Daily Archives: March 25, 2016

Donald Trump’s Top Foreign Adviser, Joseph Schmitz, Is a Former Blackwater Executive

When asked this week about how he would approach foreign policy, Republican presidential candidate Donald Trump told MSNBC, “I’m speaking with myself, number one, because I have a very good brain, and I’ve said a lot of things.” He also announced his lineup of little-known foreign policy advisers, including Joseph Schmitz, a former Pentagon inspector general with ties to the Center for Security Policy, who was forced out of his job amid accusations that he protected high-level officials in the George W. Bush administration who were suspected of wrongdoing. We get reaction from The Intercept’s Jeremy Scahill, who notes Schmitz is a radical Christian supremacist with an “insane worldview” who was a former executive with Blackwater.

TRANSCRIPT

This is a rush transcript. Copy may not be in its final form.

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Democrats Need to Give Up Being Deficit Hawks Even When it Feels Good Politically

By William K. Black
March 24, 2016     Bloomington, MN

Representative Nancy Pelosi has just written the latest effort by a prominent Democrat to bash Republicans for the high crime of not being financially illiterate.  The Republicans are frequently financially illiterate on budget issues and they bash Democrats for the high crime of not being financially illiterate.  The leaders of both parties share the hypocrisy of bashing the rival party for supporting budgetary stimulus in circumstances in which stimulus is vital.  Particular forms of budgetary stimulus can be simultaneously desirable (relative to austerity) and inferior relative to alternative forms of budgetary stimulus.  The Republican‘s favored form of budgetary stimulus – large tax cuts for the wealthy – is a remarkably inefficient means of providing  stimulus that makes income inequality worse.  Those two points are the correct bases for criticizing their proposed tax cuts.  Far too many Democrats, however, cannot pass up the political opportunity to bash the Republicans for supporting stimulus when further stimulus is vital.  When Democrats like Pelosi launch these myth-based political attacks on Republican stimulus programs they help to enshrine economically illiterate austerity policies that make it even harder for Democrats to make the case for stimulus even when it is essential.

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Lehman to Pay Out Additional $1.6 Billion to Creditors

The team winding down Lehman Brothers Holdings Inc. said Thursday it would be paying $1.6 billion to creditors next week, more than seven-and-a-half years after the investment bank’s collapse triggered the financial crisis.

The payout, the ninth since the investment failed, will bring the total payout in the firm’s bankruptcy to approximately $106.9 billion. The bulk of the cash?$78.5 billion?has gone to pay so-called third-party, or non-Lehman claims.

Most the latest payout, some $1.3 billion, is also earmarked for non-Lehman creditors and is slated to be made March 31.

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Credit Suisse becomes latest to settle with NCUA over credit union RMBS losses

Bank will pay $29 million to failed credit unions

The National Credit Union Administration announced earlier this week that it reached a $29 million settlement with Credit Suisse over losses related to several corporate credit unions’ purchases of faulty residential mortgage-backed securities in the run-up to the financial crisis.

Credit Suisse becomes the latest to settle with the NCUA over the failure of Members United Corporate Federal Credit Union and Southwest Corporate Federal Credit Union.

In 2013, the NCUA filed suit against Royal Bank of ScotlandMorgan Stanley and eight other institutions over the sale of nearly $2.4 billion in mortgage-backed securities to U.S. Central Federal Credit UnionWestern Corporate Federal Credit Union, Members United Corporate Federal Credit Union and Southwest Corporate Federal Credit Union.

In October 2015Barclays and Wachovia, now a part of Wells Fargo, said they would pay a total of $378 million to NCUA as part of two separate settlements stemming from losses related to purchases of residential mortgage-backed securities.

In September 2015, RBS agreed to a $129.6 million settlement with the NCUA over similar claims. And in December 2015, Morgan Stanley agreed to pay $225 million to settle as well.

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High Court Asks Administration to Weigh in on Predatory Lending Case

A Supreme Court order this week forces the Obama Administration to make a decision: either save consumers tens of billions of dollars at the expense of debt collectors, car loan specialists, and student lenders, or defend those financial entities.

In a one-line order, the justices on Monday asked Solicitor General Donald Verrilli, the legal representative for the federal government in Supreme Court matters, to file a brief in the case of Madden v. Midland Funding, “expressing the views of the United States.”

In Madden, a class-action case, borrowers argued that loans sold by a bank to a debt collector should be subject to the usury law in New York state, which limits the interest rate that can be charged. The 2nd Circuit Court of Appealsagreed, and Midland Funding appealed to the Supreme Court. Legal experts are following the case closely, since it could, after nearly 40 years, herald a return to prominence for state-based usury laws, a key safeguard against predatory lending.

“Does the White House stand for consumer protection, or will it support Wall Street when no one is looking?” asked Adam Levitin, a law professor at Georgetown University. Levitin, a pioneer of the argument that state usury laws apply to non-banks, believes the White House’s views will likely determine whether the Supreme Court takes the case.

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Blackwater’s Founder Is Under Investigation for Money Laundering, Ties to Chinese Intel, and Brokering Mercenary Services

It’s about time…

ERIK PRINCE, founder of the now-defunct mercenary firm Blackwater and current chairman of Frontier Services Group, is under investigation by the U.S. Department of Justice and other federal agencies for attempting to broker military services to foreign governments and possible money laundering, according to multiple sources with knowledge of the case.

What began as an investigation into Prince’s attempts to sell defense services in Libya and other countries in Africa has widened to a probe of allegations that Prince received assistance from Chinese intelligence to set up an account for his Libya operations through the Bank of China. The Justice Department, which declined to comment for this article, is also seeking to uncover the precise nature of Prince’s relationship with Chinese intelligence.

Prince, through his lawyer, Victoria Toensing, said he has not been informed of a federal investigation and had not offered any defense services in Libya. Toensing called the money-laundering allegations “total bullshit.”

The Intercept interviewed more than a half dozen of Prince’s associates, including current and former business partners; four former U.S. intelligence officers; and other sources familiar with the Justice Department investigation. All of them requested anonymity to discuss these matters because there is an ongoing investigation. The Intercept also reviewed several secret proposals drafted by Prince and his closest advisers and partners offering paramilitary services to foreign entities.

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