Political Fraud And The Taxpayer Funded Bailout Bill

Move over Enron and WorldCom. This story is destined to become the greatest financial fraud of modern time. The staggering financial loss is estimated to total 50 billion dollars and it has ensnared some of the world's most visible millionaires, charities, pension plans and global banking institutions.

It is the work of a once highly respected man managing a highly respected Wall Street firm. The truth is that it was all a fraud, supported by Washington insiders, and a sad story of the lack of regulatory oversight into hedge funds and the brokerage industry.

Bernard Madoff sat on a committee of academics, regulators, and executives that was formed in the year 2000 to advise the Securities and Exchange Commission on new stock-market rules in response to the growth of electronic trading. He also led the trading committee at the Securities Industry Association, Wall Street’s biggest trade group, and once served as chairman of the NASDAQ Stock Market.

Still, he is best known as the founder of Bernard L. Madoff Investment Securities LLC, the closely-held market-making firm he launched in 1960. However, he also ran a hedge fund that U.S. prosecutors now allege racked up nearly $50 billion of fraudulent investor losses.

A document filed by Madoff with the U.S. Securities and Exchange Commission on January 7, 2008, said Madoff's investment advisory business served between 11 and 25 clients and had a total of about $17.1 billion in assets under management. Those clients probably included other funds that in turn had many more investors.

Since the year 2004, annual returns in the Madoff advisory business have averaged around 8 percent, but during the last decade returns were typically in the low-double digits. In the last year, the hedge fund’s return has averaged between 6 and 12%. That was before investor redemptions totaled billions and uncovered the fraud when Madoff could not pay.

Of course, since it was a scam that went on for years, and was never uncovered by government regulators, nothing is now left of anyone's investment. Fifty billion dollars is owed to Madoff’s global investors. It will be interesting to see if the United States taxpayer will again be asked to pay.

It is hard to believe that U.S. regulators never inspected Bernard Madoff's investment advisory business even after he had subjected it to Securities and Exchange Commission (S.E.C.) oversight two years ago.

Of course, the reason for the lack of government attention to his firm may well have been political. During the last eight years, Madoff and his family have given more than $100,000 to the Democratic Senatorial Campaign Committee and more than $23,000 to various Democratic Party’s candidates, including Senator Charles Schumer, Congressman Charles Rangel and Senator Hillary Clinton of New York, as well as Senator Frank Lautenberg of New Jersey, who leads a charitable foundation that invested with Madoff.

The use of political contributions resulting in a lack of government regulation and oversight was used for years by Fannie Mae and Freddie Mac. Both companies poured money into lobbying and campaign contributions to federal candidates, parties, and committees as a general tactic, but they've also directed those contributions as part of a political strategy.

In the 2006 election cycle, Fannie Mae gave 53 percent of its total $1.3 million in contributions to Republicans who controlled Congress at that time. This cycle, with Democrats in control, they've reversed course, giving the party 56 percent of their total $1.1 million in contributions. Similarly, Freddie Mac gave 53 percent of its $555,700 in contributions to Democrats this cycle, compared to the 44 percent it gave during 2006.

Recently, in Illinois, Democratic Governor Blagovich was caught on an FBI tape trying to allegedly solicit bribes to sell his appointment of President-elect Barack Obama's Senate seat to the highest bidder. His bribery scheme was called "pay to play".

In the cases of Freddie Mac, Fannie Mae, and the recent arrest of Bernard Madoff, the concept of political fraud is much more subtle, but the result is not very different. Political campaign contributions to Washington politicians of both political parties can be used to insure that regulators and government oversight will stay away.

It may not be called pay to play, but political fraud on Capitol Hill is one of the main reasons behind the recent 700 billion dollar, taxpayer-funded financial services industry bailout bill.

http://www.eworldvu.com

Comments

[RONALD E NEWTON]

Improve the means by which citizens may fire a politician. Let's not wait until the elected term expires. Let's keep them home out of Washington, DC. Let them vote by phone or Internet. (I wish!)

I have never met a politician who didn't hunger for power or believed they were destined to be the elite power broker. Congress is a gambling scheme that stacks the deck against the working stiff.

[Health Reform?]

Beatrice Wilkinson Welters is President Obama's nominee for ambassador to Trinidad and Tobago. No surprise, her husband Anthony Welters, is an executive with UnitedHealthGroup which brought in $200,000-$500,000 in campaign donation for the election and another $100,000 for the Obama crowning inaugural. Beatrice Welters donated $4,600 to the Obama campaign in each of the years 2007 and 2008. Her husband, Anthony donated $4,600 in 2008. The Welters' two sons were also $4,600-donors: Bryant, reportedly 19 years old today, donated $4,600 in the second quarter of each of the years 2007 and 2008, when he was an unemployed student, and Andrew, reportedly 17 years old today, an unemployed student, donated $4,600 in the second quarter of 2008.
BACKGROUND*
Anthony Welters has been President of Public and Senior Markets Group at UnitedHealth Group Inc. since September 2007. Mr. Welters has been Executive Vice President of UnitedHealth Group Inc., since December, 2006. He serves as Chief Executive Officer of AmeriChoice Health Services, Inc. He served as Head of Public & Social Markets Group of UnitedHealth Group since August 2007. Mr. Welters co-founded AmeriChoice Corporation (AmeriChoice) in 1989 and served as its Chief

[Health Reform?]

Beatrice Wilkinson Welters is President Obama's nominee for ambassador to Trinidad and Tobago. No surprise, her husband Anthony Welters, is an executive with UnitedHealthGroup which brought in $200,000-$500,000 in campaign donation for the election and another $100,000 for the Obama crowning inaugural. Beatrice Welters donated $4,600 to the Obama campaign in each of the years 2007 and 2008. Her husband, Anthony donated $4,600 in 2008. The Welters' two sons were also $4,600-donors: Bryant, reportedly 19 years old today, donated $4,600 in the second quarter of each of the years 2007 and 2008, when he was an unemployed student, and Andrew, reportedly 17 years old today, an unemployed student, donated $4,600 in the second quarter of 2008.
http://maggiesnotebook.blogspot.com/2009/11/beatrice-wilkinson-welters-ambassador.html

BACKGROUND*
Anthony Welters has been President of Public and Senior Markets Group at UnitedHealth Group Inc. since September 2007. Mr. Welters has been Executive Vice President of UnitedHealth Group Inc., since December, 2006. He serves as Chief Executive Officer of AmeriChoice Health Services, Inc. He served as Head of Public & Social Markets Group of UnitedHealth Group since August 2007. Mr. Welters co-founded AmeriChoice Corporation (AmeriChoice) in 1989 and served as its Chief