Reply #38: Fun Fraudonomics Facts By Mark Ames

[Demeter]

http://www.nypress.com/article-21164-fun-fraudonomics-facts.html

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Ever since I got kicked out of Russia and forced back home, I’ve been collecting all kinds of news articles about fraud, in a document file titled “America Is Russia.” Here’s a sampling.

* Accounting Fraud: Last year, America’s leading banks were insolvent. So Tim Geithner and Larry Summers forced an accounting rule change called “mark-to-model,” which let banks essentially scrape a pile of dogshit off the sidewalk, fling it into a vault, and mark it “worth 1 billion dollars.” Voila! The banks are making record profits.

* Big Pharm Fraud: Between May 2004 and March 2010, a handful of top drug companies like Pfizer, Eli Lilly and Bristol-Myers paid over $7 billion in criminal penalties for bribing doctors to prescribe drugs for unapproved uses, but it was a small price to pay for the tens of billions they earned poisoning Americans. Up to 100,000 Americans die every year from misprescribed drugs. Bummer for you guys.

* Greenspan Fraud: America’s central banker didn’t believe fraud is a crime that should be regulated, and he forced out a do-gooder regulator named Brooksley Born, who disagreed. Then Alan Greenspan pumped up the biggest housing bubble in human history, and once it was ready to burst, he quit the Fed and went on the payroll of three firms that made billions on the subprime crash: Paulson & Co., Deutsche Bank, and Pimco.

* Bond Fraud: America’s $2.8 trillion municipal bond market is rife with so much fraud, thanks to contracts done in backroom deals, it’d make an Uzbek bureaucrat blush. It wasn’t always this corrupt: In 1970, 85 percent of muni bond deals were done through open tenders, but last year, only 15 percent of bond deals were done in the open. Result: Muni bond defaults soared 20 times in 2009 over 2008.

* Regulatory Fraud: In the OTS, OCC, Fed, pension benefit guaranty agency and of course the SEC, where whistleblowers were routinely ignored because the regulators were too busy painting their monitors while surfing sites like www.fuck-my-wife.com.

* Journo Fraud: The Washington Post got caught whoring out their venerable editorial staff to corporate lobbyists for anywhere from $25,000 to $250,000 a date, depending on the access. The%u202FAtlantic Monthly admitted to TalkingPointsMemo that it routinely sold access to its editorial staff for cash. Henry Blodget, banned for life from the securities industry by the SEC for committing fraud, runs a media site called Business Insider, which has Blodget articles like: “HOLD EVERYTHING: The SEC’s Fraud Case Against Goldman Seems VERY Weak.”

* Teaching Fraud: Fifty-three percent of MBA students admit to cheating, more than any other discipline. In 1940, only 20 percent of university students said they cheat; today, that number is as high as 98 percent. The same with schools, where administrators routinely fix their students’ standardized test scores. Half of all elementary schools in Georgia may have fudged their students’ scores; two-thirds in California.

* Judicial Fraud: Juvenile court judges in Pennsylvania took millions of dollars in kickbacks from privately run prisons in exchange for sentencing thousands of innocent kids to juvenile prison terms. Chronic on-the-bench masturbation is running rampant: an Oklahoma judge was accused of using a penis pump on the bench, while nearby in Texas, a Harris County judge masturbated and ejaculated on a defendant’s hand.

* Lit Fraud: James Frey’s addiction “memoir” A Million Little Pieces turned out to be A Million Pieces of Bullshit, the biggest literary fraud of our time. Fooled readers sued, Oprah chewed him out and Frey is now a bestelling “fiction” author.