing the biggest fine in the commission's history. On June 27, British and American authorities announced the deal with Barclays, which agreed to pay more than $450 million total. "For this illegal conduct, Barclays is paying a significant price," Mr. Breuer said then.

Lamar Waldron will talk about his new book, "Watergate, The Hidden History", on coasttocoastam on this coming Tuesday, July 17th. http://www.coasttocoastam.com/show/2012/07/17 http://www.coasttoco...dron-lamar/6628 I purchased the book today and have read the first three chapters. It is impressive. The first chapter grabs the reader's attention immediately. Because the book also deals extensively with the Kennedys -- JFK and Robert and their father -- I thought it appropriate to call the attention of forum members here to the upcoming radio show.

http://www.coasttocoastam.com/show/2012/07/17

The Insanity of War Flags Over Graves by William Blum Boiling Frogs Post Recently by William Blum: Yeswecanistan Lewrockwell.com July 14, 2012 In his autobiography, Dreams From My Fathers, Barack Obama writes of taking a job at some point after graduating from Columbia University in 1983. He describes his employer as “a consulting house to multinational corporations” in New York City, and his functions as a “research assistant” and “financial writer”. Oddly, Obama doesn’t mention the name of his employer. However, a New York Times story of October 30, 2007 identifies the company as Business International Corporation. Equally odd is that the Times did not remind its readers that the newspaper itself had disclosed in 1977 that Business International had provided cover for four CIA employees in various countries between 1955 and 1960. The British journal, Lobster – which, despite its incongruous name, is a venerable international publication on intelligence matters – has reported that Business International was active in the 1980s promoting the candidacy of Washington-favored candidates in Australia and Fiji. In 1987, the CIA overthrew the Fiji government after but one month in office because of its policy of maintaining the island as a nuclear-free zone, meaning that American nuclear-powered or nuclear-weapons-carrying ships could not make port calls. After the Fiji coup, the candidate supported by Business International, who was much more amenable to Washington’s nuclear desires, was reinstated to power – R.S.K. Mara was Prime Minister or President of Fiji from 1970 to 2000, except for the one-month break in 1987. In his book, not only doesn’t Obama mention his employer’s name; he fails to say exactly when he worked there, or why he left the job. There may well be no significance to these omissions, but inasmuch as Business International has a long association with the world of intelligence, covert actions, and attempts to penetrate the radical left – including Students for a Democratic Society (SDS) – it’s reasonable to wonder if the inscrutable Mr. Obama is concealing something about his own association with this world. Adding to the wonder is the fact that his mother, Ann Dunham, had been associated during the 1970s and 80s – as employee, consultant, grantee, or student – with at least five organizations with intimate CIA connections during the Cold War: The Ford Foundation, Agency for International Development (AID), the Asia Foundation, Development Alternatives, Inc., and the East-West Center of Hawaii. Much of this time she worked as an anthropologist in Indonesia and Hawaii, being in good position to gather intelligence about local communities. As one example of the CIA connections of these organizations, consider the disclosure by John Gilligan, Director of AID during the Carter administration (1977-81). “At one time, many AID field offices were infiltrated from top to bottom with CIA people. The idea was to plant operatives in every kind of activity we had overseas, government, volunteer, religious, every kind.” And Development Alternatives, Inc. is the organization for whom Alan Gross was working when arrested in Cuba and charged with being part of the ongoing American operation to destabilize the Cuban government. July 14, 2012 William Blum is the author of Killing Hope: U.S. Military and CIA Interventions Since World War II, Rogue State: a guide to the World's Only Super Power, West-Bloc Dissident: a Cold War Political Memoir, and Freeing the World to Death: Essays on the American Empire.

Libor: They all knew – and no one acted Regulator’s claim it knew nothing thrown into doubt as documents show authorities were told of rate-rigging in 2008 BEN CHU Saturday, 14 July 2012 The Independent Regulators on both sides of the Atlantic failed to act on clear warnings that the Libor interest rate was being falsely reported by banks during the financial crisis, it emerged last night. Click HERE to view 'The missed warnings how us authorities demanded changes... and were ignored' graphic A cache of documents released yesterday by the New York Federal Reserve showed that US officials had evidence from April 2008 that Barclays was knowingly posting false reports about the rate at which it could borrow in order to assuage market concerns about its solvency. An unnamed Barclays employee told a New York Fed analyst, Fabiola Ravazzolo, on 11 April 2008: "So we know that we're not posting, um, an honest Libor." He said Barclays started under-reporting Libor because graphs showing the relatively high rates at which the bank had to borrow attracted "unwanted attention" and the "share price went down". The verbatim note of the call released by the Fed represents the starkest evidence yet that Libor-fiddling was discussed in high regulatory circles years before Barclays' recent £290m fine. The New York Fed said that, immediately after the call, Ms Ravazzolo informed her superiors of the information, who then passed on her concerns to Tim Geithner, who was head of the New York Fed at the time. Mr Geithner investigated and drew up a six-point proposal for ensuring the integrity of Libor which he presented to the British Bankers Association, which is responsible for producing the Libor rate daily. Mr Geithner, who is now US Treasury Secretary, also forwarded the six-point plan to the Governor of the Bank of England, Sir Mervyn King. The Bank pointed out last night that there was no evidence in the Geithner letter of banks actually making false submissions – although then note did allude to "incentives to misreport". It was unclear last night whether Mr Geithner informed Sir Mervyn about the testimony of the Barclays employee who said that the bank was being dishonest in its submissions. If it turned out that he did, that would be highly damaging for the Bank since it has always claimed that it never saw or heard any evidence that private banks were deliberately making false reports about their borrowing costs. Sir Mervyn is due to be questioned by the House of Commons Treasury Select Committee next Tuesday, where MPs are likely to put this question to the Governor. The Bank's Deputy Governor, Paul Tucker, went before the Treasury committee last week to answer allegations that he had put pressure on Barclays to misreport its borrowing rates in 2008 while attempting to promote financial stability. Mr Tucker denied that he had done so and said he only found out that Barclays had been deliberately submitting dishonest Libor submissions recently. The New York Fed released its cache of documents in response to a request from the chairman of Congress's Committee on Financial Services on Oversight and Investigation, Randy Neugebauer, who has been investigating how much US regulators knew about the rate-fixing scandal, in which 11 other banks around the world have been implicated. A separate email released by the Bank of England yesterday shows that Mr Tucker forwarded the Geithner email to Angela Knight, the former chief executive of the British Bankers Association. She responded saying that "changes had been made to incorporate the views of the Fed". While the BBA is understood to have acted on two of Mr Geithner's proposals, the other four were not adopted. Before hearing from Sir Mervyn on Tuesday, the Treasury Select Committee is set to take evidence on Monday afternoon from Jerry del Missier, the former chief operating officer at Barclays, who gave the green light for traders to submit false Libor submissions during the crisis. He will be asked about whether he thought the order to do so had come down from the Bank of England. Last month Barclays was fined £290m for rigging Libor between 2005 and 2008. The regulators found that Barclays traders had initially submitted false reports to make profits for its traders, but subsequently to allay concerns about the bank's health. Barclays' chief executive Bob Diamond resigned on 3 July. The Libor rate is used to fix the cost of borrowing on mortgages, loans and derivatives worth more than $450 trillion (£288 trillion) globally. The missed warnings: ‘So we know that we’re not posting, um an honest Libor One document released yesterday by the Fed detailed a conversation between staffer Fabiola Ravazzolo and an unnamed Barclays employee in April 2008, including the following edited extract: Fabiola Ravazzolo: And, and why do you think that there is this, this discrepancy? Is it because banks maybe they are not reporting what they should or is it um… Barclays employee: Well, let's, let's put it like this and I'm gonna be really frank and honest with you. FR: No that's why I am asking you [laughter] you know, yeah [inaudible] [laughter] BE: You know, you know we, we went through a period where we were putting in where we really thought we would be able to borrow cash in the interbank market and it was above where everyone else was publishing rates. FR: Mm hmm. BE: And the next thing we knew, there was um, an article in the Financial Times, charting our LIBOR contributions... and inferring that this meant that we had a problem... and um, our share price went down... So it's never supposed to be the prerogative of a, a money market dealer to affect their company share value. FR: Okay. BE: And so we just fit in with the rest of the crowd, if you like... So, we know that we're not posting um, an honest LIBOR. And yet and yet we are doing it, because, um, if we didn't do it it draws, um, unwanted attention on ourselves. FR: Okay, I got you then. BE: And at a time when the market is so um, gossipy... it was not a useful thing for us as an organization.

Barclays chief Bob Diamond could be brought before Congress, sources say Washington politicians considering asking former Barclays chief executive to testify as Libor-fixing By Dominic Rushe in New York and Jill Treanor guardian.co.uk, Wednesday 11 July 2012 17.59 EDT US politicians are considering summoning Barclays' former boss Bob Diamond to Washington to answer questions about the Libor-fixing scandal, in a sign that the controversy is becoming an ever hotter issue in the US. Two high powered committees, the Senate banking committee and the House financial services committee, are both believed to be considering calling Diamond to testify. Sources close to both committees said they were in the early stages of gathering information and were almost certain to call the former Barclays chief executive after the summer recess. Senator Tim Johnson, chairman of the banking committee, said on Tuesday that his panel would quiz Federal Reserve chairman Ben Bernanke and Treasury secretary Timothy Geithner on the scandal at hearings scheduled before the August break. "I am concerned by the growing allegations of potential widespread manipulation of Libor and similar interbank rates by some financial firms," said Johnson. A spokesman for the Senate banking committee would not confirm plans to call Diamond. He said: "No decisions have been made beyond plans already outlined." A spokesman for Diamond declined to comment. The US justice department is already investigating the scandal, and several cities and state pension funds have launched legal action, claiming that their investments suffered as a result of the manipulation of Libor rates. Barclays is the first high-profile settlement with regulators, and last month was fined £290m ($450m) by regulators in the UK and US over allegations that it attempted to manipulated Libor. But more than a dozen other banks including Citigroup, HSBC and JP Morgan Chase are being investigated for their roles in setting Libor rates. White collar crime expert William Black, professor of economics and law at University of Missouri Kansas City, said US action would soon escalate the scandal. "We have very tough disclosure laws. We already seen how horrific these people's emails can be, there's going to be a lot more where that came from," he said. In emails already disclosed, Barclays traders referred to Libor "fixings" and appear to have colluded in manipulating the exchange rate. "Dude. I owe you big time! Come over one day after work and I'm opening a bottle of Bollinger," wrote one trader after a colleague helped him out. In the first signs of the reputational fall-out of the crisis, which has left Barclays searching for a new chief executive and chairman, Barclays was dropped from a bond issue for Japan Bank for International Cooperation, because of its involvement in the attempts to fix Libor. Barclays refused to comment on its role in the bond issue, although City sources noted it had been active in other bond issues in recent days, including for other Japanese issues such as Sumitomo and NTT. Wayne State University law professor Peter Henning said the scandal had the potential to become "the signature financial fraud of the meltdown." He said the trigger point was likely to come if and when a US bank is fined. Henning pointed out that the Justice Department's fraud division was looking after the case, not the anti-trust division. "They are looking at this as a fraud case. That's much more serious for any individual involved. Given the amounts of money we are discussing, there could be serious jail time if anyone is convicted," he said. Henning said he expected the scandal to become an increasingly hot political topic. Analysts in the City are attempting to calculate the potential cost of any litigation. Cormac Leech, an analyst at Liberum Capital, calculated that bailed out Lloyds Banking Group could face a bill of £1.5bn – 7% of its stock market value – in the eventual fallout from the affair. About 45% of US mortgages are tied to Libor rates, and cities including Baltimore are claiming they have had to cut essential services as a result of losing money on investments tied to Libor. "They are never going to say this, but the Obama administration would like nothing more than to charge a big banker ahead of the election," said Henning. John Coffee, a Columbia Law School professor, said the scandal was proving as damaging for regulators as bankers. The fallout from the scandal is already hitting Obama's team. Geithner was president of the Federal Reserve bank of New York when the alleged manipulations took place and was aware of some of the issues. Geithner held a meeting on April 28 2008 titled "Fixing Libor" and communicated his concerns to the UK authorities but no further action appears to have been taken.He also regularly spoke to senior figures at Barclays, including Diamond. "If the Federal Reserve knew that Libor was being manipulated and sat there and tolerated it, it suggests they were more interested in their relationships with the banks than with consumers," said Coffee. "When Republicans are being hammered for being too close to big business, what could be better than pointing fingers at Geithner?" said Black.

Medieval French Village Echoes With the Voice of Kennedy’s Camelot By RALPH BLUMENTHAL The New York Times July 12, 2012 LE THOR, France — If the French loved John F. Kennedy, there is a special spot in their hearts for Pierre Salinger, his rotund, cigar-smoking, francophone-ish press secretary whose maternal grandfather served in the Assemblée Nationale and fought to clear Capt. Alfred Dreyfus. So it’s not surprising that here in this medieval Provençal village east of Avignon, where Mr. Salinger spent his last years with his fourth wife, there is a temple to the jovial spokesman who traded a prizewinning journalistic career for a roller-coaster life of politics, public service, comedy and tragedy. In a memoir published nine years before his death at a local hospital in 2004 at 79, Mr. Salinger averred distaste for what he called the “Camelotization” of the Kennedys. Yet, on exhibit here is the leather cigar case with the gold initials “J.F.K.” that Jacqueline Kennedy presented Mr. Salinger, “with my love and appreciation for all you did to make his days here so unforgettable.” Also, Mr. Salinger’s presidential appointment certificate (“Reposing special trust and confidence in your integrity, prudence and ability, I do appoint you. ... ”), and other memorabilia of happily-ever-aftering, like his PT-109 tie clasp and prototype American Express card, color purple, No. 200. The poignant little museum has been tucked away since 2006 in a corner of a former marble yard that Mr. Salinger and his last wife, Nicole, bought in 1998 and turned into an upscale bed-and-breakfast, La Bastide Rose, the pink bastion, or country house. Their foundation sponsors annual exhibits on the property — this year, a tribute to Léopold Sédar Senghor, the Senegalese poet, liberator and statesman. But Mr. Salinger — who went on to high-profile careers as an ABC News bureau chief, a prolific fiction and nonfiction author, a publicist and, for one brief shining moment, United States senator — remains the heart and soul of the enterprise. “Pierre loved France, and France loved him back,” wrote Jonathan Randal, an author and former foreign correspondent for The New York Times and The Washington Post, in an e-mail. “Pierre became the quintessential American for the French, partly because of the J.F.K. gold dust, partly because he made it his business to get to know the French political scene and partly because he spoke atrociously accented French that made the French feel good about themselves and about America, for here was a son of both countries who loved France but spoke odd French.” To be sure, Mr. Randal added, “Pierre was part of what cynics sometimes call ‘La sauce Lafayette,’ ” a reference to the affectionate relations that developed with the French help for the colonists during the Revolutionary War. But as a Navy veteran he also embodied the sacrifices Americans made for France in two world wars. Robert Korengold, a former Newsweek foreign correspondent and aide to President Ronald Reagan, once toasted Mr. Salinger at Versailles as someone considered by the French not as “an American, or the American but THEIR American in France.” The exhibits trace Mr. Salinger’s childhood as a piano prodigy in San Francisco; his attendance at a longshoremen’s union summer camp (Kennedy later kidded him about being a Communist); his World War II service, when he took up cigar-smoking for gravitas; and his award-winning series in The San Francisco Chronicle in 1953 exposing barbaric conditions in the jails. When his investigative series on the Teamsters was scrapped because Collier’s magazine folded, he sought out Robert F. Kennedy at the Senate labor investigations subcommittee. He soon became the panel’s chief investigator and joined John F. Kennedy’s campaign for president. In his 1995 memoir, “P.S.,” Mr. Salinger said he opposed Senator Lyndon B. Johnson’s place on the 1960 ticket while Robert F. Kennedy supported it. But it was under President Johnson that Mr. Salinger was appointed to fill a Senate vacancy and to run for the California seat in the 1964 election. He lost to the Republican actor George Murphy, concluding, “The people have spoken — the bastards!” Le Thor is remote, with a 14th-century castle and ancient gates along the banks of the Sorgue River. But those who find their way here among the lavender fields and van Gogh landscapes of France’s sunny south may get an earful of oral history from Mr. Salinger’s ebulliently bilingual widow, Nicole (known as Poppy, to distinguish her from Mr. Salinger’s third wife, who was also named Nicole). The couple met in 1983. She was then the Comtesse de Menthon, wife of a French aristocrat, and communications director for the fashion designer Guy Laroche in Paris. Then separated from his third wife, Mr. Salinger, in his recounting, fell hard for the Bardot-look-alike, besieging her with phone calls and surprise visits. Finally won over, she divorced and they married in 1989. (After his death she married a childhood beau, Aygulf Le Cesne, and now, at 67, is Nicole Salinger Le Cesne). She tells how Mr. Salinger, prone to conspiracy theories, continued to believe that an errant American missile from a Navy ship, not a mechanical malfunction, brought down T.W.A. Flight 800 off Long Island in 1996, killing all 230 aboard. Mr. Salinger said French intelligence sources had given him a document pointing to a cover-up, but the F.B.I. said the account was baseless. Mr. Salinger’s French roots ran deep. His mother’s father, Pierre Bietry, founded the Syndicat des Jaunes, or Yellow Labor Union, of anti-Marxist socialists, winning a seat in the French Parliament from 1906 to 1910 and championing the defense of Captain Dreyfus, the Jewish officer hounded into prison for supposed treason. His daughter Jehanne, Mr. Salinger’s mother, became a journalist in Asia before settling in San Francisco in 1921, where she met and married Herbert Salinger, a divorced Jewish mining engineer who had founded a symphony orchestra in Salt Lake City. Here in Le Thor, Mr. Salinger’s penchant for fine wine and cigars is fondly recalled. A centerpiece of the museum is a large wooden cigar box, all that remains of a gift that Nikita Khrushchev presented Mr. Salinger during a visit to Moscow in 1962. The 150 cigars had come from Fidel Castro and violated the newly installed embargo. President Kennedy was aghast, directing Mr. Salinger to surrender the cigars so Customs could destroy them. Years later, Mr. Salinger reflected ruefully that he could have done that himself, “one by one.”

Mr. Romney’s Financial Black Hole Editorial The New York Times July 11, 2012 Paying taxes forthrightly has long been a matter of civic pride for most American politicians, a demonstration of honesty and of a willingness to share in society’s burdens. Since the Watergate era, presidential candidates have released several years of tax returns, allowing voters to peer at their financial choices and discern their entanglements. Mitt Romney has upended that tradition this year. He has released only one complete tax return, for 2010, along with an unfinished estimate of his 2011 taxes. What information he did release provides a fuzzy glimpse at a concerted effort to park much of his wealth in overseas tax shelters, suggesting a widespread pattern of tax avoidance unlike that of any previous candidate. Mr. Romney has resisted all demands for more disclosure, leading to growing criticism from Democrats that he is trying to hide his fortune and his tax schemes from the public. Given the troubling suspicions about his finances, he needs to release many more returns and quickly open his books to full scrutiny. The 2010 tax return showed that the blind trust held by his wife, Ann, included a $3 million Swiss bank account that had not been properly reported on previous financial disclosure statements. (The account was closed by the trust manager in 2010 who feared it might become embarrassing for the campaign. He was right.) It also showed that Mr. Romney had used a complex offshore tax shelter, known as a blocker corporation, to shield the investments in his I.R.A. from paying an obscure business tax. The use of that technique by wealthy taxpayers and institutions, long been blasted by Congressional tax experts as abusive, costs the treasury $1 billion a decade. The return showed at least 20 investments not previously listed on disclosure reports, but it did not provide enough information to evaluate their size or holdings. Neither the tax return nor other disclosures have revealed the full amounts of the Romneys’ other offshore holdings over the years, including investments in Germany, Luxembourg, the Cayman Islands, Australia and Ireland. Recent articles by The Associated Press and Vanity Fair focused on a Bermuda account that Mr. Romney transferred to his wife’s blind trust the day before he was inaugurated as governor of Massachusetts in 2003. The account, created in 1997, had not been properly disclosed to voters until January. Even though it had few assets in 2010, according to the return, it could have sheltered a significant amount of income last year or in previous years. Mr. Romney also has not fully explained the nature of his separation agreement with Bain Capital, the private-equity firm he founded, which he left in 1999. Last month, his trust reported receiving a $2 million payment from Bain as part of unpaid earnings from his work there. Of the 138 Bain funds organized in the Cayman Islands, Mr. Romney has interests in 12, worth up to $30 million, according to Vanity Fair. Though the Romney campaign has often distanced itself from Bain’s recent corporate takeover work, voters have no way of knowing how much the candidate has received from Bain since he left, or how much is coming. Firms like Bain park money in the Caymans because the islands have no taxes on capital gains, profits or income for foreigners. But just because it’s legal doesn’t mean it’s the right thing to do. The campaign says Mr. Romney has received no tax benefits from his offshore shelters, a dubious assertion but one impossible to check without more disclosure. Mr. Romney said this week that he had no idea where the blind trust had put his money, and he dismissed the issue of the offshore investments, saying they were no more consequential than investing in a foreign car company. A foreign investment, however, is not the same as an offshore tax shelter. A more conscientious politician would have urged his blind trusts to have nothing to do with shelters not available to the general public. And Mr. Romney is tarnishing an important political tradition — one set by his father, George Romney, who released 12 years of tax returns in 1967 — by continuing to keep the sources of his income in the shadows.

July 10, 2012, 9:21 pm Parliament Questions Culture at Barclays The New York Times By MARK SCOTT and BENJAMIN PROTESS LONDON - During his tenure as Barclays chief executive, Robert E. Diamond Jr. spoke passionately about creating a strong culture of integrity and trust, a common philosophy that would breed success at the big British Bank. In a speech last year, he emphasized that the "evidence of culture is how people behave when no one is watching." But now Mr. Diamond, who stepped down last week, faces criticism about his leadership as Barclays deals with fallout from a scandal involving interest rate manipulation. On Tuesday, Barclays released new documents that indicate British regulators had raised questions about Mr. Diamond's management style, with concerns dating to his appointment to the top spot in late 2010. The scrutiny of Mr. Diamond came months - and in one case, years - before the bank came under fire for trying to manipulate key interest rates. The revelations, during a tense parliamentary committee hearing in Britain, could put added pressure on the bank and Mr. Diamond. "The culture at Barclays came from the top," said Andrew Tyrie, a member of Parliament who heads the committee. "It came from top executives." In late June, Barclays agreed to pay $450 million to settle accusations by American and British authorities that it reported false rates in an effort to improve profits and make its financial position look stronger. The case, the first major action stemming from a global investigation into big banks, focuses on a key benchmark known as the London interbank offered rate, or Libor. Such rates are used to help determine the borrowing costs for credit cards, mortgages and other types of debt. To help quell the anger over the case, Mr. Diamond agreed on Tuesday to forgo up to $31 million in stock bonuses that he was set to receive. Last week, the bank's chairman, Marcus Agius, said he also would resign, along with one of Mr. Diamond's top deputies, Jerry del Missier. "I am sorry, angry and disappointed," Mr. Diamond told the parliamentary committee last week. On Tuesday, British politicians directed their ire at Mr. Agius, who testified at the hearing for more than two hours. Lawmakers focused mainly on the actions of Mr. Diamond, wondering what went wrong inside the bank. The committee, in part, addressed the newly released documents that show British regulators' earlier concerns about Mr. Diamond. In a letter to Mr. Agius in late 2010, Hector Sants, the chief executive of Britain's Financial Services Authority, pushed for Mr. Diamond, who had been recently tapped as chief executive, to have an "increased level of engagement" with authorities. He added that regulators expected the incoming Barclays chief, who took over in early 2011, to have a "close, open and transparent relationship" with them. Mr. Sants also cautioned about the incoming chief's chumminess with top Barclays deputies. Mr. Diamond helped build Barclays' investment bank into a global leader, and regulators wanted to ensure that he would exercise sufficient "clarity in oversight" over two close colleagues, Mr. del Missier and Rich Ricci, who replaced Mr. Diamond as the co-heads of the unit. Questions about the bank's culture persisted. In April, Adair Turner, chairman of the Financial Services Authority, wrote a letter to Mr. Agius, addressing what the regulator perceived as overly aggressive practices at the bank. He pointed to Barclays' efforts to avoid paying around $774 million in corporate taxes and some of the bank's accounting methods. "Barclays often seems to be seeking to gain advantage through the use of complex structures, or through regulatory approaches which are at the aggressive end of interpretation of the relevant rules and regulations," Mr. Turner wrote. In his testimony on Tuesday, Mr. Agius said that Mr. Turner's letter showed the bank's "strained" relationship with the Financial Services Authority. "What that letter is saying is that we overdid it," Mr. Agius said. The correspondence between Barclays and British regulators appears to contradict evidence that Mr. Diamond gave last week to the same parliamentary committee. In his testimony, Mr. Diamond indicated that the bank maintained a good relationship with the British regulator. He also said that he did not recall that the regulator had raised concerns about the bank's activities or its internal culture. "I knew nothing about it at the time that I was appointed," Mr. Diamond told the parliamentary committee last week. British politicians repeatedly asked Mr. Agius on Tuesday whether Mr. Diamond had been completely forthcoming during his testimony. "Would you say that Mr. Diamond lied to this committee?" David Ruffley, a member of Parliament, asked Mr. Agius. "I can't comment on Mr. Diamond's testimony," the Barclays chairman said. In light of the concerns about Mr. Diamond's testimony, Mr. Diamond might be recalled to give further evidence next week. Senior officials from the Financial Services Authority also are expected to testify. In his testimony, Mr. Agius gave more detail about the inner workings of the British bank. The Barclays chairman, who said he was first told about the investigations into the bank's Libor activities in April 2010, said the bank's board did not make decisions involving the setting of the Libor. Instead, issues related to the rate were left to lower-level executives, he told lawmakers. When asked why senior managers did not question decisions to report artificially low rates, Mr. Agius said that the bank handled many difficult situations after the collapse of Lehman Brothers in 2008. "I think it reflects the extraordinary times," he said. At the beginning of his testimony, Mr. Agius said that Mr. Diamond would give up his deferred stock bonuses. Still, Mr. Diamond will receive around $3.1 million, including one year's pay and a cash payment. The agreement is roughly double what he is contractually owed. "We want to retain such good will as we can with him," Mr. Agius said. Mr. Agius, who became Barclays' chairman in 2007, was asked to detail the circumstances of Mr. Diamond's resignation last week. He told the committee that in early July he and Michael Rake, one of the bank's independent directors, talked to Mervyn A. King, the governor of the Bank of England, about the rate-manipulation scandal. During the conversation, Mr. King indicated that Mr. Diamond no longer had the support of the Financial Services Authority, according to Mr. Agius's testimony. But Mr. King said Barclays' board would have to make the final decision about Mr. Diamond's future. After the conversation with Mr. King, Mr. Agius held a conference call with the bank's nonexecutive directors, who decided to ask Mr. Diamond to resign. After calling Mr. King to inform him of the board's decision, the chairman visited Mr. Diamond at his house. "I left confident that he would resign," Mr. Agius said.

July 10, 2012, 9:28PM Rate Scandal Stirs Scramble for Damages The New York Times By NATHANIEL POPPER As unemployment climbed and tax revenue fell, the city of Baltimore laid off employees and cut services in the midst of the financial crisis. Its leaders now say the city’s troubles were aggravated by bankers’ manipulation of a key interest rate linked to hundreds of millions of dollars the city had borrowed. Baltimore has been leading a battle in Manhattan federal court against the banks that determine the interest rate, the London interbank offered rate, or Libor, which serves as a benchmark for global borrowing and stands at the center of the latest banking scandal. Now cities, states and municipal agencies nationwide, including Massachusetts, Nassau County on Long Island, and California’s public pension system, are looking at whether they suffered similar losses and are weighing legal action. Dozens of lawsuits filed by municipalities, pension funds and hedge funds have been consolidated into a few related cases against more than a dozen banks that are involved in setting Libor each day, including Bank of America, JPMorgan Chase, Deutsche Bank and Barclays. Last month, Barclays admitted to regulators that it tried to manipulate Libor before and during the financial crisis in 2008, and paid $450 million to settle the charges. It said other banks were doing the same, but none of them have been accused of wrongdoing. Libor, a measure of how much banks must pay to borrow money from one another in the short term, is set through a daily poll of the banks. The rate influences what consumers, businesses and investors pay on a wide range of financial contracts, as varied as mortgages and interest rate swaps. Barclays has said it and other banks understated the rate during the financial crisis to make themselves look healthier to the public, rather than to make more money from clients. As regulators and lawmakers in Washington and Europe assess the depth of the Libor abuse and the failure to address it, economists and analysts are already predicting it could be one of the most expensive scandals to hit Wall Street since the financial crisis. Governments and other investors may face many hurdles in proving damages. But Darrell Duffie, a professor of finance at Stanford, said he expected that their lawsuits alone could lead to the banks’ paying out tens of billions of dollars, echoing numbers from a recent report by analysts at Nomura Equity Research. American municipalities have been among the first to claim losses from the supposed rate-rigging, because many of them borrow money through investment vehicles that directly derive their value from Libor. Peter Shapiro, who advises Baltimore and other cities on their use of these investments, said that “about 75 percent of major cities have contracts linked to this.” If the banks submitted artificially low Libor rates during the financial crisis in 2008, as Barclays has admitted, it would have led cities and states to receive smaller payments from financial contracts they had entered with their banks, Mr. Shapiro said. “Unambiguously, state and local government agencies lost money because of the manipulation of Libor,” said Mr. Shapiro, who is managing director of the Swap Financial Group and is not involved in any of the lawsuits. “The number is likely to be very, very big.” The banks have declined to comment on the lawsuits, but their lawyers have asked for the cases to be dismissed in court filings, pointing to the many unusual factors that influenced Libor during the crisis. The efforts to calculate potential losses are complicated by the fact that Libor is used to determine the cost of thousands of financial products around the globe each day. If Libor was artificially pushed down on a particular day, it would help people involved in some types of contracts and hurt people involved in others. Securities lawyers say the lawsuits will not be easy to win because the investors will first have to prove that the banks successfully pushed down Libor for an extended period during the crisis, and then will have to demonstrate that it was down on the day when the bank calculated particular payments. In addition, investors may have to prove that the specific bank from which they were receiving their payment was involved in the manipulation. Before it even reaches the point of proving such subtleties, however, the banks could be compelled to settle the cases. One of the major complaints was filed by several traders and hedge funds that entered into futures contracts that are traded through the Chicago Mercantile Exchange and that pay out based on Libor. These contracts were a popular way to protect against spikes in interest rates, but they would not have paid off as expected if Libor had been artificially lowered. A 2010 study cited in the suit — conducted by professors at the University of California, Los Angeles and the University of Minnesota — indicated that Libor was significantly lower than it should have been throughout 2008 and was particularly skewed around the bankruptcy of Lehman Brothers. A separate complaint filed in 2010 by the investment firm Charles Schwab asserts that some of its mutual funds, including popular ones like the Schwab Total Bond Market Fund, lost money on similar investments. The complaints being voiced by municipalities are mostly related to their use of a popular financial contract known as an interest rate swap. States and cities generally enter into these swaps with specific banks so that they can borrow money in the bond market. They pay bondholders based on a floating interest rate — like an adjustable-rate mortgage — but end up paying their bankers a fixed rate through a swap. If Libor is artificially lowered, the municipality is stuck paying the same fixed rate, but it receives a smaller variable payment from its bank. Even before the current controversy, some municipal activists have said that banks took advantage of the financial inexperience of municipal officials to sell them billions of dollars of interest rate swaps. Experts in municipal finance say that because of the particular way that cities and states borrow money, they are especially liable to lose out on their swaps if Libor drops. Mr. Shapiro, who helps cities, states and companies negotiate these contracts, said that if a city had interest rate swaps on bonds worth $1 billion and Libor was artificially pushed down by 0.30 percent, which is what the lawsuits contend, that city would have lost $3 million a year. The lawsuit claims the manipulation occurred over three years. Barclays’ settlement with regulators did not specify how much the banks’ actions may have moved Libor. In Nassau County, the comptroller, George Maragos, said in a statement that according to his own calculations, Libor manipulation may have cost the county $13 million on swaps related to $600 million of outstanding bonds. A Massachusetts state official who spoke on the condition of anonymity because of potential future legal actions, said the state was calculating its potential losses. “We are deeply concerned and we are carefully analyzing all of our options,” the official said. Anne Simpson, a portfolio manager at the California Public Employees’ Retirement System — the nation’s largest pension fund — said that the fund’s officials “are sifting through the impact, but there certainly is an impact.” In Baltimore, the city had Libor-based interest rate swaps on about $550 million of bonds, according to the city’s financial report from 2008, the central year discussed in the lawsuit. The city’s lawyers have declined to specify what they think Baltimore’s losses were. The city solicitor, George Nilson, said that the rate manipulation claims meant that the city lost out on money when it needed it the most. “The injury we suffered during the time we suffered it hurt more because we were challenged budgetarily,” Mr. Nilson said. “Every dollar we lost due to illegal conduct was a dollar we couldn’t pay to keep open recreation centers or to pay police officers.”

FSA's Wheatley to examine wider market prices in wake of Libor scandal A wide range of financial benchmarks are to be scrutinised in a government-backed investigation, after Bank of England policy-maker Paul Tucker warned the Libor rate-setting scandal could be repeated in other markets. By Emma Rowley 6:01PM BST 10 Jul 2012 The Telegraph http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9390336/FSAs-Wheatley-to-examine-wider-market-prices-in-wake-of-Libor-scandal.html The Financial Services Authority's head of financial conduct Martin Wheatley is expected to examine many other “self-certified” market prices in his upcoming review investigating Libor. Prices which, like Libor, are based on quotes or estimates from market players rather than actual trading, include foreign exchange rates, as well as prices for precious metals and - in part - benchmark prices for other commodities. The Wheatley review was announced by the Chancellor last week, but its full remit has yet to be formally unveiled. Mr Wheatley is designated to become chief executive when part of the FSA is split into the Financial Conduct Authority. Mr Tucker, the Bank of England's deputy governor, on Tuesday told MPs that Barclays’ abuse of the Libor system may be only one part of the banks’ dishonesty over crucial financial information, suggesting that other markets should now be investigated. The official inquiry into Libor – which helps determine interest rates for householders and businesses – should be broadened to include several over markets where banks are trusted to report their own data, he said. Barclays has been fined almost £300m for deliberately lying about the rates it was paying during the financial crisis, in order to downplay the financial pressure it was under. Other banks are also being investigated for distorting Libor, which is calculated on major banks’ own reports of their borrowing costs. Mr Tucker said he could not be sure that abuse of the Libor system is not continuing to this day, telling the committee: “I can't be confident of anything after learning of this cesspit.” The Libor scandal could be repeated in a number of other “self-certifying” markets where prices are determined, he added. “Self-certification is clearly open to abuse, so this could occur elsewhere,” he said. Mr Wheatley's inquiry, due to conclude this summer, will examine whether Libor-setting should be regulated, what data it should use, and whether existing sanctions surrounding market abuse of Libor

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Federal Reserve Of New York Proposed Reforms For Libor Issues In 2007 To 2008 Reuters | Posted: 07/10/2012 6:59 am Updated: 07/10/2012 11:40 am By Carrick Mollenkamp July 10 (Reuters) - The Federal Reserve Bank of New York may have known as early as August 2007 that the setting of global benchmark interest rates was flawed. Following an inquiry with British banking group Barclays Plc in the spring of 2008, it shared proposals for reform of the system with British authorities. The role of the Fed is likely to raise questions about whether it and other authorities took enough action to address concerns they had about the way Libor rates were set, or whether their struggle to keep the banking system afloat through the financial crisis meant the issue took a backseat. A New York Fed spokesperson said in a statement that "in the context of our market monitoring following the onset of the financial crisis in late 2007, involving thousands of calls and emails with market participants over a period of many months, we received occasional anecdotal reports from Barclays of problems with Libor. "In the spring of 2008, following the failure of Bear Stearns and shortly before the first media report on the subject, we made further inquiry of Barclays as to how Libor submissions were being conducted. We subsequently shared our analysis and suggestions for reform of Libor with the relevant authorities in the UK." The Fed statement did not provide the precise timing of the communication with the British authorities. Bear Stearns collapsed in early March 2008 and was then acquired by JPMorgan. Meanwhile, legislators on Capitol Hill have signaled they are interested in learning more about what Fed officials knew with regards to allegations of Libor manipulation. On July 9, Rep. Randy Neugebauer, chairman of a subcommittee of the House Financial Services Committee, sent a letter to the New York Fed asking for transcripts of any "communications with Barclays regarding the setting of interbank offered rates from August 2007 to November 2008." In the letter, a copy of which was reviewed by Reuters, the Texas Republican asked New York Fed President William Dudley to provide the transcripts by Friday. Tim Johnson, who chairs the Senate Banking Committee, said on Tuesday he was concerned by the allegations of the potential "widespread manipulation" of Libor and had directed his staff to schedule briefings on the issue. Johnson also said the committee planned to ask Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke about the allegations at hearings later this month. Barclays last month agreed to pay $453 million to British and U.S. authorities to settle allegations that it manipulated Libor, a series of rates set daily by a group of international banks in London across various currencies. The rates are an integral part of the world financial system and have an impact on borrowing costs for many people and companies as they are used to price some $550 trillion in loans, securities and derivatives. By manipulating Libor, banks could have made profits or avoided losses by wagering on the direction of interest rates. During the enormous liquidity problems in the financial crisis they could, by reporting lower than actual borrowing costs, have signaled that they were in better financial health than they really were. So far, the scandal has been more of a British affair, prompting the resignation of Barclays top three executives, condemnation from the British government amid a public outcry, and questions about the lack of oversight from British regulators. The Bank of England's Deputy Governor Paul Tucker on Monday even had to deny suggestions that government ministers had pressured him to encourage banks to manipulate Libor. But the deepening investigation by regulators in Britain, the United States, and other countries is expected to uncover problems well beyond Barclays and British banks. More than a dozen banks are being investigated for their roles in setting Libor, including Citigroup, JPMorgan Chase & Co, Deutsche Bank, HSBC Holdings Plc , UBS and Royal Bank of Scotland.. JAWBONING Regulators, including the New York Fed, had a responsibility "to force greater integrity and cooperation," and it had clearly reviewed the situation and had the resources to investigate, said Andrew Verstein, an associate research scholar at Yale University, who has written about Libor. "Obviously they considered this to be within their orbit." Many of the requests for improper Libor submissions came from traders in New York. As one of the world's most powerful regulators, the New York Fed has the power to "jawbone" banks to force them to make tough decisions, said Oliver Ireland, former associate general counsel at the Federal Reserve in Washington and now a lawyer at Washington law firm Morrison & Foerster. Still, he said by the autumn of 2008, the New York Fed's focus was locked on the impact of the meltdown of Lehman Brothers and AIG as it sought to prevent a global economic disaster. Barclays said in documents released last Tuesday that it first contacted Fed officials to discuss Libor on Aug. 28, 2007, at a time when credit problems arising from the U.S. housing bust were beginning to mount. It communicated with the Fed twice that day. Between then and October 2008, it communicated another 10 times with the U.S. central bank about Libor submissions, including Libor-related problems during the financial crisis, according to the documents. In its document listing those meetings as well as ones with British authorities, Barclays said: "We believe that this chronology shows clearly that our people repeatedly raised with regulators concerns arising from the impact of the credit crisis on LIBOR setting over an extended period." As a bank doing business in the United States, Barclays U.S. operations would have come under the Fed's purview. This would have been even more the case after it acquired the investment banking and trading operations of the bankrupt Lehman Brothers in September 2008. Officials with the New York Fed talked to authorities in Britain about problems with the calculation of Libor and also heard from market participants about whether an alternative could be found for Libor, people familiar with the situation said. In early 2008, questions about whether Libor reflected banks' true borrowing costs became more public. The Bank for International Settlements published a paper raising the issue in March of that year, and an April 16 story in the Wall Street Journal cast doubts on whether banks were reporting accurate rates. Barclays said it met with Fed officials twice in March-April 2008 to discuss Libor. "FIXING LIBOR" According to the calendar of then New York Fed President, Timothy Geithner, who is now U.S. Treasury Secretary, it even held a "Fixing LIBOR" meeting between 2:30-3:00 pm on April 28, 2008. At least eight senior Fed staffers were invited. It is unclear precisely what was discussed at this meeting or who attended. Among those invited, along with Geithner, was William Dudley, who was then head of the Markets Group at the New York Fed and who succeeded Geithner as its president in January 2009. Also invited was James McAndrews, a Fed economist who published a report three months later that questioned whether Libor was manipulated. "A problem of focusing on the Libor is that the banks in the Libor panel are suspected to under-report the borrowing costs during the period of recent credit crunch," said that report in July 2008 that examined whether a government liquidity facility was helping ease pressure in the interbank lending market. When asked for comment, McAndrews directed questions to a New York Fed spokeswoman. Dudley could not be immediately reached for comment. To be sure, the Fed's reports have sometimes been inconclusive. One from last month - only shortly before the Barclays settlement was announced - found that "while misreporting by Libor-panel banks would cause Libor to deviate from other funding measures, our results do not indicate whether or not such misreporting may have occurred." However, a 2010 draft of a related paper had said that banks appeared to be paying higher rates to borrow from other banks during the financial crisis compared with the levels they reported. One step the New York Fed could have taken in 2008 when questions initially were raised was to find a way to get its staff embedded in the Libor calculation process, Yale's Verstein said. There, they could use the Fedwire Funds Service - an electronic system through which banks settle interbank loans between one another - as a backstop to measure whether banks were accurately reporting borrowing costs. Then after the financial crisis had passed, regulators could have helped "urge on a newer and better system," he said. The New York Fed was not part of the Barclays settlement, which was the first major resolution in the Libor probe. The U.S. Commodity Futures Trading Commission, the U.S. Department of Justice, and the Financial Services Authority in Britain, settled with Barclays. NO ULTIMATE RESPONSIBILITY The scandal has thrown into sharp relief a potential regulatory gap: No single regulator appears to have had ultimate responsibility for making sure rates banks submitted were honest. On Monday, the Bank of England's Tucker called the issue of banks improperly submitting rates a "cesspit." In documents released with the Barclays settlement, the CFTC said Barclays traders on a New York derivatives desk asked another Barclays desk in London to manipulate Libor to benefit trading positions. "For Monday we are very long 3m (three-month) cash here in NY and would like the setting to be set as low as possible," a New York trader emailed in 2006 to a person responsible for setting Barclays rates. Darrell Duffie, a Stanford University finance professor who has followed the Libor issue for several years, said that he believed regulators were "on the case reasonably quickly" after questions were raised in 2008. "It appears that some regulators, at least at the New York Fed, indeed knew there was a problem at that time. New York Fed staff have subsequently presented some very good research on the likely level of distortions in Libor reporting," Duffie said. "I am surprised, however, that the various regulators in the U.S. and UK took this long to identify and act on the misbehavior."

http://www.dailymail.co.uk/news/article-2170941/Bank-England-deputy-governor-Paul-Tucker-I-didnt-tell-Bob-Diamond-rig-rates.html

July 9, 2012, 12:30 pm British Official Defends Role of Central Bank in Barclays Rate-Setting Scandal By MARK SCOTT 3:53 p.m. | Updated The New York Times LONDON - Under sharp questioning by political leaders on Monday, Paul Tucker, the deputy governor of the Bank of England, defended the central bank in light of the interest rate manipulation scandal that has engulfed Barclays. Mr. Tucker rebutted allegations by Barclays' officials that the central bank was well aware of the manipulation of rates and did nothing to stop it. Robert E. Diamond Jr., the former chief executive of Barclays, resigned because of the scandal and told the same committee last week that senior government officials had been repeatedly told about efforts to influence key interest rates but did nothing to intervene. Mr. Tucker testified that while senior officials had maintained regular contact with senior managers at Barclays after the collapse of Lehman Brothers in 2008, he was not informed of the effort to manipulate the London interbank offered rate, or Libor. The rate is used as a benchmark for trillions of dollars of corporate loans, home mortgages and derivatives around the world. "I was not aware of allegations of lawbreaking until the last few weeks," Mr. Tucker said during more than two hours of questioning. Mr. Tucker, who is a front-runner to replace Mervyn A. King as the head of Britain's central bank next year, appeared confident in the initial part of his testimony, but became increasingly anxious as politicians queried him on his role in the scandal. He added that the Bank of England had continued to use the rate to underpin its multibillion-dollar credit facilities for local banks throughout the financial crisis. The British government lent firms more than $310 billion as part of its so-called Special Liquidity Scheme from 2008 to 2011. Despite the Bank of England's actions, British politicians criticized Mr. Tucker for not taking a more active role in policing. When asked by politicians whether he was confident that the Libor manipulation had now stopped, Mr. Tucker wavered. "I can't be confident about anything after learning about this cesspit," he replied. Barclays agreed in late June to pay about $450 million to settle accusations from United States and British authorities that its traders and senior executives had manipulated the rate. Amid concerns that senior officials may have directed Barclays to alter its Libor submissions, British politicians on Monday focused their questioning on a conversation Mr. Tucker had with Mr. Diamond at the end of October 2008. In his testimony, Mr. Tucker said the worries from authorities were linked to fears that the financial markets might perceive Barclays to be at risk if its Libor submissions continued to be higher than those of other international banks. The British official said his phone call to Mr. Diamond was to remind the Barclays chief that people in the markets were questioning whether the British bank had access to financing. "I wanted to make sure that Barclays' day-to-day funding issues didn't push it over the cliff," Mr. Tucker said. E-mails released by the Bank of England before Mr. Tucker's testimony revealed that senior British officials were worried about banks' access to the financial markets in the aftermath of the collapse of Lehman Brothers. "We are [very] concerned that U.S. rates are tumbling but we remain stuck," Jeremy Heywood, a senior British civil servant, told Mr. Tucker in an e-mail on Oct. 22, 2008. Mr. Tucker also was in almost daily contact with senior Barclays executives during the final weeks of October, 2008, according to the documents. "These were completely extraordinary times," Mr. Tucker said. "Two banks had been taken under the government's wing, so Barclays was next in line." During that period, the British government provided multibillion-dollar bailouts for Royal Bank of Scotland and Lloyds Banking Group. He contacted Mr. Diamond on Oct. 25, 2008, saying he was "struck" that Barclays was paying a high interest rate on its loans, even though they were backed by British government guarantees. Mr. Tucker also asked to meet Mr. Diamond to discuss the financing issues. A few days later, Mr. Diamond sent a separate e-mail to the Bank of England deputy governor with details of a 3 billion euro ($3.7 billion) bond that Barclays had issued, in an effort to quell officials' fears that the British bank was having financing problems. "Investor confidence is slowly (very slowly) returning," Mr. Diamond wrote on Oct. 30, 2008. The European Commission also waded into the fray on Monday after Michel Barnier, the financial services commissioner, said he would propose amendments to draft market abuse legislation that would outlaw the manipulation of Libor and other benchmark rates. Mr. Tucker's testimony was seen as being pivotal to his future career path. Mr. Tucker, 54, has been with the Bank of England for more than 30 years. After working briefly at the British bank Baring Brothers and with the Hong Kong government in the 1980s, Mr. Tucker rose inside the Bank of England to become the central bank's deputy governor in charge of financial stability in 2009. He also is a leading figure in global efforts to overhaul financial regulation, holding senior positions at both the Financial Stability Board and the Global Economy Meeting, whose memberships comprise officials from the world's leading central banks. Mr. Tucker is known for his practical knowledge of the financial markets as well as for a track record of backing extra support to finance British banks during the recent economic crisis, according to several of his current and former colleagues, who spoke on the condition of anonymity. Yet the Libor scandal has hurt Mr. Tucker's reputation. Individuals connected to the Bank of England have voiced concerns that he missed signs that rate manipulation was happening. In November 2007, for example, Mr. Tucker headed a committee meeting at the central bank in which, according to the meeting's minutes, some officials raised questions that banks were submitting lower Libor rates than what they could obtain from the market, a process called lowballing. "This doesn't look good, Mr. Tucker," Andrew Tyrie, the chairman of the parliamentary committee, said. "In these minutes, we have what appear to any reasonable person as the lowballing of rates."

We're powerless to get truth about bankers, says key MP Diamond faces recall to Parliament – but Select Committee member says inquiry isn't working By Andy McSmith, Oliver Wright The Independent Monday, 9 July 2012 Politicians have been virtually "useless" so far at getting to the truth behind the banking scandal, one of the MPs responsible for investigating the affair has admitted. Andrea Leadsom, whose forensic questioning of the former chief executive of Barclays, Bob Diamond, led to his only uncomfortable moments during last week's cross-examination by the Commons Treasury Select Committee, said: "I don't think we felt we did a fantastic job. It's a fair criticism to say, 'You guys were useless'. "We had great weaknesses in that we didn't have email trails. We didn't have recordings of the morning meetings where you could point to what had been said. All we really had were the regulators' reports, what we'd seen in the media." Her frank remarks, in an interview with The Independent, will raise doubts about whether the larger parliamentary inquiry being set up to investigate the banking scandal will be able to uncover the whole truth. David Cameron has rejected Labour's calls for a judge-led inquiry, arguing that it would take too long. Several of the MPs who questioned Mr Diamond last week are now considering calling him back for a second bout because they are dissatisfied with his answers. Paul Tucker, the Deputy Governor of the Bank of England, will be questioned by the same committee today about the now-infamous telephone call he had with Mr Diamond at the height of the banking crisis in 2008. Any clash between his evidence and Mr Diamond's will add to the pressure for the former Barclays head to be recalled. One of the committee members, Pat McFadden, who was a business minister under Labour, said: "I can see that happening [Mr Diamond being recalled] after we have talked to other witnesses. There were some inconsistencies in what he told us. We'll ask Tucker if his version of the phone call tallies with Bob Diamond's." Ms Leadsom complained that she found parts of Mr Diamond's evidence "simply unbelievable", while John Mann, another Labour member of the committee, said that he "may not have been entirely honest in his answers". The Labour leader, Ed Miliband, will today promise to introduce major reforms of the banking industry in an attempt to improve competition and change its culture. Tomorrow the Treasury Select Committee will ask the outgoing Barclays chairman, Marcus Agius, about the state of mind of executives who thought it was acceptable to rig interest rates. He can also expect to come under pressure not to allow Mr Diamond his full pay-off, reputed to be £17m. The Business Secretary, Vince Cable, told the BBC yesterday that the public would regard it as an "outrage". The shadow Chancellor, Ed Balls, added: "It's outrageous that somebody should stand aside because the board decides that there's a problem and then get a payout which is sort of off the scale for anything normal people will earn in their lifetimes. How can that be?"

Jim, you are a talented writer and an energetic researcher and your knowledge of the JFK assassination is vast. You are also totally clueless about the fact that your constant attitude of “my way or the highway” towards many others who write on the topic is self-defeating when by your merely showing common courtesy and self-restraint would end any criticism by those upset with your methods. Such a change in methods would undoubtedly engender even wider admiration and recognition of your work.

I concur with what Mr. Janney has written above. It is something that has needed to be said for a long time.

NOTW editor 'spiked paedophilia scoop on Arthur C Clarke for fear of Murdoch' Ex-reporter claims story never ran because the sci-fi author was the proprietor's friend MARTIN HICKMAN The Independent Saturday, 7 July 2012 The News of the World spiked an exclusive story exposing the science fiction writer Arthur C Clarke as a paedophile, according to a new book about life inside the newspaper whose closure was announced a year ago today. In Hack, an account of his nerve-shredding days as a reporter on the News of the World and then the Sunday Mirror, Graham Johnson claims that although the NOTW prided itself on outing pederasts, editors made an exception for Mr Clarke because he was a friend of Rupert Murdoch. Through BSkyB, the tycoon commercially exploited the futurologist's theory that satellites would be ideal for communications and praised him in public. As a result, according to Mr Johnson, who by that time had been sacked by the NOTW and had joined the Sunday Mirror, a story by reporter Roger Insall about Mr Clarke's alleged abuse of adolescent boys was never published for fear of upsetting the proprietor. Tipped off about the story, the Sunday Mirror sent Mr Johnson to Colombo, where he extracted an confession from the author that he paid boys for sex. "I have never had the slightest interest in children – boys or girls. They should be treated in the same way. But once they have reached the age of puberty, then it is OK," Mr Clarke was quoted as saying in the Sunday Mirror. "If the kids enjoy it and don't mind it doesn't do any harm … there is a hysteria about the whole thing in the West." Mr Clarke subsequently denied he was a paedophile, saying: "The allegations are wholly denied." But he never sued the Sunday Mirror and died aged 90 at his Sri Lanka home in 2008. Speaking to The Independent yesterday, Mr Johnson said: "Roger [insall] said that because Arthur C Clarke was a mate of Rupert Murdoch, the editor wasn't having any of it and despite Roger getting a lot of evidence that Clarke was a paedophile they wouldn't publish it." Yesterday, Phil Hall, the then editor, said: "I can vaguely remember that story. I do remember that Roger Insall worked on it and I remember it was not published. My only recollection is that the only reason we wouldn't publish it was because of legal reasons." He said Mr Murdoch never asked him to spike stories. News International, publisher of the NOTW, made no comment.

Exclusive: Barclays insider lifts lid on bank's toxic culture Whistleblower: bosses ‘would have known’ what the traders were doing By James Moore The Independent Saturday, 7 July 2012 A former senior Barclays employee today exposes the "culture of fear" that operated at the bank and claims Bob Diamond would have been aware of his traders' activities. Speaking exclusively to The Independent, the banker alleges that senior executives would have known of Libor fiddling in 2008. The Serious Fraud Office announced yesterday that it had launched a criminal inquiry into interest rate fixing amid increasing clamour for rogue bankers to be prosecuted. Speaking on condition of anonymity, the banker says that senior Barclays bosses would have been told about Libor concerns because staff were drilled to pass anything untoward up to their managers. Failure to do this meant the sack. "Libor fixing was escalated by several people up to their directors, they would then have escalated it up the line because at Barclays if you don't escalate, and it is found out that you haven't, it is grounds for disciplinary action. You will be dismissed." The banker also describes the dark side of working for Mr Diamond's bank. He spoke of management by intimidation, even physical threat, punishing hours and a ruthless grading system that left workers in terror of their annual appraisals. Employees were often reduced to tears by the end of a day, but only when they had departed from the building. Such weakness would not be tolerated inside. The SFO gave no details about who would be the subject of its investigations. It said: "The SFO director, David Green QC, has today decided formally to accept the Libor matter for investigation." Danny Alexander, Chief Secretary to the Treasury, said he was "delighted" by the decision, which helped to strangle a muted recovery in the bank's shares over the past couple of days. Barclays finished down at 164.75p. Investigations into other banks are continuing on both sides of the Atlantic. Misreporting of Libor figures is thought to have been common practice in the run-up to the financial crisis. Mr Diamond has claimed the scandal engulfing Barclays could put other banks off alerting regulators about such issues in future. He has argued that Barclays has been punished for being a "first mover". Mr Diamond has always denied prior knowledge of Libor fixing and told MPs on Wednesday he was only made aware of it last month. Connections between Mr Diamond and Barclays are understood to have been severed. "He's history," said a source. The scandal led to heated exchanges in the Commons between the Chancellor, George Osborne, and shadow Chancellor, Ed Balls. A parliamentary inquiry into the affair, as opposed to a judge-led public enquiry advocated by Labour, was agreed on Thursday. Lord Ashcroft, a Tory peer, raised the temperature ahead of Monday's appearance before MPs of Paul Tucker, deputy governor of the Bank England. A note of a conversation between Mr Tucker and Mr Diamond, published by Barclays last week, appeared to suggest that senior government officials were endorsing Libor fixing. Writing on the Conservative Home website, Lord Ashcroft criticised the Tory approach of "trying to establish shady motives on the part of Labour for demanding one type of inquiry rather than another; speculating about the role of former Labour ministers; and wondering what sort of 'senior figures' a Bank of England official was referring to in a conversation with the Barclays chief executive four years ago". He added: "The Libor scandal happened on Labour's watch, but voters have already passed judgement on Labour's time in office." Mr Tucker is expected to face a grilling from MPs who will want to know exactly who the officials he talked to Mr Diamond about were. Mr Diamond said he viewed the memo as a warning that the Barclays Libor submissions, which were higher than those of other banks, were worrying government officials. Last night, a Barclays spokesman pointed out that Rich Ricci, head of the investment banking division, conducted the investigation into the Libor issue and reported to the board. Mr Diamond could not be contacted in time for publication. Ricci’s tears: Banker who broke down He may have the toughest name in banking, but Rich Ricci has feelings, too. The Barclays' investment banking boss apparently cried as he tried to reassure staff the bank would be able to pull through the outrage after the Libor rate-rigging scandal.

Bank Scandal Deepens Editorial The New York Times July 6, 2012 The settlement between government authorities and Barclays over the bank’s attempts to rig benchmark interest rates drew a picture of a bank that was negligent and corrupt at various times and to varying degrees. Unfortunately, as big banks go, that comes as no shock. It would be a shock if regulators and prosecutors found the resources and willingness to go wherever the rate-rigging scandal leads, even to the upper echelons of the world’s biggest banks and powerful central banks, including the Bank of England and the Federal Reserve. On Wednesday, the deposed chief executive of Barclays, Robert Diamond Jr., presented documents and testimony to a British parliamentary committee, saying that it had advised both the Bank of England and the Federal Reserve Bank of New York about lowballed interest rates by banks across Wall Street. The disclosures speak to the overly cozy relationships between authorities and bankers, before, during and since the crisis. To be thorough, further investigations into rate-manipulation will need to answer questions about what the authorities knew about rate-rigging and when they knew it. We are not minimizing misconduct by Barclays or perhaps other banks. More than 10 big banks are being investigated for their role in setting benchmark rates, including JPMorgan Chase, Citigroup and UBS. Authorities suspect big banks reported false rates during the crisis to squeeze out profits and mask their true financial health. That would be a huge fraud, so it is encouraging that the Commodity Futures Trading Commission, which started investigating Barclays in 2008, is reportedly building its cases against other banks on a bank-by-bank basis, rather than seeking one global settlement. That approach can avoid the drawback of previous group settlements, which have obscured as much as they have revealed. It is the right approach if other regulators and the Justice Department are serious about the rate-rigging case, including the question of whether central bankers looked the other way.

Serious Fraud Office to investigate Libor manipulation Criminal charges could be brought against traders implicated in the interest rate rigging scandal after the SFO began a formal investigation By Jill Treanor, City editor guardian.co.uk, Friday 6 July 2012 09.47 EDT Serious Fraud Office is investigating Libor manipulation. Criminal charges could be brought against traders implicated in the interest rate rigging scandal after the Serious Fraud Office announced on Friday that it had begun a formal investigation into attempts to fix Libor. The director of the SFO David Green said he had "decided to formally accept the Libor matter for investigation" after reviewing the information provided by regulators which last week fined Barclays £290m for attempting to manipulate the price of the key interest rate known as Libor - the London interbank offered rate. The investigation is understood to be into the wider market and not just Barclays. The decision to embark on a formal investigation appears to been taken quickly as on Monday the SFO had said it was considering "whether it is both appropriate and possible to bring criminal prosecutions". "The issues are complex and the assessment of the evidence the FSA has gathered will take a short time, but we hope to come to a conclusion within a month," the SFO had said on Monday. The fine related to events that took place between 2005 and 2009 when the bank was found to have manipulated the prices it submitted to help its own traders and rival banks' traders. Part of the fine also related to attempts by the bank to lower its Libor submissions during the 2008 banking crisis to reduce the chance that it was regarded as being in financial difficulty - which it was not. The decision by Green to take on the investigation comes at a difficult period for the SFO which has suffered a number of high profile setbacks, and as the Barclays chairman Marcus Agius prepares to appear before MPs on Tuesday. The FSA has been providing information to the SFO and has already made it clear that Barclays is not the only bank under investigation for civil sanctions such as fines of the kind imposed on Barclays. On the day the Barclays fine was announced Tracey McDermott, acting director of enforcement and financial crime at the City regulator, said that a "number of other significant cross-border investigations in this area" were under way involving other banks. "The action against Barclays should leave firms in no doubt about the serious consequences of this type of failure," she said. At this week's treasury select committee, Bob Diamond, the former boss of Barclays, had said: "I understand that there will be follow-up criminal investigations on certain individuals ... It's not up to us, but we are certainly not going to stand in the way of it".

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