Undoubtedly one of Harding’s worst appointments was that of Harry M. Daugherty was a lawyer, political advisor and friend of the president dating to earlier times in Ohio.Daugherty was suspected of profiting from the sale of government alcohol supplies, failing to enforce prohibition statutes, and the selling of pardons.Embarrassment was delivered to the administration's doorstep through the actions of Jesse W. Smith, a friend of the attorney general and a member of the so-called Ohio Gang.Smith had received an appointment from Daugherty, but his subsequent unsatisfactory performance included corrupt involvement with the Alien Property Custodian and taking bribes to settle matters before the Justice Department. Harding asked that Smith be sent back to Ohio, but Smith committed suicide in May 1923, which caused considerable discomfort for the administration.Daugherty was dismissed by Calvin Coolidge in March 1924. The new president showed only moderate interest in pursuing the perpetrators of the Harding scandals, but made certain that his administration was not guilty of similar infractions.Daugherty was later charged with defrauding the government. In his 1927 trial, he asserted his Fifth Amendment protection against self-incrimination and was eventually acquitted.
See other domestic events during the Harding administration.
Bank of America to Pay $16.65 Billion in Historic Justice Department Settlement for Financial Fraud Leading up to and During the Financial Crisis
Attorney General Eric Holder and Associate Attorney General Tony West announced today that the Department of Justice has reached a $16.65 billion settlement with Bank of America Corporation – the largest civil settlement with a single entity in American history — to resolve federal and state claims against Bank of America and its former and current subsidiaries, including Countrywide Financial Corporation and Merrill Lynch. As part of this global resolution, the bank has agreed to pay a $5 billion penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) – the largest FIRREA penalty ever – and provide billions of dollars of relief to struggling homeowners, including funds that will help defray tax liability as a result of mortgage modification, forbearance or forgiveness. The settlement does not release individuals from civil charges, nor does it absolve Bank of America, its current or former subsidiaries and affiliates or any individuals from potential criminal prosecution.
“This historic resolution - the largest such settlement on record - goes far beyond ‘the cost of doing business,’” said Attorney General Holder. "Under the terms of this settlement, the bank has agreed to pay $7 billion in relief to struggling homeowners, borrowers and communities affected by the bank’s conduct. This is appropriate given the size and scope of the wrongdoing at issue.”
This settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force and its Residential Mortgage-Backed Securities (RMBS) Working Group, which has recovered $36.65 billion to date for American consumers and investors.
“At nearly $17 billion, today’s resolution with Bank of America is the largest the department has ever reached with a single entity in American history,” said Associate Attorney General West. “But the significance of this settlement lies not just in its size this agreement is notable because it achieves real accountability for the American people and helps to rectify the harm caused by Bank of America’s conduct through a $7 billion consumer relief package that could benefit hundreds of thousands of Americans still struggling to pull themselves out from under the weight of the financial crisis.”
The Justice Department and the bank settled several of the department’s ongoing civil investigations related to the packaging, marketing, sale, arrangement, structuring and issuance of RMBS, collateralized debt obligations (CDOs), and the bank’s practices concerning the underwriting and origination of mortgage loans. The settlement includes a statement of facts, in which the bank has acknowledged that it sold billions of dollars of RMBS without disclosing to investors key facts about the quality of the securitized loans. When the RMBS collapsed, investors, including federally insured financial institutions, suffered billions of dollars in losses. The bank has also conceded that it originated risky mortgage loans and made misrepresentations about the quality of those loans to Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA).
Of the record-breaking $16.65 billion resolution, almost $10 billion will be paid to settle federal and state civil claims by various entities related to RMBS, CDOs and other types of fraud. Bank of America will pay a $5 billion civil penalty to settle the Justice Department claims under FIRREA. Approximately $1.8 billion will be paid to settle federal fraud claims related to the bank’s origination and sale of mortgages, $1.03 billion will be paid to settle federal and state securities claims by the Federal Deposit Insurance Corporation (FDIC), $135.84 million will be paid to settle claims by the Securities and Exchange Commission. In addition, $300 million will be paid to settle claims by the state of California, $45 million to settle claims by the state of Delaware, $200 million to settle claims by the state of Illinois, $23 million to settle claims by the Commonwealth of Kentucky, $75 million to settle claims by the state of Maryland, and $300 million to settle claims by the state of New York.
Bank of America will provide the remaining $7 billion in the form of relief to aid hundreds of thousands of consumers harmed by the financial crisis precipitated by the unlawful conduct of Bank of America, Merrill Lynch and Countrywide. That relief will take various forms, including principal reduction loan modifications that result in numerous homeowners no longer being underwater on their mortgages and finally having substantial equity in their homes. It will also include new loans to credit worthy borrowers struggling to get a loan, donations to assist communities in recovering from the financial crisis, and financing for affordable rental housing. Finally, Bank of America has agreed to place over $490 million in a tax relief fund to be used to help defray some of the tax liability that will be incurred by consumers receiving certain types of relief if Congress fails to extend the tax relief coverage of the Mortgage Forgiveness Debt Relief Act of 2007.
An independent monitor will be appointed to determine whether Bank of America is satisfying its obligations. If Bank of America fails to live up to its agreement by Aug. 31, 2018, it must pay liquidated damages in the amount of the shortfall to organizations that will use the funds for state-based Interest on Lawyers’ Trust Account (IOLTA) organizations and NeighborWorks America, a non-profit organization and leader in providing affordable housing and facilitating community development. The organizations will use the funds for foreclosure prevention and community redevelopment, legal assistance, housing counselling and neighborhood stabilization.
As part of the RMBS Working Group, the U.S. Attorney’s Office for the District of New Jersey conducted a FIRREA investigation into misrepresentations made by Merrill Lynch to investors in 72 RMBS throughout 2006 and 2007. As the statement of facts describes, Merrill Lynch regularly told investors the loans it was securitizing were made to borrowers who were likely and able to repay their debts. Merrill Lynch made these representations even though it knew, based on the due diligence it had performed on samples of the loans, that a significant number of those loans had material underwriting and compliance defects - including as many as 55 percent in a single pool. In addition, Merrill Lynch rarely reviewed the unsampled loans to ensure that the defects observed in the samples were not present throughout the remainder of the pools. Merrill Lynch also disregarded its own due diligence and securitized loans that the due diligence vendors had identified as defective. This practice led one Merrill Lynch consultant to “wonder why we have due diligence performed” if Merrill Lynch was going to securitize the loans “regardless of issues.”
“In the run-up to the financial crisis, Merrill Lynch bought more and more mortgage loans, packaged them together, and sold them off in securities – even when the bank knew a substantial number of those loans were defective,” said U.S. Attorney Paul J. Fishman for the District of New Jersey. “The failure to disclose known risks undermines investor confidence in our financial institutions. Today’s record-breaking settlement, which includes the resolution of our office’s imminent multibillion-dollar suit for FIRREA penalties, reflects the seriousness of the lapses that caused staggering losses and wider economic damage.”
This settlement also resolves the complaint filed against Bank of America in August 2013 by the U.S. Attorney’s Office for the Western District of North Carolina concerning an $850 million securitization. Bank of America acknowledges that it marketed this securitization as being backed by bank-originated “prime” mortgages that were underwritten in accordance with its underwriting guidelines. Yet, Bank of America knew that a significant number of loans in the security were “wholesale” mortgages originated through mortgage brokers and that based on its internal reporting, such loans were experiencing a marked increase in underwriting defects and a noticeable decrease in performance. Notwithstanding these red flags, the bank sold these RMBS to federally backed financial institutions without conducting any third party due diligence on the securitized loans and without disclosing key facts to investors in the offering documents filed with the SEC. A related case concerning the same securitization was filed by the SEC against Bank of America and is also being resolved as part of this settlement.
“Today’s settlement attests to the fact that fraud pervaded every level of the RMBS industry, including purportedly prime securities, which formed the basis of our filed complaint,” said U.S. Attorney Anne M. Tompkins for the Western District of North Carolina. “Even reputable institutions like Bank of America caved to the pernicious forces of greed and cut corners, putting profits ahead of their customers. As we deal with the aftermath of the financial meltdown and rebuild our economy, we will hold accountable firms that contributed to the economic crisis. Today’s settlement makes clear that my office will not sit idly while fraud occurs in our backyard.”
The U.S. Attorney’s Office for the Central District of California has been investigating the origination and securitization practices of Countrywide as part of the RMBS Working Group effort. The statement of facts describes how Countrywide typically represented to investors that it originated loans based on underwriting standards that were designed to ensure that borrowers could repay their loans, although Countrywide had information that certain borrowers had a high probability of defaulting on their loans. Countrywide also concealed from RMBS investors its use of “shadow guidelines” that permitted loans to riskier borrowers than Countrywide’s underwriting guidelines would otherwise permit. Countrywide’s origination arm was motivated by the “saleability” of loans and Countrywide was willing to originate “exception loans” (i.e., loans that fell outside of its underwriting guidelines) so long as the loans, and the attendant risk, could be sold. This led Countrywide to expand its loan offerings to include, for example, “Extreme Alt-A” loans, which one Countrywide executive described as a “hazardous product,” although Countrywide failed to tell RMBS investors that these loans were being originated outside of Countrywide’s underwriting guidelines. Countrywide knew that these exception loans were performing far worse than loans originated without exceptions, although it never disclosed this fact to investors.
“The Central District of California has taken the lead in the department’s investigation of Countrywide Financial Corporation,” said Acting U.S. Attorney Stephanie Yonekura for the Central District of California. “Countrywide’s improper securitization practices resulted in billions of dollars of losses to federally-insured financial institutions. We are pleased that this investigation has resulted in a multibillion-dollar recovery to compensate the United States for the losses caused by Countrywide’s misconduct.”
In addition to the matters relating to the securitization of toxic mortgages, today’s settlement also resolves claims arising out of misrepresentations made to government entities concerning the origination of residential mortgages.
The U.S. Attorney’s Office for the Southern District of New York, along with the Federal Housing Finance Agency’s Office of Inspector General and the Special Inspector General for the Troubled Asset Relief Program, conducted investigations into the origination of defective residential mortgage loans by Countrywide’s Consumer Markets Division and Bank of America’s Retail Lending Division as well as the fraudulent sale of such loans to the government sponsored enterprises Fannie Mae and Freddie Mac (the “GSEs”). The investigation into these practices, as well as three private whistleblower lawsuits filed under seal pursuant to the False Claims Act, are resolved in connection with this settlement. As part of the settlement, Countrywide and Bank of America have agreed to pay $1 billion to resolve their liability under the False Claims Act. The FIRREA penalty to be paid by Bank of America as part of the settlement also resolves the government’s claims against Bank of America and Countrywide under FIRREA for loans fraudulently sold to Fannie Mae and Freddie Mac. In addition, Countrywide and Bank of America made admissions concerning their conduct, including that they were aware that many of the residential mortgage loans they had made to borrowers were defective, that many of the representations and warranties they made to the GSEs about the quality of the loans were inaccurate, and that they did not self-report to the GSEs mortgage loans they had internally identified as defective.
“For years, Countrywide and Bank of America unloaded toxic mortgage loans on the government sponsored enterprises Fannie Mae and Freddie Mac with false representations that the loans were quality investments,” said U.S. Attorney Preet Bharara for the Southern District of New York. “This office has already obtained a jury verdict of fraud and a judgment for over a billion dollars against Countrywide and Bank of America for engaging in similar conduct. Now, this settlement, which requires the bank to pay another billion dollars for false statements to the GSEs, continues to send a clear message to Wall Street that mortgage fraud cannot be a cost of doing business.”
The U.S. Attorney’s Office for the Eastern District of New York, together with its partners from the Department of Housing and Urban Development (HUD), conducted a two-year investigation into whether Bank of America knowingly made loans insured by the FHA in violation of applicable underwriting guidelines. The investigation established that the bank caused the FHA to insure loans that were not eligible for FHA mortgage insurance. As a result, HUD incurred hundreds of millions of dollars of losses. Moreover, many of Bank of America’s borrowers have defaulted on their FHA mortgage loans and have either lost or are in the process of losing their homes to foreclosure.
“As a Direct Endorser of FHA insured loans, Bank of America performs a critical role in home lending,” said U.S. Attorney Loretta E. Lynch for the Eastern District of New York. “It is a gatekeeper entrusted with the authority to commit government funds earmarked for facilitating mortgage lending to first-time and low-income homebuyers, senior citizen homeowners and others seeking or owning homes throughout the nation, including many who live in the Eastern District of New York. In obtaining a payment of $800 million and sweeping relief for troubled homeowners, we have not just secured a meaningful remedy for the bank’s conduct, but have sent a powerful message of deterrence.”
“Bank of America failed to make accurate and complete disclosure to investors and its illegal conduct kept investors in the dark,” said Rhea Kemble Dignam, Regional Director of the SEC’s Atlanta Office. “Requiring an admission of wrongdoing as part of Bank of America’s agreement to resolve the SEC charges filed today provides an additional level of accountability for its violation of the federal securities laws.”
“Today’s settlement with Bank of America is another important step in the Obama Administration’s efforts to provide relief to American homeowners who were hurt during the housing crisis,” said U.S. Department of Housing and Urban Development (HUD) Secretary Julián Castro. “This global settlement will strengthen the FHA fund and Ginnie Mae, and it will provide $7 billion in consumer relief with a focus on helping borrowers in areas that were the hardest hit during the crisis. HUD will continue working with the Department of Justice, state attorneys general, and other partners to take appropriate action to hold financial institutions accountable and provide consumers with the relief they need to stay in their homes. HUD remains committed to solidifying the housing recovery and creating more opportunities for Americans to succeed.”
“Bank of America and the banks it bought securitized billions of dollars of defective mortgages,” said Acting Inspector General Michael P. Stephens of the FHFA-OIG. “Investors, including Fannie Mae and Freddie Mac, suffered enormous losses by purchasing RMBS from Bank of America, Countrywide and Merrill Lynch not knowing about those defects. Today’s settlement is a significant, but by no means final step by FHFA-OIG and its law enforcement partners to hold accountable those who committed acts of fraud and deceit.”
The attorneys general of California, Delaware, Illinois, Kentucky, Maryland and New York also conducted related investigations that were critical to bringing about this settlement. In addition, the settlement resolves investigations conducted by the Securities and Exchange Commission (SEC) and litigation filed by the Federal Deposit Insurance Company (FDIC).
Bush’s long history of tilting Justice
THE SCANDAL unfolding around the firing of eight U.S. attorneys compels the conclusion that the Bush administration has rewarded loyalty over all else. A destructive pattern of partisan political actions at the Justice Department started long before this incident, however, as those of us who worked in its civil rights division can attest.
I spent more than 35 years in the department enforcing federal civil rights laws — particularly voting rights. Before leaving in 2005, I worked for attorneys general with dramatically different political philosophies — from John Mitchell to Ed Meese to Janet Reno. Regardless of the administration, the political appointees had respect for the experience and judgment of longtime civil servants.
Under the Bush administration, however, all that changed. Over the last six years, this Justice Department has ignored the advice of its staff and skewed aspects of law enforcement in ways that clearly were intended to influence the outcome of elections.
It has notably shirked its legal responsibility to protect voting rights. From 2001 to 2006, no voting discrimination cases were brought on behalf of African American or Native American voters. U.S. attorneys were told instead to give priority to voter fraud cases, which, when coupled with the strong support for voter ID laws, indicated an intent to depress voter turnout in minority and poor communities.
At least two of the recently fired U.S. attorneys, John McKay in Seattle and David C. Iglesias in New Mexico, were targeted largely because they refused to prosecute voting fraud cases that implicated Democrats or voters likely to vote for Democrats.
This pattern also extended to hiring. In March 2006, Bradley Schlozman was appointed interim U.S. attorney in Kansas City, Mo. Two weeks earlier, the administration was granted the authority to make such indefinite appointments without Senate confirmation. That was too bad: A Senate hearing might have uncovered Schlozman’s central role in politicizing the civil rights division during his three-year tenure.
Schlozman, for instance, was part of the team of political appointees that approved then-House Majority Leader Tom DeLay’s plan to redraw congressional districts in Texas, which in 2004 increased the number of Republicans elected to the House. Similarly, Schlozman was acting assistant attorney general in charge of the division when the Justice Department OKd a Georgia law requiring voters to show photo IDs at the polls. These decisions went against the recommendations of career staff, who asserted that such rulings discriminated against minority voters. The warnings were prescient: Both proposals were struck down by federal courts.
Schlozman continued to influence elections as an interim U.S. attorney. Missouri had one of the closest Senate races in the country last November, and a week before the election, Schlozman brought four voter fraud indictments against members of an organization representing poor and minority people. This blatantly contradicted the department’s long-standing policy to wait until after an election to bring such indictments because a federal criminal investigation might affect the outcome of the vote. The timing of the Missouri indictments could not have made the administration’s aims more transparent.
This administration is also politicizing the career staff of the Justice Department. Outright hostility to career employees who disagreed with the political appointees was evident early on. Seven career managers were removed in the civil rights division. I personally was ordered to change performance evaluations of several attorneys under my supervision. I was told to include critical comments about those whose recommendations ran counter to the political will of the administration and to improve evaluations of those who were politically favored.
Morale plummeted, resulting in an alarming exodus of career attorneys. In the last two years, 55% to 60% of attorneys in the voting section have transferred to other departments or left the Justice Department entirely.
At the same time, career staff were nearly cut out of the process of hiring lawyers. Control of hiring went to political appointees, so an applicant’s fidelity to GOP interests replaced civil rights experience as the most important factor in hiring decisions.
For decades prior to this administration, the Justice Department had successfully kept politics out of its law enforcement decisions. Hopefully, the spotlight on this misconduct will begin the process of restoring dignity and nonpartisanship to federal law enforcement. As the 2008 elections approach, it is critical to have a Justice Department that approaches its responsibility to all eligible voters without favor.
Nixon’s Obstruction of Justice
It later came to light that Nixon was not being truthful. A few days after the break-in, for instance, he arranged to provide hundreds of thousands of dollars in “hush money” to the burglars.
Then, Nixon and his aides hatched a plan to instruct the Central Intelligence Agency (CIA) to impede the FBI’s investigation of the crime. This was a more serious crime than the break-in: It was an abuse of presidential power and a deliberate obstruction of justice.
Meanwhile, seven conspirators were indicted on charges related to the Watergate affair. At the urging of Nixon’s aides, five pleaded guilty to avoid trial the other two were convicted in January 1973.
What Was the Saturday Night Massacre?
One of the most controversial episodes of the Watergate scandal, the so-called “Saturday Night Massacre” came on October 20, 1973, when embattled President Richard Nixon fired Special Prosecutor Archibald Cox and accepted the resignations of Attorney General Elliot Richardson and Deputy Attorney General William Ruckelshaus.
The “massacre” stemmed from an inquiry into the notorious June 1972 break-in at the Watergate complex, in which five Nixon operatives were caught trying to bug the Democratic National Committee headquarters. Archibald Cox, a Harvard law professor and former U.S. solicitor general, was tapped to investigate the incident in May 1973. He soon clashed with the White House over Nixon’s refusal to release over 10 hours of secret Oval Office recordings, some of which implicated the president in the break-in.
On October 20, 1973, in an unprecedented show of executive power, Nixon ordered Attorney General Elliot Richardson and Deputy Attorney General William Ruckelshaus to fire Cox, but both men refused and resigned their posts in protest. The role of attorney general then fell to Solicitor General Robert Bork, who reluctantly complied with Nixon’s request and dismissed Cox. Less than a half hour later, the White House dispatched FBI agents to close off the offices of the Special Prosecutor, Attorney General and Deputy Attorney General.
Nixon’s attack on his own Justice Department came with grave consequences. More than 50,000 concerned citizens sent telegrams to Washington, and 21 members of Congress introduced resolutions calling for Nixon’s impeachment.
In the face of overwhelming protest, Nixon relented and appointed Leon Jaworski as the new Watergate prosecutor. Jaworski resumed the investigation and eventually secured the release of the Oval Office recordings in July 1974, when the Supreme Court ruled the tapes did not fall under executive privilege. Faced with the so-called “Smoking Gun” of his involvement in Watergate, Nixon resigned the presidency on August 8, 1974.
The probe began in 2004 or earlier. By 2006 the name "Corrupt Bastards Club" (alternatively "Corrupt Bastards Caucus") began being used to designate Alaska legislators implicated in the federal corruption (a.k.a., "Polar Pen") investigation. The nickname originated in the spring of 2006 as a barroom joke among Alaska legislators after the publication of a guest article by Lori Backes, executive director of the All Alaska Alliance. It ran in Alaska's three largest newspapers and named 11 lawmakers who had received large campaign contributions from executives of the oilfield services company VECO Corporation. VECO had a long history of making substantial campaign contributions to Alaska politicians. The article also named Senate President Ben Stevens, son of U.S. Senator Ted Stevens, as having received large consulting fees from VECO.  
In her article, Backes detailed the extent of political campaign donations contributed between 1998 and 2004 by the top seven VECO executives to Alaska lawmakers who were in office at the time her article was written. The figures were based on reports made by contributors and recipients to the Alaska Public Offices Commission.
- John Cowdery (R-Anchorage), Senate Rules Committee Chair: $24,550. Pete Kott (R-Eagle River), former speaker of the House: $21,300.
- Representative Norman Rokeberg (R-Anchorage), House Rules Committee Chair: $18,000.
- Representative Vic Kohring (R-Wasilla), House Oil and Gas Committee Chair: $14,708. Frank Murkowski (R): $6,500 (excluding donations to prior U.S. Senate races)
- Representative (later state Senator and currently Lieutenant Governor) Kevin Meyer (R-Anchorage), House Finance Committee Co-Chair: $12,300.
- Representative Mike Chenault (R-Nikiski), House Finance Committee Co-Chair: $12,000.
- Representative (later Senator) Lesil McGuire (R-Anchorage), House Judiciary Committee Chair: $12,000.
- Senator Con Bunde (R-Anchorage), Senate Labor and Commerce Committee Chair: $11,500.
- Senator Lyda Green (R-Wasilla), Senate Finance Committee Co-Chair: $28,000.
- Representative Mike Hawker (R-Anchorage): $8,050.
- Representative Tom Anderson (R-Anchorage), House Labor and Commerce Chair: $8,000.
Additionally, Backes noted the consulting contract Senate President Ben Stevens (R-Anchorage) had with VECO Corporation and financial relationships other lawmakers had with other companies active in the oil and gas industry, including ConocoPhillips and ASCG Incorporated, the latter a subsidiary of the Alaska Native-owned Arctic Slope Regional Corporation which is heavily involved in oilfield business in Alaska. 
According to Chenault, one of the lawmakers named in the article: "Somebody walked up [in the bar] and said, 'You corrupt bastards,' and that name stuck." Hats with the label "CBC," standing for "Corrupt Bastards Club" or "Corrupt Bastards Caucus," were later printed up, but according to Chenault "that was the extent of the CBC deal." 
In the first week of August 2006, an ill Representative Carl E. Moses returned to the state capitol in Juneau after receiving medical treatment in Anchorage, to cast a critical vote that ensured passage of a bill giving tax breaks to the oil industry. The vote took place, shortly after Moses received campaign contributions from Bill Allen and five other VECO executives, the only Democrat to receive any from that source. 
The FBI had set up in a Baranof hotel suite just three blocks away from the capitol building in Juneau. There they videotaped VECO's CEO Bill Allen, peeling off bills for legislators to stuff in their pockets. According to the Juneau Empire, Ray Metcalfe said he had spoken with FBI agents about the case, but didn't know how the feds first got interested in Alaska."I think the jury is still out on what started this," said Metcalfe. Juneau Mayor Bruce Botelho, the longest-serving attorney general in the state's history, appointed during the successive administrations of Republican Wally Hickel, and Democrat Tony Knowles said it appeared that those state agencies responsible for ensuring ethical government had failed to do their jobs, but it was too soon to tell for sure. 
Raids on legislative offices Edit
On August 31 and September 1, 2006, the FBI served some 20 search warrants in Anchorage, Juneau Wasilla, Eagle River, Girdwood, and Willow, primarily on the district and capitol offices of several legislators. Republican legislators whose offices were searched included Senator John Cowdery, Senate President (and son of U.S. Senator Ted Stevens) Ben Stevens, Representatives Vic Kohring, Bruce Weyhrauch, Pete Kott and Bev Masek as well as Democratic Senator Donny Olson.    The warrants permitted the search of computer files, personal diaries, Alaska Public Offices Commission reports, and any other items showing evidence of financial ties between legislators and the oilfield services company VECO Corporation,  as well as clothing items with the phrase "Corrupt Bastards Club" or its related acronym printed on it.  A search warrant for Sen. Olson's Juneau office, made available by his office to the public, specifically authorized the seizure of documents relating to VECO Corporation executives Bill Allen (CEO), Richard Smith (vice president), Pete Leathard (president), and Roger Chan (chief financial officer). The warrant also authorized the seizure of clothing, including hats, bearing the logos or phrases "VECO," "Corrupt Bastards Caucus," "Corrupt Bastards Club," or "CBC" printed on them. 
John Cowdery was indicted  for bribery and extortion under official right and bribery concerning programs that receive federal funding.
Management of corruption investigation Edit
It later emerged that the investigation of political corruption in Alaska was being managed not by the Alaska U.S. Attorney's office, but rather by the Public Integrity Section of the U.S. Department of Justice in Washington, D.C., with FBI agents working out of the FBI building in downtown Anchorage acting as lead investigators. The FBI raids on legislative offices on August 31 and September 1 involved dozens of extra FBI agents brought up from the Lower 48 but returned home after the initial round of searches and interviews. Other agencies, including the Internal Revenue Service, were also involved. 
The Public Integrity Section, created in 1976, is charged with the investigation of election fraud, misconduct by federal judges, and corruption of elected officials in all levels of government — federal, state, and local.   While U.S. Attorney offices also investigate and prosecute public corruption cases, because U.S. Attorneys are political appointees in local jurisdictions, they are sometimes recused from particular cases.  
Brooke Miles, then-executive director of the Alaska Public Offices Commission, reported that the FBI began to collect public campaign reports and financial disclosure records on selected Alaska legislators perhaps a year prior to the raids, and returned at the start of 2006 to obtain such records for all legislators. 
Investigation widens Edit
The FBI conducted a second search on the legislative office of Republican State Senator Ben Stevens on September 18, 2006, seizing among other items documents related to the proposed natural gas pipeline and the oil and gas tax law which had been discussed in the Alaska Legislature during the regular and two special legislative sessions in 2006, as well as items related to his work on the Senate Ethics Committee and documents related to fisheries. Stevens disclosed to the Anchorage Daily News that the FBI seized items during both searches of his office related to the Alaska Fisheries Marketing Board (AFMB), created under legislation by Ben Steven's father, U.S. Senator Ted Stevens, to distribute federal grants to promote Alaska seafood.  Ben Stevens had been chair of AFMB until early in 2006.  He had received consulting fees from at least three organizations that had benefited from the grants  — over $250,000 during the time he served on the board.  Other documents related to fisheries were also seized in the September 18 FBI search.  One of these was a copy of an affidavit by Victor Smith, a salmon fisherman from Friday Harbor who alleged that Stevens had been paid by a seiners association to lobby his father and that he failed to disclose that income as required by Alaska law. 
Private corrections Edit
In October 2006, Rep. Vic Kohring's attorney, Wayne Anthony Ross, provided the Anchorage Daily News with a copy of the search warrant that had been served on Kohring on August 31, as well as a list of items seized. The warrant showed that federal investigators were also interested in information related to developer Marc Marlow and correspondence between Kohring and the Alaska Department of Corrections. Ross told the Anchorage Daily News that his client had been questioned by the FBI about Cornell Companies' (purchased by GEO Group in 2010) effort, in cooperation with VECO Corporation, to build a for-profit prison in Whittierl That scheme failed due to gubernatorial and bipartisan legislative opposition. The Daily News observed, "Those documents, though lacking detail or context, suggest that the probe is wide-ranging and not focused on any one company, issue or individual." 
Tom Anderson arrested on federal bribery and extortion charges Edit
The observation by the Anchorage Daily News and other news organizations, that the probe had a wider focus than legislators' ties to the VECO Corporation, was confirmed on December 7, 2006, when outgoing Representative Tom Anderson - whose offices had not been targeted by the August and September FBI raids — was arrested on allegations of extortion, bribery, conspiracy, and money laundering involving his support of a private corrections company. Anderson was accused of accepting money from the company, CorPlan, through a shell corporation set up by a lobbyist, identified in Anderson's charging documents as "Lobbyist A," and later identified as prominent Anchorage lobbyist Bill Bobrick, to disguise the source of payments. Unbeknownst to Anderson or Bobrick, their contact with the private corrections company was a confidential source of the FBI working undercover. According to federal prosecutors, the private corrections company — unidentified in the court documents but widely believed to be Cornell Companies — was not implicated in the plot, and had been unaware of the FBI investigation until Anderson's indictment and arrest. The confidential informant in the case was Frank Prewitt, a former commissioner of the Alaska Department of Corrections. After leaving state employ, Prewitt took positions first with halfway house entrepreneur Bill Weimar, serving on his Allvest corporation board of directors, and subsequently with Cornell Companies, which bought out Weimar to establish its Alaska operations.  Court documents filed on March 22, 2010 in a criminal appeal indicated that Prewitt had been paid $200,000 for his assistance in investigating and convicting his former associates.  Allvest
Subpoenas of fisheries businesses Edit
Additional subpoenas were served on fishery executives involved with federal funding and the United Fishermen of Alaska who have had business associations with Ben Stevens. 
|Name||Indicted||Pleaded guilty/convicted||Sentenced||Sentence||Started serving||Current location|
|Bill Allen||Yes||May 7, 2007||October 28, 2009||Three years, $750,000 fine||January 12, 2010 ||Released from New Mexico halfway house on November 22, 2011. |
|Tom Anderson||Yes||July 9, 2007||October 15, 2007||60 months||December 3, 2007||Released to halfway house 2/1/11, from probation 5/11. |
|Bill Bobrick||Yes||May 16, 2007||November 27, 2007||5 months||Released June 6, 2008|
|Jim Clark||Yes||March 4, 2008||Court vacated indictment and plea||Vacated||All charges dropped|
|John Cowdery||Yes||December 19, 2008||March 10, 2009||6 months house arrest, $25,000 fine||Died July 13, 2013 |
|Vic Kohring||Yes||November 1, 2007||May 8, 2008||3½ years||Pleaded guilty after previous conviction overturned, sentenced to time already served, plus one year of supervised release. Many appeals denied.|
|Pete Kott||Yes||September 25, 2007||December 7, 2007||72 months||January 17, 2008||Pleaded guilty after previous conviction was overturned, sentenced to time already served, three years supervised release, fine of $10,000|
|Beverly Masek||Yes||March 12, 2009||September 23, 2009||six months+3 years probation||November 11, 2009||Released May 7, 2010|
|Donald Olson||No||Refused bribe, still serving in Senate|
|Rick Smith||Yes||May 7, 2007||October 28, 2009||21 months, $10,000 fine||Released July 20, 2011.|
|Ben Stevens||No||In December 2018, Stevens was named by incoming Republican Governor Mike Dunleavy, as an advisor on legislation, transportation and fishing. |
|Ted Stevens||Yes||October 27, 2008||Convictions voided, no retrial was held||Died in plane crash, August 9, 2010|
|Jerry Ward||No||Headed Alaska Trump presidential campaign|
|Bill Weimar||Yes||August 11, 2008||Nov 12, 2008||6 months and $75,000 fine||Completed federal sentence on July 2, 2009, and afterward, probation. Captured in February 2011, after fleeing to Cuba and Mexico after Sarasota, Florida, child sexual abuse allegations.  Charges eventually dropped. |
|Bruce Weyhrauch||Yes||Federal charges dismissed, guilty plea to state charges, $1,000 fine, received probation||Private practice of law in Juneau|
|Don Young||No||Still serving in Congress|
Indictment, arrest of Kott, Kohring and Weyhrauch Edit
On May 4, 2007, former Representatives Pete Kott (R-Eagle River) and Bruce Weyhrauch (R-Juneau) were arrested and charged with bribery, extortion wire and mail fraud. Then-Representative Vic Kohring (R-Wasilla) later turned himself in and was similarly charged. All three were arraigned in Juneau. Charges against the three involved allegations of soliciting and receiving money and favors from VECO chief executive officer Bill Allen and chief lobbyist and V.P. Richard L. "Rick" Smith in return for their votes on an oil tax law favored by the VECO that was the subject of vigorous debate during the 2006 legislative session and two special sessions in 2006. 
Kott and Kohring were both convicted, but their convictions were later vacated due to misconduct by the prosecuting attorneys. In 2011 both agreed to plead guilty. Prosecutors agreed to recommend both men be sentenced to time served and subject to conditions upon release.  Kohring lost his latest bid to appeal his conviction, turned down unanimously by an en banc hearing of the 9th Circuit Court of Appeals. 
After federal charges were dropped, Weyhrauch pleaded guilty to a misdemeanor lobbying violation, his sentence was suspended, and he was fined $1,000. It was estimated he had spent $300,000 on his defense.  [https://www.adn.com/politics/article/former-alaska-rep-weyhrauch-cited-ethics-committee-corruption-charges/2016/02/18/ In 2016, the state senate's Select Committee on Legislative Ethics found that Weyhrauch had committed ethics violations a decade earlier and requested he pay a fine of $18,100 and write and publicize a letter of apology regarding the situation.  Two years later, the requests for the apology and payment of the fine were waived. 
Of the original seven lawmakers who had their legislative offices searched, only Democratic State Senator Don Olson (D-Nome), who had refused a bribe, was not implicated in the scandal, and helped the FBI to make their case.
VECO executives indicted, plead guilty Edit
On May 7, 2007, VECO CEO Bill Allen and Vice President for Community & Government Affairs Rick Smith pleaded guilty in U.S. District Court in Anchorage to charges of extortion, bribery, and conspiracy to impede the Internal Revenue Service.
In addition to the three politicians arraigned on May 4, the new court filings mention illegal payments made to a former state senator, named as "Senator B" in court documents, who received over $240,000 from VECO Corp. over several years, income which Senator B reported as "consulting fees." In the May 7 guilty pleas by Allen and Smith, they admit that the only work done by Senator B in exchange for the funds was advancing VECO's agenda in the state legislature. The only former state senator who matches the information contained in court documents about Senator B is former Senator Ben Stevens (R-Anchorage), son of U.S. Senator Ted Stevens (R-Alaska). Ben Stevens was not indicted.  Another state senator discussed in the court documents, identified as "Senator A" in court documents, was identified by sources as John Cowdery. 
On May 11, 2007 at a meeting of the VECO Corporation's board of directors and shareholders, Bill Allen resigned as the company's CEO and chairman of its board of directors, citing "the best interest of the corporation, all of our companies, and our many valued employees and customers." Allen's daughter Tammy Kerrigan replaced him as chairman of the board a new CEO had not yet been chosen. At the same meeting, Rick Smith resigned from his position as vice president of community and government affairs. It was not clear from the VECO statement if Smith's position will be refilled. 
Lobbyist Bill Bobrick charged, pleads guilty in Tom Anderson bribery probe Edit
On May 14, 2007, William (Bill) Bobrick, a prominent municipal lobbyist in Anchorage, was charged with one count of conspiracy to commit extortion, bribery, and money laundering in the same scheme for which Rep. Tom Anderson was indicted the previous December. Bobrick was the creator of the shell corporation, Pacific Publishing, through which money was allegedly funneled to Anderson. Bobrick also received money through the scheme.  Bobrick appeared in U.S. District Court in Anchorage on May 16, where he entered a guilty plea. Bobrick was sentenced after the trial of Tom Anderson, scheduled to begin June 25, where Bobrick testified for the prosecution. Under sentencing guidelines Bobrick faced a possible 2 to 2½ years imprisonment, but his sentence was reduced to six months in return for his cooperation with prosecutors. 
In reaction to Bobrick's part in the corruption scandal, the Anchorage Assembly on May 22, 2007 unanimously approved a measure which prohibits individuals who have been convicted of a felony within the past 10 years of registering as a lobbyist with the Municipality of Anchorage. 
US Senator Ted Stevens investigated, charged, convicted and verdict vacated Edit
Ted Stevens was also investigated by both the FBI and IRS. Authorities investigated an extensive remodeling project done at the Stevens "chalet" in the small town of Girdwood, Alaska. Unusual aspects of this remodeling project that were investigated were that the project was supervised by VECO, and invoices for the work on the residence were first sent to VECO before being sent to the senator. Some of the issues investigated were the extent of work done on the home, exactly whom had paid the invoices from the construction contractors and their subcontractors, and the purpose and extent of VECO's involvement.
On the morning of July 30, 2007, agents from the FBI and the IRS raided the residence in Girdwood. Photographs and video of the inside and outside of the residence were taken. Wine bottles in the home were photographed as objects of interest. The raid continued well into the evening. 
On July 29, 2008, just a day short of the anniversary of the Girdwood raids, Stevens was charged with seven counts of false statements on financial disclosures involving VECO, the oil services company in Alaska, and the renovations done on his home.
On October 27, 2008, U.S. Senator Ted Stevens was successfully prosecuted in the District of Columbia. He was found guilty by a jury of all seven felonies against him. The case had been prosecuted by Principal Deputy Chief Brenda K. Morris, Trial Attorneys Nicholas A. Marsh and Edward P. Sullivan of the Criminal Division's Public Integrity Section, headed by Chief William M. Welch II, and Assistant U.S. Attorneys Joseph W. Bottini and James A. Goeke from the District of Alaska. Eight days after the verdict, Stevens narrowly lost re-election to Anchorage's Democratic then-Mayor Mark Begich.  He had held his seat since December 24, 1968.
On February 13, 2009, U.S. District Judge Emmet Sullivan cited William M. Welch II, Brenda K. Morris, Patty Merkamp Stemler (Chief of the Justice Department Criminal Appeals Section), and another Justice Department attorney for contempt of court. Judge Sullivan amended the contempt citation on February 14, 2009 to remove the fourth attorney. The contempt citation was for failing to turn over to defense counsel for former Senator Stevens documents relating to a complaint by Chad Joy, a Federal Bureau of Investigation agent, alleging misconduct by prosecutors in the Stevens case. Judge Sullivan had ordered, on February 3, 2009, that the documents in question be given to defense counsel. In the contempt citation, Judge Sullivan described the conduct of the Justice Department's lawyers as "outrageous."  
On February 16, 2009, the Justice Department stated in a court filing that it had removed six attorneys from "litigation relating to allegations of misconduct in (the case against former Senator Stevens)." The six attorneys were William M. Welch II, Brenda K. Morris, Nicholas A. Marsh, Edward P. Sullivan, Joseph W. Bottini, and James A. Goeke. 
On April 1, 2009 Attorney General Eric Holder decided to drop all charges against Stevens after a review of the case turned up alleged evidence of prosecutorial misconduct, including failure to fully disclose potentially exculpatory evidence in response to a Brady motion by Stevens' attorneys. Since Stevens had not yet been sentenced, Holder's action effectively vacated Stevens' conviction. 
Prosecutor Marsh, although he had been removed as the team leader of the Alaska probe's prosecution, well prior to the Stevens debacle, had become episodically depressed as a result of the extreme length of the investigation into the conduct of the team involved in the Senator's case. This was exacerbated by his consequent reassignment to less favorable international duties, pending resolution of the inquiry, though he had anticipated complete exoneration. On September 26, 2010, not long after he returned from a trip to Europe, he hung himself in the basement of his home in Takoma Park, Maryland. 
Stevens meanwhile, 17 months after leaving office, died in a corporate executive airplane crash on August 9, 2010. He had been en route to a remote hunting lodge in western Alaska. 
US drops Jim Clark corruption conviction Edit
In 2008, Clark admitted that he was aware that Veco Corp had paid $10,000 for a political poll to gauge the popularity of then-incumbent Governor Murkowski, and was charged with "honest services fraud". Before he was sentenced, the US Supreme Court ruled that the statute was drafted with unconstitutional vagueness and henceforth will only cover "fraudulent schemes to deprive another of honest services through bribes or kickbacks supplied by a third party who ha[s] not been deceived." Since Clark was guilty of neither bribes nor kickbacks, all charges were voided.
Bill Weimar pleads guilty to making illegal campaign contributions Edit
On August 11, 2008, the Anchorage Daily News reported that Bill Weimar, a former operator of halfway houses for inmates in Alaska was indicted and charged with two felony counts alleging campaign finance violations. Weimar funneled money to an unnamed consultant for an unnamed state legislative candidate in 2004. Weimar agreed to plead guilty to the charges, and in exchange prosecutors will ask for a reduced sentence, a nonbinding agreement that the judge is free to modify.  Weimar subsequently pleaded guilty in federal court in Anchorage. His sentencing occurred on November 12, 2008. Weimar was sentenced to 6 months in federal prison and ordered to pay a US $75,000 fine.  In 2010, Weimar who was on federal probation after serving six months in prison for illegal campaign contributions, allegedly forced sex on a six-year-old Sarasota girl. After being indicted on January 23, 2011 he fled to Havana, Cuba. From there he flew to Cancun, Mexico where he was arrested on his yacht and extradited back to Florida. 
Jerry Ward implicated in probe Edit
On December 15, 2008, the Anchorage Daily News reported that former Alaska state senator Jerry Ward had been implicated in the probe. Ward allegedly convinced a witness in the trial against Senator Ted Stevens to lie about an immunity deal in court to ensure that he was included in it and would therefore not be prosecuted. According to federal prosecutors, Ward had been under investigation for some time over his relationship with Bill Weimar, who was convicted of two felony counts in the matter and sentenced to prison. While he was presumed to be under continued investigation, Ward was not charged. 
John Cowdery pleads guilty Edit
On December 18, 2008 KTUU Anchorage Channel 2, an affiliate of NBC, reported that John Cowdery had agreed to change his plea from not guilty to guilty in exchange for some of the charges against him being dropped. As part of his plea agreement, Cowdery did not have to testify against other defendants in the case. No sentencing parameters were agreed upon as a result of this agreement. Cowdery subsequently pleaded guilty in federal court on December 19, 2008.  Due in part to his age and alleged infirmity, he was only sentenced to 6 months of house arrest and fined US$25,000. Cowdery died on July 13, 2013.
Beverly Masek pleads guilty Edit
On March 13, 2009, the Anchorage Daily News reported that former Alaska state representative Beverly Masek had pleaded guilty to soliciting and accepting at least $4,000 in bribes from VECO Corp. Masek, who originally rose to fame by competing in the Iditarod Trail Sled Dog Race while still known by her maiden name of Beverly Jerue, was first elected to the House in 1994. Masek represented a district consisting of the northern and western reaches of the Matanuska-Susitna Borough in the House from 1995 to 2005 before being defeated by Mark Neuman in the 2004 primary election. Masek was sentenced on September 23, 2009. 
Justice Department Scandal - History
The United States has never won the World Cup, and for decades we have been considered a second-rate soccer culture--the U.S. squad is currently ranked 28th in the world. But, by golly, the U.S. rule of law, and more important the enforcement of it, can indeed be world class and reach far beyond U.S. shores. This is what seven members of Fédération Internationale de Football Association (FIFA), soccer's ruling body, learned in Zurich when, at the behest of the feds, they were hauled in by Swiss cops at their posh lakeside hotel to answer a 47-count indictment unsealed in Brooklyn, New York.
The indictment alleges racketeering, wire fraud, and money-laundering conspiracies, among other charges related to the world's most popular sport and its greatest event, the World Cup. In the U.S., four sports marketing executives were charged with paying more than $150 million in bribes and kickbacks to get media and marketing rights to FIFA soccer tournaments, including the World Cup and the Gold Cup, which has been played in the U.S.
Those arrested in Zurich had gathered to attend FIFA's annual meeting, where the organization's imperious president, Sepp Blatter, had been expected to be reelected for a fifth term. Blatter was not charged.
For decades, Blatter and company have managed to sweep enough allegations of corruption under the rug at FIFA headquarters in Lausanne to build another alp. But this mountain of reprehension came crashing down in part because the Confederation of North, Central American and Caribbean Association Football (CONCACAF) did business in the U.S. Jeffrey Webb and Jack Warner, the current and former CONCACAF presidents, respectively, were among those indicted. Chuck Blazer, the former longtime CONCACAF general secretary, had previously pleaded guilty and has been cooperating with the feds in the investigation.
Think of Blatter as the unholy pope of football. Although he isn't the head of any nation, he travels with head-of-state status and rules FIFA's 209-member body as a potentate. Blatter's power doesn't come from soccer's powers, such as Germany or England. In FIFA's organization, every nation's football association (FA) has one vote, whatever that nation's size or soccer relevance. Curacao is just as mighty as Brazil in this world. So Blatter has showered millions of dollars of FIFA's money on many of its smallest or poorest FAs, commanding fealty everywhere from Vanuato to Venezuela. Where that money goes hasn't always been clear.
The DOJ said the corruption dates back 24 years, although FIFA's critics will say the history of malfeasance goes even longer than that. "The indictment alleges corruption that is rampant, systemic, and deep-rooted both abroad and here in the United States," said Attorney General Loretta E. Lynch. "It spans at least two generations of soccer officials who, as alleged, have abused their positions of trust to acquire millions of dollars in bribes and kickbacks."
Hours after the U.S. action, Swiss authorities revealed an investigation related to FIFA's awarding of the 2018 World Cup to Russia and the 2022 tournament to Qatar--a nation where gametime temperatures could easily reach 120 degrees. The Swiss AG raided FIFA's headquarters and removed electronic and paper documents.
Why would FIFA allow a soccer tournament to be staged in the desert? In the summer? FIFA had previously conducted its own investigation into bribery allegations, hiring Michael Garcia, a former attorney for the southern district of New York. After Garcia delivered a 430-page report, FIFA issued a 42-page summary and concluded, "nothing wrong here." Garcia swiftly denounced the summary as containing "numerous materially incomplete and erroneous representations of the facts." FIFA refused to release the full report. This time Swiss authorities, who have been hampered by that nation's privacy laws, now have ammunition to look into allegations that the Qataris, as well as the Russians, bribed their way in.
Devin Nunes' new "unmasking" scandal exposes the corruption within Bill Barr's DOJ
By Heather Digby Parton
Published May 19, 2021 9:52AM (EDT)
Bill Bar, Devin Nunes, and Donald Trump (Getty Images/AP Photo/Salon)
I was just wondering the other day whatever happened to Congressman Devin Nunes. During the first two years of the Trump administration, the California Republican was Trump's most loyal henchman, running interference for the White House from within the House Intelligence Committee where as chairman he worked diligently to sabotage any meaningful investigations of the president's curious dealings with Russia during the 2016 campaign. For a time you couldn't turn on the TV without seeing Nunes' doleful, hangdog, visage defending Trump through thick and thin.
Nunes had been a member of the Trump transition and in another era would have had to recuse himself from any of the investigations into Trump and Russia since the transition period was heavily implicated. He did not do that and instead jumped right in and proved himself to be a willing spinner on Trump's behalf, denying that he had any knowledge of calls between Trump's adviser Michael Flynn and Russian Ambassador Sergei Kislyak. There were indeed calls and they ended Flynn's short tenure as National Security Adviser. It turned out that the White House had requested this allegedly independent committee chairman and others to pooh-pooh the Russia scandal in the media and Nunes, being an eager soldier, did as he was ordered.
But Devin Nunes will likely be remembered for one of the lamest political gambits in history for what's known as his "Midnight Ride."
On March 4th 2017, just a little over a month after Trump took office, he tweeted that Obama had "wire tapped" Trump Tower "just before the victory" and called it McCarthyism. This led to a frenzy among right-wingers to prove that Obama had illegally used the power of the federal government to spy on Trump. The night after Nunes was riding in a car when he got a text message that was so urgent he made the Uber driver stop and he raced over to the White House. He met with a couple of young Trump toadies named Ezra Cohen-Watnick and Michael Ellis, who hysterically informed him that they had found evidence of "unmasking" of Americans' identities intercepted on foreign surveillance calls during the Trump transition. The following morning Nunes held a strange press conference in which he declared "I have confirmed that additional names of Trump Transition Team members were unmasked," and raced to the White House to "brief" the president. Afterward, he held another press conference in front of the White House and told the press that Trump felt "somewhat vindicated" by what he had to say. The press asked him whether he was more bothered by the surveillance or the "unmasking" and he replied that he was especially bothered by the latter. To the question of whether it was appropriate for the Chairman of the House Intelligence Committee which was investigating the Russian interference in the 2016 election to rush over to brief the president he said, "the President needs to know that these intelligence reports are out there I have a duty to tell him that."
The thing is, he obviously wasn't telling the White House anything. They had given him the information the night before.
Nunes mumbled incoherently when confronted with his lie the next day saying, "the president didn't invite me over, I called down there and invited myself because I thought he needed to understand what I say and he needed to get that information." Two days later he finally admitted what he did, releasing a statement through his spokesman, but once again declaring his deep concerns about "unmasking" during the Obama administration and insisting that he had been on the trail even before the White House called him over in the middle of the night to show him the evidence.
He eventually recused himself from the investigation without ever really recusing. And it was clear from that point on that nothing the Intelligence Committee did going forward would be kept confidential. Devin Nunes was Trump's man on the inside and there was nothing anyone could do about it. He issued his own highly anticipated "memo" that revealed nothing, called for the impeachment of FBI Director Christopher Wray, flogged the discredited "Uranium One" scandal, railed against the FISA process, and went hard after the Department of Justice, saying at one point, "I hate to use the word 'corrupt,' but they've become at least so dirty that who's watching the watchmen? Who's investigating these people? There is no one."
After the Republicans lost their House majority, Nunes was apparently working on the Rudy Giuliani project to get Ukrainian dirt on Joe Biden. At least that's what Lev Parnas, Giuliani's accomplice currently under indictment, said when it was reported that they had spoken on the phone. And he was suing people who criticized him, from news organizations to watchdog groups and even a fruit farmer who called him a "fake farmer." But his most famous lawsuit was against a satirical Twitter account that called itself "Devin Nunes's Cow" which was, of course, dismissed.
We now know that Nunes's thin-skinned crusade wasn't just his personal folly.
It turns out that he had friends in high places using the full force of the federal government to help him "unmask" another Twitter handle called @NunesAlt another parody account that made fun of the very sensitive congressman. Two weeks after Trump's defeat last November, the New York Times reported this week, the Justice Department got a grand jury subpoena, a unique power that requires no judge to sign off, to demand that Twitter hand over the identity of @NunesAlt. Twitter refused, citing free speech concerns and the fact that despite the government assertion that this person violated federal law by issuing a threat, they could not produce any evidence that they had. The Justice Department under Merrick Garland later withdrew the subpoena.
But this is yet another example of the level of partisan corruption throughout the Trump administration — especially in former Attorney General William Barr's Justice Department.
Barr's last-minute refusal to help Trump overturn the election was nothing more than a last-ditch effort to redeem some small piece of his reputation but he continued to do Trump and his allies' dirty work nonetheless. Trump and his henchmen spent years caterwauling about the alleged "Deep State" conspiring against them for political purposes yet at every turn we found them abusing their power to punish their political opponents. Remember, it was Nunes himself who said of the DOJ, "I hate to use the word 'corrupt,' but they've become at least so dirty that who's watching the watchmen?" I guess he knew what he was talking about for once.
Heather Digby Parton
Heather Digby Parton, also known as "Digby," is a contributing writer to Salon. She was the winner of the 2014 Hillman Prize for Opinion and Analysis Journalism.
National Health Care Fraud Takedown Results in Charges Against 601 Individuals Responsible for Over $2 Billion in Fraud Losses
Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Alex M. Azar III, announced today the largest ever health care fraud enforcement action involving 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings. Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s arrests. In addition, HHS announced today that from July 2017 to the present, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other Federal health care programs, which includes 587 providers excluded for conduct related to opioid diversion and abuse.
Attorney General Sessions and Secretary Azar were joined in the announcement by Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Deputy Director David L. Bowdich of the FBI, Assistant Administrator John Martin of the Drug Enforcement Administration (DEA), Deputy Inspector General Gary Cantrell of the HHS Office of Inspector General (OIG), Deputy Chief Eric Hylton of IRS Criminal Investigation (CI), Centers for Medicare and Medicaid Services (CMS) Deputy Administrator and Director of the Center for Program Integrity Alec Alexander and Director Dermot F. O’Reilly of the Defense Criminal Investigative Service (DCIS).
Today’s enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit in conjunction with its Medicare Fraud Strike Force (MFSF) partners, a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. In addition, the operation includes the participation of the DEA, DCIS, IRS-CI, Department of Labor, other various federal law enforcement agencies, and State Medicaid Fraud Control Units.
The charges announced today aggressively target schemes billing Medicare, Medicaid, TRICARE (a health insurance program for members and veterans of the armed forces and their families), and private insurance companies for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department. According to the CDC, approximately 115 Americans die every day of an opioid-related overdose.
“Health care fraud is a betrayal of vulnerable patients, and often it is theft from the taxpayer,” said Attorney General Sessions. “In many cases, doctors, nurses, and pharmacists take advantage of people suffering from drug addiction in order to line their pockets. These are despicable crimes. That’s why this Department of Justice has taken historic new steps to go after fraudsters, including hiring more prosecutors and leveraging the power of data analytics. Today the Department of Justice is announcing the largest health care fraud enforcement action in American history. This is the most fraud, the most defendants, and the most doctors ever charged in a single operation—and we have evidence that our ongoing work has stopped or prevented billions of dollars’ worth of fraud. I want to thank our fabulous partners with the FBI, DEA, our Health Care Fraud task forces, HHS, the Defense Criminal Investigative Service, IRS Criminal Investigation, Medicare, and especially the more than 1,000 federal, state, local, and tribal law enforcement officers from across America who made this possible. By every measure we are more effective at finding and prosecuting medical fraud than ever.”
“Every dollar recovered in this year’s operation represents not just a taxpayer’s hard-earned money—it’s a dollar that can go toward providing healthcare for Americans in need,” said HHS Secretary Azar. “This year’s Takedown Day is a significant accomplishment for the American people, and every public servant involved should be proud of their work.”
According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare, Medicaid, TRICARE, and private insurance companies for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of submitting a total of over $2 billion in fraudulent billings. The number of medical professionals charged is particularly significant, because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims. Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.
“Healthcare fraud touches every corner of the United States and not only costs taxpayers money, but also can have deadly consequences,” said FBI Deputy Director Bowdich. “Through investigations across the country, we have seen medical professionals putting greed above their patients’ well-being and trusted doctors fanning the flames of the opioid crisis. I want to thank the agents, analysts and our law enforcement partners in every field office who work each and every day to stop these criminals and hold them accountable for their actions.”
“DEA is committed to ending the opioid crisis occurring in our communities and preventing prescription drug misuse,” said DEA Assistant Administrator Martin. “DEA will continue to work with our partners every day to protect our citizens while ensuring that patients have adequate access to these critical medications.”
“This year’s operations, focusing on opioid-related schemes, spotlight the far-reaching impact of health care fraud,” said HHS Deputy Inspector General Cantrell. “Such crimes threaten the vitally important Medicare and Medicaid programs and the beneficiaries they serve. Though we have made significant progress in our fight against health care fraud our efforts are not complete. We will continue to work with our partners to protect the health and safety of millions of Americans.”
“It takes a special kind of person to prey on the sick and vulnerable as happened in many of these health care fraud schemes,” said Deputy Chief Hylton. “Medical professionals and others callously placed individuals and vital healthcare services in harm’s way simply because of greed. IRS-CI special agents continue to work side-by-side with other federal, state and local law enforcement officers to uncover these schemes and hold these criminals accountable for their actions.”
“CMS makes it a top priority to protect the health and safety of millions of beneficiaries who depend on vital federal healthcare programs,” said Alec Alexander, deputy administrator and director of the Center for Program Integrity. “CMS’ Center for Program Integrity collaborates closely with our law enforcement partners to safeguard precious taxpayer dollars. Under Administrator Seema Verma, we will continue to strengthen this partnership with law enforcement in order to ensure the integrity and sustainability of these essential programs that serve millions of Americans.”
“Heath care fraud wounds our service members and veterans alike, as they rely upon and rightfully expect uncompromised care through the Department of Defense’s TRICARE Program,” said DCIS Director O’Reilly. “Investigations that culminated in enforcement actions over the past several days underscore the steadfast commitment of the Defense Criminal Investigative Service and our investigative partners to vigorously investigate fraud impacting TRICARE. We remain vigilant in our efforts to ensure the high standards of care our service members, military retirees, and their dependents deserve while safeguarding American taxpayer dollars.”
The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in 10 locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,700 defendants who collectively have falsely billed the Medicare program for over $14 billion.
For the Strike Force locations, in the Southern District of Florida, 124 defendants were charged with offenses relating to their participation in various fraud schemes involving over $337 million in false billings for services including home health care and pharmacy fraud. In one case, an owner, medical director, and two employees of a sober living facility were charged with conspiracy to commit health care and wire fraud, substantive counts of health care fraud, and substantive counts of money laundering. The indictment alleges a scheme that illegally recruited patients, paid kickbacks, and defrauded health care benefit programs for widespread fraudulent urine testing. During the course of the fraudulent scheme, the facility submitted more than $106 million in claims for substance abuse treatment services.
In the Central District of California, 33 defendants were charged for their roles in schemes to defraud insurance programs out of more than $660 million. For example, one indictment in a compounding pharmacy fraud case alleges an attorney/marketer paid kickbacks and offered incentives such as prostitutes and expensive meals to two podiatrists in exchange for prescriptions written on pre-printed prescription pads, regardless of the medical need for the prescriptions. Once the prescriptions were filled, members of the conspiracy submitted approximately $250 million in fraudulent claims to federal, state, and private insurers for the compounded drugs.
In the Southern District of Texas, 48 individuals were charged in cases involving more than $291 million in alleged fraud. Among these defendants are a pharmacy chain owner, managing partner, and lead pharmacist charged with a drug and money laundering conspiracy. According to the indictment, the coconspirators used fraudulent prescriptions to fill bulk orders for over one million pills of hydrocodone and oxycodone, which the pharmacy, in turn, sold to drug couriers for millions of dollars. In the Northern District of Texas, a home health agency owner was arrested on a criminal complaint for a $2.6 million health care fraud scheme.
In the Eastern District of Michigan, 35 defendants face charges for their alleged roles in fraud, kickback, money laundering and drug diversion schemes involving approximately $197 million in false claims for services that were medically unnecessary or never rendered. In one case, a physician was charged in separate kickback conspiracies with two home health agency owners, which resulted in more than $12 million in fraudulent insurance billings.
In the Northern District of Illinois, 21 individuals were charged for various fraud schemes involving home health and dental services. These schemes involved allegedly over $54 million in fraudulent billing. One case alleges a home health fraud and kickback conspiracy, which resulted in more than $6.2 million paid by Medicare based on the fraudulent billings.
In the Eastern District of New York, 13 individuals were charged with participating in a variety of schemes including kickbacks, services not rendered, identity theft and money laundering involving over $38 million in fraudulent billings. For example, the owner of a Brooklyn ambulette company was charged in a $7 million conspiracy stemming from the alleged payment of kickbacks for the referral of patients, who subjected themselves to purported physical and occupational therapy and other services, and were transported by the ambulette company.
In the Middle District of Florida, 21 individuals were charged with participating in a variety of schemes involving more than $21 million in fraudulent billings. In one case, a physician and clinic owner were charged with a conspiracy to defraud Medicare of more than $2.8 million for fraudulent home health billings.
In the Southern Louisiana Strike Force, operating in the Middle and Eastern Districts of Louisiana as well as the Southern District of Mississippi, 42 defendants were charged in connection with health care fraud, drug diversion, and money laundering schemes involving more than $16 million in fraudulent billings. One case alleges that three pharmacy owners and a nurse practitioner conspired to unlawfully dispense controlled substances and defraud TRICARE and private insurance companies out of $12 million.
In the Corporate Strike Force, five defendants were charged in the Middle District of Tennessee with a kickback conspiracy at a durable medical equipment company, which allegedly resulted in more than $1 million in kickbacks and over $2.5 million in fraudulent billings to Medicare.
In addition to the Strike Force locations, today’s enforcement actions include cases and investigations brought by an additional 46 U.S. Attorney’s Offices, including the execution of search warrants in various investigations conducted by the Central and Northern Districts of California, Middle District of Florida, Southern District of Georgia, Western District of Kentucky, Eastern District of Michigan, Western District of North Carolina, Eastern and Western Districts of Texas, Eastern and Western Districts of Virginia, and Western District of Washington.
In the Northern and Southern Districts of Alabama, 15 defendants were charged for their roles in eight health care fraud schemes involving compounding pharmacy fraud and unlawful distribution of controlled substances.
In the Eastern District of California, four defendants were charged for their roles in two health care fraud schemes, one of which included forged prescriptions.
In the Southern District of California, seven defendants, including a physician, were charged for their roles in three health care fraud schemes and one scheme involving identity theft and services that were not rendered.
In the District of Colorado, a defendant was charged with health care fraud related to billings to Medicaid and Medicare.
In the District of Connecticut, three defendants, including two medical professionals, were charged for their roles in two schemes involving compounding drugs and unlawful distribution of Schedule II and IV controlled substances.
In the District of Delaware, a physician/owner of a pain management clinic was charged with unlawfully prescribing more than two million dosage units of Oxycodone products.
In the District of Columbia, a durable medical equipment company owner was charged with defrauding Medicaid of $9.8 million.
In the Northern District of Florida, four defendants were charged in a scheme to defraud TRICARE and other private insurance companies out of over $8 million for medically unnecessary compounded creams and pills.
In the Northern, Middle, and Southern Districts of Georgia, 12 defendants, including two physicians, were charged in nine health care fraud, drug diversion, or compounding pharmacy schemes involving over $13.5 million in fraudulent billings.
In the District of Idaho, three defendants, all of who are medical professionals, were charged for their roles in three separate fraud schemes involving controlled substances.
In the Central and Southern Districts of Illinois, seven defendants were charged in six separate schemes to defraud the Medicaid program.
In the Northern District of Indiana, eight defendants were charged in various health care fraud schemes to defraud both the Medicare and Medicaid programs.
In the Northern District of Iowa, two defendants – both medical professionals – were charged for their roles in two opioid-related schemes.
In the Districts of Kansas and the Northern and Western Districts of Oklahoma, 12 defendants, including four physicians, were charged in various unlawful distribution of controlled substances schemes. In the Western District of Oklahoma, one case marks the district’s first time charging unlawful distribution of controlled substances resulting in a death.
In the Eastern and Western Districts of Kentucky, 12 defendants, including five medical professionals, were charged in various schemes involving health care fraud, unlawful distribution of controlled substances, aggravated identity theft, and money laundering. One case involved the operation of two false-front medical clinics.
In the Districts of Maine and Vermont, two defendants were charged for their roles in two schemes to defraud various government programs including Medicare, Medicaid, and ones run by the HHS’ Administration for Children and Families.
In the District of Nebraska, seven defendants, including one physician, were charged in five separate schemes to defraud Medicare, Medicaid, and various HHS programs.
In the District of Nevada, four defendants, including three medical professionals were charged with conspiracies to commit health care fraud and distribute controlled substances.
In the District of New Jersey, eight defendants, including a New York doctor, an anesthesiology technologist for a Philadelphia hospital, and the owner of a medical billing company, were charged for their roles in five schemes to defraud private insurance companies of over $16 million.
In the Southern District of New York, two defendants were charged in schemes involving health care fraud or drug diversion.
In the Middle District of North Carolina, two defendants were charged with a conspiracy to defraud Medicare out of over $4 million.
In the Southern District of Ohio, three defendants – all medical professionals – were charged for their roles in two health care fraud schemes, one of which involved illegal drug distribution and kickbacks.
In the Eastern and Middle Districts of Pennsylvania, 12 defendants were charged for their roles in three drug diversion schemes.
In the Western District of Pennsylvania, four defendants – all physicians – were charged in various health care fraud and drug diversion schemes. One scheme involved 32,000 dosage units of buprenorphine.
In the District of Rhode Island, one defendant was charged for participating in a theft and aggravated identity theft scheme.
In the District of South Carolina, three defendants were charged for their separate roles in a conspiracy to possess with the intent to distribute fentanyl.
In the District of South Dakota, two defendants were charged in separate cases, one of which involved a scheme to defraud the Indian Health Service.
In the Middle District of Tennessee, 10 defendants were charged in two separate schemes, including a conspiracy to fraudulently obtain oxycodone.
In the Eastern District of Texas, two defendants were charged for their role in health care fraud schemes to defraud the Medicare and Medicaid programs.
In the District of Utah, two defendants were charged in two cases, one of which involved a $31 million scheme to defraud Medicare and Medicaid.
In the Western District of Virginia, eight defendants were charged for their alleged roles in health care fraud schemes. One $45 million scheme to defraud Medicaid involved falsification of documents in patient files.
In the Eastern District of Washington, a dentist and another individual were indicted for distributing and conspiring to distribute hydrocodone and tramadol without a legitimate medical purpose.
In the Eastern District of Wisconsin, three defendants were charged in a scheme involving the unlawful distribution of controlled substances and aggravated identity theft.
In addition, in the states of Arizona, Arkansas, California, Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Kansas, Louisiana, Maine, Michigan, Missouri, Mississippi, Nevada, New York, Oklahoma, Pennsylvania, Texas, Vermont, and Washington, 97 defendants have been charged with defrauding the Medicaid program out of over $27 million. These cases were investigated by each state’s respective Medicaid Fraud Control Units. In addition, the Medicaid Fraud Control Units of the states of California, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Nevada, North Carolina, Ohio, Texas, Tennessee, and Virginia participated in the investigation of many of the federal cases discussed above.
The cases announced today are being prosecuted and investigated by U.S. Attorney’s Offices nationwide, along with Medicare Fraud Strike Force teams from the Criminal Division’s Fraud Section and from the U.S. Attorney’s Offices in the Southern District of Florida, Eastern District of Michigan, Eastern District of New York, Southern District of Texas, Central District of California, Eastern District of Louisiana, Northern District of Texas, Northern District of Illinois, Middle District of Louisiana, and the Middle District of Florida and agents from the FBI, HHS-OIG, DEA, DCIS, IRS-CI, Department of Labor, other various federal law enforcement agencies, and state Medicaid Fraud Control Units.
A complaint, information, or indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Additional documents related to this announcement will shortly be available here:
This operation also highlights the great work being done by the Department of Justice’s Civil Division. In the past fiscal year, the Department of Justice, including the Civil Division, has collectively won or negotiated over $2 billion in judgements and settlements related to matters alleging health care fraud.
The scandal in Washington no one is talking about
The deadly-but-forgotten government gun-running scandal known as “Fast and Furious” has lain dormant for years, thanks to White House stonewalling and media compliance. But newly uncovered emails have reopened the case, exposing the anatomy of a coverup by an administration that promised to be the most transparent in history.
At least 20 other deaths or violent crimes have been linked to Fast and Furious-trafficked guns.
A federal judge has forced the release of more than 20,000 pages of emails and memos previously locked up under President Obama’s phony executive-privilege claim. A preliminary review shows top Obama officials deliberately obstructing congressional probes into the border gun-running operation.
Fast and Furious was a Justice Department program that allowed assault weapons — including .50-caliber rifles powerful enough to take down a helicopter — to be sold to Mexican drug cartels allegedly as a way to track them. But internal documents later revealed the real goal was to gin up a crisis requiring a crackdown on guns in America. Fast and Furious was merely a pretext for imposing stricter gun laws.
Only the scheme backfired when Justice agents lost track of the nearly 2,000 guns sold through the program and they started turning up at murder scenes on both sides of the border — including one that claimed the life of US Border Patrol Agent Brian Terry.
While then-Attorney General Eric Holder was focused on politics, people were dying. At least 20 other deaths or violent crimes have been linked to Fast and Furious-trafficked guns.
Brian Terry was killed in a 2010 firefight near the Arizona-Mexico border. AP
The program came to light only after Terry’s 2010 death at the hands of Mexican bandits, who shot him in the back with government-issued semiautomatic weapons. Caught red-handed, “the most transparent administration in history” flat-out lied about the program to Congress, denying it ever even existed.
Then Team Obama conspired to derail investigations into who was responsible by first withholding documents under subpoena — for which Holder earned a contempt-of-Congress citation — and later claiming executive privilege to keep evidence sealed.
But thanks to the court order, Justice has to cough up the “sensitive” documents. So far it’s produced 20,500 lightly redacted pages, though congressional investigators say they hardly cover all the internal department communications under subpoena. They maintain the administration continues to “withhold thousands of documents.”
Even so, the batch in hand reveals the lengths to which senior Obama operatives went to keep information from Congress.
The degree of obstruction was “more than previously understood,” House Oversight and Government Reform Chairman Jason Chaffetz said in a recent memo to other members of his panel.
“The documents reveal how senior Justice Department officials — including Attorney General Holder — intensely followed and managed an effort to carefully limit and obstruct the information produced to Congress,” he asserted.
They also indict Holder deputy Lanny Breuer, an old Clinton hand, who had to step down in 2013 after falsely denying authorizing Fast and Furious.
Their efforts to impede investigations included:
- Devising strategies to redact or otherwise withhold relevant information
- Manipulating media coverage to control fallout
- Scapegoating the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) for the scandal.
For instance, a June 2011 email discusses withholding ATF lab reports from Congress, and a July 2011 email details senior Justice officials agreeing to “stay away from a representation that we’ll fully cooperate.”
Though Obama prides himself on openness, transparency and accountability, the behavior of his administration belies such lofty principles.
The next month, they went into full damage-control mode, with associate Deputy Attorney General Matt Axelrod warning an ATF official that providing details about Fast and Furious “strikes us as unwise.”
Then, in late August 2011, another email reveals that Holder had instructed his staff to have an official at ATF “close the door to his office” to prevent information about the mushrooming scandal from leaking.
Talking points drafted for Holder and other brass for congressional hearings made clear that Justice intended to make ousted ATF officials the fall guys for the scandal.
“These (personnel) changes will help us move past the controversy that has surrounded Fast and Furious,” Assistant Attorney General Ron Weich wrote in August 2011.
In an October 2011 email to his chief of staff, moreover, Holder stated that he agreed with a strategy to first release documents to friendly media “with an explanation that takes the air out” of them, instead “of just handing them over” to Congress.
“Calculated efforts were made by senior officials to obstruct Congress,” Chaffetz fumed.
“Over the course of the investigation,” he recounted, “the Justice Department has provided false information, stonewalled document requests, produced scores of blacked-out pages and duplicate documents and refused to comply with two congressional subpoenas.”
Though Obama prides himself on openness, transparency and accountability, the behavior of his administration belies such lofty principles. “Transparency should not require years of litigation and a court order,” Chaffetz pointed out.
Obama insists Fast and Furious is just another “phony” scandal whipped up by Republicans to dog his presidency. What does his heir apparent Hillary Clinton think?
The anti-gun zealot has been silent on the gun-proliferation scandal. But then, she’s been busy sweeping subpoenaed emails under the rug of her own scandal.
Paul Sperry is former Washington bureau chief for Investor’s Business Daily and author of “Infiltration” and “Muslim Mafia.”