President Obama Speaks on Comprehensive Immigration Reform (video/transcript)

THE PRESIDENT:  Thank you!  (Applause.)  Thank you!  Thank you so much.  (Applause.)  It is good to be back in Las Vegas!  (Applause.)  And it is good to be among so many good friends.

Let me start off by thanking everybody at Del Sol High School for hosting us.  (Applause.)  Go Dragons!  Let me especially thank your outstanding principal, Lisa Primas.  (Applause.)

There are all kinds of notable guests here, but I just want to mention a few.  First of all, our outstanding Secretary of the Department of Homeland Security, Janet Napolitano, is here.  (Applause.)  Our wonderful Secretary of the Interior, Ken Salazar.  (Applause.)  Former Secretary of Labor, Hilda Solis.  (Applause.)  Two of the outstanding members of the congressional delegation from Nevada, Steve Horsford and Dina Titus.  (Applause.)  Your own mayor, Carolyn Goodman.  (Applause.)

But we also have some mayors that flew in because they know how important the issue we’re going to talk about today is.  Marie Lopez Rogers from Avondale, Arizona.  (Applause.)  Kasim Reed from Atlanta, Georgia.  (Applause.)  Greg Stanton from Phoenix, Arizona.  (Applause.)  And Ashley Swearengin from Fresno, California.  (Applause.)

And all of you are here, as well as some of the top labor leaders in the country.  And we are just so grateful.  Some outstanding business leaders are here as well.  And of course, we’ve got wonderful students here, so I could not be prouder of our students.  (Applause.)

Now, those of you have a seat, feel free to take a seat.  I don’t mind.

AUDIENCE MEMBER:  I love you, Mr. President!

THE PRESIDENT:  I love you back.  (Applause.)

Now, last week, I had the honor of being sworn in for a second term as President of the United States.  (Applause.)  And during my inaugural address, I talked about how making progress on the defining challenges of our time doesn’t require us to settle every debate or ignore every difference that we may have, but it does require us to find common ground and move forward in common purpose.  It requires us to act.

I know that some issues will be harder to lift than others.  Some debates will be more contentious.  That’s to be expected.  But the reason I came here today is because of a challenge where the differences are dwindling; where a broad consensus is emerging; and where a call for action can now be heard coming from all across America.  I’m here today because the time has come for common-sense, comprehensive immigration reform.  (Applause.)  The time is now.  Now is the time.  Now is the time.  Now is the time.

AUDIENCE:  Sí se puede!  Sí se puede!

THE PRESIDENT:  Now is the time.

I’m here because most Americans agree that it’s time to fix a system that’s been broken for way too long.  I’m here because business leaders, faith leaders, labor leaders, law enforcement, and leaders from both parties are coming together to say now is the time to find a better way to welcome the striving, hopeful immigrants who still see America as the land of opportunity.  Now is the time to do this so we can strengthen our economy and strengthen our country’s future.

Think about it -- we define ourselves as a nation of immigrants.  That’s who we are -- in our bones.  The promise we see in those who come here from every corner of the globe, that’s always been one of our greatest strengths.  It keeps our workforce young.  It keeps our country on the cutting edge.  And it’s helped build the greatest economic engine the world has ever known.

After all, immigrants helped start businesses like Google and Yahoo!.  They created entire new industries that, in turn, created new jobs and new prosperity for our citizens.  In recent years, one in four high-tech startups in America were founded by immigrants.  One in four new small business owners were immigrants, including right here in Nevada -- folks who came here seeking opportunity and now want to share that opportunity with other Americans.

But we all know that today, we have an immigration system that’s out of date and badly broken; a system that’s holding us back instead of helping us grow our economy and strengthen our middle class.

Right now, we have 11 million undocumented immigrants in America; 11 million men and women from all over the world who live their lives in the shadows.  Yes, they broke the rules.  They crossed the border illegally.  Maybe they overstayed their visas.  Those are facts.  Nobody disputes them.  But these 11 million men and women are now here.  Many of them have been here for years.  And the overwhelming majority of these individuals aren’t looking for any trouble.  They’re contributing members of the community.  They're looking out for their families.  They're looking out for their neighbors.  They're woven into the fabric of our lives.

Every day, like the rest of us, they go out and try to earn a living.  Often they do that in a shadow economy -- a place where employers may offer them less than the minimum wage or make them work overtime without extra pay.  And when that happens, it’s not just bad for them, it’s bad for the entire economy.  Because all the businesses that are trying to do the right thing -- that are hiring people legally, paying a decent wage, following the rules -- they’re the ones who suffer.   They've got to compete against companies that are breaking the rules.  And the wages and working conditions of American workers are threatened, too.

So if we're truly committed to strengthening our middle class and providing more ladders of opportunity to those who are willing to work hard to make it into the middle class, we've got to fix the system.

We have to make sure that every business and every worker in America is playing by the same set of rules.  We have to bring this shadow economy into the light so that everybody is held accountable -- businesses for who they hire, and immigrants for getting on the right side of the law.  That’s common sense.  And that’s why we need comprehensive immigration reform.  (Applause.)

There’s another economic reason why we need reform.  It’s not just about the folks who come here illegally and have the effect they have on our economy.  It’s also about the folks who try to come here legally but have a hard time doing so, and the effect that has on our economy.

Right now, there are brilliant students from all over the world sitting in classrooms at our top universities.  They’re earning degrees in the fields of the future, like engineering and computer science.  But once they finish school, once they earn that diploma, there’s a good chance they’ll have to leave our country.  Think about that.

Intel was started with the help of an immigrant who studied here and then stayed here.  Instagram was started with the help of an immigrant who studied here and then stayed here.  Right now in one of those classrooms, there’s a student wrestling with how to turn their big idea -- their Intel or Instagram -- into a big business.  We’re giving them all the skills they need to figure that out, but then we’re going to turn around and tell them to start that business and create those jobs in China or India or Mexico or someplace else?  That’s not how you grow new industries in America.  That’s how you give new industries to our competitors.   That’s why we need comprehensive immigration reform.  (Applause.)

Now, during my first term, we took steps to try and patch up some of the worst cracks in the system.

First, we strengthened security at the borders so that we could finally stem the tide of illegal immigrants.  We put more boots on the ground on the southern border than at any time in our history.  And today, illegal crossings are down nearly 80 percent from their peak in 2000.  (Applause.)

Second, we focused our enforcement efforts on criminals who are here illegally and who endanger our communities.  And today, deportations of criminals is at its highest level ever.  (Applause.)

And third, we took up the cause of the DREAMers -- (applause) -- the young people who were brought to this country as children, young people who have grown up here, built their lives here, have futures here.  We said that if you’re able to meet some basic criteria like pursuing an education, then we’ll consider offering you the chance to come out of the shadows so that you can live here and work here legally, so that you can finally have the dignity of knowing you belong.

But because this change isn’t permanent, we need Congress to act -- and not just on the DREAM Act.  We need Congress to act on a comprehensive approach that finally deals with the 11 million undocumented immigrants who are in the country right now.  That's what we need.  (Applause.)

Now, the good news is that for the first time in many years, Republicans and Democrats seem ready to tackle this problem together.  (Applause.)  Members of both parties, in both chambers, are actively working on a solution.  Yesterday, a bipartisan group of senators announced their principles for comprehensive immigration reform, which are very much in line with the principles I’ve proposed and campaigned on for the last few years.  So at this moment, it looks like there’s a genuine desire to get this done soon, and that’s very encouraging.

But this time, action must follow.  (Applause.)  We can't allow immigration reform to get bogged down in an endless debate.  We've been debating this a very long time.  So it's not as if we don't know technically what needs to get done.  As a consequence, to help move this process along, today I’m laying out my ideas for immigration reform.  And my hope is that this provides some key markers to members of Congress as they craft a bill, because the ideas I’m proposing have traditionally been supported by both Democrats like Ted Kennedy and Republicans like President George W. Bush.  You don't get that matchup very often.  (Laughter.)  So we know where the consensus should be.

Now, of course, there will be rigorous debate about many of the details, and every stakeholder should engage in real give and take in the process.  But it’s important for us to recognize that the foundation for bipartisan action is already in place.  And if Congress is unable to move forward in a timely fashion, I will send up a bill based on my proposal and insist that they vote on it right away.  (Applause.)

So the principles are pretty straightforward.  There are a lot of details behind it.  We're going to hand out a bunch of paper so that everybody will know exactly what we're talking about.  But the principles are pretty straightforward.

First, I believe we need to stay focused on enforcement.  That means continuing to strengthen security at our borders.  It means cracking down more forcefully on businesses that knowingly hire undocumented workers.  To be fair, most businesses want to do the right thing, but a lot of them have a hard time figuring out who’s here legally, who’s not.  So we need to implement a national system that allows businesses to quickly and accurately verify someone’s employment status.  And if they still knowingly hire undocumented workers, then we need to ramp up the penalties.

Second, we have to deal with the 11 million individuals who are here illegally.  We all agree that these men and women should have to earn their way to citizenship.  But for comprehensive immigration reform to work, it must be clear from the outset that there is a pathway to citizenship.  (Applause.)

We’ve got to lay out a path -- a process that includes passing a background check, paying taxes, paying a penalty, learning English, and then going to the back of the line, behind all the folks who are trying to come here legally.  That's only fair, right?  (Applause.)

So that means it won’t be a quick process but it will be a fair process.  And it will lift these individuals out of the shadows and give them a chance to earn their way to a green card and eventually to citizenship.  (Applause.)

And the third principle is we’ve got to bring our legal immigration system into the 21st century because it no longer reflects the realities of our time.  (Applause.)  For example, if you are a citizen, you shouldn’t have to wait years before your family is able to join you in America.  You shouldn't have to wait years.  (Applause.)

If you’re a foreign student who wants to pursue a career in science or technology, or a foreign entrepreneur who wants to start a business with the backing of American investors, we should help you do that here.  Because if you succeed, you’ll create American businesses and American jobs.  You’ll help us grow our economy.  You’ll help us strengthen our middle class.

So that’s what comprehensive immigration reform looks like:  smarter enforcement; a pathway to earned citizenship; improvements in the legal immigration system so that we continue to be a magnet for the best and the brightest all around the world.  It’s pretty straightforward.

The question now is simple:  Do we have the resolve as a people, as a country, as a government to finally put this issue behind us?  I believe that we do.  I believe that we do.  (Applause.)  I believe we are finally at a moment where comprehensive immigration reform is within our grasp.

But I promise you this:  The closer we get, the more emotional this debate is going to become.  Immigration has always been an issue that enflames passions.  That’s not surprising.  There are few things that are more important to us as a society than who gets to come here and call our country home; who gets the privilege of becoming a citizen of the United States of America.  That's a big deal.

When we talk about that in the abstract, it’s easy sometimes for the discussion to take on a feeling of “us” versus “them.”  And when that happens, a lot of folks forget that most of “us” used to be “them.”  We forget that.  (Applause.)

It’s really important for us to remember our history.  Unless you’re one of the first Americans, a Native American, you came from someplace else.  Somebody brought you.  (Applause.)

Ken Salazar, he’s of Mexican American descent, but he points that his family has been living where he lives for 400 years, so he didn't immigrate anywhere.  (Laughter.)

The Irish who left behind a land of famine.  The Germans who fled persecution.  The Scandinavians who arrived eager to pioneer out west.  The Polish.  The Russians.  The Italians.  The Chinese.  The Japanese.  The West Indians.  The huddled masses who came through Ellis Island on one coast and Angel Island on the other.  (Applause.)  All those folks, before they were “us,” they were “them.”

And when each new wave of immigrants arrived, they faced resistance from those who were already here.  They faced hardship.  They faced racism.  They faced ridicule.  But over time, as they went about their daily lives, as they earned a living, as they raised a family, as they built a community, as their kids went to school here, they did their part to build a nation.

They were the Einsteins and the Carnegies.  But they were also the millions of women and men whose names history may not remember, but whose actions helped make us who we are; who built this country hand by hand, brick by brick.  (Applause.)  They all came here knowing that what makes somebody an American is not just blood or birth, but allegiance to our founding principles and the faith in the idea that anyone from anywhere can write the next great chapter of our story.

And that’s still true today.  Just ask Alan Aleman.  Alan is here this afternoon -- where is Alan?  He's around here -- there he is right here.  (Applause.)  Alan was born in Mexico.  (Applause.)  He was brought to this country by his parents when he was a child.  Growing up, Alan went to an American school, pledged allegiance to the American flag, felt American in every way -- and he was, except for one:  on paper.

In high school, Alan watched his friends come of age -- driving around town with their new licenses, earning some extra cash from their summer jobs at the mall.  He knew he couldn’t do those things.  But it didn’t matter that much.  What mattered to Alan was earning an education so that he could live up to his God-given potential.

Last year, when Alan heard the news that we were going to offer a chance for folks like him to emerge from the shadows -- even if it's just for two years at a time -- he was one of the first to sign up.  And a few months ago he was one of the first people in Nevada to get approved.  (Applause.)  In that moment, Alan said, “I felt the fear vanish.  I felt accepted.”

So today, Alan is in his second year at the College of Southern Nevada.  (Applause.)  Alan is studying to become a doctor.  (Applause.)  He hopes to join the Air Force.  He’s working hard every single day to build a better life for himself and his family.  And all he wants is the opportunity to do his part to build a better America.  (Applause.)

So in the coming weeks, as the idea of reform becomes more real and the debate becomes more heated, and there are folks who are trying to pull this thing apart, remember Alan and all those who share the same hopes and the same dreams.  Remember that this is not just a debate about policy.  It’s about people.  It’s about men and women and young people who want nothing more than the chance to earn their way into the American story.

Throughout our history, that has only made our nation stronger.  And it’s how we will make sure that this century is the same as the last:  an American century welcoming of everybody who aspires to do something more, and who is willing to work hard to do it, and is willing to pledge that allegiance to our flag.

Thank you.  God bless you.  And God bless the United States of America.  (Applause.)


President Barack Obama Weekly Address January 26, 2013 (Video/Transcript)

Remarks of President Barack Obama
Weekly Address
The White House
January 26, 2013
Hi, everybody.  Here in America, we know the free market is the greatest force for economic progress the world has ever known.  But we also know the free market works best for everyone when we have smart, commonsense rules in place to prevent irresponsible behavior. 
That’s why we passed tough reforms to protect consumers and our financial system from the kind of abuse that nearly brought our economy to its knees.  And that’s why we’ve taken steps to end taxpayer-funded bailouts, and make sure businesses and individuals who do the right thing aren’t undermined by those who don’t.

But it’s not enough to change the law – we also need cops on the beat to enforce the law.  And that’s why, on Thursday, I nominated Mary Jo White to lead the Securities and Exchange Commission, and Richard Cordray to continue leading the Consumer Financial Protection Bureau.

Mary Jo White has decades of experience cracking down on white-collar criminals and bringing mobsters and terrorists to justice.  At the SEC, she will help complete the task of reforming Wall Street and keep going after irresponsible behavior in the financial industry so that taxpayers don’t pay the price. 

Richard Cordray is a champion for American consumers.  After the Senate refused to allow Richard an up-or-down vote when I nominated him in 2011, I took action to appoint him on my own.  And since then, he’s helped protect Americans from predatory lenders, launched a “Know Before You Owe” campaign to help families make smart decisions about paying for college, and cracked down on credit card companies that charge hidden fees.  But Richard’s appointment runs out at the end of the year, and in order for him to stay on the job, the Senate needs to finally give him the vote he deserves.

As President, my top priority is simple: to do everything in my power to fight for middle-class families and give every American the tools they need to reach the middle class.

That means bringing in people like Mary Jo and Richard whose job it is to stand up for you.  It means encouraging businesses to create more jobs and pay higher wages, and improving education and job training so that more people can get the skills that businesses are looking for.  It means reforming our immigration system and keeping our children safe from the menace of gun violence.  And it means bringing down our deficit in a balanced way by making necessary reforms and asking every American to pay their fair share.

I am honored and humbled to continue to serve as your President.  And I am more hopeful than ever that four years from now – with your help – this country will be more prosperous, more open, and more committed to the principles on which we were founded.

Thanks, and have a great weekend.


UN launches probe into drone strikes (video)

Expert to inquire into drone strikes and whether resultant civilian deaths constitute a war crime.
Source:Al Jazeera 

The UN Office of the High Commissioner for Human Rights has launched an investigation into drone strikes and will review resultant civilian casualties to determine whether the attacks constitute a war crime.

Ben Emmerson, a UN special rapporteur on human rights and counter-terrorism, formally launched the inquiry on Thursday, in response to requests from Russia, China and Pakistan.
A statement released by the UN Office of the High Commissioner of Human Rights states that the inquiry will provide a "critical examination of the factual evidence concerning civilian casualties".

It also states that the inquiry ultimately intends to make recommendations to the UN General Assembly to prompt countries to "investigate into the lawfulness and proportionality of such attacks".

"This is not an investigation into the conduct of any particular state. It's an investigation into the consequence into this form of technology," Emmerson told Al Jazeera.

"The reality is that the increasing availability of this technology [...] makes it very likely that more states will be using this technology in the coming months and years and includes raising the spectre that non state organisations - organisations labelled as terrorist groups - could use the technology in retaliation," he added.
He said that it was a "very serious and escalating situation" which must be addressed by the international community "urgently".

At a press conference on Thursday in London, Emmerson said that the British government had already agreed to co-operate with the investigation and that he was "optimistic" that the US would do the same.

He also requested the US to release "before and after" videos of the drone strikes and internal reports of those killed, including civilians.

Emmerson's team will conduct the inquiry in consultation with military experts and journalists from the UK, Yemen and Pakistan.

Drone deaths
Chris Woods, a senior journalist at London-based The Bureau of Investigative Journalism (TBIJ) said "more than 400 US covert drone strikes have so far taken place in Pakistan, Yemen and Somalia which have killed at least 3,000 people".

In a twitter post from Emmerson's press conference, Woods said that the "inquiry will study 25 drone strikes, where civilians [were] reported killed across Yemen, FATA [Federally Administered Tribal Areas of Pakistan], Somalia, Afghanistan and Gaza".

"We believe more than 500 were likely to have been civilians [in those attacks]. The UN inquiry is important because it will focus on the key questions of the legality of such strikes, and the reported deaths of civilians," he told Al Jazeera.

He added that TBIJ believes that there is not enough evidence to support the claims of some US officials who say that Pakistan secretly approves drone strikes.
Robert Densmore, editor of Defence Report  magazine told Al Jazeera that the inquiry "is something that [needed] to happen to drive forward some more regulation".

He said the inquiry could lay a framework to a potential UN convention to govern the use of drones - something similar to conventions in place for undetectable landmines and cluster ammunition.

"I think there could be enough multilateral pressure to convince the US that this would be something to pursue" he said.

Five-steps to cheating the middle class worker

The rich are driving us ever closer to the status of most wealth-unequal country in the world

It’s so artfully done, and so diabolical, that one can picture secret seminars in subterranean Wall Street meeting rooms, guiding young business recruits in the proven process of taking an extra share of wealth from the middle class. Their presentation might unfold as follows:

1. Boost productivity while keeping worker wages flat.
The trend is unmistakable, and startling: productivity has continued unabated while wages have simply stopped growing. Improved technologies have reduced the need for workers while globalization has introduced the corporate world to cheap labor. In effect, the workers who built a productive America over a half-century stopped getting paid for their efforts.
Paul Krugman suggests that a “sharp increase in monopoly power” is another reason for the disparity. As John D. Rockefeller said, “Competition is a sin.” That certainly is the rule of thumb in banking and agriculture and health insurance and cell phones. Yet despite the fact that low-wage jobs are increasingly defining the American labor market, apologists for our meager minimum wage claim an increase will worsen unemployment. So it remains at $7.25. A minimum wage linked to productivity would be $21.00 per hour.

2. Build up a financial industry that has no maximum wage.

This is where the money is. In 2007, before the financial crisis, a Harvard survey revealed that almost half of the school’s seniors aspired to careers in finance. The industry’s share of corporate profits grew from 16% in 1980 to an astonishing 45% in 2002.

And there’s no limit to the earning potential. Hedge fund manager John Paulson conspired with Goldman Sachs in 2007 to bundle sure-to-fail subprime mortgages in attractive packages, with just enough time for Paulson to collect other people’s money to bet against his personally designed financial instruments. He made $3.7 billion, enough to pay the salaries of 100,000 new teachers.

3. Keep accumulating wealth created by the financial industry.

Experienced schemers have undoubtedly observed that over the past 100 years the stock market has grown three times faster than the GDP. The richest quintile of Americans owns93% of such non-home wealth.

In the last 25 years, only the richest 5% of Americans have increased their share of non-home wealth, by the impressive rate of almost 20 percent.
In just one year, the richest 20 Americans earned more from their investments than the entireU.S. education budget.

4. Tax yourself as little as possible.

The easiest and least productive way to make money – holding on to investments – is also taxed at the lowest rate. In addition to the capital gains benefit, tax ploys like carried interestperformance-related paystock options, and deferred compensation allow hedge fund managers and CEOs to pay less than low-income Americans, and possibly evennothing at all.
The richest 400 taxpayers doubled their income in just seven years while cutting their tax rates nearly in half. U.S. corporations can match that, doubling their profits and cutting their taxes by more than half in under ten years. The 1.3 million individuals in the richest 1% cut their federal tax burden from 34% to 23% in just 25 years.

5. Lend out your excess money to people who can no longer afford a middle-class lifestyle.

As stated by Thom Hartmann, “The ‘Takers’ own vast wealth, and loan it out at interest to everybody from students to governments..” Overall, Americans are burdened with over $11 trillion in consumer debt, including mortgages, student loans, and credit card liabilities.
Wealth has largely disappeared for the middle- and lower-income classes. More than $7 trillion has been lost in the decline of home prices since 2006. Young college graduates have an average of $27,200 in student loans, and the 21-35 age group has lost 68% of its median net worth since 1984, leaving each of them about $4,000. Median net worth for single black and Hispanic women is a little over $100.

So we’re hanging on by the frazzled thread of debt that indentures us to the rich and makes it harder and harder to fight back against the theft of our middle-class wealth. As we struggle to support ourselves, the super-rich remain on the take, driving us ever closer to the status of most wealth-unequal country in the world.


Dawkins on religion

An interview with renowned atheist Richard Dawkins on whether religion is a force for good or evil.

Source:Al Jazeera 

Fanaticism, fundamentalism, superstition and ignorance. Religion is getting a bad press these days. Much of the conflict in the world, from the Middle East to Nigeria and Myanmar, is often blamed on religion.

But how are things from a different perspective? Defenders of religion claim Adolf Hitler was an atheist. Communism under Joseph Stalin, Pol Pot or Mao Zedong (毛澤東)banned religion, but also massacred millions. And science brought incredible and amazing advances, but also pollution and the atomic bomb.
A critic of religious dogmatism, Professor Richard Dawkins revolutionised genetics in 1976 with the publication of The Selfish Gene, which explained how evolution takes place at the genetic level. He has since written 12 more bestsellers, including The God Delusion which sold millions of copies, was translated into more than 30 languages, and catapulted him to the position of the world's foremost atheist.

Mehdi Hasan interviews evolutionary biologist Richard Dawkins at the Oxford Union and asks: Is religion a force for good or evil? Can it co-exist with science? Is science the new religion? And why if god does not exist, is religion so persistent?

Lanny Breuer: Financial Fraud Has Not Gone Unpunished

Lanny Breuer serves as assistant attorney general for the Department of Justice’s Criminal Division. He told FRONTLINE that when fraud from the financial crisis has been detected, the Department of Justice has pursued charges. “But when we cannot prove beyond a reasonable doubt that there was criminal intent, then we have a constitutional duty not to bring those cases,” Breuer said. This is the edited transcript of an interview conducted on Nov. 30, 2012.

In September 2009, you met with Sen. Ted Kaufman [D-Del.] and his staff, and they asked you what you were doing. They were concerned that you were not being aggressive enough. How did you respond to them?
Sen. Kaufman and I had a great partnership, and I visited with Sen. Kaufman repeatedly. And what I told the senator was that we were going to aggressively investigate cases. And that’s exactly what we’ve done.

If you look at the [financier Allen] Stanford case, the [mortgage lender Lee] Farkas Colonial Bank case and the thousands of cases around the country and mortgage security fraud that we’ve brought, I think I did exactly what I promised Sen. Kaufman we were going to do.

Kaufman, in the first oversight hearing, asked you, “Why aren’t we seeing more boardroom prosecutions?” And you responded that “We’re bringing the cases, but it will take a long time. But they will be brought.” It’s been four years. There have been no such prosecutions. What did you mean by it would take a long time?

What I meant by it is it takes a long time to investigate these kinds of cases. And I don’t accept your premise that they haven’t been brought. I think it’s a matter of definition.

Since I testified with Sen. Kaufman, we’ve brought a case against Allen Stanford for a $7 billion fraud. Stanford was the president of Stanford Financial. We recently brought two other most senior executives to trial, and we convicted them as well.

We brought Mr. Farkas, who brought down Colonial Bank and TBW [Taylor, Bean & Whitaker Mortgage Corp.], we brought him to trial since that investigation. He was convicted, and he also is serving what is effectively a life sentence, and many of his senior executives are in jail as well.

As recently as last week, we got convictions of the leaders of one of the large markets origination firms on the West Coast. So we have done a lot, and there have been thousands, I think literally thousands, of prosecutions since I testified in front of Sen. Kaufman.

There have been a lot of prosecutions at the origination level.  There have been a number of other cases, like you mentioned Stanford. But that’s a Ponzi scheme. Farkas was not a Wall Street CEO. What Kaufman was asking you was whether or not there are going to be any prosecutions of those people on Wall Street that securitized bad mortgages.
… Let me first say we have prosecuted lots and lots of investment fraudsters. And for the police officer who put his entire retirement savings with an investment fraud — whether it was Mr. [Trevor] Cook or Mr. [Frank] Castaldi or Mr. [Nevin] Shapiro or all of the others [running Ponzi schemes] around the country — these are billion-dollar frauds sometimes. Those police officers and those hardworking people lost their life savings. We were looking hard at people who lost their financial savings on Main Street or on Wall Street, and so we brought those cases.

With respect to Wall Street cases, we looked at those as hard as we looked at any others, and when a case could be brought, we did. But when we cannot prove beyond a reasonable doubt that there was criminal intent, then we have a constitutional duty not to bring those cases.

We spoke to a couple of sources from within the fraud section of the Criminal Division, and through mid-2010 they reported that when it came to Wall Street, there were no investigations going on; there were no subpoenas, no document reviews, no wiretaps.

Well, I don’t know who you spoke with. I mean, I don’t think you spoke to people in my fraud section, because we have looked hard at the very types of matters that you’re talking about.

The Financial [Crisis] Inquiry Commission came forward. I testified before that commission. I gave Mr. [Phil] Angelides and others my commitment. We would look hard. And we looked hard at every one of the referrals that we had. In fact, many of the referrals we had were the very matters that we brought to the attention of the Financial [Crisis] Inquiry Commission.

When the PSI [Permanent Subcommittee on Investigations] looked at matters, we looked hard at those. And indeed when any whistle-blower came forward, at least to my division, I brought in some of the finest and brightest lawyers in the country to look at those matters.

They’re the same kind of lawyers who brought in BP. And we’ve brought the BP case, the largest criminal case. It’s the same lawyers who brought Libor [London Interbank Offered Rate]. Libor will prove to be one of the largest, if not the largest white-collar case in history. It goes after financial institutions, and it goes after the most major players in Wall Street. So I absolutely reject the notion that we didn’t look hard at these kinds of matters.

These sources said that at the weekly indictment approval meetings that there was no case ever mentioned that was even close to indicting Wall Street for financial crimes.
If you look at what we and the U.S. attorney community did, I think you have to take a step back. Over the last couple of years, we have convicted Raj Rajaratnam, one of the largest hedge fund leaders. Now, you’ll say that’s an insider trading case, but it’s clearly going after Wall Street.

But it has nothing to do with the financial crisis, the meltdown, the packaging of bad mortgages that led to the collapse that led to the recession.

First of all, I think that the financial crisis is multifaceted. But even within that, all we can do is look hard at this multifaceted, multipronged problem. And what we’ve had is a multipronged, multifaceted response.

When a criminal case can be brought, whether it’s from an originator, whether it’s from a bank executive who acted with criminal intent, we’ve brought those cases.

But in those cases where we can’t bring a criminal case — and federal criminal cases are hard to bring — I have to prove that you had the specific intent to defraud. I have to prove that the counterparty, the other side of the transaction, relied on your misrepresentation. If we cannot establish that, then we can’t bring a criminal case.

But we don’t let these institutions go. We’ve brought civil cases. We’ve brought regulatory cases. And the entire approach here is to have a multipronged, comprehensive approach to what gave rise to the financial crisis.

In January, during his State of the Union address, the president announced a new Residential Mortgage-Backed Securities Working Group. Why form a new unit then? What was wrong with the original financial fraud unit?

I don’t think there was anything wrong with what was originally going on. What was originally going on was you had United States attorneys around the country working very, very hard, all the way from New York to California.

You had my Criminal Division working on it. You had our SEC [Security Exchange Commission] and other regulators working on it. And indeed, you had the states’ attorneys general working hard, and there was a financial fraud task force that was bringing these people together. And there were many actions brought, some small, some large, some criminal, some civil, some regulatory.

When the Residential Mortgage-Backed Security Working Group was brought about a year ago, I think the sense was after three years of what we had done, we could be even more nuanced, and we could, in a smaller group, even more share information.

And I think you see the results of that. Just within the last couple of months, we have announced some of the largest civil cases ever with respect to this. And I think that is a direct result of this group coming together at this point in time.

Out of the Financial Crisis Inquiry Commission, Phil Angelides spotlighted these Clayton [Holdings] documents that revealed the kind of due diligence that the banks had done on their own mortgage-backed securities. And what he saw there, what he uncovered there, was that Clayton determined that as much as half of or more of the mortgages that made up those securities were below the standards of the bank, yet they were passed along to investors and reps, and warranties were made on these things that were false. He brought that to you as a criminal referral. Why couldn’t that have constituted a criminal case?

I can’t really talk about any specific case, but let me more generally address very directly what you’re saying.

First of all, Phil Angelides and I have had very direct and very good conversations. And indeed, there are lots of U.S. attorneys who have looked at this and related matters.

But in reality, in a criminal case, we have to prove beyond a reasonable doubt — not a preponderance, not 51 percent — beyond any reasonable doubt that a crime was committed. And I have to prove not only that you made a false statement but that you intended to commit a crime, and also that the other side of the transaction relied on what you were saying. And frankly, in many of the securitizations and the kinds of transactions we’re talking about, in reality you had very sophisticated counterparties on both sides.

And so even though one side may have said something was dark blue when really we can say it was sky blue, the other side of that transaction, the other sophisticated party, wasn’t relying at all on the description of the color. They themselves had made their own determination that they either didn’t care about what the representations were, or they themselves were looking at the underlying securities here.

And if I show that sophisticated Bank One is doing a transaction with sophisticated Bank Two, and sophisticated Bank Two knows fully what it’s getting into or doesn’t care at all what the first representations are, then I cannot bring a case.

… The other issue we have here in those kinds of transactions [is] for the most part, you had the most sophisticated bankers and lawyers and accountants as consultants. So for me to bring a criminal case, I have to show that the very sophisticated lawyers on Wall Street who worked on this, the very sophisticated accountants, that either they were in on the crime, or frankly, what is reality is that in these disclosure documents out there, there was enough disclosure that we cannot bring a criminal case.

You know, at the second FINRA [Financial Industry Regulatory Authority] oversight hearing in September of 2010, you come forward. Sen. Kaufman, his staff, others, [Sen. Chuck] Grassley [R-Iowa], they’re frustrated. They’re disappointed with the lack of progress. You had said at the first FINRA oversight hearing nine months earlier that there would be progress. I’ve talked to Sen. Kaufman. I’ve talked to Sen. Grassley. I’ve talked to staffers. I’ve talked to a number of people outside. I’ve talked to Phil Angelides. They told us that they felt that you didn’t make this a top priority.
Well, I’m sorry if they think that, because I made it an incredibly top priority. I think under the watch that we have, if you look at what our division has done and what this department has done, it’s really quite extraordinary. I gave my word that in the area of health care fraud, we would prosecute it zealously, and four years later, we have record levels of Medicare fraud prosecutions.

They’re not criticizing your record, though.

I just want to keep going for a moment. I promised the attorney general and others that we’d get to the bottom of BP, and we have secured the largest criminal case in the history of the republic in BP.

To your credit.

I promised the Congress that in organized crime and the like that we would set new records, and we’ve brought the most dramatic organized crime cases in the history of the republic.

The same DNA that my prosecutors have in those cases they’ve had in the securities area. And when there has been a crime, we have brought it. I have brought in lawyers from the private sector, I’ve brought in lawyers from U.S. attorneys’ offices around the country, and I’ve said to them, “I want you to spend the next year doing nothing but looking at these securitizations.”

I’ve literally had lawyers and U.S. attorneys studying every single one of these, and they come back. And with the same level of zealousness that we have in all those other areas, they’ve looked at it. But ultimately they have said in many of these cases that we cannot bring a criminal case.

Do we drop it? Absolutely not. We share whatever information we can with civil authorities, and civil lawsuits are brought. We share whatever we can with regulators, and regulators bring cases. We’ve been incredibly transparent and open in what we’re doing.

It is simply a fiction to say it hasn’t been a priority, and it’s simply a fiction to say that where crimes were committed, we didn’t pursue the cases. And that’s why where crimes were committed, you have more people in jail today for securities fraud, bank fraud and the like than ever before.

But no Wall Street executives?

No Wall Street executives, if that’s how you want to define it. But Raj Rajaratnam, he’s in jail.

Insider trading case.

Well, he’s a Wall Street executive. And so the reality? Well, I know that that’s not what you’re here to talk about. But the reality is, if a Wall Street executive was involved in a transaction, and on the other side of that transaction was another Wall Street executive, and they both had sophisticated lawyers and they both had sophisticated disclosure documents, as much as the conduct is reprehensible — and let me be clear here. I am personally offended by much of what I have seen. I think there was a level of greed, a level of excessive risk taking in this situation that I find abominable and I find very upsetting. But that is not what makes a criminal case.

What makes a criminal case is that I can prove beyond a reasonable doubt every element of a crime. And if you can show that you disclosed in some document that your lawyers created that the risks that were created that you felt were disclosed in some form, then I cannot prevail in a criminal case. And I have a constitutional obligation not to bring the case.

So history is going to record that the sale, the peddling of bad mortgages was that we were unable to prove that this was intentional beyond a reasonable doubt, and that the people on the other side of the transaction weren’t relying on the reps and warranties made by the bank.
You know what I think it’s going to show, unfortunately? It’s going to show that people in Wall Street and throughout thought that there was no going down in the market. Everybody was going to get rich. And so they bundled these mortgages, and they made representations with their sophisticated lawyers, and another sophisticated entity, another financial institution, purchased those securitizations. And they knew what they were purchasing, or they knew enough about what they were purchasing.

So this is Wall Street’s defense; that this was greedy perhaps, it was wrongheaded, it was mass delusion, but it wasn’t criminal?
Well, I don’t know if it’s its defense. I do think that a lot of the financial crisis is greedy, abhorrent, should not in any way be complimented. It should be condemned. We should pursue it, and we have through incredibly large — the largest civil cases ever. Where criminal cases can be brought, we are bringing them. But there will be a type of conduct that we absolutely can’t bring.

And just to be clear yet again, it’s not like we’re trying to give a pass to Wall Street. Recently we put a managing director of Morgan Stanley in jail. We’ve brought other executives to jail. Where the cases are brought, we have brought them. And where the case can’t be brought, we have investigated them hard.

I brought the most aggressive prosecutors, and my colleagues like Preet Bharara, [U.S. attorney for Southern District] in New York, have put the most aggressive prosecutors on these cases. But if we can’t bring a criminal case, we won’t.

Let me give you a hypothetical case. A group of people are brought in to analyze loans, a due diligence contractor. They examine a group of mortgages, and they’ve been sold by a Wall Street bank. The bank has them [take] a look at them. They find that more than half are below the stated guidelines of the bank. From emails within the bank and from whistle-blower testimony, it’s clear that these mortgages are faulty and that the banks knew it and that they went ahead and sold these to investors. Is that not intentional?

It depends what the facts are. It sure sounds, at the first instance, like it could be intentional.

So that’s fraud?

But wait. We have to look further. It could be fraud, but there’s also civil fraud. We have to determine who knew what exactly, who said what exactly. What did the documents actually say? The people who bought that, the institution that bought the very securitizations or the very loans that you said, what did they understand they were buying? What did they really rely on? Were those representations there?

In the very real world, we have brought in those purchasers in some of these transactions, and we’ve said, “It said A, but it wasn’t A.” And they said: “We didn’t care what it said. We had our own people look at it, and we made our own determination that it wasn’t A, that it was B.” And under federal law, under bank fraud or securities fraud, a false statement isn’t enough.

But there’s dozens of [other] investors that will come forward [and] say that, “It said A, and we got B.” And there are dozens of civil suits that are private litigant suits. And in fact the suits that have been brought by the [attorney generals'] office are clones of those very lawsuits.
If you look at exactly what the AGs are doing, that’s why we have our Residential Mortgage-Backed Securities Working Group, because, as I said, the crisis was multifaceted, and the response has to be. So when the attorney general brings a case, let’s say in New York, he can rely on the Martin Act.

The Martin Act does not require specific intent to commit a crime. The Martin Act doesn’t require the same mental thought that the federal fraud statutes require. It doesn’t require the same level of reliance. It’s a totally different statute.

For me, when I’m looking at the case, and when my prosecutors around the country and my colleagues like Preet Bharara and others will look at it, we have to prove beyond a reasonable doubt. In a civil lawsuit, all that has to be proved is that the government has proved its case by a little over 50 percent, 51 percent. That’s all that needs to be done.

But in a criminal case, we have to prove beyond a reasonable doubt. You can’t have a reasonable doubt when I have the counterparties say, “We didn’t rely on the representation, and we’re the ones who purchased it,” or when I have the originator say, “Look, we may have said A, and maybe it wasn’t A, but we also in our disclosure document show very clearly that we say, ‘Our representations may not exactly be right.’”

I don’t like that conduct. I condemn that conduct. We have to go after that conduct, but it isn’t always going to be a criminal case.

You do have plaintiffs who will come forward and say that they relied on the reps and warranties, and they relied on the due diligence claims that were made by the bank.
And in the cases where we have had that, and when we’ve really dug forward and we have interviewed those whistle-blowers, and when we’ve been able to bring a criminal case, we do. That’s why just in the last few weeks, one of the large mortgage loan originators who defrauded financial institutions in what he was providing is going to jail.

That’s why people who led investment funds who lied about what they were doing are going to jail. That’s why just a couple of weeks ago the MoneyGram suit, which is again where frauds were perpetrated, we resolved that case.

We have brought cases against financial institutions, executives and the like, whether it’s in the securitization space that you’re talking about or, more broadly, securities fraud, financial fraud, health care fraud. The same aggressiveness, the same commitment, the same desire to bring people to justice in one area we’ve brought throughout.

But no matter how morally outraged I am and how morally outraged other people are, when we really examine these cases and we do the hard work, and we look at the thousands and thousands of documents, and we interview the individuals, we only can bring the case when we have a criminal case, no matter the level of moral outrage that’s out there.

We’ve spoken to people inside the Residential Mortgage-Backed Securities Working Group who said that when they began their work in January, February, March of 2012 that they found nothing at the Justice Department in the pipeline, no ongoing cases looking at securitization.
So I don’t know with whom you spoke. Here’s what I can tell you. We looked hard at — it’s public — we looked hard at Goldman Sachs. We looked at it for years, and we made a determination. Our colleagues in the West Coast looked hard at issues like WaMu [Washington Mutual]. They looked at it for years, and they looked at others for years.

It’s simply a fiction to say that we haven’t looked at it, and it’s simply a fiction to say they weren’t in the pipeline. But in the same way that I couldn’t promise you two years ago we were going to bring Libor cases, and now Libor will prove to be one of the largest, if not the largest white-collar case in history against all of the major financial institutions, or many of them, and we put great prosecutors on that and moved forward, we used the exact same level of commitment. We probably had more commitment in looking at the securitizations. It’s the same way that we looked hard over the last two years, my division, at BP and have now brought the largest criminal case ever.

We’re not approaching this any differently. It’s just at the end of the day, we have to look at it hard as prosecutors and lawyers, and we can’t simply rely on our hearts which are so upset about what happened. We have to be able to prove a fraud beyond a reasonable doubt.

Let me get your reaction again back to our hypothetical. If a bank negotiates discounts because it finds, through its due diligence, that many of the loans are not up to standards, and they negotiate a discount with the originator and then don’t pass that on to the investor — this is called “double dipping”; it’s in the civil lawsuits — why isn’t that criminal?

Because what happens in that situation, as upsetting as it sounds, if we find out that the very documents that that bank filled out with the originator have one set of conditions, and the very documents that the bank fills out with those who have invested in the fund say something else? And if you look hard at those documents, what happens if it says in those two documents: “When we’re going to settle on defaulting loans, we may not put it in the fund. We may take a discount. And we may, under certain circumstances, be able to keep the money for ourselves”?

Is it double dipping? It sure may be. But if in the documents that were created, in the two sets of documents with lawyers and accountants, it provides for that scenario, as offensive as it is to me, as incredible as it is to me that people would have agreed to that, I cannot bring a criminal case, because the financial institution can come in and say: “Here is document agreements A. Here are document agreements B. Phenomenal lawyers were involved in A. Phenomenal lawyers were in B,” right there, it’s disclosed.

That’s as good an example as any of the challenges that we, as criminal prosecutors, have in bringing certain kinds of cases. And that’s exactly why we have to review thousands of documents, read the materials and interview lots of people.

A number of people we’ve spoken to have said that you’re simply overmatched. The government is overmatched. And it’s a relatively new phenomenon, and it has to do with the enormous increase in financial innovation and sophistication of banks and financial institutions; that 30 years ago, the Justice Department could go toe to toe with banks in whatever cases might come up. But today, with finding the needle in the haystack, finding the emails that are going to be the smoking gun, [it] is simply beyond your capability.

We have recruited the smartest and best lawyers. The SEC has as well. We don’t have infinite funds, and it would be unfair and fictitious to say we do.

And you don’t have as deep pockets as the banks, right?

But what we do have is we have incredible professionals.

I’m not putting down the staff that you have.

I know you’re not.

… Something seems wrong here to a lot of people who would like to see some closure on what happened in 2008 with the meltdown. I’m groping for an answer here, and one of those that’s been offered is that we simply haven’t adjusted our ability to go after the banks.

I don’t think it’s right to say that we are being overmatched, but I do think it’s fair to say that we have to work within limited resources, and I think it’s fair to say that these kinds of cases take huge resources and a great amount of sophistication.

And the way we do it is that this Department of Justice and I think many of the regulators are more efficient and are working at a higher level than ever before. And we do that by recruiting the finest lawyers we can, both prosecutors from within the department or through district attorneys’ offices and, frankly, private lawyers who come from some of the great law firms in the country who want to serve.

We do it by collaboration with our regulators and with state AGs. I am proud. I think that the relationship between my division and the U.S. attorneys’ offices, my division and regulators, my division and attorneys general has never been stronger and greater.

And it in fact does, as you say, require partnerships. It requires lots of communication. And it requires the kind of openness that I’d like to think I’ve had with Congress, with regulators and the like.

Another criticism that has been thrown at you is that you’ve not done enough to go looking for the whistle-blowers that are out there. We have been able to contact a number of people who were inside the banks, doing due diligence work as contractors, who all told us that they were never contacted by the Justice Department.
I can’t talk in general about nondescript, anonymous whistle-blowers. But here’s what I can tell you. Whenever I personally have been in any public setting, I’ve invited whistle-blowers to come forward.

But why don’t you go out and look for them?

We do go out and look for them. I don’t even know what more I could do. I speak publicly. Preet Bharara, [U.S. Attorney for the Central District of California] Andre Birotte on the West Coast, the U.S. attorneys speak about it. We have a forum where we talk about mortgage fraud and investment fraud, and we go around the country, and we have fora.

We’re available to the press. I’m available to Congress. We passed Dodd-Frank [Wall Street Reform and Consumer Protection Act], which gives whistle-blowers a financial incentive to come forward. I talk to our regulators more than ever. And when journalists come forward and they talk about whistle-blowers or TV shows come on that talk about whistle-blowers who make your very claims, we have FBI agents and lawyers and regulators come speak to those people right away.

… It shouldn’t be so easy for journalists to go out and find whistle-blowers that at this point, four years after the meltdown, haven’t been contacted by Justice.

I don’t accept for one moment that you all are finding whistle-blowers that we’re not. What I do believe is then when we speak to the whistle-blowers, we have to make a determination whether what they say is really a criminal case.

So in your scenario, before where you say, “How is it possible that the bank is able to keep some of the proceeds and not pass it over?,” the whistle-blower may say, “I saw that the bank kept those proceeds.” I’m offended by it, but unfortunately, when we look at the documents, when we look at the origination materials and we look at the contracts, it says in those contracts that this reprehensible conduct is permitted. …

We can’t lose track of the fact that in our federal prisons and in state jails around the country are thousands of people who engaged in securities fraud. Now, it may not be precisely what you want to talk about today, the highest level securitizations, but those people are in jail.

It was the money generated by selling those securitizations on Wall Street that fueled all the origination. That was the core. That was the money engine on Wall Street.
And I totally agreed that that was right.

Without that, we wouldn’t have had all the appraisal fraud and all the straw buyers that you have in all of these prosecutions at the low level.

And as a country, we, as I’ve said before, have to address how that happened and why it happened. And we need policymakers and legislators to pass laws to ensure, and regulators to become stronger, which I think they have, to ensure that this doesn’t happen again.

And when the loan originator committed a crime, that loan originator is in jail. When the people perpetrated frauds in Nevada against all of these housing sectors and authorities, all of those people are in jail, including lawyers.

As they should, right?
And in Wall Street, when people like Marc Dreier, who is the head of a major Wall Street firm and is an Ivy League-educated, wealthy person, perpetrated a fraud and we could establish it, he’s in jail.

But that’s not the fraud that we’re talking about here.

… I have to prove that you had the specific intent to commit a crime and that the other side relied on it. And if you can establish that you relied on the finest lawyers in the country to draft the materials, that you were open about your greed, that you were open about the fact that your representations may not be precise, do I think we should run you out of town? Maybe we should run you out of town. Do I think we should sue you for every penny you’re worth? I think we should sue you for every penny you’re worth. But our criminal justice system is created so that in that kind of a situation, we cannot prevail. And juries in this country don’t care about moral outrage. …

You gave a speech before the New York Bar Association. You talked about your use of nonprosecution and deferred prosecution agreements. And in that speech, you made a reference to “losing sleep at night over worrying about what a lawsuit might result in at a large financial institution.” Is that really the job of a prosecutor, to worry about anything other than simply pursuing justice?

I think I am pursuing justice. And I think the whole entire responsibility of the department is to pursue justice. But in any given case, I think I and prosecutors around the country, being responsible, should speak to regulators, should speak to experts, because if I bring a case against institution A, and as a result of bringing that case there’s some huge economic effect, it affects the economy so that employees who had nothing to do with the wrongdoing of the company –

Or shareholders.

Well, first let’s talk about the employees. Employees may lose their jobs. Shareholders may or may not lose, and shareholders invested. But the employees perhaps did something different.

If it creates a ripple effect so that suddenly counterparties and other financial institutions or other companies that had nothing to do with this are affected badly, it’s a factor we need to know and understand.

We have, as a government and as an administration, dug out of one of the great financial crises in the world. And at the Department of Justice, we’re being aggressive, but we should in fact take into consideration what the experts tell us.

That doesn’t mean we won’t go forward, but it has to be a factor. And if you look at deferred prosecution agreements and nonprosecution agreements, they are a tool that we use in appropriate cases. And we have to continue to use those.

Why not go after individuals rather than institutions and create real deterrents by prosecuting individuals?
That’s exactly what we did. Garth Peterson is a managing director of Morgan Stanley. He’s in jail. And we dealt with Morgan Stanley differently. I’ve announced indictments of more executives in the whole array of industries than ever before.

Just two weeks ago in the BP case, which is ongoing, the largest criminal case, we announced prosecutions against individuals. We have every day announced cases against individuals, and we’re going to continue to do so. And that’s why we have had just in the last year executives go to jail for 110 years, 105 years, 60 years, 50 years, 40 years. These were senior executives who were living very affluent lives. And they effectively are in jail now for the rest of their lives.

The public thinks Wall Street’s getting a pass.

I understand that the world is upset. And I’m upset. I get it. I work with career government people. They’re my friends, and they’re my colleagues. They have lost their 401(k)s. My own family has lost their 401(k)s. I get it and understand it.

We are holding people to account, but in holding them to account, it cannot always be a criminal case. And in the same way that our 94 U.S. attorneys around the country, or state AGs around the country, or district attorneys around the country are looking at these matters, they cannot always bring a criminal case. When they can, they do. And when they can’t, there are other responses. And those other responses have to be regulatory, civil and legislative reform.


The Untouchables | FRONTLINE ( Video)

Watch The Untouchables on PBS. See more from FRONTLINE.

Is society inherently corrupt?

A look at the global arms industry and the effect corruption has on our politics, society and culture

Source:Al Jazeera
Bribery, fraud and dishonest conduct by people in power - corruption is a cancer in society, no matter where you live. But who are the guilty parties? Is corruption becoming socially accepted? And what can we do about it?

On this episode of South2North, Redi Tlhabi takes a look at the effect corruption has on our politics, society and culture.

Redi talks to Andrew Feinstein, a former parliamentarian and co-founder of Corruption Watch UK, an organisation dedicated to exposing bribery and corruption. Feinstein is also a whistleblower on illegal arms deals and the author of the book, The Shadow World: Inside the Global Arms Trade, that investigates the dark side of this trillion-dollar industry.

Feinstein explains why corruption in the global arms trade has interested him specifically:
“It’s estimated that the trade in weapons accounts for around 40 percent of all corruption in all world trade .…The thing that I think is so important about it is it runs to the core of the way we’re governed, because the trade in weapons is extremely closely tied into the mechanics of government. The defence manufacturers, those who make the weapons, are closely tied in to governments, to militaries, to intelligence agencies and crucially to political parties. So they have enormous influence.”

While Feinstein acknowledges that there is a security need for countries to have arms, he points out that the nature of the trade calls for greater transparency and regulation.

“The global trade in weapons is regulated less than the global trade in bananas. We’re producing something that kills people. Surely it should be amongst the most highly regulated products that are produced on this planet.”

Feinstein laughs off the over 2,000 footnotes in his book, explaining that he does not say anything that he cannot back up. He explains that even in the notoriously dangerous industry, people want to talk to him, and that he has even used Facebook to find ex-arms traders.
Asked about indexes that indicate that people perceive developing countries to be more corrupt, Feinstein explains that corruption is everywhere, including the US and Europe.
“I think corruption in those countries is simply more sophisticated.”

South2North is also joined by Zwelinzima Vavi, the head of the largest workers union in Africa and anti-corruption activist; and Dr Dilip Menon, an expert on Indian corruption from the Centre for Indian Studies in Johannesburg.

Vavi has dealt with corporates and government in his role as the general secretary of Africa’s largest workers union Cosatu.

He says: “Unless people in power fear the police, the judiciary and the media, you have lost the fight. It’s always absolutely critical to have a mobilised citizenship who are ready to confront the most powerful in society - without that, I’m sorry, but we’ll lose the fight.”

Both Feinstein and Vavi have lost friends and upset colleagues with their anti-corruption stances. They have also both received death threats.

“That was very hard personally, but the issue with me is that I’ve tried to differentiate my own experience from the issues,” says Feinstein.

Vavi pointed to the murders in Kwa-Zulu Natal in South Africa, explaining that it is not about hostility towards whistleblowers anymore, but real threat.

Dr Menon has written extensively around corruption in his home India. Menon believes that corruption is viewed as something necessary in the developing world, as something that has to be tolerated in order to become an economically successful country.



Watch Inside Obama's Presidency on PBS. See more from FRONTLINE.

The Republicans’ Plan for the New President

Watch Facing a Permanent Minority? on PBS. See more from FRONTLINE.

On the night of Barack Obama’s inauguration, a group of top GOP luminaries quietly gathered in a Washington steakhouse to lick their wounds and ultimately create the outline of a plan for how to deal with the incoming administration.

“The room was filled. It was a who’s who of ranking members who had at one point been committee chairmen, or in the majority, who now wondered out loud whether they were in the permanent minority,” Frank Luntz, who organized the event, told FRONTLINE.

Among them were Senate power brokers Jim DeMint, Jon Kyl and Tom Coburn, and conservative congressmen Eric Cantor, Kevin McCarthy and Paul Ryan.

After three hours of strategizing, they decided they needed to fight Obama on everything. The new president had no idea what the Republicans were planning.

Tonight’s film, Inside Obama’s Presidency, explores the behind-the-scenes story of his first four years. With inside accounts from his battles with his Republican opponents over health care and the economy to his dramatic expansion of targeted killings of enemies, FRONTLINE examines the president’s key decisions and the experiences that will inform his second term.
Watch the film online or check your local listings to find out when it will be broadcast on your local station. Until then, read our discussion with six leading journalists who weigh in on President Obama’s first term. Has he been the transformative president he wanted to be?

President Obama Delivers His Second Inaugural Address (video/transcript)

 United States Capitol

THE PRESIDENT:  Vice President Biden, Mr. Chief Justice,
members of the United States Congress, distinguished guests, and fellow citizens:

Each time we gather to inaugurate a President we bear witness to the enduring strength of our Constitution.  We affirm the promise of our democracy.  We recall that what binds this nation together is not the colors of our skin or the tenets of our faith or the origins of our names.  What makes us exceptional -- what makes us American -- is our allegiance to an idea
articulated in a declaration made more than two centuries ago:

“We hold these truths to be self-evident, that all men are created equal; that they are endowed by their Creator with certain unalienable rights; that among these are life, liberty, and the pursuit of happiness.”

Today we continue a never-ending journey to bridge the meaning of those words with the realities of our time.  For history tells us that while these truths may be self-evident, they’ve never been self-executing; that while freedom is a gift from God, it must be secured by His people here on Earth.  (Applause.)  The patriots of 1776 did not fight to replace the tyranny of a king with the privileges of a few or the rule of a mob.  They gave to us a republic, a government of, and by, and for the people, entrusting each generation to keep safe our founding creed.

And for more than two hundred years, we have.

Through blood drawn by lash and blood drawn by sword, we learned that no union founded on the principles of liberty and equality could survive half-slave and half-free.  We made ourselves anew, and vowed to move forward together.

Together, we determined that a modern economy requires railroads and highways to speed travel and commerce, schools and colleges to train our workers.

Together, we discovered that a free market only thrives when there are rules to ensure competition and fair play.

Together, we resolved that a great nation must care for the vulnerable, and protect its people from life’s worst hazards and misfortune.

Through it all, we have never relinquished our skepticism of central authority, nor have we succumbed to the fiction that all society’s ills can be cured through government alone.  Our celebration of initiative and enterprise, our insistence on hard work and personal responsibility, these are constants in our character.

But we have always understood that when times change, so must we; that fidelity to our founding principles requires new responses to new challenges; that preserving our individual freedoms ultimately requires collective action.  For the American people can no more meet the demands of today’s world by acting alone than American soldiers could have met the forces of fascism or communism with muskets and militias.  No single person can train all the math and science teachers we’ll need to equip our children for the future, or build the roads and networks and research labs that will bring new jobs and businesses to our shores.  Now, more than ever, we must do these things together, as one nation and one people.  (Applause.)

This generation of Americans has been tested by crises that steeled our resolve and proved our resilience.  A decade of war is now ending.  (Applause.)  An economic recovery has begun.  (Applause.)  America’s possibilities are limitless, for we possess all the qualities that this world without boundaries demands:  youth and drive; diversity and openness; an endless capacity for risk and a gift for reinvention.  My fellow Americans, we are made for this moment, and we will seize it -- so long as we seize it together.  (Applause.)

For we, the people, understand that our country cannot succeed when a shrinking few do very well and a growing many barely make it.
 (Applause.)  We believe that America’s prosperity must rest upon the broad shoulders of a rising middle class.  We know that America thrives when every person can find independence and pride in their work; when the wages of honest labor liberate families from the brink of hardship.  We are true to our creed when a little girl born into the bleakest poverty knows that she has the same chance to succeed as anybody else, because she is an American; she is free, and she is equal, not just in the eyes of God but also in our own.  (Applause.)  

We understand that outworn programs are inadequate to the needs of our time.  So we must harness new ideas and technology to remake our government, revamp our tax code, reform our schools, and empower our citizens with the skills they need to work harder, learn more, reach higher.  But while the means will change, our purpose endures:  a nation that rewards the effort and determination of every single American.  That is what this moment requires.  That is what will give real meaning to our creed.  

We, the people, still believe that every citizen deserves a basic measure of security and dignity.  We must make the hard choices to reduce the cost of health care and the size of our deficit.  But we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future.  (Applause.)  For we remember the lessons of our past, when twilight years were spent in poverty and parents of a child with a disability had nowhere to turn.

We do not believe that in this country freedom is reserved for the lucky, or happiness for the few.  We recognize that no matter how responsibly we live our lives, any one of us at any time may face a job loss, or a sudden illness, or a home swept away in a terrible storm.  The commitments we make to each other through Medicare and Medicaid and Social Security, these things do not sap our initiative, they strengthen us.  (Applause.)  They do not make us a nation of takers; they free us to take the risks that make this country great.  (Applause.)  

We, the people, still believe that our obligations as Americans are not just to ourselves, but to all posterity.  We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations.  (Applause.)  Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires and crippling drought and more powerful storms.

The path towards sustainable energy sources will be long and sometimes difficult.  But America cannot resist this transition, we must lead it.  We cannot cede to other nations the technology that will power new jobs and new industries, we must claim its promise.  That’s how we will maintain our economic vitality and our national treasure -- our forests and waterways, our crop lands and snow-capped peaks.  That is how we will preserve our planet, commanded to our care by God.  That’s what will lend meaning to the creed our fathers once declared.

We, the people, still believe that enduring security and lasting peace do not require perpetual war.  (Applause.)  Our brave men and women in uniform, tempered by the flames of battle, are unmatched in skill and courage.  (Applause.)  Our citizens, seared by the memory of those we have lost, know too well the price that is paid for liberty.  The knowledge of their sacrifice will keep us forever vigilant against those who would do us harm. But we are also heirs to those who won the peace and not just the war; who turned sworn enemies into the surest of friends -- and we must carry those lessons into this time as well.

We will defend our people and uphold our values through strength of arms and rule of law.  We will show the courage to try and resolve our differences with other nations peacefully –- not because we are naïve about the dangers we face, but because engagement can more durably lift suspicion and fear.  (Applause.)

America will remain the anchor of strong alliances in every corner of the globe.  And we will renew those institutions that extend our capacity to manage crisis abroad, for no one has a greater stake in a peaceful world than its most powerful nation.  We will support democracy from Asia to Africa, from the Americas to the Middle East, because our interests and our conscience compel us to act on behalf of those who long for freedom.  And we must be a source of hope to the poor, the sick, the marginalized, the victims of prejudice –- not out of mere charity, but because peace in our time requires the constant advance of those principles that our common creed describes:  tolerance and opportunity, human dignity and justice.

We, the people, declare today that the most evident of truths –- that all of us are created equal –- is the star that guides us still; just as it guided our forebears through Seneca Falls, and Selma, and Stonewall; just as it guided all those men and women, sung and unsung, who left footprints along this great Mall, to hear a preacher say that we cannot walk alone; to hear a King proclaim that our individual freedom is inextricably bound to the freedom of every soul on Earth.  (Applause.)

It is now our generation’s task to carry on what those pioneers began.  For our journey is not complete until our wives, our mothers and daughters can earn a living equal to their efforts.  (Applause.)  Our journey is not complete until our gay brothers and sisters are treated like anyone else under the law  –- (applause) -- for if we are truly created equal, then surely the love we commit to one another must be equal as well.  (Applause.)  Our journey is not complete until no citizen is forced to wait for hours to exercise the right to vote.  (Applause.)  Our journey is not complete until we find a better way to welcome the striving, hopeful immigrants who still see America as a land of opportunity -- (applause) -- until bright young students and engineers are enlisted in our workforce rather than expelled from our country.  (Applause.)   Our journey is not complete until all our children, from the streets of Detroit to the hills of Appalachia, to the quiet lanes of Newtown, know that they are cared for and cherished and always safe from harm.

That is our generation’s task -- to make these words, these rights, these values of life and liberty and the pursuit of happiness real for every American.  Being true to our founding documents does not require us to agree on every contour of life. It does not mean we all define liberty in exactly the same way or follow the same precise path to happiness.  Progress does not compel us to settle centuries-long debates about the role of government for all time, but it does require us to act in our time.  (Applause.)

For now decisions are upon us and we cannot afford delay.  We cannot mistake absolutism for principle, or substitute spectacle for politics, or treat name-calling as reasoned debate.  (Applause.)  We must act, knowing that our work will be imperfect.  We must act, knowing that today’s victories will be only partial and that it will be up to those who stand here in four years and 40 years and 400 years hence to advance the timeless spirit once conferred to us in a spare Philadelphia hall.

My fellow Americans, the oath I have sworn before you today, like the one recited by others who serve in this Capitol, was an oath to God and country, not party or faction.  And we must faithfully execute that pledge during the duration of our service.  But the words I spoke today are not so different from the oath that is taken each time a soldier signs up for duty or an immigrant realizes her dream.  My oath is not so different from the pledge we all make to the flag that waves above and that fills our hearts with pride.

They are the words of citizens and they represent our greatest hope.  You and I, as citizens, have the power to set this country’s course.  You and I, as citizens, have the obligation to shape the debates of our time -- not only with the votes we cast, but with the voices we lift in defense of our most ancient values and enduring ideals.  (Applause.)

Let us, each of us, now embrace with solemn duty and awesome joy what is our lasting birthright.  With common effort and common purpose, with passion and dedication, let us answer the call of history and carry into an uncertain future that precious light of freedom.  

Thank you.  God bless you, and may He forever bless these United States of America.  (Applause.)