House votes to overturn 'net neutrality' rules

AFP

WASHINGTON (AFP) - The US House of Representatives voted on Friday to overturn "net neutrality" rules aimed at ensuring an open Internet, setting the stage for a clash with the Senate and President Barack Obama.

The House voted 240-179 in favor of a Republican-backed resolution that seeks to block the rules approved by the Federal Communications Commission (FCC).

The House vote went almost entirely along party lines although six Democrats joined the Republicans in voting for the resolution and two Republicans opposed it.

The five-member, Democratic-controlled FCC, in a vote split on party lines, agreed in December to the rules aimed at safeguarding "network neutrality" -- the principle that lawful Web traffic should be treated equally.

Supporters have argued that the rules are needed to ensure an open Internet but opponents have decried them as unnecessary government intervention.

The Senate, where Democrats are in the majority, is unlikely to pass a measure similar to that approved by the House and the White House has threatened a veto if the resolution reaches President Obama's desk.

House Majority Leader Eric Cantor, a Republican from Virginia, welcomed the House's approval of the resolution calling it "an important step to bring down the FCC's harmful and partisan plan to regulate the Internet."

"These regulations give the government unwarranted authority to control broadband networks which ultimately will hinder a thriving industry, harm competition and stifle innovation," Cantor said.

"Under Republican leadership, the House is focusing on ending anti-growth government regulations," he said.

Democratic House leader Nancy Pelosi of California said the Republican-backed resolution "takes us in the wrong direction -- revoking basic consumer protections, eliminating competition, and shutting off outlets of innovation."

Senator Jay Rockefeller, a Democrat from West Virginia, expressed disappointment with the House move saying "Americans want the Internet to remain free and open and the FCC's net neutrality rules provided just that."

The rules are a balancing act by the FCC between support for consumers and the cable and telephone companies that are the main Internet service providers in the United States.

The rules would prevent fixed broadband providers from blocking lawful content, applications or services, providing their own video content at a faster speed, for example, than that of a rival.

Wireless providers may not block access to lawful websites or applications that compete directly with their own voice or video telephony services but they could potentially block other applications or services.

Fixed broadband providers can also charge consumers according to usage, a metered pricing practice already used by some wireless carriers.

US telecom carrier Verizon Communications filed a legal challenge to the FCC's rules in January but a federal appeals court threw it out this week on the grounds that it was "premature" because the FCC has not yet published the rules in the Federal Register.

© AFP -- Published at Activist Post with license

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The Foolishness of Congress Forcing CFL Light Bulbs (Video)

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House Republicans Tee Up Resolution to Overturn Net Neutrality Rules

Congress/AFP image

David Makarewicz, Contributing Writer
Activist Post

The next front in the war for Internet freedom is about to begin in Congress with a new battle over net neutrality.

On Tuesday, the House voted 241-178 to take up a Republican-backed resolution to overturn the FCC's net neutrality rules. The vote was largely down party lines. The resolution states:

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That Congress disapproves the rule submitted by the Federal Communications Commission relating to the matter of preserving the open Internet and broadband industry practices (Report and Order FCC 10-201, adopted by the Commission on December 21, 2010), and such rule shall have no force or effect.

Once the resolution officially passes the House, it will move on to the Senate, where the outcome is less certain because the Democrats, who typically favor net neutrality, maintain a narrow majority.  Since the resolution relates to a federal agency, Senate rules do not allow a filibuster, so only 51 votes will be needed to pass the Senate.  This week, President Obama threatened to veto the resolution if it passes.

"Report and Order FCC 10-201" refers to the net neutrality regulations enacted by the FCC last December.  Net neutrality rules limit Internet broadband providers' ability to block or slow down access to legal websites.  Without these regulations, a provider would have the right to force website publishers to pay for the privilege of users being able to access their sites at high speeds, while sites that could not pay (or whose message a provider did not like) might only be accessible at slow speeds.

Many Republicans, as well as Internet providers such as Comcast and Sprint, have framed the net neutrality regulations as an attempt by liberals and the Obama Administration to control the Internet.  Supporters of the regulations counter that net neutrality, by its nature, is designed to prevent control of the Internet by corporations, not to give the Government additional control.

On another front, on Monday, the U.S. Court of Appeals for the District of Columbia dismissed lawsuits attempting to overturn the net neutrality rules, which had been filed by Verizon and Metro PCS .  However, the suits were only dismissed because of a timing technicality (the complaints were filed before the net neutrality order was formally published), so the carriers will almost certainly refile their lawsuits at the appropriate time.

David Makarewicz is an attorney practicing internet law concerning privacy rights and copyright defense for websites and blogs. Visit Dave at Sites and Blogs to keep up with breaking Internet news.

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Senate report to reveal mortgage crisis details: WSJ

The Journal said the Senate investigation's findings
would likely expose bad blood between
Goldman and Morgan Stanley
© AFP/Getty Images/File Chris Hondros

AFP

WASHINGTON (AFP) - The Senate will soon issue findings of a probe of the US mortgage meltdown that fueled the global financial crisis, with Goldman Sachs likely to face fresh embarrassment over its role, the Wall Street Journal reported Sunday.

The Senate Permanent Subcommittee on Investigations, whose high-profile inquiry commission subpoenaed Goldman's and other executives last year, is due to release its report on the subprime implosion of 2007 and 2008.

The paper, citing people familiar with the matter, said the report was expected to release emails from securities firms that developed or sold subprime mortgages and financial vehicles including collaterized debt obligations (CDO).

CDOs were used to help Wall Street firms bet against the housing market. When the housing bubble burst, several of the top CDOs were downgraded to "junk" status, and their values plunged.
Goldman, the Journal reported, created CDOs in 2006 and 2007 to shield its exposure to the US housing market, and has been accused of making large bets against the market while selling bullish positions to group that were not expecting the market to fall.

People familiar with the matter said Goldman and Deutsche Bank -- both of which have been criticized for misleading investors in the housing market -- were expected to draw particular scrutiny in the report, the Journal said.

In January, Goldman said it was renewing its commitment to the "primacy" of client interests, and laid out 39 recommendations stressing greater transparency in how the company does business, especially with regard to its own private trading and potential conflicts of interest.

The Journal said the Senate investigation's findings would likely expose bad blood between Goldman and Morgan Stanley, another Wall Street giant, over their roles in a deal involving a CDO called Hudson Mezzanine Funding 2006-1.

According to the Journal, Goldman had sold insurance on the CDO, allowing the company to make money if and when the loans backing the deal began to default.

The Senate report was expected to disclose that Morgan Stanley was a key counterparty in the Hudson deal, said the paper.

It said Morgan Stanley's involvement in the deal was one of the company's bad mortgage bets that contributed to its $9.0-billion trading loss in 2007, while Goldman's mortgage division lost some $1.2 billion in 2007 and 2008, the worst years of the crisis.

© AFP -- Published at Activist Post with license

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US senators seek to force Libya vote

US Sen. Rand Paul
© AFP/Getty Images/File Chip Somodevilla

AFP

WASHINGTON (AFP) - Two senators concerned about US military strikes on Libya warned Friday they aimed to force a vote on whether President Barack Obama has the authority to wage war without congressional approval.

"We believe the answer is that he does not," Republican Senators Rand Paul and Mike Lee said in a letter to Democratic Senate Majority Leader Harry Reid and Republican Senate Minority Leader Mitch McConnell.

Paul and Lee said they would block legislation pending in the Senate until Reid schedules a debate and vote on a resolution offered by Paul that states Obama "does not have the power to unilaterally authorize a military attack in a situation that does not involve an actual or imminent threat to the nation."
"While we realize there are other matters the Senate had planned to work on, it is our belief that there is very little we are doing that rises to the level of a constitutional question regarding war," they wrote.

"We do not take this responsibility lightly, and we believe the Senate is abdicating its responsibility at this very moment," they said in the letter, which Paul's office made public.

"The bombing and military action against the Libyan government will be two weeks old by the time we return to session next week. That means congressional debate on this war is two weeks overdue," they said.

Jon Summers, a spokesman for Reid, said the Obama administration had done a "good job of consulting with Congress and conveying as much information to us as is possible."

"Further, the Senate has had hearings and briefings, which Senators Paul and Lee have been invited to attend, throughout the week to carefully examine the effectiveness of our operations, and will continue to do so as operations continue," he said.

The US Constitution reserves to Congress the right to declare war, though US presidents have often deployed forces without first getting lawmakers' explicit say-so, despite a 1973 law that aimed to curtail their ability to do so.

The War Powers Act allows the president to use force in response to an attack on the United States, its territories, or its armed forces, but calls for notifying Congress within 48 hours and says US troops must start to withdraw 60 days later unless specifically authorized to remain by lawmakers.

© AFP -- Published at Activist Post with license

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Are Lehman's Auditors Above The Law?

Dees Illustration

Jeff McCord

Activist Post 

Many wonder why the Securities and Exchange Commission and U.S. Department of Justice are seemingly unable to prosecute Lehman Brothers and its auditor Ernst & Young for the massive over-valuations of the investment bank’s sub-prime mortgage-backed “assets” and other misleading (and, possibly, fraudulent) information published in financial statements in the years and quarters leading to the systemic financial meltdown that Lehman’s own bankruptcy helped fuel.  Are Lehman’s auditors above the law?  Regrettably, for a number of reasons, auditors are becoming increasingly immune from challenge by prosecutors, regulators and investors. 

The first reason is that money talks in Washington.  Although most citizens know of the overwhelming donations to federal political candidates by banks and other financial services firms, it may surprise some that accountants are also a very generous source of funding for both Republican and Democratic candidates.  In the election cycle of 2009-2010, alone, the “big four” accounting firms and their association contributed more than $8 million to federal candidates, according to the Center for Responsive Politics.  In the same period, fraud defendant Ernst & Young contributed in excess of $1.6 million to politicians. 

“When the Rich Break Laws, Prosecutors Find Themselves on Trial”

Certainly, it is not unknown for Members of Congress to make their views known when favored companies or industries are under investigation.  In a recent column applauding the documentary Inside Job, Paul Krugman, the Nobel laureate in economics, provided just one of many examples of recent political intrusion into prosecutors’ work:

The . .  . proposed [legal] settlement between state attorneys general and the mortgage servicing industry . . . is a 'shakedown',” says Senator Richard Shelby of Alabama. The money banks would be required to allot to mortgage modification would be 'extorted,' declares The Wall Street Journal. And the bankers themselves warn that any action against them would place economic recovery at risk.  All of which goes to confirm that the rich are different from you and me: when they break the law, it’s the prosecutors who find themselves on trial. Source

Why Can’t SEC Pursue Big White Collar Criminals?

Aside from Congressional interference with prosecutors, why can’t the SEC bring big accountants and banks to heel? Again, Congress runs interference.  With the new majority in the House of Representatives now cutting millions from the SEC’s budget at the same time the Commission’s responsibilities have ballooned, the agency must place on-hold desperately needed technology up-grades and new hires. For years, experts have warned that regulators could not and cannot keep up with the explosive growth in securities markets and the new exotic computer-driven financial instruments that played a starring role in the 2008 financial meltdown. 

Consider these comments by regulatory authorities: 

– "State regulators and the SEC filed numerous cases against corporations and secondary actors [the lawyers, accountants, investment bankers and other advisers that enable complex modern frauds] in the recent decade.  However, many more cases of fraud were not pursued by regulators due to their limited resources."  -- September 17, 2009 Testimony before the U.S. Senate Judiciary Committee’s subcommittee on crime and drugs by Tanya Solov, Director, Illinois Securities Department on behalf of the North American Securities Administrators Association, the representative organization of the regulators within each of the 50 states. The state administrators testified in favor restoring private liability for fraud aiders and abettors. 

– “Quite frankly, our enforcement and examination resources have been seriously constrained in recent years,”  -- Mary Schapiro, Chairman, Securities and Exchange Commission, in speech to the Council of Institutional Investors, April 6, 2009. 

– “Investors’ rights of private action have been seriously eroded in the past decade.  Investors should not have to suffer the type of conduct that contributed to Enron and other scandals.  And the SEC does not, and will not have the resources to enforce the securities laws in all instances.”  -- Mr. Lynn Turner, CPA and former SEC Chief Accountant in March 10, 2009 testimony before Senate Banking Committee hearing. 

Can Investors Take Action Against Auditors? 

Aside from their seeming immunity from serious criminal or government civil actions, the auditors upon whom investors and the public rely when researching a company have also won near immunity from private investor actions -- a major deterrent to accounting fraud and other wrongdoing -- thanks to a pro-fraud defendant law Congress enacted in 1995 over President Clinton’s veto and radical decisions by an increasingly politicized Supreme Court (which Congress is unwilling to override). 

As explained by Philadelphia attorney and Roosevelt Institute “Braintruster” Daniel Berger, accountant-driven securities “reform” legislation in 1995 and two Supreme Court decisions (Central Bank in 1994 and Stoneridge in 2008) eliminated accountability to investors for those who knowingly aid and abet securities fraud, such as the accountants who allegedly helped Lehman “cook the books”:

Bi-partisan legislation in the 1990s [during the de-regulatory binge] and two major Supreme Court decisions in 1994 and 2008 have effectively eliminated liability for aiding and abetting securities fraud. [In a column, economist Robert] Kuttner noted that 'You can be sure if this right were still available, Ernst and Young would have thought twice about giving Lehman a clean bill of health.' Source

In January, 2010, testimony before the United States Financial Crisis Inquiry Commission,  Denise Voigt Crawford, the president of the North American Securities Administrators Association and Commissioner of Texas State Securities Board explained how investors’ ability to pursue private actions, a major deterrent to Wall Street and corporate accounting fraud and other wrongdoing, have been limited:  

[O]ver the last 15 years, Congressional actions and Supreme Court decisions have restricted the ability of private plaintiffs to seek redress in court for securities fraud.  These restrictions have not only reduced the compensation available to those who have been the victims of securities fraud, they have also weakened a powerful deterrent against misconduct in our financial markets. (See Commissioner Crawford’s full testimony.)

Will Auditors Remain Above the Law? 

The climate might be changing in Washington and in Europe. The Washington Post recently reported that the Public Company Accounting Oversight Board is asking why auditors didn’t warn the public and investors about the shaky condition of America’s financial services industry before the 2008 meltdown:  

The Public Company Accounting Oversight Board is conducting investigations that may lead to disciplinary action against audit firms or individual auditors, board chairman James Doty said in a statement he prepared for a meeting [March16]Source

Regulatory authorities in Europe and the United Kingdom are also investigating the role of auditors in the worldwide financial meltdown made in the USA, according to Reuters. 

With continued media scrutiny of the causes of the great financial debacle, and Wall Street spawned recession that followed it, public opinion might trump campaign contributions and lead Congress to restore to U.S. citizens lost legal rights, fully fund regulators and law enforcement agencies and even butt out of state and federal prosecutions. And, regulatory and possible criminal actions by the less conflicted European Union might also help shame U.S. law makers into taking action.  

Some day soon, auditors may again become subject to the same laws as us little people.

More articles by Jeff McCord about investors and securities fraud and the need to improve investor protection can be read at The Investor Advocate.

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Obama Starts Another Illegal War, Rangel Calls For Draft

Anthony Freda Illustration

Eric Blair
Activist Post

What balls! What hubris! What hypocrisy! What happened to America?

Once again, America has preemptively attacked a sovereign nation that posed no threat to her without a declaration of war from the people's representatives.  Apparently the U.S. president now gets permission from the U.N. to spend U.S. taxpayer dollars on unprovoked wars and outright murder.  Isn't it still called murder when killing is not done in self-defense?  Okay, just checking to make sure I haven't lost my mind.

Nobel Peace prince Obama launched his liberation of the good people of Libya with his own shock-and-awe bombing campaign appropriately on the eighth anniversary of Bush's illegal invasion of Iraq.  This tyrannical intervention is so naked, so brazen in its hubris that whatever shred of goodwill America had left is completely gone.  America is officially the most murderous, anti-democratic, terrorist nation the world has ever known.
And get this, on the very same day of this unconstitutional act of war, ethically-challenged Charlie Rangel reintroduced his National Service "Draft" bill.  Rangel pointed out in his announcement that the government lied us into the Iraq war that ultimately resulted in the deaths of over 4,400 servicemen with over 32,000 injured.  He claims this is the reason we need a draft:

Based on false pretenses of weapons of mass destruction and involvement in the 9/11 attacks, the unfunded war in Iraq has cost our nation not only $800 billion dollars, but the lives of more than 4,400 brave American patriots. Over 32,000 U.S. soldiers have also been seriously wounded in the war we should not have been in the first place. 

It is because of these devastating statistics and the commitment our nation must make to sharing in duty and service that I reintroduced the Universal National Service Act, commonly known as the draft bill.

You can't make this stuff up.  So, our government lies us into wars for profit and oil, thrusts our brave young men and women in harms way against poor nations who in their wildest dreams couldn't threaten America, and puts off paying for them as long as the banks and China get their interest payments at gunpoint from the taxpayer. And now you want to force all of our kids to take part in this sociopathic behavior?

Rangel continues:

Currently the burden of defending our nation is carried by an increasingly smaller segment of our population. Only 1 percent of the American population currently makes the sacrifice of laying down life and limb for our country. 

Far too many are being forced into repeated tours of duty, sometimes as many as six deployments. This repeated combat exposure to our troops is why 25 percent of America's active duty military personnel suffer from Post-Traumatic Stress Disorder (PTSD). It is why the Army's current suicide rate is far above the civilian rate at 22-per-100,000.  The rate for the Marine Corps is even higher.

Boy, Rangel is a first-rate salesman.  Who could resist the idea of forcing their children into repeated tours of duty and a 1-in-4 chance of getting ruined by PTSD?  Or, making them so miserable that they think suicide is better than killing poor brown people for Big Oil profits and their pocket-change politicians -- all while bankrupting the country and their home towns in the process?

Rangel's pitch that a draft would alleviate these problems is ill-conceived, as he even pointed out: "Having a draft does not necessarily mean that everyone called to duty would be required to serve in the Armed forces."  Who in their right mind would choose the Armed forces in this corrupt imperial climate if given a choice of community services?

Of course, liberals like to think Rangel's hidden argument is that a draft would actually discourage war by making the people pay more attention to the wars enough to protest. Wake up! We can't even get Congress to vote for these wars anymore!  The notion that the decision makers will actually give a shit about the people's will is laughable.  Besides, we all know how they handle peaceful protesters these days, despite their lofty rhetoric of fighting for people's rights in foreign countries.

At this point, it seems the only thing that can stop these conquistadors is when soldiers start refusing to fight en masse.  They, and they alone, have the power to end this insanity.  As Albert Einstein said "Nothing will end war unless the people themselves refuse to go to war."  God help them find the courage and moral compass to end this tyranny.

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US lawmakers seek big Afghan withdrawal in July

© AFP Peter Parks

AFP

WASHINGTON (AFP) - Eighty-one US lawmakers, mostly Democratic allies of the White House, pressed President Barack Obama on Wednesday to make a "significant and sizeable" drawdown of US forces from Afghanistan in July.

"Let us be clear. The redeployment of a minimal number of US troops from Afghanistan in July will not meet the expectations of Congress or the American people," the group, all members of the US House of Representatives, said in a letter to Obama.

The lawmakers, just four of whom were Republicans, expressed support for Obama's plans to start withdrawing US troops from Afghanistan no later than July 2011 with an eye to transferring security to Afghan forces by 2014.
But "we, the undersigned members of Congress, believe the forthcoming reduction in US troop levels in Afghanistan must be significant and sizeable, and executed in an orderly fashion," they said.


The letter, crafted by Democratic Representative Barbara Lee and made public by the Peace Action advocacy group, came on the eve of a House of Representatives vote on a resolution calling for an end to the war.

The letter noted that polls show Americans overwhelmingly believe that the war is not worth fighting, and it cited the conflict's high cost at a time when many government programs are on the chopping block.

And the lawmakers cited senior US officials who have said there was no military solution to the unrest, and said that a US drawdown would spur the Afghan government to make strides in battling corruption and pursuing good governance efforts.

"We must commit ourselves to ensuring that our nation's military engagement in Afghanistan does not become the status quo. It is time to focus on securing a future of economic opportunity and prosperity for the American people and move swiftly to end America's longest war in Afghanistan," they wrote.

© AFP -- Published at Activist Post with license

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Ian Bremmer's Top Ten Political Risks for 2009

Eurasia Group's Ian Bremmer just released the firm's top ten political risks for 2009. We will feature a panel discussing the ethical implications of these risks with Ian Bremmer, Michele Wucker, and Art Kleiner next week, on Jan. 13, at the Carnegie Council. Sign up for the event at gpievents@cceia.org.

Here is how Ian summarizes the top risks for the year:

First, we’ll see more state intervention in the global economy. Second, that intervention will be both reactive and uncoordinated by a series of local, regional, and national political actors who have decidedly non-global (and in many cases non-market) views of the cost/benefit equations that attend their policy decisions. In short, politics will drive the global economy more directly, and more inefficiently, in the coming year than at any point since World War II.

Below, we present a truncated excerpt of the ten risks:

1. Congress - Political risks have historically been most important for economic outcomes in emerging markets, but that’s not so this year. The current financial crisis has created an unprecedented space for government interference in economic affairs within developed states, as well. Nowhere is that more true than in Washington.

2. South Asia Security - The security environment in India, Pakistan, and Afghanistan will deteriorate significantly over the coming year, and the United States and Europe will find themselves more directly involved in conflicts in all three states, with little benefit to show for it, by the end of 2009.

3. Iran/Israel - The likelihood of the United States launching strikes against Iran has diminished considerably over the past two years, due both to internal policy wrangling between Vice President Dick Cheney and others within the Bush administration and the election of Barack Obama as president. But 2009 is the critical year for conflict (both direct and through proxies) between Iran and Israel.

4. Russia - We enter 2009 with Russia in play in a way we haven’t seen in decades. The relevant comparison isn’t 1998, when the Russians engaged in default and devaluation but remained within the bounds of their existing political and economic system (as Lenin said, two steps forward, one step back). The history to consider is 1989—as key aspects of the Russian system could change for the worse.

5. Iraq - Frankly, Iraq at number five is a good news story. With about 140,000 American troops remaining on the ground and no serious evolution of the Iraqi political model, it’s a testament to the relative improvements of security that Iraq has managed to claw its way away from a risk that keeps the world on edge.

6. Venezuela - President Hugo Chavez has made a habit of miscalculation over the years, but this may be the big one. His plans for a referendum in the coming month to reform the Venezuelan constitution and abolish term limits (which would allow Chavez to run again for the presidency in 2012) show little likelihood of success. Then the Venezuelan president will have a real political fight on his hands.

7. Mexico - While Colombia’s President Alvaro Uribe has effectively won his country’s war against the drug cartels, the same can’t be said of Mexico’s President Felipe Calderon. The security situation there has worsened and is almost certain to deteriorate further over the course of 2009. Well armed and well financed narco-criminals have effectively declared war on the state of Mexico—increasingly singling out elected government officials, bureaucrats, and the armed forces and police for their attacks. As the government continues to rely on the military to go after the drug lords, the bloodshed will continue.

8. Ukraine - As I mentioned, Ukraine isn’t likely to spur the kind of direct military conflict we saw last August in Georgia. But it merits a slot in our top risks because of the government’s inability to deal effectively with the severe challenges posed by the current financial crisis and economic downturn—and one certainly not helped by its volatile relationship with Moscow.

9. Turkey - Speaking of internal distractions, Turkey is essentially defining the problem. The country has all sorts of factors in its favor—a diversified economy, strong demographics, an extremely favorable trade route geography, and solid ties with both western countries and its Middle Eastern neighbors. Yet the fight pitting secularists in the judiciary, military, and industry against Islamists in government is becoming a serious obstacle to economic advancement. And the AK party leadership, feeling that it increasingly carries the weight of popular support on its side, is unwilling to compromise—instead, casting out potential dissent from within the party (and losing critical bureaucratic competence as a result). To make matters worse, the AK party has long lost its reformist spirit and has embraced a more nationalist attitude, making it more difficult to find a solution to the thorny Kurdish question.

10. South Africa - Rounding out the top risks for 2009 is South Africa. Upcoming elections will dominate the news, but it’s more political context than electoral results that will cause concern. It’s pretty clear that the African National Congress (ANC) will keep its majority in parliament, though the emergence of a new splinter party will reduce its numbers. In principal, that’s not a bad development; popular concerns over the ANC’s abuse of power should be reduced accordingly. But the transition is going to be hard on the ANC leadership—with South Africa’s legislators having to accept the need to cooperate with political opponents, rather than using political influence to force would-be dissidents into line. The initial reaction is likely to be a lack of patience and tolerance, undermining public confidence in South Africa’s political institutions...and providing little comfort to investors.

Notice China instability, the Persian Gulf, and climate change are not on the list. Ian sees these as either red herrings or, in climate change's case, longer term developments.