The Silenced Majority: Stories of Uprisings, Occupations, Resistance, and Hope (39 page)

UBS, which once stood for Union Bank of Switzerland, was founded more than a century ago. Its success hinges on Switzerland’s famous banking secrecy laws, allowing people to squirrel money away in untraceable “numbered accounts.” Secret Swiss bank accounts have become a favorite way for wealthy people in the U.S. to dodge taxes. According to the U.S. Senate’s Permanent Subcommittee on Investigations, in a July 2008 report, “From at least 2000 to 2007, UBS made a concerted effort to open accounts in Switzerland for wealthy U.S. clients, employing practices that could facilitate, and have resulted in, tax evasion by U.S. clients.”

As part of the settlement, UBS agreed to share client account information with the U.S. government. While there may be as many as 52,000 such accounts, UBS is releasing around 4,450 client names. Internal Revenue Service Commissioner Doug Shulman said in a press release, “We will be receiving an unprecedented amount of information on taxpayers who have evaded their tax obligation by hiding money offshore at UBS.” UBS will be sending account holders notification that their names may be among those delivered to the IRS, and the IRS, in turn, is granting leniency to tax dodgers who turn themselves in before September 23. Account holders won’t know if their names are included, though, so gamblers among them may keep quiet and hope their accounts stay secret.

Last Friday, as Wolf was preparing for his golf game with Obama, UBS whistle-blower Bradley Birkenfeld was sentenced to forty months in prison for facilitating offshore tax evasion through UBS banking schemes, despite assisting federal investigators in exposing the secretive bank.

Above the entrance to UBS’s headquarters in Zurich is a bust of the Greek god Hermes—not only the fleet-footed messenger of the gods, but also the god of thieves and merchants. The symbolism is striking. Whether or not Wolf won his golf game against Obama, UBS has clearly scored a hole-in-one.

October 20, 2010

When Banks Are the Robbers

The big banks that caused the collapse of the global finance market, and received tens of billions of dollars in taxpayer-funded bailouts, have likely been engaging in wholesale fraud against homeowners and the courts. But in a promising development this week, attorneys general from all fifty states announced a bipartisan joint investigation into foreclosure fraud.

Bank of America, JPMorgan Chase, GMAC, and other big mortgage lenders recently suspended most foreclosure proceedings, following revelations that thousands of their foreclosures were being conducted like “foreclosure mills,” with tens of thousands of legal documents signed by low-level staffers with little or no knowledge of what they were signing.

Then the Obama administration signaled that it was not supporting a foreclosure moratorium. Not long after, Bank of America announced it was restarting its foreclosure operations. GMAC followed suit, and others will likely join in. So much for the voluntary moratorium.

GMAC Mortgage engaged in mass document processing, dubbed “robo-signing.” In several cases, GMAC Mortgage filed documents with courts that were signed by Jeffrey Stephan. Stephan presided over a staff of twelve in suburban Philadelphia. Ohio Attorney General Richard Cordray filed a lawsuit against GMAC Mortgage, Stephan, and the bank that owns GMAC, Ally Financial (itself a subsidiary of General Motors).

According to one report, Stephan received 10,000 mortgage foreclosure documents to process in one month. Based on an eight-hour workday, he would have had to read, verify, and sign, in the presence of a notary, about one document per minute. He admitted to signing documents without reading them or checking the facts about homeowners said to be in default. And Stephan was just one of many “robo-signers.”

Recall that GM received $51 billion in taxpayer bailouts; its subsidiary, GMAC, received $16.3 billion; and Ally Financial subsidiary GMAC Mortgage received $1.5 billion as an “incentive payment for home loan modification.”

So you as a taxpayer may have bailed out a bank that is fraudulently foreclosing on you. What recourse do you have?

Back in February 2009, Ohio Rep. Marcy Kaptur advised homeowners to force lenders to “produce the note.” People facing foreclosure were being taken to court while the bank alleging default couldn’t even prove it owned the mortgage. The mortgage document often had been lost in the tangled web of financial wheeling and dealing. Kaptur told me: “Millions and millions of families are getting foreclosure notices. They don’t have proper legal representation . . . possession is nine-tenths of the law; therefore, stay in your property.”

If you stay in your home, your mortgage lender may break in. Nancy Jacobini of Orange County, Florida, was inside her home when she heard an intruder. Thinking she was being burglarized, she called 911. Police determined the intruder was actually someone sent by JPMorgan Chase to change the locks. And Jacobini wasn’t even in foreclosure!

Most banks that suspended foreclosure efforts only did so in twenty-three states—because it is only in those twenty-three states that courts actually adjudicate over foreclosure proceedings. One judge who oversees foreclosures is New York State Supreme Court Justice Arthur Schack. He has made national headlines for rejecting dozens of foreclosure filings. He told
Democracy Now!
news hour, “My job is to do justice . . . we run into numerous problems with assignments of mortgages, questionable affidavits of merit and just sloppy paperwork in general.”

Bruce Marks runs Neighborhood Assistance Corporation of America (NACA), a national nonprofit that helps people avoid foreclosure. He told me: “When President Obama was running for president, he said one of the first things he’ll do is put a moratorium on foreclosures. He never did. He never backed bankruptcy reform so people could have the right to go in front of a bankruptcy judge.”

He went on: “And where is President Obama? When he says, ‘Well, you know, we don’t want to upset the market,’ what is good about a market when someone is foreclosed on and . . . you’ve got a vacant building? We have to have a national moratorium to give ourselves a window of opportunity to restructure mortgages . . . to look at homeowners as people, not as a commodity to make money.”

According to RealtyTrac, banks repossessed 102,134 properties in September, a home roughly every thirty seconds. Every thirty seconds, banks—many that received funds from the Bush administration’s TARP, and that may be using fraudulent practices—foreclose on an American family’s dream of home ownership. Meanwhile, GMAC Mortgage has reported increased profits for the first half of 2010.

February 2, 2011

When Corporations Choose Despots over Democracy

“People holding a sign ‘To: America. From: the Egyptian People. Stop supporting Mubarak. It’s over!” So tweeted my brave colleague,
Democracy Now!
senior producer Sharif Abdel Kouddous, from the streets of Cairo.

More than 2 million people rallied throughout Egypt on Tuesday, most of them crowded into Cairo’s Tahrir Square.
Tahrir
, which means
liberation
in Arabic, has become the epicenter of what appears to be a largely spontaneous, leaderless, and peaceful revolution in this, the most populous nation in the Middle East. Defying a military curfew, this incredible uprising has been driven by young Egyptians, who compose a majority of the 80 million citizens. Twitter and Facebook, and SMS text messaging on cell phones, have helped this new generation to link up and organize, despite living under a U.S.-supported dictatorship for the past three decades. In response, the Mubarak regime, with the help of U.S. and European corporations, has shut down the Internet and curtailed cellular service, plunging Egypt into digital darkness. Despite the shutdown, as media activist and professor of communications C. W. Anderson told me, “people make revolutions, not technology.”

The demands are chanted through the streets for democracy, for self-determination. Sharif headed to Egypt Friday night, into uncertain terrain. The hated Interior Ministry security forces, the black-shirted police loyal to President Hosni Mubarak, were beating and killing people, arresting journalists, and smashing and confiscating cameras.

On Saturday morning, Sharif went to Tahrir Square. Despite the SMS and Internet blackout, Sharif, a talented journalist and technical whiz, figured out a workaround, and was soon tweeting out of Tahrir: “Amazing scene: three tanks roll by with a crowd of people riding atop each one. Chanting ‘Hosni Mubarak out!’”

Egypt has been the second-largest recipient of U.S. foreign aid for decades, after Israel (not counting the funds expended on the wars and occupations of Iraq and Afghanistan). Mubarak’s regime has received roughly $2 billion per year since coming to power, overwhelmingly for the military.

Where has the money gone? Mostly to U.S. corporations. I asked William Hartung of the New America Foundation to explain:

“It’s a form of corporate welfare for companies like Lockheed Martin and General Dynamics, because it goes to Egypt, then it comes back for F-16 aircraft, for M-1 tanks, for aircraft engines, for all kinds of missiles, for guns, for tear-gas canisters [from] a company called Combined Systems International, which actually has its name on the side of the canisters that have been found on the streets there.”

Hartung just published a book,
Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex
. He went on: “Lockheed Martin has been the leader in deals worth $3.8 billion over that period of the last 10 years; General Dynamics, $2.5 billion for tanks; Boeing, $1.7 billion for missiles, for helicopters; Raytheon for all manner of missiles for the armed forces. So, basically, this is a key element in propping up the regime, but a lot of the money is basically recycled. Taxpayers could just as easily be giving it directly to Lockheed Martin or General Dynamics.”

Likewise, Egypt’s Internet and cell phone “kill switch” was enabled only through collaboration with corporations. U.K.-based Vodafone, a global cellular-phone giant (which owns 45 percent of Verizon Wireless in the U.S.), attempted to justify its actions in a press release: “It has been clear to us that there were no legal or practical options open to Vodafone . . . but to comply with the demands of the authorities.”

Narus, a U.S. subsidiary of Boeing Corp., sold Egypt equipment to allow “deep packet inspection,” according to Tim Karr of the media policy group Free Press. Karr said the Narus technology “allows the Egyptian telecommunications companies . . . to look at texting via cell phones, and to identify the sort of dissident voices that are out there. . . . It also gives them the technology to geographically locate them and track them down.”

Mubarak has pledged not to run for re-election come September. But the people of Egypt demand he leave now. How has he lasted thirty years? Maybe that’s best explained by a warning from a U.S. Army general fifty years ago, President Dwight D. Eisenhower. He said, “We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.”

That deadly complex is not only a danger to democracy at home, but, by shoring up despots, to democracies abroad.

October 5, 2011

Policing the Prophets of Wall Street

The Occupy Wall Street protest grows daily, spreading to cities across the United States. “We are the 99 percent,” the protesters say, “that will no longer tolerate the greed and corruption of the 1 percent.”

The response by the New York City Police Department has been brutal. Last Saturday, the police swept up more than 700 protesters in one of the largest mass arrests in U.S. history. The week before, innocent protesters were pepper-sprayed in the face without warning or reason.

That is why, after receiving a landmark settlement this week from the police departments of Minneapolis and St. Paul, as well as the U.S. Secret Service, my colleagues and I went to Liberty Square, the heart of the Wall Street occupation, to announce the legal victory.

On Labor Day 2008, the
Democracy Now!
news team and I were covering the first day of the Republican National Convention in St. Paul. Thousands protested outside. I was on the convention floor, interviewing delegates from what that week was the hottest state, Alaska. Blocks away, my colleagues Sharif Abdel Kouddous and Nicole Salazar were covering a police assault on the dispersing crowd of marchers.

The riot police had hemmed the protesters into a parking lot, along with credentialed journalists. The police charged at Nicole, shouting “On your face!” She shouted back “Press, press!” holding up her press credentials in one hand and filming with the other, video-recording her own violent arrest. She screamed as they brought her down on her face, a knee or boot in her back, dragging her by her leg and bloodying her face. The first thing they then did was pull the battery from her camera, if there was any question about what they did not want documented. As Sharif tried to calm the riot(ing) police, they pushed him against a brick wall, kicked him in the chest twice, threw him down, and handcuffed him.

I got a call on my cell phone and raced from the Convention Center to the scene of the arrests. The riot police had encircled the area. I ran up to the police, my credentials hanging around my neck. I asked for the commanding officer to get my journalist colleagues released. It wasn’t seconds before they tore me through the police line, twisted my arms behind my back, and handcuffed me. Finally brought to stand next to Sharif, as fully credentialed journalists, we demanded to be released, whereupon a Secret Service agent came over and ripped the credentials from around our necks.