Feeling Slighted, Rich Patron Led Albany Revolt

Tom Golisano, a major behind-the-scenes player in the State Senate rebellion, in Albany.








In early spring, Tom Golisano went to Albany from his home in Rochester to meet with Malcolm A. Smith, then the Senate majority leader.

Mr. Golisano, a billionaire business executive, had spent heavily to help Mr. Smith and other Democrats win control of the Senate in the November election, and was angry to hear they were now planning to raise taxes on the wealthy. He expected an audience befitting a major financial patron.

Such used to be called bosses.

Instead, he said, Mr. Smith played with his BlackBerry and seemed to barely listen.

That meeting led to the dramatic collapse Monday of the Democrats’ grip on the Senate majority as a frustrated Mr. Golisano secretly planned with Republicans to persuade two Democrats to join them in ousting Mr. Smith.

A man with a lot of money who expected to be listened to got annoyed and spent more money and influence to get his way.

Gov. David A. Paterson vowed not to leave the state during the crisis and said he still considered Mr. Smith to be the majority leader.

Not leave the state; what will that accomplish?

Mr. Golisano, asked by reporters about the legal troubles of Pedro Espada Jr. and Hiram Monserrate, the two Democrats who had joined with the Republicans to oust Mr. Smith, said: “Don’t talk to me about ethical background in Albany,” adding, “We have a governor who stood on a podium on national television and said he had extramarital affairs and used cocaine.”

And he is pure himself, Golisano? Not that Patterson looks anything but a buffoon.

Mr. Espada said the Republicans had promised him and Mr. Monserrate that the Senate would be run in a bipartisan way, and predicted that other Democrats would eventually join the power-sharing coalition.

Bipartisan? Please.

“This cannot become a circus,” said Mr. Espada, faced with the prospect of starting his career as Senate president being locked out of the Senate chamber. "We won’t force our way into any locked chambers. This is childlike, taking home all the marbles."

Cannot become a circus? It is a circus. Every year the NY State budget is late.

"If we’re blocked from the room, we’ll do it outside in the park if it’s a nice day," he added.

And if it isn't, they can go to Chuck E. Cheese.

Along with Mr. Golisano, a key figure who helped pull off the plan to overthrow Mr. Smith was Steve Pigeon, who is not only Mr. Golisano’s top political adviser but also a longtime friend of Mr. Espada’s.

Cronyism, influence peddling, back room politics.

After Mr. Golisano’s fruitless meeting with Mr. Smith in March, Mr. Pigeon and Mr. Golisano returned to Albany to meet with Mr. Smith’s top aide, Angelo J. Aponte, the secretary of the Senate. Mr. Golisano insisted that there had to be a way to balance the state budget without raising taxes, and at one point snatched a pad from one of Mr. Aponte’s aides and began scrawling back-of-the-envelope calculations.

Don't raise my taxes.

Mr. Golisano gave up on the Democrats and Mr. Pigeon moved quickly to set up a meeting with three top Senate Republicans. Secrecy was imperative, so they decided to meet at a small Albany rock club, Red Square, an unlikely locale for lawmakers. “You wouldn’t find anybody there that we knew,” recalled Senator George D. Maziarz, a Republican from western New York who attended.

Certainly not smoke filled, because there is no smoking, but in a back room, out of the sight of others, not in sunshine, as it were.

Mr. Pigeon soon set to wooing Mr. Espada, a Bronx Democrat who had once caucused with the Republicans. Mr. Pigeon and Mr. Espada had a long relationship, going back to Mr. Pigeon’s days as a counsel to the Senate Democrats. Mr. Espada drafted Mr. Monserrate, one of his close friends in the Senate, to join him in his defection.

A pair of twits.

Mr. Espada has said he joined the effort because he wanted to change how Albany does business. Indeed, shortly after taking power on Monday, Republicans enacted new rules for the Senate, including one imposing six-year term limits for the Senate’s leaders and another equalizing distribution of the $85 million the Senate allocates annually for legislative earmarks. But Mr. Espada was said to have grown frustrated about power and money.

Not that the Democrats are anything to crow about.

Mr. Espada has been fined more than $60,000 for ignoring state law requiring disclosure of campaign contributions. A nonprofit organization that he ran for decades, Soundview HealthCare Network, is being investigated by the attorney general on suspicion of having misappropriated funds. And the Bronx district attorney is investigating whether he lives in the Bronx district he represents.

What a guy.

Mr. Pigeon kept Mr. Golisano, who recently moved his primary residence to Florida, apprised of the progress, and Mr. Pigeon told him last Thursday the deal “was real solid,” Mr. Golisano said.

The twit doesn't even live in New York.

Say again?

Two headlines:

Corrupción frena lucha antinarco en México: EU from Excelsior, Mexico
US says Mexico makes progress against drug cartels Reuters

A Lonely Lament From a Whistle-Blower

For Harry Markopolos, the Madoff fallout has brought on sleeping problems and haunting thoughts over the apparent suicide of a French money manager.

Harry Markopolos, the Boston-based investor-turned-investigator who for years warned regulators that Bernard Madoff was running a huge Ponzi scheme, has received pitches to appear on television shows, make movies and write books elaborating on his experience.

Later this month, he is scheduled to appear before Congress to present recommendations to improve the Securities and Exchange Commission.

But rather than enjoy a sense of vindication, Mr. Markopolos says he is miserable. He has trouble sleeping and is haunted by the apparent suicide of Thierry Magon de La Villehuchet, a French money manager found dead shortly after Mr. Madoff's Dec. 11 arrest on fraud allegations.

Who Will Save Jewish Charity?

This is a wonderful piece of writing. The writer, Lucette Lagnado,wrote a book that is very popular, both here at HWPL, and county-wide, The man in the white sharkskin suit : my family's exodus from Old Cairo to the New World.
The Madoff scandal has shaken the American Jewish community to its core – maiming institutions large and small, wiping out life savings and triggering soul-searching: How could one man deceive so many? And what does the affair say about American Jewish values?

Far too sweeping a statement, to lump all American Jews as one. Still, she starts off by quoting Jonathan Sarna, the prominent American-Jewish historian, defining the affluent Orthodox Jewish community where Madoff found so many victims, as "a kind of shtetl – a very wealthy shtetl."

Madoff has hurt so very many people and charities; even Henry Kaufman lost money. Still, who was really hurt, financially, anyway?

The pain is being felt especially intensely in philanthropic circles, which may never fully recover. Some Jewish nonprofits have shut down. Several large institutions, Hadassah and the American Jewish Congress among them, have been seriously wounded. Then there is the blow to the community's sense of self – the confidence and prosperity that enabled it to build magnificent houses of worship, Jewish day schools that rivaled the finest secular ones and, more recently, charities with impressively large endowments.

Prosperity; magnificent; rivaled; large endowments. These are words that speak of a sector of the community: affluent, elegant, fashionable, upscale.

For the past several years, Jewish nonprofits had been relying on "fewer – but larger – gifts," according to Jack Wertheimer, a professor at the Jewish Theological Seminary in New York. United Jewish Communities, which represents 157 Jewish Federations across North America, has seen a steep decline in its ranks of donors in the past 20 years – even as the total funds raised have continued to grow.

Less people giving, more money raised. "Top end" donors were pursued, others neglected, maybe ignored.

There was so much wealth out there that it seemed more cost-effective than going after smaller donors.

Mega-donors gave mega-sums, had buildings or programs, let alone foundations, named after themselves, and rested smugly with a guilt-free conscience. Madoff has changed that, perhaps irrevocably, certainly fundamentally: if nothing else, trust has been damaged.

Jewish charity may have to return to its roots, becoming once again a widespread communal effort, instead of being concentrated in a few powerful hands.

I don't have a great solution to the Madoff problem or to the damage that it has wrought. I have a more limited suggestion: I would like to see the comeback of the pushke – the little collection box that was once in every Jewish home. To be sure, I don't want Jewish charities to suffer; it is simply that in our post-Madoff universe I find myself longing for the kind of more humble, more individual tzedakah, or personal charity, that took place before the rise of the uber-Jewish foundations and zillionaire philanthropists.

I've never heard either term, but I agree with her.

It would be lovely to see the return of little checks – the donations everyone could afford to give and often did. Neither they nor the pushkes require the fund-raising galas and the elaborate administrative structures that have become the norm across the Jewish charitable world.

Some Jewish leaders may blanch at my words. Prof. Wertheimer notes that "Jewish organizational life has become much more expensive – nickels, dimes and pushkes aren't going to do it." Though Mr. Kane at the UJA and others now hint at new strategies to broaden the donor base, some Jewish leaders are ready to return to business as usual, sending the message that we must get in some big checks to replace the money that was lost. But this scandal makes me wish we could remember the values of our shtetl and think small again.

Governor Accused in Scheme to Sell Obama’s Senate Seat

This putz of a politician, arrogant enough to believe he could get away with such sleaze, especially after he unseated a governor who is in jail for his corruption, exemplifies some of the worst in public life. This quote says it all:

“The conduct would make Lincoln roll over in his grave,” Patrick J. Fitzgerald, the United States attorney for the Northern District of Illinois, said in announcing the arrest of Mr. Blagojevich and his chief of staff, John Harris.

Illinois governor arrested

You can't make this stuff up. This is some twist. Yesterday the Governor was banning Bank of America from doing business with the state because of the Republic Windows debacle, anw he is arrested.

As Mr. Blagojevich mulled the Senate appointment, prosecutors say, he discussed gaining “a substantial salary” at a nonprofit foundation or organization connected to labor unions, placing his wife on corporate boards where she might earn as much as $150,000 a year and trying to gain promises of campaign money, or even a cabinet post or ambassadorship, for himself.

And he obviously thought he'd get away with it.

According to the statement from prosecutors, Mr. Blagojevich told an adviser last week that he might “get some (money) upfront, maybe” from one of the candidates hoping to replace Mr. Obama. That person was identified only as “Candidate 5.”In an earlier recorded conversation, prosecutors say, Mr. Blagojevich said he was approached by an associate of “Candidate 5” with an offer of $500,000 in exchange for the Senate seat.

Who is number 5?

And the twist: The authorities also say Mr. Blagojevich threatened to withhold state assistance from the Tribune Company, the publisher of the Chicago Tribune and Los Angeles Times, which filed for bankruptcy on Monday. According to the authorities, Mr. Blagojevich wanted members of the Tribune’s editorial board, who had criticized him, to be fired before he extended any state assistance.

Oh, and look at the hair on this guy.

Premier of Iraq Is Quietly Firing Fraud Monitors

Nice work.

The government of Prime Minister Nuri Kamal al-Maliki is systematically dismissing Iraqi oversight officials, who were installed to fight corruption in Iraqi ministries by order of the American occupation administration, which had hoped to bring Western standards of accountability to the notoriously opaque and graft-ridden bureaucracy here.

So much for change.

The dismissals, which were confirmed by senior Iraqi and American government officials on Sunday and Monday, have come as estimates of official Iraqi corruption have soared. One Iraqi former chief investigator recently testified before Congress that $13 billion in reconstruction funds from the United States had been lost to fraud, embezzlement, theft and waste by Iraqi government officials.

Waste? Well, in that sense Iraq is becoming a modern society.

The moves have not been publicly announced by Mr. Maliki’s government, but word of them has begun to circulate through the layers of Iraqi bureaucracy as Parliament prepares to vote on a long-awaited security agreement. While some Iraqi officials defended the dismissals, saying there had been no political motivation, others pointed to the secrecy involved as supporting their view that those removed had lost their posts without good cause. Each of Iraq’s 30 cabinet-level ministries has one inspector general. These oversight officials are supported by varying budgets and staffing.

Secrecy is not a good sign.

In one case, investigations of a former electricity minister landed him in jail before he escaped and fled to the United States, and an Oil Ministry inspector general detailed extensive smuggling and extortion schemes that he said bedeviled the industry.

How curious that this former minister wound up in the US.

Mole in Mexican AG

Mexican newspaper El Universal.com.mx has an article about the infiltration of the main anti-drug agency of the Mexican government. A mole.

Desde 1997 uno de los principales funcionarios de la lucha antinarcóticos, Miguel Colorado González, coordinador técnico de la Subprocuraduría de Investigación Especializada en Delincuencia Organizada (SIEDO), se convirtió en un funcionario al servicio del cártel de los Beltrán Leyva, señala la nota diplomática 3149 entregada por el gobierno de Washington al de México.

My translation of the paragraph: Since 1997 one of the principal functionaries (officials) of the anti-narcotics fight, Miguel Colorado González, technical coordinator of the Assistant Attorney General (?) of Specialized Investigations of Organized Crime, became a (in effect) mole in the service of the cartel of Beltrán Leyva, signals diplomatic note 3149 delivered by the Washington government to Mexico.





Mexican police with alleged members of a drug cartel arrested in Mexico City this month.

These jerks just don't get it

I have mostly stayed away from writing about the implosion of the markets and the economy, both because every day there is more detail and more pain, and because there is so much of it to go around -- but this is one story that leaves me incredulous.

A week after the insurance giant, the American International Group, received an $85 billion federal bailout, executives at its life insurance subsidiary, AIG General, held a weeklong retreat at the exclusive St. Regis Resort in Monarch Beach, Calif. Expenses for the week, lawmakers were told, totaled $442,000, including $200,000 for hotel rooms, $150,000 for food and $23,000 in spa charges.

That is simply being blind to what normal people are facing, and is pure arrogance. It is beyond greed.

In addition, the former A.I.G. executive who led the London-based division whose implosion is largely blamed for the insurance giant’s downfall, Joseph J. Cassano, continues to receive $1 million a month from the company, on top of the $280 million he received in the last eight years.

And even after A.I.G. reported $5 billion in losses in the final quarter of 2007, its chief executive at the time, Robert B. Willumstad, argued before a compensation committee that executives should receive performance bonuses. He received $5 million. Mr. Willumstad left after A.I.G. received federal assistance. The current chief is Edward M. Liddy.

A million a month even now? And Willumstad argued for more money? WHere are those directors now? I wish they'd explain why they agreed to more compensation.


“Looking back at my time as C.E.O., I don’t believe A.I.G. could have done anything differently,” Mr. Willumstad said. “The crisis that required A.I.G. to seek assistance from the Federal Reserve is not limited to A.I.G. It is a marketwide crisis of confidence that has affected the entire financial industry and the American and global economy.” “A.I.G. was caught in a vicious circle,” Mr. Willumstad said.

Nothing could have been done differently? Nothing? Looking back, I know I could have done a few things differently, beginning with understanding how much risk I was taking and how exposed I was leaving my portfolio. Doesn't do me any good, but, hopefully, I have learned a lesson.

“A.I.G. is blaming its downfall on accounting rules which require it to disclose losses to its investors,” the specialist, Lynn E. Turner, the former chief accountant at the Securities and Exchange Commission, said. “That’s like blaming the thermometer, folks, for a fever.”

This next one is precious.

An accountant, Joseph St. Denis, who had been hired by A.I.G. to address accounting problems, was not given access to the very unit whose losses, mostly in toxic credit-default swaps, led to the bailout, lawmakers were told. Mr. Cassano told Mr. St. Denis, according to testimony, that he had been “deliberately excluded” from the evaluation of AIG Financial Products, to avoid polluting the process. Mr. St. Denis resigned in protest.

Polluting the process? He must mean covering their asses.

The GOP's Lame-Duck Push

The Journal's Op-Ed page's liberal. Hooray.

In his landmark 1938 study of political corruption, "The Politicos," Matthew Josephson recalled for his readers the final moments of the Republican 43rd Congress, meeting in a lame-duck session in early 1875.

Matthew Josephson? He was a liberal journalist, among whose other books was The robber barons: the great American capitalists 1861-1901. Yup. That Joshepson, whose name does not at all often appear in the Wall Street Journal.

It is in moments of defeat rather than those of triumph that politicians "show their real hand," Josephson observed. Masks are dropped in the stampede; brutal essence shoves aside compassionate appearance.

Though Cheney has never bothered about appearance.

A similar mood of desperation hangs over Washington in this last year of the Bush administration. Hence the panic: Whatever items remain on the business wish list must get done immediately, consequences be damned.

Arctic Wildlife and offshore drilling are the newest conservative rages.

Conservatives and Their Carnival of Fraud

How did this guy get on the op-ed page of the Wall Street Journal?

...call into question one of the greatest shibboleths of conservative governance. Although contracting-out has been celebrated by big thinkers from both parties and although it has been practiced in some form or other since the earliest days of the republic, an ideological commitment to outsourcing is one of the signatures of conservative rule.

And a bad, wasteful and dangerous one.

The ostensible justifications for it, in the early days, were thrift and efficiency. The 1984 "Grace Commission," in which a battalion of corporate executives ransacked the government looking for waste, recommended privatizing federal operations as a way to save money. With the government plunged deep into deficit, government needed to hire out its duties to business in order to save itself. The ideological assumption was only barely concealed: Whatever "big government" could do, the private sector could do better, cheaper and faster.

And outsorced to friends and cronies, say, as in Halliburton.

Privatization also constitutes a fundamental change in the constituency to which government answers.

Exactly; it is anti-democratic.

It is time for a new Grace Commission, this one examining the sordid history of privatization in all its details. President Barack Obama should launch it on day one.

Yup, I read this in the Journal. Amazed, I emailed the dude:

Very well said, dude!

Reaganomics is one of the greatest frauds ever perpetrated, and its effects went beyond federal budget deficits ballooning to heights never seen before in history. It was Ronald Reagan who labeled government an enemy of the people. As a result, neoconservatives were emboldened to outsource governmental functions, to slash government programs that could not be outsourced to their friends, allies and cronies, and to call for government to be run as a business.

Where is J. Peter Grace now, anyway? And is his company out of Chapter XI bankruptcy?

I sure hope, along with you, that President Obama appoints a Commission of Governmental Services (or some such) in his first week in office? Wonder what his email address is, anyway; maybe you/we could send him the idea.

Right on, dude.

Sal Weir
Flushing, NY

Gunmen Kill Chief of Mexico’s Police

The power of corruption, the lure of fortune.

Gunmen assassinated the acting chief of Mexico’s federal police early Thursday morning in the most brazen attack so far in the year-and-a-half-old struggle between the government and organized crime gangs.

To a softie like me, this is incomprehensible.

The police chief, Edgar Millán Gómez, was ambushed by several men wearing rubber gloves and carrying weapons as he entered his apartment building in the Guerrero neighborhood of Mexico City with two bodyguards at 2:30 a.m. He was hit nine times in the chest and one hand. He died a few hours later at Metropolitan Hospital.

Imagine: hit nine times. The violence.

His death was the tenth assassination of a federal police official in the last two months. Last week, gunmen also shot and killed the head of the organized crime division in the public security ministry, Roberto Velasco Bravo.

The lure of the millions.

One of Mr. Millán’s bodyguards, though wounded, managed to wrestle an attacker to the ground and arrest him. The man, Alejandro Ramírez Báez, 34, was wearing rubber gloves and carried a pistol with a silencer, the police said. Shells from an assault rifle were also found at the scene. The police said Mr. Ramírez has a criminal record, having been convicted twice for stealing cars. Still, it remained unclear who, if anyone, had hired him as an assassin, they said.

That is amazing: the bodyguard, amidst this mayhem, managed to wrestle one of the attackers, to pin him, and arrest him. My sense, and this is way out of my league, is that the killers are low-level dirt that are paid what for them is a small fortune -- and to those who hire those who hire them is a pittance.

For me, who adores Mexico, it is a sad day. For Mexicans themselves ...

Bush’s promotion of contractors as integral elements of war-fighting strategy.

Lowest bidder, or politically connected?

Supplier Under Scrutiny on Aging Arms for Afghans By C. J. CHIVERS To arm Afghan forces to fight against Al Qaeda and the Taliban, the U.S. has relied on a fledgling company that has provided ammunition that is more than 40 years old.

Ammunition supplied by an American contractor to Afghan forces. Some of it was in such poor shape that it was not used.

With the award last January of a federal contract worth as much as nearly $300 million, the company, AEY Inc., which operates out of an unmarked office in Miami Beach, became the main supplier of munitions to Afghanistan’s army and police forces. Since then, the company has provided ammunition that is more than 40 years old and in decomposing packaging, according to an examination of the munitions by The New York Times and interviews with American and Afghan officials. Much of the ammunition comes from the aging stockpiles of the old Communist bloc, including stockpiles that the State Department and NATO have determined to be unreliable and obsolete, and have spent millions of dollars to have destroyed.

What?!