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Barney Frank not seeking re-election in 2012 November 28, 2011

Washington (CNN) — U.S. Rep. Barney Frank, a prominent 16-term liberal Democrat from Massachusetts and arch-enemy of political conservatives nationwide, announced Monday that he does not intend to seek re-election in 2012.

Frank, 71, said his decision to retire from Congress was prompted partly by changes made to the boundaries of his U.S. House district. As part of Massachusetts’ recently concluded redistricting process, Frank’s 4th Congressional District will lose the heavily Democratic blue-collar port city of New Bedford while gaining several smaller, more conservative towns.

“I will miss this job, (but) the district is very substantially changed” with roughly 325,000 new constituents, Frank told reporters. The veteran congressman said he was planning to retire after 2014 regardless, but said he didn’t “want to be torn” next year between the need to serve his existing constituents, reach out to new district residents, and protect his signature Dodd-Frank financial regulatory reform law.

President Barack Obama issued a statement praising Frank’s public service, calling the congressman a “fierce advocate for the people of Massachusetts and Americans everywhere who needed a voice.”

While Massachusetts’ entire congressional delegation is currently Democratic, local Republicans insist Frank’s retirement will put the reconfigured district in play.

“It is clear that Congressman Frank was not looking forward to another hard fought campaign after losing his gerrymandered district and spending nearly every penny he had in 2010,” Massachusetts Republican Party Executive Director Nate Little said in a written statement.

“Republicans were already gearing up for a strong race and Frank’s sudden retirement injects added optimism and excitement into the election.”

Frank, first elected to the U.S. House of Representatives in 1980, is the top Democrat on the powerful House Financial Services Committee. The controversial 2010 Dodd-Frank measure, designed to rein in Wall Street excesses after the 2008 financial collapse, passed the House without any GOP support.

Frank made headlines earlier in his career by becoming one of the first openly gay members of Congress. He was formally reprimanded by the House in 1990 for allegations relating to his association with a male prostitute.

Launching his career as an aide to Boston Mayor Kevin White in the late 1960s, Frank quickly became known for an acidic political wit.

Frank’s current district — which extends from the affluent, liberal Boston suburbs of Newton and Brookline to the port cities of New Bedford and Fall River — is considered safe Democratic political terrain. Frank did, however, receive an unusually strong challenge from Republican Sean Bielat in 2010.

Frank ultimately defeated Bielat, 54% to 43%.

“One of the advantages to me of not running for office is I don’t even have to pretend to try to be nice to people I don’t like,” Frank joked with reporters Monday. “Some of you may not think I’ve been good at it, but I’ve been trying.”


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Barney Frank to Announce He Won’t Seek Re-Election


November 28, 2011

by legitgov

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Barney Frank to Announce He Won’t Seek Re-Election 26 Nov 2011 Longtime Rep. Barney Frank, D-Mass., will announce Monday he is not seeking re-election, holding an afternoon press conference in Newton, Mass., to offer details behind his decision. The 16-term lawmaker, whose name is emblazoned on the banking reform law that passed Congress last year, had long been rumored to be ready for retirement. He was previously chairman of the House Financial Services Committee but is now ranking member since Democrats lost the majority in the 2010 midterm election.

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MF Global’s Jon Corzine may decide silence is golden November 26, 2011

Jon Corzine’s career seems to turn in circles. The former Goldman Sachs boss moved into politics as governor of New Jersey, then back into finance, now he’s heading back to Washington. Sadly for the former New Jersey governor his return to Capitol Hill will be made in less than auspicious circumstances.

Next month, the House financial services committee will publicly quiz Corzine for the first time about the collapse of MF Global, the brokerage he headed until it went bust. Government lawyers and private investors will be hanging on his every word as Corzine is called upon to explain what went wrong in what could be one of the most worrying bankruptcies since the collapse of Lehman Brothers.

Regulators and the court-appointed trustee looking for MF Global’s missing money are now searching for somewhere between $600m and $1.2bn (£773m) in missing funds.

The case is gaining more attention as farmers who used the firm to hedge against losses have begun to press politicians and regulators for action as they fret about their missing money. In relative terms MF Global is small fry but the problems its collapse exposes could end up being anything but.

The hearings come as federal investigators continue to try to work out what happened at MF Global. So far Corzine has said nothing publicly about the broker’s spectacular collapse. He could refuse to testify, in which case the panel could subpoena him. Corzine faces a tough choice as he faces a committee that, in its own words, will focus on “the decisions and events leading to the collapse of MF Global, the effectiveness of regulators in overseeing MF Global’s activities and the impact MF Global’s bankruptcy will have on its customers”.

Bradley Abelow, MF Global’s president and chief operating officer, has also been called to testify before the committee. Abelow, another Goldman alumnus, followed Corzine from Wall Street to the New Jersey statehouse, serving as treasurer and then chief of staff during Corzine’s governorship. The close ties between the two men seem to be coming apart. Abelow was the operations guy, Corzine the risk-taking trader, according to some. As a legal battle looms the blame game is about to begin and this committee hearing will be each sides’ first opportunity to set out their defence.

Wrongdoing

“It’s too early to say exactly where this is going but we will have a clearer idea after this hearing,” said Robert Mintz, a former federal prosecutor and now head of the government investigations and white collar criminal defence practice group at New Jersey law firm McCarter English.

“There may have been criminal wrongdoing, there may not. But as long as these sizeable amounts of money are missing, that’s a question that is going to keep getting asked,” he added.

Many chief executives of troubled firms have been up before congressional hearings; not all have ended up involved in legal cases, but anything Corzine says can and will be used against him by the army of lawyers now looking at MF Global.

Most famously, in 2002 Kenneth Lay, chairman of Enron, chose to plead the Fifth Amendment, which allows people not to answer questions that might incriminate them, and refused to answer the questions fired at him by a Senate panel investigating the collapse of the Houston energy firm he once ran. Lay managed to keep silent for two hours as senators pummelled him with unanswered questions.

His reputation, however, did not survive the attack. “Mr Lay, I’ve concluded that you’re perhaps the most accomplished confidence man since Charles Ponzi,” said senator Peter Fitzgerald. “I’d say you’re a carnival barker, except that wouldn’t be fair to carnival barkers.”

More recently Lloyd Blankfein, Corzine’s old colleague and successor to the top job at Goldman Sachs, also came under fire from inquisitory political committees. Blankfein chose to tough it out as senators accused his firm of duping clients into buying toxic mortgage products, arguing they were misguided and muddled.

The plan paid off, Goldman has bounced back from the credit crunch and Blankfein is still at the top with no sign of prosecution. But Goldman Sachs remains a going concern. MF Global is dead.

So far the MF Global mess seems to centre on what went wrong with a $6.3bn bet on European bond positions. Over the summer the financial industry regulatory authority (Finra), one of the many regulators overseeing MF Global, reportedly told the firm it was concerned it did not have enough capital to cover those bets.

In September the firm agreed to boost its capital ration after lengthy consultations with Finra and the securities and exchange commission. But clearly whatever action it took was entirely inadequate. The open question now is whether that’s a systemic problem to do with the way these brokers are regulated, a problem specific to MF Global, or both.

If it’s both, the next big question is how many more MF Globals are out there?

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Watchdog refers ex-counsel’s dealings with Bernard Madoff to justice department September 21, 2011

The US’s top financial watchdog has asked the department of justice to investigate whether its former lead lawyer broke the law in his dealings with convicted fraudster Bernard Madoff.

David Becker, former general counsel of the Securities and Exchange Commission, had financial ties with Madoff through an account he inherited with his brothers after his mother died.

Irving Picard, the trustee overseeing the bankruptcy of Madoff’s investment empire, has sued the Beckers, seeking to recover about $1.5m in gains they received before the account was closed.

Becker’s link to Madoff was questioned by politicians earlier this year who called on the SEC to clarify any potential conflicts of interest. His work at the SEC included advising on compensation for Madoff’s victims. Becker’s ties to Madoff were not revealed publicly until February this year, shortly after his resignation from the SEC.

The referral to the justice department, first reported by the New York Times, follows an investigation by David Kotz, the inspector general of the SEC.

The report will be discussed on Thursday at the House financial services committee and the committee on oversight and government reform, where Kotz, Becker and Mary Schapiro, the chairwoman of the SEC, are expected to testify.

According to the New York Times, the report says Becker was treated differently from other employees who had ties to the Madoff family, and that he was allowed to advise on the commission’s recommendations related to the Madoff case despite his own financial interest.

The report also suggests the SEC chose not to have Becker testify before a Washington committee because he wanted to disclose his Madoff ties. According to the report, an SEC staff member told Schapiro that Becker wanted to make the disclosure and the pair then decided someone other than Becker should speak at the hearing.

“The decision that Becker would not serve as a witness was made in large part because he would have disclosed the fact that his mother had held a Madoff account,” the report concludes.

The report also claims that Becker pushed – unsuccessfully – to limit Picard’s ability to recover funds from investors such as himself.

In a statement earlier this year the SEC said Becker “sought advice from the ethics office, and was advised that the liquidated account was not a basis for disqualification from participation in certain Madoff-related matters”.

The SEC has come under intense criticism following the Madoff scandal. Becker clashed with Harry Markopolos, the whistleblower who first alerted the SEC to Madoff’s fraud. According to Markopolos, Becker reacted badly to his account of the Madoff fraud. “Maybe he simply was insulted that I had called his agency incompetent … but whatever the reason, he was furious,” Markopolos wrote in his book No one Would Listen.

In interviews Madoff, now serving a 150-year jail sentence, has said he was amazed the SEC did not see through his scheme. He told investigators he had “too much credibility with them and they dismissed” suggestions he was running a Ponzi scheme.

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