Wall Street onlookers greet Bush’s speech with skepticism

A protester holds a sign reading “Stop Corporate Greed” outside the Regent Hotel in New York, where George W. Bush gave a speech on July 10, 2002.
Photo by Hugh Gran, courtesy of NYC Indymedia

By John Tarleton
and Cathy Bussewitz

New York, New York, July 10— Janice Schiavo is a former Wall Street office worker who has been out of work for 22 months. Her savings have dwindled to $2,000 and her 401(k) plan has taken a beating during the recent stock market slide. Her anxiety has turned to anger with the recent flood of corporate scandals that have rocked the world’s financial markets. On Tuesday, Schiavo, 55, stood outside the Regent Hotel waiting for answers, or at least a shred of hope, while President Bush gave a speech inside about corporate responsibility.

Schiavo, of Bay Ridge, was joined by 500 other mostly curious on-lookers who lined the police barricades at the corner of Wall and William Sts. The presidential motorcade arrived to a scattering of polite applause, but the mood was one more of sullen curiosity.

“It’s like my father said: steal $500 and you’ll go to jail for a couple of years. Steal $500 million and you’ll never go to jail,” said Stuart Locker, a Hewlett-Packard employee visiting from Houston this week.

David Mehlman, 20, a clerk on the Stock Exchange floor, said long jail terms for crooked CEOs of companies like Enron and Worldcom were the only possible deterrent to the current epidemic of white collar crime. But he didn’t think Bush’s speech would have much impact.

“Nothing is going to change today,” Mehlman said. “Bush is here to appease all the people who are losing their money.”

In his much-anticipated speech to business leaders, Bush called for:

* Increasing Securities and Exchange Commission (SEC) funding by $100 million per year (Congressional Democrats are calling for a $340 million increase).

* More regulation to ensure that company directors are independent.

* Greater SEC enforcement powers, including a corporate fraud task force which “will function as a financial crimes SWAT team.”

* Preventing corporate officers at publicly-traded firms from receiving loans from their own companies. u The nation’s stock markets to require that a majority of a company’s directors and all members of the company’s audit, nominating and compensation committees have no material relationship with the company so that they are truly independent.

* Companies to explain how their executive compensation packages are in the company’s interest and provide “every detail” of these packages in plain English in their annual reports.

“At this moment, America’s greatest economic need is higher ethical standards—standards enforced by strict laws and upheld by responsible leaders,” Bush said.

However, Bush did not endorse: u Any specific reform bill.

* A more far-reaching proposal that is gaining considerable support in the Senate to create a new felony for any “scheme or artifice” knowingly used to defraud shareholders.

* Strengthening whistle-blower protections. u Barring corporate criminals from getting government contracts.

* Closing the offshore tax haven loophole which allows CEOs to claim that they are not covered by the new proposals by locating overseas.

Bush also re-affirmed his support for embattled SEC Chairman Harvey L. Pitt. By day’s end, the market appeared to concur with Mehlman. The Dow Jones industrial average fell 178.81 points to 9,096.09. The Standard & Poor’s 500 suffered its largest loss in five weeks and the NASDAQ composite also declined.

Outside, protesters struggled to find each other amid the maze of police barricades that ran through the financial district. When one group of about ten across the street from the Regent worked up the nerve to begin chanting “Bush is a hypocrite! Bush must quit!” they were quickly threatened with arrest and shunted off to a “protest pen” several blocks away.

Justus Ohlhaver, a financial news analyst from Hamburg, Germany, was disturbed by how the protesters were treated. “I think the cops are misinterpreting the laws,” he said. “You should be allowed to demonstrate wherever you are, to voice your opinion. You also get easily intimidated by the police.”

“The opposition is very disorganized,” added Peter Rock, 55, an unemployed Spanish and English interpreter who immigrated from Cuba in 1960. “There should have been hundreds and thousands of people protesting.”

Though not protesting himself, Rock was scathing in his criticism of Bush’s visit. “The Republican agenda ... especially in this administration, is that poor people have too much money and rich people don’t have enough and they are going to do something about it.”

Amin Rashid, 37, a stockbroker from Long Island, was more forgiving of Bush. “I think it is reassuring that we have a system where the government cares, and is interested in fixing what goes on in the system,” Rashid said. “The problem has been around for a very long time. It’s not about any administration. We have an opportunity to fix the problem. The reason this problem is magnified is because we’re going through a downturn.”

Protesters from the Sierra Club and NYPIRG were also present. They noted the difference between the Bush Administration’s call for corporate responsibility toward shareholders and its business-friendly environmental policies including its recent proposal to shift Superfund payments for cleaning toxic waste sites from businesses to taxpayers and a proposal that would gut a key provision of the Clean Air Act that mandates when businesses have to install new pollution controls.

“We feel it is scandalous that the administration is proposing to eliminate the funding in 33 sites, and shift payment for the fund from the companies to the taxpayers,” said Norma Ramos, New York City representative of the Sierra Club. “Every president, including Bush senior, has supported the ‘polluter pays’ principle.”

Chris Anderson also contributed to this report.
Source: NYC Indymedia Center

Cheney sued over accounting fraud

By David Teather

New York, New York, July 11— Dick Cheney, the US vice-president, was yesterday sued for alleged accounting fraud while he was a director of the oil firm Halliburton, further undermining the Bush administration’s attempt to take a firm grip on the scandals shaking corporate America.

The lawsuit was filed by Judicial Watch, a self-appointed public interest law firm that monitors corruption in government and often challenged former president Bill Clinton.

Halliburton said in May that the US financial watchdog, the Securities and Exchange Commission (SEC), had opened an investigation into the firm’s accounting. The civil suit claims that Halliburton overstated earnings by $445m (£287m) over a period of three years.

It names Cheney, Halliburton, the auditor Arthur Andersen and a number of the company’s board members but has not specified damages.

President Bush has also faced a barrage of questions about his own business dealings while a director of the Houston-based company Harken Energy a decade ago.

Judicial Watch said that Bush’s promise to crack down on corporate malfeasance in a rhetoric-laden speech to Wall Street on Tuesday was an attempt to distract attention from his and Cheney’s own business dealings.

Larry Klayman, chairman and general counsel of Judicial Watch, said: “The American people cannot look the other way just because the president and the vice-president are allegedly involved.” To do so, he added, “would set a precedent that the Washington elite are above the law.”

Political rivals to President Bush have seized on the crisis of confidence in Wall Street as the first ammunition to attack the administration since Sept. 11. Mid-term elections are in November.

The accounting policies under investigation at Halliburton were adopted by the oilfield services and construction company in 1998. Under the change in policy, the company booked as revenue disputed claims when construction projects ran over budget. The effect was to increase revenues at a time when the company was actually suffering big losses on a number of long-term contracts.

Halliburton maintains that it conformed with generally accepted accounting rules.

Judicial Watch is suing on behalf of two shareholders in Halliburton who, it said, were deceived by fraudulent accounting which caused the shares to be overvalued. Cheney was chairman and chief executive of the company from 1995 to 2000.

The SEC has not yet filed any charges against Halliburton but last month said the investigation would continue regardless of where it leads.

Ari Fleischer, the White House spokesman, said he had spoken to the vice-president’s office and “they believe the suit is without merit and that’s where it stands.”

President Bush, who had promised to scale back Washington’s interference in big business before his election, has been forced to take an aggressive stance on the wave of corporate scandals. A series of cases of accounting fraud, insider dealing and episodes of astonishing greed among top executives has shaken faith in US markets. Companies hit have included Enron, Xerox and WorldCom, some of the biggest names in US business.

Bush has been criticized for the sale of $849,000 worth of shares in Harken in 1991 shortly before the company reported heavy losses, causing the share price to lose almost half its value. The SEC investigated possible insider dealing but dropped the case without taking any action.

Judicial Watch noted yesterday that the chairman of the SEC at the time was an appointee of the president’s father, George Bush Sr. It remains unclear why the president failed to disclose the share sale for eight months. But Harken was forced to restate its earnings for 1989 by the SEC after disputing the accounting for the sale of a subsidiary.

President Bush shrugged off comparisons with Enron earlier this week. “This was an honest disagreement about accounting procedures. And the SEC took a good look at it and decided that the procedures used by the auditors was not the right procedure in this particular case.”

Source: Guardian (UK)

Brutal cops caught on tape

Hundreds participated in rallies in front of the Inglewood Police Department over the July 12-14 weekend to protest the beating of 16-year-old Donovan Jackson.
Photo by gaucelm, courtesy of Indymedia LA

By Brendan Conley

July 17 (AGR)— In two incidents reminiscent of the 1991 beating of Rodney King, white police officers have been caught on videotape beating unarmed black men.

Inglewood, CA police officer Richard Morse was videotaped beating Donovan Jackson, a black teenager, in the course of a routine traffic stop.  Morse is shown slamming the handcuffed boy onto the hood of a patrol car and punching him in the face.

In Oklahoma City, two white police officers were videotaped striking a black man 27 times with batons.  The man was also pepper-sprayed twice.

Hundreds of protesters marched on Inglewood City Hall in multiple demonstrations over the July 12-14 weekend.  The protesters said that racial profiling led to the incident, claiming that Jackson and his father, Coby Chavis, would not have been stopped by police if they were white.  Chavis was cited for driving with a suspended license, and Jackson was charged with battery on a police officer.

Inglewood is adjacent to Los Angeles, scene of the 1991 beating of black motorist Rodney King by white police officers.  The 1992 acquittal of the officers on assault charges sparked a multiracial uprising in which fifty-four people were killed.

The protesters in Inglewood also demanded that Mitchell Crooks, the man who videotaped the Jackson incident, be released.  After coming forward with the tape, Crooks, who is white, was arrested on outstanding warrants and is serving a seven-month sentence.  Crooks said the police considered him a “marked man” for his role in the incident, and that he feared for his life.

Officer Morse defended his actions, saying he punched Jackson only after the youth resisted arrest and grabbed the officer’s testicles.

Other officers present said Jackson attacked Morse, scratching him above his ear and on his neck.  In the video, Morse can be seen bleeding from a cut near his ear. 

On July 12, Inglewood Mayor Roosevelt Dorn said that investigations will be reopened into two previous complaints made against Morse.  Morse is on paid leave while the investigations proceed.  Also Friday, a woman filed a civil rights lawsuit against Morse and other officers, claiming that they beat her when they raided her home Oct. 20.  Morse is being represented by John Barnett, who won the 1992 acquittal of LAPD officer Theodore Briseno in the Rodney King case.

Another officer present at the scene, Bijan Darvish, who has alternately been described as being white and of East Indian descent, admitted to striking Jackson.  In a police report obtained by the Los Angeles Times, Darvish wrote, “Fearing that Jackson would pull me into him and strike me with his other hand, I punched him two times in the face, using my right hand.”

National black leaders converged on Inglewood over the weekend, including Dick Gregory, Martin Luther King III, and Maxine Waters.  After a march on city hall, hundreds of activists and community members met at Faith United Methodist Church for a rally and organizing meeting.  The organizers said they would demand a civilian review board to investigate police misconduct.  Internal police investigations are often corrupt, according to Taleeba Shakur, Jackson’s cousin and one of the organizers. 

“We don’t want Jesse James to be investigating Frank James,” the Los Angeles Independent Media Center quoted her as saying.

Congresswoman Maxine Waters dismissed speculation about what occurred before the videotaped beating. 

“We don’t know what happened before the video, we don’t know what happened after, but we do know what happened during the video, and that’s enough,” she said.

Other activists focused on the education and organization of the black community as a political force.  “It’s not police brutality, it’s not police abuse,” said James Simmons of the National Conference of Black Lawyers.  “Stop talking like it’s an administrative problem.  Let’s call it what it is. Absolutely, what happened is a crime.”

Jackson and Chavis have filed a federal civil rights lawsuit against the Los Angeles County Sheriff’s Department, the Inglewood Police Department, and several officers.  In addition, a grand jury is investigating the incident, a prosecutor revealed on a call-in radio show.

In Oklahoma City, police officers Greg Driskill and E.J. Dyer were videotaped beating Donald Pete, 50, who police said was soliciting prostitution and resisting arrest.  The beating was videotaped by Brian Bates, a “video vigilante” who routinely videotapes illegal sex acts and reports them to authorities.  The police chief defended the officers’ actions, and said the case was under review by an internal police committee.  Sean Baker, a local representative of the National Association for the Advancement of Colored People, said he was “appalled” by the videotape.

Nationally, the two incidents were decried by human rights organizations as more evidence that police brutality remains endemic in many areas of the United States, and usually goes unpunished.

Bush’s corporate cop
linked to fraud

Compiled by Shawn Gaynor

July 16 (AGR)— The leader of President Bush’s new task force on corporate crime was a director of a credit card company that paid more than $400 million to settle charges of consumer and securities fraud.

Larry Thompson served on the board of the company, Providian Financial Corp., from June 1997 until he was confirmed by the Senate in May 2001, according to Securities and Exchange Commission documents. During that period, state, local and federal agencies investigated Providian for gouging its customers, who filed class-action lawsuits against the company. Providian paid more than $400 million in 2000 to settle the investigations and lawsuits.

The settlement, by far the largest ever negotiated by federal bank regulators, closed a one-year investigation by the San Francisco district attorney, the California attorney general and the federal office of comptroller of the currency.

Regulators found that the firm systematically charged excessive fees and used deceptive sales tactics to bolster its bottom line. In documents obtained by The San Francisco Chronicle earlier this year, Providian founder Andrew Kahr wrote that, in lending to the kinds of high-risk customers Providian specialized in, the “problem is to squeeze out enough revenue and get customers to sit still for the squeeze.”

In a March 1999 memorandum to Executive Vice President David Alvarez, he wrote: “Making people pay for access to credit is a lucrative business wherever it is practiced. . . . Is any bit of food too small to grab when you’re starving and when there is nothing else in sight? The trick is charging a lot, repeatedly, for small doses of incremental credit.”

Thompson sat on Providian’s board and served as chairman of the firm’s audit and compliance committee from June 1997 until his unanimous confirmation by the Senate as deputy attorney general on May 10, 2001.

He sold his Providian stock when he became a Deputy Attorney General— said to be worth as much as $4.7 million — to comply with ethics rules. The sale came just months before the firm disclosed looming problems with credit card defaults that led to the collapse of its stock and thousands of layoffs. Providian’s stock price began to slide after a Sept. 4, 2001, announcement that its third-quarter earnings would be lower than expected. The stock, which reached a 52-week high of $59.85 in July, 2001, eventually hit a low of $2 a share in November. It closed at $4.65 on Friday.

The company was once the nation’s sixth-largest issuer of credit cards.

Insider trading is an issue in a separate lawsuit brought by stockholders and employees that accuses Providian officials of concealing financial problems while former CEO Shailesh Mehta and two other executives dumped shares. Providian’s officers and directors, including Thompson, are defendants in the lawsuit brought by company employees who claim they urged large holdings of Providian stock in 401(k) retirement plans while they were employing questionable accounting methods and cashing in on their own shares.

Thompson could not be reached for comment. Thompson was not questioned about the case during his confirmation hearing for the Justice Department appointment.

“He only became aware of the (fraud) issues when regulators began to make inquiries,” Justice Department spokesperson Mark Corallo told the Washington Post.

Bush established the white-collar crime task force Tuesday amid mounting corporate scandals. He gave Thompson, formerly a deputy attorney general, until July 19 to convene its first meeting. But in a surprise move, he held the first session on Friday at the White House.

At the meeting, Thompson pledged to go after corporate criminals “with vigor and an aggressive manner.”

Sources: Associated Press, San Francisco Chronicle

SOA nonviolent actions continue; 2 arrested, including IMC journalist

By Melissa Fridlin

Columbus, Georgia, July 15 (AGR)— As  the week-long trial of the “SOA 37” concluded on Friday, School of the Americas Watch (SOA Watch) activists continued the tradition of nonviolent action against the SOA/WHISC by staging another action at the main gate of Fort Benning.

Judge G. Mallon Faircloth gave twenty-nine human rights activists sentences ranging from three to six months in federal prison. Seven defendants received six months probation. Fines ranged up to $5,000.

Ken Crowley of Houston, TX was the first defendant called before the judge for sentencing. His attorney stated that the federal probation office had made a recommendation that he be sentenced to 12 months probation and a $500 fine. Judge Faircloth ordered attorneys and defendants not to bring up any of the other probation office recommendations during sentencing. It is believed that a majority of the defendants received similar recommendations.

The defendants were among 10,000 who gathered last fall to call for the closure of the Western Hemisphere Institute for Security Cooperation (WHISC), formerly known as the School of the Americas (SOA).  They were charged with trespassing after peacefully crossing onto the property of Fort Benning, site of the school, on Nov. 18, 2001.

The SOA/WHISC is a combat training school for Latin American soldiers that operates at Fort Benning, Georgia. Many human rights organizations have published reports that directly link graduates of the school to human rights abuses and atrocities. In December 2000, Congress passed legislation which created the WHISC to replace the SOA. The renaming of the school was widely viewed as an attempt to defuse public criticism and to disassociate the school from its reputation. Critics say that the school has changed little of its notorious curriculum.

Many of the activists on trial wore t-shirts proclaiming: “You Can Jail the Resisters But You Can’t Jail the Resistance.”  SOA Watch  activists followed through on that statement by continuing nonviolent action on Saturday, just 12 hours after sentencing concluded.

The front gates of Fort Benning were closed at 10am on Saturday by SOA Watch staff person Rebecca Johnson, who chained them shut and locked herself to the gates. She sat underneath a sign that read: “Lock up SOA/WHISC, Not Peacemakers!”

Johnson was joined by a vigil including some of the 37 who were sentenced and their supporters who gathered in a permitted demonstration area. No cars were able to enter the base through this entrance during the three hours it took Ft. Benning authorities to remove her.

Frank Salerno, a journalist for the Atlanta Independent Media Center and Free Speech Radio, was also arrested while videotaping the action. Stepping a few feet over the line to get a better camera angle, Salerno stepped back when told that he was trespassing.  Approximately 30 minutes later, he was detained by base security while on the Columbus side of the property line.

After being questioned, fingerprinted and photographed, Salerno was released without being charged with a crime. His camera, film and notebooks were confiscated and held as “evidence.” This is the first time that a journalist has been arrested while covering an SOA protest.

Though long and often tedious, last week’s trial allowed the 37 defendants to tell their personal stories and reasons for risking a possible sentence of six months in prison and a $5,000 fine. 

Richard Ring, a paralegal from Atlanta, GA, said, “While I was in Guatemala, I asked the people there what I could do to help, and they answered, ‘If you really want to help, go home and change your country,’” said Ring.  “So I came to Fort Benning and thought, ‘What else can I do but cross the line?’”

Many of the defendants challenged Judge Faircloth to find them not guilty, claiming that they were following a higher law when they crossed the line. The power of jury nullification was brought up several times.  This power allows judges and juries to declare a defendant not guilty based on other factors, even when the evidence proves that the person actually committed the crime in question.

Father Bill O’Donnell, a 72-year-old Catholic priest from Berkeley, CA, who has been arrested 224 times for civil disobedience over the last 46 years, condemned the court for being involved in “a sinister partnership with the Pentagon.”

“This court has for years been pimping for the Pentagon, and as a pimp does, it covers up for the crimes of its prostitutes,” he charged.  He then asked Faircloth to sentence him to six months at the WHISC instead of prison, so that he could “emerge and tell whether it has mended its ways.”

Faircloth eventually did offer the possibility to nine defendants (not including Father O’Donnell) who were “first-timers,” people who have only crossed onto the base one time during a protest. 

The sentence would have included six months federal probation, with the requirement of attending classes at the WHISC for the entire six months. In addition, the defendants would not have been allowed to leave Muskogee and Chattahoochee counties for the duration of the probation. 

All of the defendants eventually refused the offer, saying that they could not in good conscience attend the WHISC, and would prefer to spend their sentence in a jail cell.

During the trial of Peter Gelderloos, US Army Major Joseph Blair, a former instructor at the SOA, testified for the defense. “A few months ago, I reviewed the new curriculum of the WHISC.  I found no substantive changes. The courses I reviewed were the same identical courses that I taught at the SOA in the 80’s; they simply changed the names… The WHISC continues to teach military practices to control civilian populations, directly violating treaties of the Organization of American States, domestic and international human rights laws, the General Agreement on Tariffs and Trade, NAFTA and other laws.”

Gelderloos used Blair’s testimony to add to the evidence proving the urgency of the need to close the school.  The judge, however, consistently refused the “necessity defense,” saying that there was no reason to believe that by trespassing on Fort Benning, that the defendants could have immediately stopped atrocities from happening.

While activists were processing the sentences that were passed down on Friday, they were simultaneously celebrating.  Steve Jacobs, one of 26 people prosecuted last year for similar actions, was released from Leavenworth Federal Prison on Friday. He had completed a one-year sentence for crossing onto Ft. Benning during SOA Watch’s November 2000 vigil and action.

Even as Jacobs returned home, others were entering jail. Five of the “SOA 37” were taken into custody immediately following sentencing, after refusing to voluntarily report to prison.  The rest of the defendants were released pending self-report to federal prison.

NATION BRIEFS

Bush jibe angers black leaders
Relations between the White House and Black American leaders slumped to a new low July 9 after President Bush gave a dismissive answer when asked why he was not addressing the convention of the National Association for the Advancement of Colored Peoples (NAACP), one of the most respected African American advocacy groups in the US.

At his press conference on July 8, Bush answered: “Let’s see. There I was sitting around the table with foreign leaders looking at Colin Powell and Condi Rice…” His voice then trailed off. He shook his head and moved on to the next question; the implication being that two Black people in his inner circle was a substitute for outreach to the rest of the community.

In the 2000 election, Bush won just 9% of Black votes. Animosity still lingers about the disenfranchisement and intimidation of many Blacks in Florida who were denied the right to vote in 2000. (Guardian, (UK), AGR staff)

FEMA preparing for massive attacks
FEMA, the federal agency charged with disaster preparedness, is engaged in a crash effort to prepare for multiple mass destruction attacks on US cities -- including the creation of sprawling temporary cities to handle millions of displaced persons.

FEMA is readying for nuclear, biological and chemical attacks against US cities, including the possibility of multiple attacks with mass destruction weapons.

The agency has already notified vendors, contractors and consultants that it needs to be prepared to handle the logistics of aiding millions of displaced Americans who will flee from urban areas that may be attacked.

The agency plans to create emergency, makeshift cities that could house hundreds of thousands, if not millions, of Americans who may have to flee their urban homes if their cities are attacked.

Ominously, FEMA has been given a deadline of having the cities ready to go by January 2003 – in about six months.

A source familiar with the deadline believes the effort is related to making the US prepared for counterattacks if the US invades Iraq sometime next year. (NewsMax)

US allowed to keep prisoners’
names a secret
New Jersey’s highest court refused July 9 to consider compelling the US government to identify people imprisoned after the Sept. 11 attacks, handing a victory to the Bush administration.

Without comment, New Jersey’s Supreme Court denied a request by the state chapter of the American Civil Liberties Union (ACLU) to hear an appeal of the case. A state appellate panel overturned a lower court’s ruling in June that would have forced federal authorities to release the identities.

The ACLU said it was considering bringing the case before the US Supreme Court.

The US Department of Justice said it was pleased with the New Jersey Supreme Court’s decision.

Under Immigration and Naturalization Service orders, the names of the prisoners, dates detained and reasons for imprisonment have been kept secret.

More than 750 people have been jailed nationwide during the investigation into Sept. 11.

According to the most recent Justice Department figures, 104 post-Sept. 11 prisoners remain in custody, most of them in New Jersey jails.

The ACLU said it is still pressing for information about post-Sept. 11 arrests in a federal lawsuit brought under the Freedom of Information Act. (Detroit Free Press)

Student wins anarchy club case
Katie Sierra will be back at Sissonville High in West Virginia this fall, and the school must allow her to form a student club devoted to anarchy after a Kanawha Circuit Court jury sided, in part, with the 15-year-old anti-war protester.

Sierra won one of three issues presented to the jury in a weeklong free speech trial. The six-member jury decided in favor of the school system on two points: Sierra is not to wear shirts critical of patriotism and the US “war on terror.” The court also upheld the decision to suspend Sierra for disobedience and causing a disturbance. But the jury found that the school violated Sierra’s First Amendment rights when she was not allowed to form an anarchy club. (Daily Mail)