New Fox, Same Henhouse: Wall Street Takes Over LIBOR

first_imgSign up for our COVID-19 newsletter to stay up-to-date on the latest coronavirus news throughout New York There is a scene in The Godfather Part II when the Hyman Roth character, played by Lee Strasberg, admonishes Al Pacino’s Michael Corleone over the death of the character credited with building Las Vegas out of a “desert stopover for GIs.”Roth fixes his steely gaze angrily on Corleone and says, “That kid’s name was Moe Greene and the city he invented was Las Vegas. And there isn’t even a plaque or a signpost or a statue of him in that town.”The same could be said of Thomas Jasper, the architect of the biggest gambling venture ever invented: the swaps market.In her book The Futures, Forbes writer Emily Lambert describes how in 1981 Salomon Brothers “pulled an investment banker named Thomas Jasper out of a cloistered office and set him up on Salomon’s trading floor with its loud, swearing, cigar-smoking men.” Jasper’s job was to figure out how to turn a new type of banking agreement called an interest rate “swap” into a contract that could be traded on an exchange much like a commodity. By 1987 Salomon’s new product was ready for market, and as Lambert notes, “by that spring, there were $35 billion worth of bond futures contracts open at the Chicago Board of Trade, and there were $1 trillion worth of outstanding swaps transactions.”For Wall Street this was like graduating instantly from slots to craps.Twenty years later, unregulated swaps would be at the heart of the global financial meltdown and the very banks responsible for creating them would be considered “too big to fail.” A lethal mixture of deregulation, manipulation and greed would transform swaps—a type of investment known as a “derivative” in which two parties exchange risk with one another in a negotiated agreement—into opaque mega investments that many traded but few understood.Today, the global derivatives market is estimated to be somewhere around $1.2 quadrillion—more than 14 times larger than the world economy.After the crash in 2008, the whole world became acquainted with these investments and some of the toxic assets they were based on. Yet since the crash, and despite the best attempts on the part of regulators to get their arms around the world of derivatives, surprisingly little has changed in the way they are packaged, sold and regulated.By staying one step ahead of regulators, banks have continued to rake in historic profits. Bart Chilton, a commissioner at the Commodity Futures and Trading Commission (CFTC), is one of the U.S. regulators charged with implementing rules that would curb risky speculative behavior on the part of banks and protect American consumers. He expressed his irritation in an interview with the Press, saying, “The financial sector has made more profits every single quarter since the last quarter of 2008 than any sector of the economy by like a hundred billion dollars. So they crash the economy and still make more than anyone else.”Chilton points to the aggressive bank lobby against regulators as one major impediment to reform.“They have fuel-injected litigation against regulators,” he laments. “There are ten financial sector lobbyists for every single member of the House and Senate.”Despite this frustration, Chilton believes in the importance of speculators “in determining what the prices of things are, whether it’s a home mortgage or a gallon of milk.” Instead of squarely blaming the banks, he believes the question “is whether or not government has allowed too much leeway so that the markets have simply become a playground for speculators to roam and romp.”One of the most important determinants in pricing everything from mortgages to the multi-trillion-dollar derivatives market is the London inter-bank offered rate, better known as LIBOR. Barclays, the British banking giant, thrust LIBOR into the headlines last year when it was discovered that it was among a handful of banks found to be manipulating daily rates for its own benefit. The scandal rocked the banking sector and sent European regulators searching for a replacement to LIBOR or, at the very least, a new third-party administrator.Charting LIBOR’s new path was left to Martin Wheatley, who was head of the Financial Services Authority in the U.K. when the scandal broke. The recommendations, known as the Wheatley Review, included the formation of a panel charged with finding a new host for LIBOR that would restore confidence to the market and ensure transparency in the rate-setting process.In a twist even Michael Corleone would appreciate, the panel chose Wall Street.LIBOR: “A huge, hairy, honking deal.”Beginning in 2008, rumors began to circulate in the financial world that several of the London banks were involved in influencing the daily posted LIBOR rates. During a 2012 House Financial Services Committee investigation into the matter, Treasury Secretary Timothy Geithner admitted to hearing the rumors while he served as head of the Federal Reserve Bank of New York. In his testimony, Geithner said he attempted to warn U.K. and U.S. regulators but assumed they would “take responsibility for fixing this.”What the British and American governments knew and when they knew it unfortunately matters little at this juncture, as both have since levied financial penalties on the banks involved that amount to a slap on the wrist. What matters now is how rates are set going forward to ensure some degree of integrity. To understand how the Wheatley Review panel merely chose a new fox to guard the world’s financial henhouse, it’s important to understand how LIBOR is calculated and how much is riding on it.LIBOR rates are determined on a daily basis. According to an Economist article that details the scandal, “The dollar rate is fixed each day by taking estimates from a panel, currently comprising 18 banks, of what they think they would have to pay to borrow if they needed money.The top four and bottom four estimates are then discarded, and LIBOR is the average of those left.”Rates were submitted to the British Bankers Association (BBA), a nonprofit third-party administrator responsible for gathering and posting the data. In theory, the arms-length distance of a disinterested third party provided enough oversight and assurances to the market that rates were being determined fairly. Only the rates weren’t based upon actual market rates. Rather, they were estimates supplied by traders from Europe’s largest banks and therefore surprisingly susceptible to manipulation and, as it turns out, collusion.Traders were caught periodically manipulating these estimates in order to gain a trading advantage in the market and maximize profit on recent transactions. Moreover, because LIBOR is an indication of the perceived health of a financial institution, bankers had an added incentive to suppress rates to artificially illustrate confidence among their colleagues. In short, everyone was in on it. Because of the global credit crunch, few banks were actually lending large sums to other banks since both sides had cheap and easy access to government dollars to provide market liquidity. This reality made LIBOR even less realistic.Former Barclays president Bob Diamond initially responded to the scandal by admitting that while manipulation occurred, it didn’t happen “on the majority of days.” The Economist said Diamond’s response was “rather like an adulterer saying that he was faithful on most days.”Diamond subsequently resigned and so far three U.K. traders, Tom Hayes, Terry Farr and James Gilmour, were swept up in the LIBOR price-fixing scandal. According to the Financial Times, “Mr. Hayes, Mr. Farr and Mr. Gilmour are the only individuals to face U.K. criminal action to date in a global scandal that has seen three banks pay a combined $2.6bn in fines for attempting to manipulate interbank lending rates.”Many bankers have distanced themselves from the importance of the scandal by calling it a victimless crime. Bart Chilton had a choice expletive for this attitude, and then added, “If it’s a home loan mortgage, or a small business loan or a credit card bill, if you buy an automobile or if you have a student loan, about everything you purchase on credit is impacted by LIBOR. It’s a huge, hairy, honking deal. If somebody says it’s a victimless crime, I bet you it’s a banker.”Michael Greenberger, a professor at the University of Maryland, has been an outspoken critic of the way derivatives have been regulated for several years. (The Press first spoke with Greenberger for a 2008 cover story on the price manipulation of crude oil.) He weighed in on the Obama Administration’s reaction to the LIBOR price-fixing scandal saying, “This Justice Department is settling these LIBOR cases for what you and I would consider to be traffic tickets.”Considering who is about to be in charge of administering LIBOR, the Obama Administration and U.S. regulators might want to pay close attention to how the process unfolds.The Wheatley Review panel chose NYSE Euronext to step into the BBA’s role as administrator of LIBOR. On the surface, choosing the members of the New York Stock Exchange—one of the oldest and most trusted brand names in global finance—to oversee rate-setting seems like sound concept. Only the NYSE isn’t the clubby, self-governed body of individual members it once was. Today the exchange is a publicly traded, for-profit business whose shareholders include none other than the world’s biggest bank-holding companies. “They’re moving from a disinterested nonprofit that couldn’t do the job,” exclaims Greenberger, “to an interested for-profit. There’ll be less transparency I bet in the way that rates are set.”Chilton is equally apprehensive at the idea of the transition: “When there’s a profit motive, I think it’s always suspect. That’s why key benchmark rates like LIBOR in my view should be monitored or overseen by either a government entity, a quasi-government entity or a not-for-profit third party that doesn’t have a vested interest in what the rates should be.”How LIBOR will be determined in the future is still being hashed out. A spokesperson for NYSE Euronext declined to answer the Press’ questions on the record, instead directing us to their standard press release. Most observers agree, however, that the days of aggregating estimates should be a thing of the past.“These benchmarks need to be based upon actual trades,” says Chilton, “not a poll of what the money movers believe it should be.”As far as the bankers’ claims that price-fixing was a victimless crime, there are several municipalities that beg to disagree. The cities of Baltimore and Philadelphia, among others, have filed suit against several banks claiming severe financial injury due to LIBOR manipulation.“That’s the hidden story of Detroit,” says Greenberger. “Detroit got clobbered in the swaps market.”Greenberger also warns that “pensions are still in this market.” That’s a scary proposition considering the underlying risk and leverage that still exists off bank balance sheets.Eric Sumberg, the spokesman for the New York State Common Retirement Fund—the nation’s third-largest pension—says State Comptroller Tom DiNapoli is watching the LIBOR transition closely.“There have been some calls for moving from LIBOR’s banker’s poll to a rate-setting process that is more directly based on a broader universe of transactions and on actual market activity,” Sumberg wrote the Press in response to our inquiries. “Such a change over time could have the potential to improve transparency and integrity in rate-setting, but potential details of any such process have not yet emerged. We will continue to monitor developments in this area.”Yet even when the proposed rules are made public and the administration of LIBOR has fully transitioned, NYSE Euronext will still only be the titular head of LIBOR. The real force behind the market is neither in London nor New York. Atlanta, home of the Intercontinental Exchange (ICE), is the new financial capital of the world.ICE IN HIS VEINSTHE ICE MAN: Jeffrey Sprecher, Chairman andCEO of the Intercontinental Exchange (ICE).Photo taken from the2012 ICE annual report.Many of the toxic assets the public became aware of after the 2008 crash have worked their way through the system and been mostly written off by many of the largest financial institutions. Much of the credit for the industry’s stunning recovery belongs to the U.S. Federal Reserve’s low interest rate policy and aggressive liquidity practices known as quantitative easing. Much like the exuberance that preceded both the tech-bubble crash of 2000 and the mortgage-backed securities crash of 2008, a capital bubble established by the Federal Reserve is artificially propping up the market.Hedge funds and bank holding companies fueled their own recovery by using deposits, borrowed federal funds and leverage to drive the equity market to historic highs and post speculative profits in the derivatives market. And while the financial sector was scrambling to regain its footing, regulators in Washington, D.C., attempted to keep pace by passing reforms to prevent the next global financial crisis should the Federal Reserve change course and remove liquidity from the system while simultaneously allowing interest rates to gradually climb.In 2010, Congress passed the Dodd–Frank Wall Street Reform and Consumer Protection Act in an effort to curb speculation and create greater oversight in the financial sector. It was a monumental legislative task that has proven even more difficult to translate into regulatory policy. Regulators at the Securities and Exchange Commission and the Commodity Futures Trading Commission have been working against bank lobbyists and the fact that the markets are global and U.S. regulatory authority only reaches so far.To complicate matters further, banks have been busy changing the rules of engagement by shifting markets from classic bilateral swaps between parties to futures contracts, which are more standardized agreements traded on exchanges and therefore subject to greater regulatory scrutiny. In theory, exchange-traded derivatives will provide the transparency that regulators seek. In practice, however, this capital shift might simply move risky investments from the frying pan into the fire, as futures exchanges are global, meaning U.S. regulators must rely heavily on the voluntary cooperation of foreign exchanges.The one person set to benefit from this capital shift is Jeffrey Sprecher, founding chairman of the ICE. Though not a household name outside of investment circles, Sprecher has emerged as the unlikely king of the global trading exchange industry. In little more than a decade, he helped transform the commodities market from a $10 billion market to more than a half a trillion dollars, with the ICE being a huge beneficiary.The growth of trading on the ICE has been so explosive Sprecher is about to close on a deal to purchase the vaunted NYSE Euronext for $8.2 billion. The deal has already been approved by European regulators and awaits final approval in the U.S. Once completed, Sprecher will not only run the world’s most famous trading exchange; he will also extend his reach into the global derivatives market as the acquisition includes NYSE Liffe, one of the world’s largest derivatives trading desks.Nathaniel Popper’s front-page story in the business section of The New York Times on Jan. 20, 2013 pulls the veil back on Sprecher, the man, and describes how he grew a little-known Southern exchange into a juggernaut capable of purchasing NYSE. As Popper himself writes, “It sounds preposterous.” Given the inevitable capital shift sparked by U.S. regulators, Popper also notes that “Wall Street firms will have to move trading in many opaque financial products to exchanges, and ICE is in a perfect position to profit.”Popper’s piece brings forward a story that few people know. Most have no idea that trading exchanges are even for-profit businesses. And while he does a worthy job demystifying the business of exchanges, he overlooks the planet-sized regulatory loopholes that allowed Sprecher to convert a small energy futures trading exchange into a global exchange that is buying the most famous trading platform on Earth.To call Sprecher an opportunist would be technically accurate but cheap and intellectually dishonest. He understood the inevitability of electronic trading and the superior potential it held. But there’s a danger in spreading the accepted mythology of Jeff Sprecher and his plucky exchange. Behind his story is the familiar invisible hand of Wall Street.“The reason Sprecher has been so successful is he’s really representing all the major ‘too big to fail’ banks,” says Greenberger. “And they want him to succeed, and therefore he is succeeding.”Missing from the brief history of the ICE are the loopholes that gave it life and the ability to flourish beyond imagination. It was the oft-spoken of— but rarely understood—“Enron Loophole” that gave corporations the legal right to trade energy futures on exchanges such as the ICE even if the corporation itself was in the business of energy. The second loophole was a maneuver by the Bush Administration that granted the ICE foreign status as an exchange despite its being based in Atlanta. This initiated a massive shift of trading dollars, and influx of new ones, into the ICE for one reason: This singular move placed the ICE outside the purview of U.S. regulators like Chilton at the Commodities Futures and Trading Commission (CFTC). Essentially, corporations could now trade energy futures electronically through the ICE without oversight or disclosure.Moreover, the mere fact that the founding investors of the ICE are some of the world’s largest bank-holding companies, Morgan Stanley and Goldman Sachs in particular, speaks to how little transparency there truly is.This in no way takes away from Sprecher’s genius as a businessman. It simply illustrates how willfully ignorant we are to the business of Wall Street and therefore how frightfully far away we are from properly regulating it. Everything Sprecher has done is legal and ethical, to the extent there is an ethos on Wall Street. Where all of this hits home for the consumer is at places like the gas pump and the supermarket.Now it’s easier to place the LIBOR issue in its proper context. Almost every “too big to fail” bank has a significant ownership stake in both the ICE and NYSE Euronext, soon to be one entity. This combined entity will also soon control LIBOR, the world’s largest rate-setting mechanism. In trader’s parlance, this would be considered the perfect “corner.”But wait, there’s more. In the attempt to rein in speculation and manage risk in the marketplace, Dodd-Frank might have unintentionally become the gift that keeps on giving—to Sprecher.THE FUTURE OF FUTURESThe sheer size and complexity of the derivatives market overwhelm even the most interested parties—including Congress, regulators and bankers themselves—leaving average citizens utterly dumbfounded and sidelined. It’s little wonder. Banks that were too big to fail in 2008 are bigger today in 2013. The vast majority of the much-ballyhooed Dodd-Frank regulations have yet to take effect, and bank leverage is back at pre-crash levels.A former trader who worked in both New York and London recently told me, “At the end of the day, this market is running on the [Federal Reserve]. Once they pull out it’s all over. Cheap money, loads of people making loads of money, but no lessons learned.”Derivatives themselves aren’t nearly as difficult to understand as the markets they trade in. They are essentially risk transfer agreements between two parties, a way to hedge investments. The word ‘derivative’ refers to the fact that the agreement derives value from other investments: a bet as to how the original investment would perform. It’s helpful to once again employ the casino analogy.Ten random players approach the roulette table and lay down $100 worth of chips on various numbers. Each individual gambler is making a bet, or an investment, collectively totaling $1,000.Now imagine that another gambler watching the action on the roulette table calls his or her bookie and places a bet on the outcome of their total wagers when the wheel stops spinning. Having sized up the situation, the gambler predicts that overall this group will win and walk away with $1,100. But in order for this bet to be placed, someone else has to take the action and bet the group will lose $100, leaving them with $900. Before the ball drops on the number, the bookie connects the two outside gamblers and creates a new bet. This bet functions as the derivative investment because even though they’re not actually playing the game, they have a stake in the outcome.In the real world of investing, the bookie is a trader and the gambler taking the action from the outside is a speculator. Sounds nefarious, but in reality, these transactions are essential to providing market stability.“If we didn’t have speculators,” says Chilton, the CFTC commissioner, “consumers would pay disproportionate prices.”There are three classic types of derivatives, all of which Chilton and the CFTC have been trying to rein in well before the crash introduced the world to this type of investment. All three involve counterparties, which trade these investments either directly or through exchanges.But the differences between the three types of derivatives are diminishing. The first type of derivative is commonly referred to as a “swap.” This is where two parties exchange risk with one another in a negotiated agreement. In the United States, these have traditionally been deals between banks that fall under the purview of the SEC. The other two types of derivatives, futures and cleared derivatives, are negotiated similarly but must be listed and cleared on exchanges.The CFTC and other regulators have long argued that these investments are similar in nature and should therefore be consistently regulated with complete transparency. With the exception of swaps, the investment created at Salomon Brothers in the 1980s, this was historically the case. But despite the similarity between swaps and other types of cleared derivatives, regulators allowed swaps to be treated as banking instruments that were held “off balance sheet.” Over the next two decades a flurry of deregulation and the growth of global trading reduced the transparency of derivatives trading and increased the size of the market dramatically.The Dodd-Frank regulations were designed to put an end to this practice by requiring anyone who deals in large amounts of swaps to register as a swaps dealer and clear their trades through an exchange. Yet CNBC’s John Carney believes the new swaps regulations have already created a “flight to futures” from swaps, an unintended consequence of Dodd-Frank that will end up with a “world with less collateral and less capital, less transparency, less investor protection, more concentration of risk, and a huge unanticipated market transformation.”In other words, the ICE will likely be the greatest beneficiary of Dodd-Frank.Nevertheless, Chilton believes that there will still be “trillions, tens of trillions if not hundreds of trillions of swaps that will be traded in the U.S. and worldwide that will be regulated and have the light of day cast upon them.”For his part, Greenberger agrees U.S. regulators are beginning to get a handle on the markets but thinks inordinate risk is still present in the market. He calls the original Dodd-Frank a “Rube Goldberg system” that was “prospective in nature. There’s still trillions of dollars of swaps that are operating in an unregulated environment.”The world will have to hold its breath until these unregulated swaps run their course and settle in the global marketplace. Intelligent reforms such as margin and capital requirements, position limits and cross-border coordination with respect to regulation are indeed around the corner. These reforms essentially mandate that everyone involved in trading these agreements has enough money to cover potential losses and plays by the same set of rules.“Ultimately we will have position limits,” Chilton believes. “I would be surprised if they weren’t in place by the end of the year.”Greenberger also believes the world will begin to recognize universal standards, saying: “The CFTC has made it clear that for futures the foreign exchanges have to comply with U.S. rules.”Sign from the Occupy Wall Street encampment at Zuccotti Park in Manhattan. Protests over the Wall Street bank bailout raged throughout the nation and yet little has changed since Occupy.Even still, he worries that “this international guidance is a roadmap for banks to avoid Dodd Frank. Just trade in foreign subsidiaries.”Chilton takes a more sanguine view on immediate concerns such as transparency, working with his European counterparts and the future of LIBOR, but he worries more about the things he cannot see.“I feel like we’re going to get things done on capital requirements and on cross-border stuff so that other regulators come to where we are,” says Chilton. “But there’s a bunch of new things that are around the corner that we can’t see.”He cites high-speed trading computers that he calls “cheetah traders” as an example of the unknown. “The cheetah traders, the high-frequency traders, are proliferating. They’re 30 to 50 percent of markets on average but during feeding frenzy time, cheetahs can be up to 70 or 80 percent of the market. There’s not one single word in the Dodd Frank legislation that deals with high-frequency trading. Not one word.”Once again, pulling the strings behind this unseen phenomenon is Sprecher, the man responsible for making high-frequency trading what it is today.Thomas Jasper will likely never get that plaque for inventing the investment world’s biggest game of chance. On a positive note, however, he’s alive, well and wealthy, unlike Moe Greene, who infamously took a bullet through the eye. But there are better-than-even odds that a statue of Jeff Sprecher will someday be erected on Wall Street. Or, at the very least, downtown Atlanta.last_img read more

Putting people first

first_img 1SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr Check out the latest news reports from Wall Street and the focus is almost always on profits and losses.How much is the market up or down? Which corporation made how much money this quarter?But in recent years, some CEOs have begun to rethink the idea that profits should be the driver behind every decision. Instead, there’s an emerging philosophy that having a purpose beyond money and putting people first—especially employees—places companies in a better position to succeed in the long run.“A piece of advice I got from a mentor a long time ago was this: ‘Your job as CEO is not to grow a company, your job is to grow people who grow the company,’” says Adam Witty, co-author with Rusty Shelton of Authority Marketing: How to Leverage 7 Pillars of Thought Leadership to Make Competition Irrelevant. continue reading »last_img read more

Employee gifts, taxes and holidays

first_img ShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblr Now that we are into the holiday season – with Christmas eighteen days away, Hanukkah ending in three days and Kwanzaa beginning in nineteen days – there are certain things that simply are inescapable. Things like holiday music being played twenty-four hours a day, bright lights everywhere, movies like Elf and A Christmas Story on an endless loop. And cookies . . . lots of them.Things can become overwhelming during this busy season. Regardless of how you feel about the holiday season, everyone likes being recognized for doing something well. This time of year, we sometimes get questions about possible compliance issues if a credit union wants to provide cash, gift cards or other small items to employees. What are the federal tax consequences that arise from such gifts? In particular, are those gifts considered income to the employee? continue reading »last_img read more

Dean Skelos Wiretaps Reveal Greed, Schemes & F-Bombs

first_imgSign up for our COVID-19 newsletter to stay up-to-date on the latest coronavirus news throughout New York Albany, the New York State Legislature’s infamous seat of power, has been synonymous with corruption for as long as lawmaking has been equated with sausage-making—with the juiciest link served this week.Monday’s arrest of New York State Senate Majority Leader Dean Skelos (R-Rockville Centre) on federal corruption charges came three months after former state Assembly Speaker Sheldon Silver (D-Manhattan) lost his leadership post amid similar accusations. Most telling in the latest case was the profanity-laced cynicism sprinkled throughout transcripts of Skelos’ wiretapped phone conversations that the FBI and federal prosecutors partly used to make their case.“I tell you this, the State is not going to do a fucking thing for the County,” Skelos’ son, Adam, who was also arrested, was recorded as saying, according to court documents. “Any favor that [Nassau County Executive] calls and asks for, it’s not happening. ”Authorities said that Adam was mad that Nassau wasn’t paying AbTech Industries, an Arizona-based environmental company that he and his father allegedly extorted $10,000 monthly payments from, in exchange for helping the business secure a $12 million county contract. That lack of payment meant Adam’s alleged bribes were in doubt, prosecutors said.Rarely does the public get a glimpse into the sausage-making machine to see how rotten the chefs and their ingredients are. But the government’s 43-page criminal complaint against 16-term senator Skelos and his 32-year-old son offers a peek, besides listing charges ranging from conspiracy and extortion to fraud and solicitation of bribes. Just like Silver before them, both men have pleaded not guilty to the charges.The documents paint Adam as a low-life, do-nothing leech whose most profitable talent is feeding off his father’s publicly financed teat. Pappa Skelos is depicted as a callous, money-crazed thug who could care less about his constituents, or his alleged misdeeds as long as it spares his son from having to earn an honest day’s pay.After Adam learned that Nassau County was entering into a public-private partnership with another company to run its sewage facilities—including the troubled Cedar Creek and Bay Park sewage treatment plants—he immediately called his daddy to complain, the court papers state.Dean saw the funerals of NYPD officers Rafael Ramos and Wenjian Liu—both of whom were murdered earlier this year in Brooklyn—as a chance to shake down Nassau County Executive Ed Mangano in person, prosecutors alleged in the complaint.Dean called Mangano to arrange a ride with him to Liu’s Jan. 4 wake while “using coded language to refer to AbTech’s complaints as ‘the situation,’” according to the court documents, pressuring the county exec to hurry up and pay the company.“Somebody feels like they’re just getting jerked around the last two years,” Skelos told Mangano, according to the documents. “So we’ll talk tomorrow.”Mangano’s office called Dean back the next day and said that the payments had been expedited, the documents show. Later, when the allegations went public, the Nassau County Executive and Democrats in the Nassau County Legislature proposed rival lobbying reform bills.The cash-strapped county’s money continued to flow, enriching Skelos’s son even though Adam, who prosecutors alleged was only hired by AbTech because of his father, admitted to a confidential informant that he “literally knew nothing about water or, you know, any of that stuff.”It seems ignorance pays–if you know the right people. In a telling section of the complaint, the shameless Adam and Dean shared a laugh at the plight of every day Long Islanders in the disastrous wake of a nor’easter that flooded LI in December, according to investigators. While LI saw floods, misery and destruction, the father and son saw green, because AbTech’s contract with Nassau was for stormwater filters.“We got some major water problems here with all the flooding going on… I love it! Keep it coming Mother Nature! Keep it coming!” Adam rejoiced to his father in a wiretapped phone conversation on Dec. 10, laughing as the Island flooded, according to the documents. Dean replied: “It will.”Equally as apparent as their greed is their disdain for Preet Bharara, the U.S. Attorney for the Southern District of New York who filed the charges against them.Adam unloaded on another intercepted call with his father, complaining that Dean couldn’t give him “real advice” about the ongoing scheme. “You can’t talk normally because it’s like fucking Preet Bharara is listening to every fucking phone call,” he allegedly said in the wiretaps. “It’s just fucking frustrating.”“It is,” agreed his dad.The wiretaps reveal that the pair became cautious, and angry, following the Jan. 22 arrest of then-Speaker Silver. This included using communications that Adam thought the feds couldn’t tap, such as iPhone’s popular “FaceTime” function—which allows users to see and talk to each other through a cellphone video link.“That doesn’t show up on the phone bill,” the hapless Adam told a government informant in a recorded call, “just the data plan,” according to the wiretap transcripts.The father-son team also allegedly used a disposable “burner” phone to try and skirt surveillance. Even still, they were overheard whining about the feds investigating state corruption.In another call, Adam asked Dean to call him back using his wife’s phone, and after telling his father he’d be “very, very vague” on the phone, his dad allegedly told him: “Right now we are in dangerous times Adam.”In March, according to investigators, Adam complained to a state Senate staff member it was “fucking frustrating” he couldn’t openly speak to his dad because he couldn’t “just send smoke signals or a little pigeon with [a] fucking note [tied] to its foot.”With charges filed against both Skelos and Silver—two of the so-called “three men in a room” who, along with the governor, shape the Empire State’s legislative agenda—Bharara said that is was clear that corruption is “a deep-seated problem in New York State.”New York consistently ranks high on public corruption analyses, ranging from Capital New York’s list in January to nonprofit State Integrity’s latest investigation and a Monmouth University poll last month, which ranked the Empire State No. one.Gov. Andrew Cuomo, on the other hand—who controversially disbanded the Moreland commission probing public corruption last year—appears to be in denial, since he recently told New York 1 that the state capitol is no more corrupt than anywhere else.“You’ve always had, and you probably always will have, some level of corruption,” he was quoted as saying. “Power corrupts, and government is a source of power. You have it in the City Council, you have it in the state Legislature, you have it in the Congress of the United States, so that continues.”Hell, there’s so much corruption among New York’s army of disgraced lawmakers that there’s even plans to memorialize them all within a Museum of Political Corruption. Its proposed headquarters? You guessed it: Albany.last_img read more

Binghamton schools to push back in-person learning again

first_imgSchool districts in the yellow zone are required to mandate weekly testing of students, teachers and staff for COVID-19. BINGHAMTON (WBNG) — The Binghamton City School District has pushed back in-person instruction until Oct. 26 due to elevated COVID-19 cases in Broome County. The move will align the district with Governor Andrew Cuomo’s 14-day New Cluster Action Initiative, which begins Oct. 9. Here is the map of the Broome County cluster — with a yellow zone — along with the guidance: pic.twitter.com/isgeAqtOET— Andrew Cuomo (@NYGovCuomo) October 6, 2020 On Tuesday, Governor Cuomo declared parts of Broome County to be a “yellow zone.” You can read the school’s full statement on the delay by clicking here. However, according to the school district, the state has not provided details regarding the specifics of the testing.last_img read more

South Korean prosecutors open probe into North’s Kim Yo Jong

first_imgLast month, Pyongyang blew up an inter-Korean liaison office on its side of the border, days after Kim Yo Jong — one of her brother’s closest advisers — had said the “useless” property would soon be seen “completely collapsed”.Before the demolition, it had issued a series of vitriolic condemnations of South Korea over anti-North leaflets that defectors send back across the heavily-militarized border — usually attached to balloons or floated in bottles.It raised pressure further by threatening military measures against Seoul, but later said it had suspended those plans in an apparent sudden dialling-down of tensions.In his complaint, lawyer Lee Kyung-jae claimed the now-demolished liaison office was South Korean property as it was renovated using South Korean government funds, despite its being located in the North. Kim “used explosives to destroy” the South’s “quasi-diplomatic mission building that served the public interest”, he said in the complaint.Lee also filed a complaint against Pak Jong Chon, chief of the general staff of the North Korean military.Under South Korea’s criminal code, he stressed, damaging property or disturbing the peace using explosives was punishable by death, or a prison sentence of at least seven years.Capital punishment remains on the statute books in South Korea, although it has not executed anyone since 1997.In practice, it would be virtually impossible for Seoul officials to punish Kim Yo Jong or Pak, but Lee told the South’s Yonhap News Agency that he wanted to “inform the North Korean people of their leader’s hypocrisy”.The announcement came a week after a Seoul court ordered Pyongyang’s leader to compensate prisoners of war who spent decades in North Korea, in a move that could set a far-reaching legal precedent on the divided peninsula.Inter-Korean relations have been strained following the collapse of a summit in Hanoi between Kim Jong Un and US President Donald Trump early last year over what the nuclear-armed North would be willing to give up in exchange for a loosening of sanctions. Seoul prosecutors have opened an unprecedented probe into North Korean leader Kim Jong Un’s sister over Pyongyang’s blowing up of a liaison office last month, officials said Thursday.The move is likely to infuriate the nuclear-armed North, which has repeatedly condemned South Korea in recent months, including directing personal insults at President Moon Jae-in.Seoul Central District prosecutors received a criminal complaint against Kim Yo Jong from a Seoul-based lawyer and had started an investigation, a spokeswoman told AFP.center_img Topics :last_img read more

Richard Lee Francis

first_imgRichard Lee Francis, 79, of Lawrenceburg passed away Thursday, February 13, 2020 at Christ Hospital.  Richard was born Wednesday, December 18, 1940, in Cincinnati, Ohio, the son of the late Edwin and Mary Bell (Leasure) Francis.  He married Linda Rainey and she survives.  Richard retired from GE after working 18 years as an engineer.  He served his country in the U.S. Navy and was a past member of the Aurora American Legion.  He enjoyed working on home projects; movies; spending time with family and especially enjoyed being with his grandchildren.Richard is survived by his wife Linda Francis; his children: Jeff McDonald, Dennis Hibbard, David Salyers, Scott Schmidt, Regina McDonald, Robin Salyers, Amanda Hibbard and Rebecca Schmidt; 14 grandchildren; 4 great grandchildren; and brother Charles (Linda) Francis of Newark, Ohio.  He was preceded in death by his parents; 3 brothers; 3 sisters; and grandchild Donovan Salyers.A service celebrating his life will be held 5 PM Tuesday, February 18 at Laws-Carr-Moore Funeral Home in Milan with Pastor Charles Miller officiating.  Full military rites provided by the Milan American Legion Post #235.  Family and friends may gather to share and remember him 4 – 5 PM Tuesday, February 18 also at the funeral home.  Memorials may be given in honor of Richard to Honor Flight Tri-Sate.  Laws-Carr-Moore Funeral Home entrusted with arrangements, 707 S Main Street, Box 243, Milan, IN 47031, (812)654-2141.  You may go to www.lawscarrmoore.com to leave an online condolence message for the family.last_img read more

Champions League: PSG challenge Bayern crown, road to final, possible line up

first_imgPSG vs. Bayern Munich Venue: Estadio da Luz, Lisbon Kick off: 8PMThe Estadio da Luz plays host to the 2019-20 Champions League final tonight as first-time finalists Paris Saint-Germain take on five-time winners of the competition Bayern Munich. Both teams comfortably made it through their semi-finals with 3-0 wins over RB Leipzig and Lyon respectively and will now battle to be crowned kings of Europe – a title which would complete an historic treble for either club.A fresh slice of history beckons in Lisbon for one of these giants as they face off in club football’s most prestigious match, but their past history at this stage of the competition could barely be more different.Bayern have been here and done it all before – only Real Madrid can top their tally of 11 European Cup and Champions League finals, while only Madrid, AC Milan and Liverpool have got their hands on the trophy more often.It has not been all triumph and glory for the Bavarian juggernauts, though, and they have lost as many finals as they have won in this competition, Juventus being the only team to have been beaten more often at this stage.PSG know all about despair in Europe’s premier club competition; their recent history has been littered by high-profile failures and it remains impossible to consider their Champions League past without thoughts immediately going back to their Neymar-inspired 6-1 defeat to Barcelona in 2016-17. Now with Neymar in their ranks and beginning to show the decisive influence PSG have been hoping for since his world-record move, the Ligue 1 giants have the chance to finally banish those memories and the hurt of seven successive seasons in which they failed to make it past the quarter-finals.The owners have made no secret of the fact that the Champions League is the holy grail for them and, after years of underachievement in the competition, it could be written in the stars for them to pull off their crowning glory in the club’s 50th anniversary year.Success at home is almost a given now for Le Parisiens, who have won 24 of the last 28 domestic trophies available to them, but victory on Sunday would see them finally join the top table of Europe’s elite.While that is the biggest and tastiest carrot for the owners, in time PSG’s possible achievement of completing a clean sweep of trophies this season may be viewed as even more historic, having already wrapped up the Ligue 1, Coupe de France, Coupe de la Ligue and Trophee des Champions titles this season.Celtic in 1966-67 are the only club to have ever lifted a quadruple of European Cup, domestic league, domestic cup and domestic league cup before, and PSG could take it as a good omen that their European Cup success famously came in Lisbon too. No French club has ever completed the treble before either as PSG look to become only the ninth team to achieve that feat, but they are facing a Bayern side similarly familiar with a domestic monopoly on titles and with far more experience in Europe.Indeed, Bayern won a treble of their own just seven years ago when they picked up their fifth Champions League crown, and victory on Sunday would see them join Barcelona as the only clubs to do so on two separate occasions.The German outfit have been simply scintillating en route to the final, plundering an incredible 42 goals during a perfect 10 wins from 10 games in the competition this season.An 8-2 obliteration of Barcelona in the quarter-finals was undoubtedly the most memorable of those wins, although amazingly it does have competition – Bayern have also beaten Tottenham Hotspur 7-2 and Red Star Belgrade 6-0 in one-off games, as well as hammering Chelsea 7-1 on aggregate.RelatedPosts Bayern Munich fans undergo Super Cup coronavirus tests Vidal lands in Milan to complete move from Barca to Inter Whirlwind Bayern Munich dismantle Schalke in season opener Rarely, if ever, has there been a more emphatic route to the final, with Bayern already boasting the best goals-per-game ratio in Champions League history and needing three more goals to equal Barcelona’s all-time record of 45 in a Champions League campaign – recorded over 16 games in 1999-00.With such a record it is easy to forget that Bayern had been in some trouble earlier in the campaign, leading to Niko Kovac being sacked and replaced by Hansi Flick, who has since steered them back on to the right path.It is not only Bayern’s European record which is formidable; German champions for an eighth year in a row, they come into this match having won 27 of their last 28 outings across all competitions including each of the last 19 – an unprecedented achievement for a German top-flight team.Yet there is not quite an aura of invincibility about the team despite the results suggesting otherwise, and PSG will have taken belief from Lyon’s performance in the semi-finals despite their fellow Ligue 1 side being on the end of a 3-0 defeat.Bayern’s clean sheet in that match was more down to some key saves from Manuel Neuer than any particularly robust defending in front of him, with Lyon capitalising on a high defensive line on more than one occasion without taking their chances.It is difficult to see the likes of Neymar, Kylian Mbappe, Angel di Maria and Mauro Icardi being quite so wasteful if gifted the same chances, and it is also difficult to see Bayern changing the way they play given their ability to outscore any team.Thomas Tuchel’s side will therefore be confident that they will get opportunities, and with the best defence in the competition this season they also seem well-equipped to keep Bayern’s own dangerous attackers at bay.PSG’s semi-final victory over RB Leipzig was more comfortable than Bayern’s over Lyon, although their overall route to the final has not been quite as straightforward.The French outfit needed to overcome a first-leg deficit to beat Borussia Dortmund in the last 16 before a dramatic stoppage-time comeback against Atalanta BC in the one-legged quarter-final – two goals in added-on time ending the Italian outfit’s dream run.However, PSG began their European campaign with a statement-making win over Real Madrid, and the Atalanta comeback in particular could prove to be a seminal moment for their fortunes in Europe.Many would have been expecting a more difficult path towards a potential first Champions League crown than Atalanta and RB Leipzig in the quarters and semis respectively, but in Bayern they face arguably the biggest test in world football at the moment.Sunday represents a tantalising opportunity to make themselves the team to beat, though, and if they are finally able to lift their most coveted prize aloft then there could be no doubting that they are worthy champions.Road to the final PSG Group stage: PSG 3-0 Real Madrid Group stage: Galatasaray 0-1 PSG Group stage: Club Brugge 0-5 PSG Group stage: PSG 1-0 Club Brugge Group stage: Real Madrid 2-2 PSG Group stage: PSG 5-0 GalatasarayLast 16: Borussia Dortmund 2-1 PSG Last 16: PSG 2-0 Borussia DortmundQuarter-final: Atalanta 1-2 PSGSemi-final: RB Leipzig 0-3 PSGBAYERN MUNICH Group stage: Bayern Munich 3-0 Red Star Belgrade Group stage: Tottenham Hotspur 2-7 Bayern Munich Group stage: Olympiacos 2-3 Bayern Munich Group stage: Bayern Munich 2-0 Olympiacos Group stage: Red Star Belgrade 0-6 Bayern Munich Group stage: Bayern Munich 3-1 Tottenham HotspurLast 16: Chelsea 0-3 Bayern Munich Last 16: Bayern Munich 4-1 ChelseaQuarter-final: Barcelona 2-8 Bayern MunichSemi-final: Lyon 0-3 Bayern MunichParis Saint-Germain possible XI: Rico, Kehrer, Thiago Silva, Kimpembe, Bernat, Verratti, Marquinhos, Herrera, Di Maria, Neymar, Mbappe.Bayern Munich possible XI: Neuer, Kimmich, Boateng, Alaba, Davies, Goretzka, Thiago, Perisic, Muller, Gnabry, Lewandowski.Tags: Bayern MunichChampions League finalEstadio da LuzParis Saint-Germainlast_img read more

Sanchez thrilled with Villa chance

first_img It followed six years at French side Valenciennes and two years at Uruguayan side River Plate, where he started his career. He is nicknamed The Rock, a tag given to him by the River Plate fans due to his physical edge. Sanchez added: “It began in Uruguay when I started my career. Then I went onto France but where it really picked up was in Spain. With the World Cup and everything I am known as The Rock now.” The midfielder has signed a four-year contract at the claret and blues after making the switch from Spanish side Elche and could make his Premier League debut at home to Newcastle on Saturday. Sanchez, who has 44 international caps, impressed in Colombia’s run to the World Cup quarter-finals, where they lost 2-1 to hosts Brazil in July. Carlos Sanchez believes Roy Keane can help turn him into a Barclays Premier League force with Aston Villa. Press Association He started training with his new team-mates on Monday and insisted that working with Villa number two and former Manchester United star Keane will only improve him. “Yes of course. He was a big player and I’ve seen him play,” Sanchez said. “I’ve always wanted to play in England. I had a few opportunities from other clubs but when I had the opportunity to come here I had no doubts. The most important thing was that the manager wanted me here. “I’ve got lots of things that I want to do, it’s a big club. I’m sure I can progress here. We’ve got everything – some great players, good technical staff and everything else we need to have a good successful season. We have got a great dressing room.” The 28-year-old also revealed former Villa and Colombia striker Juan Pablo Angel and Fulham’s Hugo Rodallega convinced him to make the switch to England. He said: “I spoke with Juan Pablo Angel. He said I absolutely had to come and had no doubts. I spoke with Hugo Rodallega, the Fulham player, too, who said I have to come. “I can’t really do the same as Juan Pablo because we play in different positions, but he is an inspiration, nonetheless.” Sanchez joined Villa following just one season with Primera Division side Elche, who he helped them to avoid relegation by a point as they finished 16th. last_img read more

Syracuse’s Newborn credits emotion on court for assisting in 5-0 start to season

first_imgA.J. James stood across the court from a 12-year-old Rhiann Newborn and let loose a booming, “Come on!”Her coach had just crushed a ball past Newborn, and he yelled to encourage Newborn to yell after she won a point.“I used to play her and beat her all the time. I’d yell a lot so, whenever she could get a ‘Come on!’ in, it felt like she was getting the best of me,” James, the AJ Elite Tennis Academy coach, said. “I think that helped her. I want my students — not to celebrate every little thing — but to pump themselves up.”Newborn carried that habit with her to Syracuse, where the sophomore’s shouting makes teammates think of Serena Williams, she said. Newborn is undefeated through five singles matches this season, and credits the success to her energy and vocal nature on the court.Playing in high-pressure situations in professional tennis tournaments and competing with friends in the video game Mortal Kombat has prepped her well to bring a competitive, high-energy style to SU.AdvertisementThis is placeholder text“That’s what I trained her on,” Newborn’s father, Darryl Newborn, said. “If you don’t want to get after it, stay home.”When Newborn was young, her neighbor, Olivia Garza, would play her every day in Mortal Kombat, on Newborn’s PlayStation 1. Newborn used Kitana most often, a character noted for the steel blades in her hand fans. Hurling the damage-inflicting fans at her opponent from across the arena was her favorite move.The girls struggled to establish dominance through 20-50 rounds per day.“We’d just keep playing,” Garza said. “Until one of us was satisfied with winning.”If Newborn’s hunger to win wasn’t fulfilled, she usually challenged her father to the game at home. And when her father — a former cornerback at the University of Texas El Paso — taught her other sports, he did so in the only way he knew how.“Passion and aggression,” Darryl Newborn said.When she was 4, her parents brought her to local tennis courts where they competed with hergrandparents. Newborn would storm the court and steal one of the rackets.Nearly two years later, she interrupted yet another match, announcing once again she wanted to play. But she didn’t have a racket. Armed with only a stick she had picked up nearby, Newborn demanded a spot on the court.Darryl Newborn knew he had no choice, so he replaced the stick with a racket. He worked with his daughter to craft a tennis style around her personality — competitive, aggressive and loud.“I think yelling intimidates (my opponents), which I like because then they get scared and I can beat them,” Newborn said, laughing. “This is the style I chose to play. I yell extremely loud, it just makes me want to compete harder.”Syracuse head coach Younes Limam first saw Newborn’s fiery style when he was recruiting her to Rice, where he used to coach.Fully-throated, guttural yells were heard above the sound of balls being hit. Parents of opposing players snickered and furrowed their eyebrows. Spectators familiar with Newborn’s work grinned.“She feeds off her energy,” Limam said. “Her presence makes the difference in close matches. It’s a big strength to have.”In the Orange’s home opener, Newborn was facing an opponent she had seen on the Texas junior circuit. Frustrated, she let out a particularly angry snarl.“You know, Rhiann’s always been this way,” the opponent’s mother said from the stands.And teetering on the brink of dropping the set, Newborn pulverized a forehand winner from the baseline past her opponent.Newborn pumped her fist, stiffened and delivered the most deafening howl yet.“Come on!” Comments Published on February 18, 2015 at 12:15 am Contact Sam: sjfortie@syr.edu | @Sam4TR Facebook Twitter Google+last_img read more