Coffee Talk Shop…

The U.S. Attorney’s office is planning to retry former State Senate Majority Leader Pedro Espada Jr. on four corruption charges that led to a deadlocked jury in Brooklyn federal court Monday, sources tell NY1. NY1′s Grace Rauh filed this report.

It turns out the two-month federal embezzlement trial against Pedro Espada Jr. and his son was just Round 1.

A U.S. Attorney’s Office source tells NY1 that federal prosecutors are planning to retry the four remaining conspiracy and theft counts against the former State Senate Majority Leader.

A federal jury convicted Espada of four counts of theft Monday but was deadlocked on the rest of the charges. The source says prosecutors will also retry their case against Espada’s son, Pedro G. Espada.

A spokesman for the U.S. Attorney’s office declined to comment.

Convictions on the other counts could mean more time behind bars for Pedro Espada Jr. He already faces up to 40 years in prison for stealing hundreds of thousands of dollars from a Bronx health care clinic he founded 33 years ago.

Prosecutors said Pedro Espada Jr. took money that should have paid for health care and spent it on a $20,000 vacation, home renovations, restaurant meals and spa treatments for his wife.

Pedro Espada Jr.’s son Alejandro is now running the clinic, which is struggling to win its fight to stay afloat. Its halls are deserted and patients are being turned away. Federal and state funding has dried up.

“What happened yesterday was about the Espadas,” Alejandro Espada said. “It’s not about Soundview. Soundview has rights. Soundview’s rights are being violated. And I ask each and every elected official [to] come on out and help Soundview.”

No date has been set yet for the sentencing of Pedro Espada Jr. It could be a while before it takes place, now that it looks like he will be back in court defending himself against the remaining counts one more time.

Article source: http://www.ny1.com/content/news_beats/political_news/161248/sources--feds-to-retry-espada-on-corruption-charges/

By KARIN LAUB and MOHAMMED DARAGHMEH
Associated Press

RAMALLAH, West Bank (AP) – The late Yasser Arafat’s powerful moneyman is the target of the highest-profile Palestinian corruption probe to date, facing allegations he syphoned off millions of dollars in public funds, the chief investigator said Wednesday.

Anti-corruption campaigners lauded the case against the shadowy former aide, Mohammed Rashid, as a sign of the maturing of the Palestinian political system, although the probe also appeared to be tinged with political intrigue.

Rashid, who has in the past denied wrongdoing, made veiled threats on a website to disclose purported secrets about the rise to power of Arafat’s successor, Palestinian President Mahmoud Abbas. And Palestinian watchdogs, while praising growing government vigilance about corruption, expressed concern that such investigations are at times being used selectively to settle personal scores.

The tall, dark-haired Rashid left the Palestinian territories after Arafat’s death in November 2004, and his current whereabouts were not immediately known. Rafik Natche, head of the Palestinian Anti-Corruption Commission, said Rashid holds business interests in Jordan, Egypt, Montenegro, Iraq and the United Arab Emirates, and that the Palestinian Authority has asked all five countries to freeze his assets and extradite him.

An Iraqi citizen of Kurdish ancestry, Rashid befriended top PLO officials in the 1980s.

From the 1994 establishment of the Palestinian Authority, a self-rule government in parts of the West Bank and Gaza, to Arafat’s death a decade later, Rashid was in charge of many of the Palestinian leader’s financial dealings. The iconic Arafat was known for a frugal lifestyle, but needed large sums to buy loyalty and allowed corrupt practices by those in his inner circle.

It is not known why Arafat put Rashid, a former journalist without formal business training, in charge of most of his business affairs.

Rashid “came to the Palestinian revolution without a penny in his pocket and became a multimillionaire,” Natche told The Associated Press. “Where did he bring his money from? Of course, this is the money of the Palestinian people.”

Natche said Rashid is suspected of having taken millions of dollars out of the Palestinian Investment Fund and the PLO’s treasury, as well as setting up fake companies in his name and in the names of relatives. “The money and the companies disappeared,” Natche said, citing documents.

In comments posted Tuesday on the website Inlightpress, Rashid said he would not respond to the allegations now, but warned that Abbas “made a huge mistake and must suffer the consequences.” He did not elaborate. The website, which is believed to be linked to Rashid, announced in a separate section that it would soon run a series of articles by Rashid about the circumstances of Abbas’ rise to power.

After keeping a low profile for years, Rashid started drawing attention to himself with a series of interviews that the Arab satellite TV station al-Arabiya began broadcasting last week. Rashid told the station he was asked by Palestinian officials in 2008 to provide documents about the investment fund, and that he told them the documents were at the fund’s office. He said he has not been contacted since then.

The first decade of the Palestinian Authority was marked by rampant corruption and official mismanagement. During those years, Rashid “ran a network of financial transactions outside the law and outside the budget,” said Azmi Shuaibi, a leading anti-corruption campaigner in the West Bank.

In 2003, the international community, concerned about millions in foreign aid going to waste, asked Palestinian economist Salam Fayyad to supervise Palestinian Authority spending. Fayyad, now the West Bank-based prime minister, is credited with providing greater transparency. However, for years, little was done to go after those suspected of stealing public funds.

Two years ago, Abbas set up the Anti-Corruption Commission and a special court. So far, the commission has handled 85 cases, including those of two Cabinet ministers who were forced to resign, but the court has not yet handed down any verdicts, Natche said.

The commission filed charges of fraud, embezzlement and money-laundering against Rashid on April 30. On May 8, the court urged Rashid through an announcement in a local newspaper to surrender to Palestinian authorities, Natche said. Rashid will be tried in absentia if he cannot be brought to the Palestinian territories, he added.

Shuaibi praised stepped up efforts to go after government corruption, but expressed concern about the way targets for investigation are being chosen. He noted that Rashid is a longtime associate of former Gaza strongman Mohammed Dahlan, who had a falling-out with Abbas last year after seemingly challenging the president’s leadership. The connection between Dahlan and Rashid created an impetus “to pursue Rashid as well,” Shuaibi said.

“I think the priorities (for investigations) are being set on a personal basis,” said Shuaibi. He said he told Abbas that “we have concerns that the issue is being handled in a way of settling personal scores.” Shuaibi said Abbas told him all suspicions were being investigated.

Officials in Abbas’ office declined comment. Natche said anyone can approach the commission with information about alleged corruption, but acknowledged that most of his leads come from government agencies.

Daoud Kuttab, a Palestinian commentator, said Arafat’s continued popularity made it difficult for investigators for some years to launch a probe against Rashid. But enough time has passed since Arafat’s death, Kuttab said, adding that “there is a strong public sentiment against corruption.”

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Article source: http://www.kfvs12.com/story/18432093/arafats-former-aide-faces-embezzlement-charges

By Samuel Rubenfeld

A group of 41 businesses and nonprofits sent a letter to every member of Congress pressing them to pass legislation that would reveal the beneficial owners of shell companies.

The letter, signed by good government groups such as Oxfam America and Human Rights Watch as well as socially responsible investment firms Calvert Investments and Domini Social Investments LLC, pushes for lawmakers to pass a bill that would require companies to disclose their ultimate owners at the time of incorporation, making it more difficult for corruption to fester without notice in the U.S. through anonymous shell companies.

“Investigations continue to reveal that American and foreign terrorists, narco-traffickers, arms dealers, corrupt foreign officials, tax evaders, individuals targeted for financial sanctions and other criminals easily and regularly set up U.S. shell companies, without providing any information about who owns or controls such companies,” the letter says.

Under current law, no U.S. state requires such disclosure.

“This enables criminals to disguise their identities behind the anonymity provided to U.S. corporations and launder dirty money through the U.S. financial system,” it says.

The legislation was introduced for a third time in the Senate last August by Sens. Carl Levin (D., Mich.) and Chuck Grassley (R., Iowa), and a companion bill was introduced in the House in November by Rep. Carolyn Maloney (D., N.Y.). Both have languished in committee.

The Obama administration committed to support such a proposal in both the U.S. National Action Plan (pdf) as part of the Open Government Partnership and its strategy (pdf) to combat transnational organized crime, which got a budget line in the 2013 fiscal year budget request. In 2008, then-Sen. Barack Obama co-sponsored the first iteration of the bill.

The Treasury Department and Justice Department each endorsed Levin’s bill when he introduced it.

Meanwhile, financial crime officials in the Treasury Department are taking comments in advance of a proposed rule that would mandate beneficial ownership due diligence obligations on financial institutions. The advance notice inviting comments, issued at the end of February, was extended in early May to last through June 11.

But the Levin-Grassley bill, as written, would apply at incorporation, making the job much easier for financial institutions, investors and others seeking information on who actually owns a company, including regulators seeking to prevent crime.

“As we seek cooperation from foreign jurisdictions in cracking down on terrorist financing, money laundering and tax evasion, we must ensure that the U.S. is not facilitating financial crime in our own backyard,” said Nicole Tichon, founding member of the Financial Accountability and Corporate Transparency Coalition, in a statement.

Read the letter below:

Cso and Business Support Ltr for S 1483 5-15-12

Article source: http://blogs.wsj.com/corruption-currents/2012/05/16/nonprofits-businesses-call-for-end-to-corporate-secrecy/

This is a RUSH transcript from “The O’Reilly Factor,” May 15, 2012. This copy may not be in its final form and may be updated.

Watch “The O’Reilly Factor” weeknights at 8 p.m. and 11 p.m. ET!

BILL O’REILLY: ”Back of the Book” segment tonight, Attorney general Eric Holder under fire from many different directions. He’s going after Sheriff Joe Arpaio in Arizona for racial profiling but will not tell Congress what the Justice Department knows about the federal gun scandal dubbed Fast and Furious.

Also, reports are the FBI may charge George Zimmerman with a hate crime for killing Trayvon Martin. But when “The Factor” called the attorney general last week, asking if he would investigate bias crime allegations in Norfolk, Virginia, the mob violence case we reported on earlier, the Justice Department refused to get back to us.

Here now to analyze the whole deal, FOX News political commentator Charles Krauthammer.

There’s something wrong here, Charles. It just — you’ve got the Black Panthers in Philadelphia. You’ve got just case after case after case after case that just doesn’t seem right. You say?

CHARLES KRAUTHAMMER, FOX NEWS CONTRIBUTOR: Well, first of all, we can start with incompetence. We saw that in the debacle with Khalid Sheikh Mohammed.

If we’re going to call him corrupt, I’ve got a pretty high threshold for corruption. I need either a smoking gun like the Nixon tapes or cold cash.

O’REILLY: What about the fact — what about the fact that he won’t turn over the documents to Congress and may be cited for contempt? Would that, if — if it happens, if he’s cited for contempt, not now, because you’ve got to, you know, let the process play out, would that be a high enough threshold?

KRAUTHAMMER: Look, of all the things on his docket, I don’t think that’s the worst. Justice Departments, administrations, White Houses have, since the beginning of time, tried to withhold documents that Congress wants. It’s an age-old struggle. And unless we can see something in the documents that we know is corrupt, we can only assume. So until I see that, I’m not going to assume corruption.

But I’ll tell you what I think explains this guy. He’s a political hack. And the reason that is so grating, is because you can be a political hack in HEW, in HUD, somewhere else.

The Justice Department is a really important job. You are the supreme law enforcement official in the country. You are entrusted with upholding the rule of law and the Constitution. And the amount of stuff he has done as a pure political hack, as you mentioned, starting with the Marc Rich pardon back in the Clinton administration, this is a guy who will be at the beck and call of his political masters.

Two cases in point. The case the Justice Department brought in Texas against the voter I.D. law, they know they’re going to lose it. There was a similar Indiana law upheld in 2008, 6-3, in which the majority included the great liberal, John Paul Stevens. They’re going to lose in Texas.

Why is he doing it? To gin up the issue, the voter suppression issue so-called, and to agitate the base, presumably minorities.

Second point, the Arizona immigration case. They’re going to lose that one, too. And they know it. And the reason he brings it up, to gin up the Hispanic vote. To bring up the idea of the Republicans as anti- immigrant.

That’s a hack. And if you’re attorney general you shouldn’t be acting in that way. You should be acting for the nation.

O’REILLY: In Arizona on the immigration case, he’s going to lose on what issue?

KRAUTHAMMER: He’s going to lose on the issue that — and you saw it in the oral arguments — the solicitor general tries to make the case that it is illegal for the state of Arizona to assist the federal government in carrying out its responsibilities on immigration. Somehow the exclusivity of the feds excludes any state assisting in that enforcement.

O’REILLY: So that would be like saying to the state police, you can’t help us solve a bank robbery, because bank robbery is a federal crime, so stay out of it. If the bank robber goes through your town, you can’t even call us.

KRAUTHAMMER: Precisely. And the case was so weak that in the oral argument, Justice Sotomayor, who was certainly no right winger, said of the solicitor general, defending the Obama case, “This isn’t selling very well, is it?”

And they know it. This is done as pure political pandering.

O’REILLY: Do you believe it’s President Obama himself that is basically telling the attorney general what to do? I mean, it would have to be at that level, because there’s really nobody else that he’s beholden to. It’s President Obama, correct?

KRAUTHAMMER: I’m sure that Obama signs off on this. I’m not sure Obama spends nights in bed thinking up Supreme Court cases that will lose, that will somehow help him in the general election, especially if they lose by ginning up his constituencies.

O’REILLY: Who would be that? I mean, who would it be?

KRAUTHAMMER: The attorney general. That’s who’s doing this. But he has to get a sign off from higher up. But he’s the guy who’s acting as a hack.

O’REILLY: So he’s anticipating what his boss might like to see?

KRAUTHAMMER: Well, no. But he’s also a Democrat. He wants to be in office himself, whether — I’m not sure if he stays on or not. If you’re a Democrat and you believe in this and you’re an ideologue the way he is, why wouldn’t you want your administration to continue?

O’REILLY: Yes. All right, Charles. Thanks, as always.

Content and Programming Copyright 2012 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2012 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.

Article source: http://www.foxnews.com/on-air/oreilly/2012/05/16/eric-holder-corrupt-or-playing-politics

By Samuel Rubenfeld

A roundup of corruption-related news from Dow Jones and other sources. You can also receive a newsletter version of Corruption Currents here.

Bribery:

Mike Lucas

Corporate America shrugged at the Wal-Mart Stores Inc. bribery scandal because a 2003 case showed the law has weaker teeth than it seemed. (The New Republic)

Griffiths Energy International Inc., a Canadian company seeking to go public, said it completed an internal investigation into allegations of bribery but didn’t detail its findings. (Globe and Mail)

Avon Products Inc. has a long road ahead as Coty Inc. walked away from its bid. (Financial Times sub req)

Mike Volkov slammed the compliance defense proposals tied to overall FCPA reform sought by the U.S. Chamber of Commerce and the FCPAProfessor, who focuses on a ruling in an FCPA case in a California federal court. The FCPA Blog continues its series on Brazil and updates on a filing in a key case. Thebriberyact.com advises on how the SFO will show it means business. Tom Fox explains compliance risk through the J.P. Morgan Chase matter. James McGrath continues a series on sentencing guidelines.

India’s anti-corruption bureau arrested a Jaipur Dairy official who was allegedly caught taking a bribe. He doesn’t appear to have been contacted for comment. (Times of India)

A soccer corruption case in China signaled a shift in attitude toward corruption. (SBS World News)

Donald Trump weighed in on the FCPA, calling for its repeal. Alexandra Wrage, founder of Trace International, slammed Trump’s comments. (NewsMax, CNBC)

The former general counsel of Tyco International Ltd. discussed his post-scandal life and career. (Corporate Counsel)

A board member of Finmeccanica is under investigation for illicit financing of political parties, the company said. (Reuters)

Documents were released from a corruption trial in Ohio. (Plain Dealer)

Money Laundering:

Financial institutions from around the world called for delays and changes to soften proposed rules governing FATCA, a law designed to combat tax evasion. Localized coverage focused on U.S. account holders in Lebanon. (Reuters, Daily Star)

A report from the Philippine Ombudsman’s office found that the impeached chief justice might have violated the country’s anti-money laundering law. Defense counsel said the report was fabricated. More here, here, here, here and here. (Sun-Star, GMA News, Philippine Daily Inquirer, Rappler, ABS-CBN News, Jakarta Post, ABS-CBN News)

Following a request to lift the freeze on his assets, the head of English soccer club Birmingham City awaits a ruling. (Birmingham Mail)

A Swiss film explores a revolutionary group laundering money in a Swiss bank. (Swissinfo)

More coverage of the Indian probe into Bharti Airtel is here, here and here. More coverage of the Swiss report on increased money laundering probes amid the Arab spring protests is here and here. (India Today, Indian Express, Reuters, Eurasia Review, Indian Express)

Austria referred legal proceedings to Croatia over former prime minister Ivo Sanader for allegations of money laundering. Sanader has insisted all of the prosecutions against him are politically motivated. (Croatia Times)

A large money-laundering ring in London was smashed. (London Evening Standard)

What is London’s link to money-laundering in Africa? Global Witness explains. (CNN)

Sanctions:

The U.K. and France are studying a European Union embargo on Iranian oil that includes a ban on insuring tankers carrying the crude to see how severely it will affect trade with non-EU countries. (Reuters)

Iraq replaced Iran as India’s second-largest crude supplier. (Wall Street Journal)

Talks between the United Nations atomic group and Iran will continue next week. More here and here. (Reuters, AP, Wired)

Some U.S. experts were blindsided by the report about the move to delist an Iranian group from the designation of foreign terror organization. Is Israel flirting with the group? More here. (Al-Monitor, Daily Beast, Emptywheel)

More analysis and coverage of the U.S. executive order targeting those obstructing reform in Yemen is here, here and here. (Emptywheel, Washington Post, Reuters)

More coverage of the U.S. sanctions on an Indian group is here, here and here. (BBC, Reuters, Global Post)

China is pushing Pyongyang to drop its nuclear test ambitions, which were the justification for new sanctions at the U.N. recently. (Reuters)

Whistleblowers:

Informants at two Swiss banks have handed over client account data to U.K. tax authorities, sources told Bloomberg.

General Anti-Corruption:

Money trouble raises the corruption risk in soccer. Can the sport be a place for diplomacy? (AFP, Global Post)

Trinidad and Tobago Transparency Institute decried the appointment of Jack Warner to act as prime minister as allegations of graft during his tenure at FIFA remain unresolved.

Corruption scandals are engulfing the Lee Myung-bak government in South Korea, and state-owned Woori Bank is uneasy as its name keeps getting brought into the mess. (Korea Times)

Prosecutors are going to retry a former New York state senator on corruption charges after jurors couldn’t come to a verdict on four counts against him. (NY1)

A new anti-corruption unit should work at busting up the Hawks of South Africa, the director of the Institute of Accountability said. (SAPA)

The money man for late Palestinian leader Yasser Arafat is the target of a corruption probe. He has denied wrongdoing in the past but made threats of exposing the secrets of the current leader. (AP)

In India, does politics make you rich? One state is probing corruption in low-caste parks. A new corruption probe engulfed Indian cricketers. (Global Post, AP, ABC News Australia,

The U.S. Border Patrol tackled corruption in its new strategic blueprint. (Center for Investigative Reporting)

Hong Kong is considering giving its chief executive a huge salary in a bid to head off corruption. (WSJ China Real Time)

An Indian court Tuesday granted bail to former telecommunication minister Andimuthu Raja, who was in jail for the past 15 months for allegedly playing a role in one of the country’s largest-ever corruption scandals. (Wall Street Journal)

PwC launched a video series on fraud and corruption. (news release)

The SEC sued a China-based natural gas company over claims its chairman secretly used the firm’s money to make $14 million in loans to his son’s real-estate business. (Bloomberg)

Article source: http://blogs.wsj.com/corruption-currents/2012/05/16/high-tide-from-shrugging-at-wal-mart-to-calling-for-fatca-delays/

By Jessica Wohl

(Reuters) – Wal-Mart Stores Inc (WMT) will try to get investors’ minds back on business and away from a Mexican bribery scandal, and continued progress in its U.S. turnaround could do just that.

Wal-Mart is expected on Thursday to post its third straight quarter of sales growth at existing U.S. stores, a milestone that could help its lagging shares regain some of the ground that has been lost in recent weeks.

But investors will be looking for any details on the bribery investigation, including costs, when the world’s largest retailer reports first-quarter earnings.

Wal-Mart continues to face negative comments from shareholders, employees and activists after a New York Times report on April 21 that Wal-Mart de Mexico (WALMEXV.MX), or Walmex, allegedly orchestrated bribes of $24 million to help it grow quickly and that Wal-Mart’s top brass tried to cover it up.

Some are suggesting that, due to the issue, shareholders should vote against board members including Chairman Robson “Rob” Walton, one of the founder’s sons, who may have known about the alleged bribes dating back to the mid 2000s, and took no action. Wal-Mart’s shareholders meeting is set for June 1.

Wal-Mart has not denied the story, which rocked its share price and prompted lawsuits. The company faces an investigation into whether it violated the U.S. Foreign Corrupt Practices Act, which forbids bribes to foreign government officials. Wal-Mart has said it is cooperating with the U.S. Department of Justice and the Securities and Exchange Commission and that a thorough investigation will take time.

There may not be much more to add about the probe in Thursday’s statement and recorded call of executive comments.

“I think earnings will be the opportunity the company needs to get people back focused on fundamentals. The FCPA investigation is going to take years to resolve and there won’t be any new info until we are further through the investigation,” said UBS analyst Robert Carroll.

Wal-Mart is expected to report a first-quarter profit of $1.04 per share, according to Thomson Reuters I/B/E/S, up from earnings of 98 cents per share last year.

Analysts, on average, expect that sales at Walmart U.S. stores open at least a year, or same-store sales, rose 1.4 percent during the quarter, according to Thomson Reuters.

Such a gain would show a solidified sales turnaround at the retailer’s largest unit, which suffered through nine straight quarterly declines before the middle of last year.

Wal-Mart itself forecast earnings per share of $1.01 to $1.06, with Walmart U.S. same-store sales flat to up 2 percent.

It could become tough for Wal-Mart’s growth to continue at its recent strong clip. Items that boosted results in fiscal 2011 could become headwinds this year, such as waning food inflation and cycling last year’s plans that brought thousands of items and holiday layaway back to U.S. stores, according to Deutsche Bank analyst Charles Grom.

“All told, the fundamental story has holes, which will widen as the year progresses,” putting pressure on earnings and the stock’s multiple, said Grom, who has a “sell” rating and $53 price target on Wal-Mart shares.

A further decline in the shares, down 1.1 percent this year through Monday after an 8.2 percent plunge in the days following the release of the New York Times article, could provide a chance to stock up, an investor said.

“If it takes a big hit on earnings for this quarter and the share price goes down a lot that would be an opportunity for us to buy more because the underlying company is a juggernaut, a powerhouse,” said Frederic Mars, founder and CEO of Cheviot Value Management Inc in Santa Monica, California.

Mars, for one, said he does not expect the bribery scandal to “make a dent in Wal-Mart’s future.”

His firm holds about 210,674 Wal-Mart shares, which make up about 4 percent of its $320 million in assets under management.

Despite the bribery overhang, some people see Wal-Mart as a defensive name “when the broader market gets ugly,” Carroll said.

Raymond James analyst Budd Bugatch said U.S. sales were likely helped in the quarter by the favorable weather that has helped other chains.

Home Depot Inc (HD) said on Tuesday the warmer-than-usual weather boosted first-quarter sales, which were still weaker than expected after demand slowed in April. [ID:nL1E8GF1H7] Target Corp (TGT), which reports on May 16, already posted a 5.3 percent rise in same-store sales.

Analysts wonder whether Wal-Mart will raise its fiscal year forecast of $4.72 to $4.92 per share, especially given the costs of the bribery investigation. Back in December, when Wal-Mart said it was looking into possible international bribery, it said the issue was not material.

“We would be surprised if management offered materially new information on the issue given its complexity and ongoing nature,” Bugatch said.

(Reporting by Jessica Wohl in Chicago; editing by Gunna Dickson)

Article source: http://finance.yahoo.com/news/wal-mart-results-could-move-192323877.html