It was F. Scott Fitzgerald who famously said that the test of a first-rate intelligence is the ability to hold two opposing thoughts in mind at the same time and still retain the ability to function. Applied here, it would work something like this: Fox News isn’t a legitimate news organization and it should in no way be afforded any of the benefits or considerations normally given to legitimate news organizations, up to and including the umbrella of unequivocal constitutional protection real journalism outlets can expect; that said, the Department of Justice and the White House are 100% wrong in their seizing of Fox News phone records, monitoring of Fox correspondent James Rosen’s comings and goings, and their naming of him as a potential co-conspirator in the leaking of national security information.

Of all the horseshit scandals President Obama’s enemies on the right have attempted to float since he took office four years ago, the persecution and threatened prosecution of newspeople allegedly involved in reporting on state secrets is the only one that has any actual merit. Drones are nonsense; Benghazi is the most ado about a non-story in recent Republican memory; the IRS looking into conservative political groups potentially trying to scam the government shouldn’t surprise a soul; and of course birth certificates, teleprompters, and Marines-holding-umbrellas are just fucking laughable. But the notion of the U.S. government monitoring journalists for doing the very jobs that make them who and what they are is frightening and it should anger just about everyone, regardless of his or her political affiliations.

It’s ironically no big secret that Fox News will do anything to bring down the Obama administration and prop up its confederates in the Republican party proper, to the point of even creating stories and scandals out of thin air; it’s for this reason that no one with a brain ever should have had a problem with Obama refusing to treat Fox as if it were just like any other news operation. But that doesn’t mean the DOJ should have wide latitude to make a reporter — any reporter — worry about being prosecuted for treason and doing prison time simply for being a reporter. Obviously, it’s important that even journalists understand that they have to behave responsibly, particularly when they’re reporting on sensitive subjects — however, it’s impossible to overstate how unwise it is for the U.S. government and the Obama administration in particular to make threats against the messengers in their quest to stamp out what they claim is an illegal message.

Collecting phone logs from the AP and closely watching James Rosen at Fox, all without contacting either outlet during the respective investigations, is something entirely new for the government, and something undeniably chilling. While national security is important and that shouldn’t be diminished, journalists do generally have special dispensation simply by virtue of their constitutional protection and what’s supposed to be their often adversarial relationship with those in power. Sure, the White House can behave as if that adversarial relationship works both ways and can treat journalists as hostile, but it had better be prepared to face the consequences of that tack. Fox News’s audience and its stable of frothing-at-the-mouth contributors don’t need a legitimate reason to loudly proclaim that the right is being persecuted by the Obama administration, but likewise the White House should be smart enough to understand that it doesn’t need the image of real journalists suddenly siding with Fox News and coming to the network’s defense. Just because Glenn Greenwald and his insufferable ilk are going to be claiming villainy at every turn regardless doesn’t mean Obama should give them any ammo.

On that note, another dichotomy at work here is the outrage from Obama’s enemies over what the White House and the Justice Department have been doing with regard to plugging leaks. Again, the White House is wrong here and has no viable excuse, but it’s laughable to watch the very same people who took state security so seriously during the Bush years that they engaged in the despicable politics of personal vendetta — outing Valerie Plame, leaving any journalist not willing to get onboard the Iraq crazy train out in the cold — now railing with righteous indignation against some of the very tactics they would’ve once applauded. Fox News, in fact, played right along with the Bush-era policy of manipulating and demonizing the legitimate media. Conservatives as a whole, meanwhile, would’ve happily strung up, say, Julian Assange and absolutely considered Daniel Ellsberg an enemy of the state, but the government sets its sites on the official news service of Red State America and suddenly there’s hell to pay.

The problem is, this time those coming to the defense of Fox News — be they conservative or liberal or none-of-the-above — are right. James Rosen’s a sniveling little turd and he works for a news outlet that’s anything but. Still, he needs to be free to report the word of whistleblowers because it’s not simply his freedom that’s at stake.

It’s the freedom of all journalists to do their jobs. And when those jobs are done correctly, it serves the freedom of all of us.

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Former Barclays Chief Executive Bob Diamond arrives at Parliament on July 4, 2012 in London, England. (Image credit: Getty Images via @daylife)

by Cora Currier: Last week, the British bank Barclays was slapped with $450 million in fines and penalties for manipulating information used to set a critical interest rate.

Settlements filed by government regulators in the U.S. and the U.K. show this manipulation happened in two ways: first, Barclays’ traders attempted to steer rates up or down in order to benefit trades they had made to profit off of those rates. Separately, the filings show that during the financial crisis, Barclays tried to counter reports that it had financial troubles by changing the interest rate it reported.

If you’re just catching up to this, here’s some background on the scandal, and how we’ll likely see government action on other banks besides Barclays.

What are these interest rates? How could one bank manipulate them?

The Libor, or London Inter Bank Offered Rate, is a short-term interest rate that’s meant to reflect the cost of borrowing between banks. A panel of banks submits estimates daily to a trade group, the British Bankers’ Association. Thomson Reuters compiles an average rate for them, discarding any very high or low submissions. That rate is used to set rates for an estimated $360 trillion worth of financial products, all the way down to consumer loans and mortgages. (An analogous process sets the Euribor, for Eurozone banks. For help cutting through all the jargon, see this helpful explainer from American Public Media.)

And why did Barclays traders want to mess with them?

Emails quoted by government regulators show Barclays traders asking employees in charge of submitting estimates for Libor and Euribor to go low or high on a given day (sample: “No probs2026low it is today” and “Come over one day after work and I’m opening a bottle of Bollinger! Thanks for the libor.”) Some of the attempts involved former Barclays traders at other banks.

The traders wanted to influence the rates in order to profit on positions they had taken in particular trades and to benefit Barclays’ derivatives portfolio as a whole. Emails and other records show that this occurred frequently from 2005 to 2007 and occasionally until 2009. It’s not clear when, and by how much, the traders’ requests actually affected the rates, though the U.S. Justice Department says they sometimes did.

Robert Diamond, Barclays’ CEO, has called these actions “reprehensible” and the bank maintained in a statement prepared for a British parliamentary committee that no one “above desk supervisor level” knew about it at the time. The government’s complaints fault Barclays for not setting controls on how the Libor was submitted.

Barclays’ other Libor problem

Much attention’s been paid to the scheming traders and their emoticon-filled emails but regulators’ complaints also focus on another aspect of Libor manipulation: How Barclays tried to shore up market confidence in the bank’s stability during the financial crisis.

As the filings detail, in 2007, Barclays started submitting higher estimates for the Libor, saying they reflected rocky market conditions. But relative to other banks, which were still submitting low rates, Barclays looked risky. The bank maintains it was hamstrung because other banks were going artificially low. “A number of banks were posting rates that were significantly below ours that we didn’t think were correct,” Diamond told a committee of British lawmakers Wednesday.

According to regulators, Barclays management issued a directive that Barclays should not be an “outlier,” and that submitters should lower their estimates to bring Barclays “within the pack.”

In October 2008, with the financial crisis at full bore, Barclays was again on the higher end of rate submissions. That month, according to filings, a senior Barclays manager spoke with a Bank of England official about Libor rates, and the idea that they might be artificially low. Hearing of this conversation, other Barclays managers “formed the understanding” that the Bank of England wanted Barclays to lower its submissions.

This week, Barclays released an email confirming the conversation was between Diamond and Bank of England’s deputy governor Paul Tucker. It was another Barclays manager, Jerry del Missier, who determined what he thought Tucker’s comments meant, Barclays says.

On Wednesday, Diamond maintained he did not know about the artificial rate-lowering until the settlement documents were released last month.

The Barclays fallout so far

Barclays settled for approximately $450 million, of which $160 million goes to the U.S. Justice Department, $200 million to the Commodity Futures Trading Commission, and the rest to the U.K.’s Financial Services Authority. Barclays’ chairman resigned Monday, shortly followed by Diamond and del Missier. As part of the agreement with the Justice Department, Barclays admitted to a set of facts, which may help private lawsuits over Libor manipulation, as this New York Times legal explainer lays out. (Here’s the Justice Department’s “statement of facts,” as well as orders of settlement from the CFTC and the FSA).

The Serious Fraud Office in Britain is considering a criminal investigation and the Justice Department could also potentially bring charges against individuals at the bank.

A problem bigger than Barclays

The Barclays penalty is the first to result from a multi-agency investigation into Libor meddling at more than a dozen banks that reaches back to 2007.

The investigation’s next steps hinge on a few questions: Which other banks were traders at Barclays communicating with when they attempted to steer rates? Was similar behavior happening at other banks? And were other banks artificially suppressing rates during the financial crisis?

In his testimony, Diamond stuck by the line that everybody was doing it. And indeed, the revelation that banks might have tried to keep their rates artificially low during the crisis isn’t altogether new2014in 2008, the Wall Street Journal reported that banks were submitting much lower rate estimates than other market measures would have suggested. In 2008, the British Bankers’ Association said it had received suggestions that banks were exhibiting “herd” behavior in setting low rates.

The Washington Post notes that a manipulated Libor doesn’t just have repercussions for investors and borrowers, but also for regulatory efforts; by keeping rates low during the financial crisis, the banks were trying to quell concerns about the health of the banking system and “stave off calls for additional regulation.”

So who else is being investigated?

Revelations about other banks have been trickling out over the past year:

· UBS previously made agreements to cooperate with several international investigations in exchange for leniency on potential criminal charges.

· Citigroup was also a target of investigation. Earlier this year, it emerged that a few traders at Citigroup and UBS tried to manipulate Libor rates for the Yen.

· The Times of London reported that Royal Bank of Scotland could soon be hit with a fine of up to $150 million for related charges.

· Bank of America also reportedly received a subpoena last year from regulators as part of the investigation. JPMorgan Chase, Credit Suisse, HSBC and others were also on the Libor-setting panel during the period being investigated.

· Last fall, European regulators seized documents from Deutsche Bank and others regarding manipulation of the Euribor.

Private lawsuits over Libor are already underway. Last summer, Charles Schwab filed a suit alleging anti-trust violations against many Libor-setting banks and at least one class action has been filed alleging that Libor manipulation meant banks paid “unduly low interest rates to investors.”

This article was originally published on Propublica.

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John Edwards: Off the hook (Photo credit: Wikipedia)

From YahooNews:

The Justice Department announced Wednesday it will give up its criminal case against former Democratic presidential candidate John Edwards.

In May, a deadlocked North Carolina federal jury found Edwards not guilty of one charge of accepting illegal campaign donations. The group couldn’t reach a decision on five other felony charges, including one alleging that Edwards knowingly used $1 million in secret campaign donations from wealthy donors to support his mistress. Edwards could have faced 30 years in prison if convicted.

Assistant Attorney General Lanny A. Breuer said in a statement that the Justice Department put forward its best case. ”The jurors could not reach a unanimous verdict on five of the six counts of the indictment, however, and we respect their judgment. In the interest of justice, we have decided not to retry Mr. Edwards on those counts.”

The prosecution was short on proof that Edwards knew about the payments or that he knew that accepting them was illegal. “As noted by nearly every campaign finance lawyer who considered the matter, this was a lousy case,” Melanie Sloan, director of the campaign finance watchdog group Citizens for Responsibility and Ethics told the Associated Press after the trial. “All the salacious details prosecutors offered up to prove that Edwards is, indeed, despicable, were not enough to persuade the jury to convict him.”

A copy of the dismissal order can be found here.

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JP Morgan's CEO Jamie Dimon in the hot seat

The US justice department opened an investigation into how JP Morgan lost more than $2bn in poorly managed trading at its London office as the bank’s embattled boss, Jamie Dimon, saw off attempts by shareholders to strip him of his role as chairman.

The justice department inquiry is at a preliminary stage and as yet there appears to be no evidence of criminal wrongdoing at the bank. The Securities and Exchange Commission has already launched a separate investigation and as political pressure for greater regulation of Wall Street banks begins to mount.

President Barack Obama appeared on the daytime talk show The View on Tuesday to call for Wall Street reform. “JP Morgan is the best, or one of the best managed, banks. You could have a bank that isn’t as strong, isn’t as profitable making those same bets and we might have had to step in. That’s exactly why Wall Street reform’s so important,” he said.

He said Dimon, the chairman and chief executive officer of JP Morgan, was “one of the smartest bankers we’ve got – and they still lost $2bn and counting.”

At the bank’s annual meeting, held at a tightly secured facility seven miles outside Tampa, Florida, shareholders quizzed Dimon on what went wrong. He said the losses “never should have happened” and that “all corrective actions” were being taken.

Forty-one percent of shareholders voted for a proposal by the American Federation of State, County and Municipal Employees (AFSCME) to appoint an independent chairman. Dimon also received 94.8% approval from shareholders on his $23m pay package from last year.

Lisa Lindsley, a AFSCME director, said the vote on splitting chairman and CEO was “pretty high” in favour considering most of the votes were in before the losses were announced last week. A similar proposal last year for an independent lead director got only 11.9% of the vote.

“We’re not saying he should be fired as CEO,” said Lindsley. But the “stakes were too high to continue business as usual,” she told shareholders. “An all-powerful CEO is his own boss,” she said. “Looking for an infallible CEO is a fool’s errand.”

Read more at the Guardian…

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The US Department of Justice has announced an investigation into the shooting of an unarmed black teenager in Florida in February.

Trayvon Martin, 17, was killed by neighbourhood watch volunteer George Zimmerman, 28, while walking through a gated community in a suburb of Orlando.

Mr Zimmerman says he was acting in self-defence.

Rallies were held on Monday to demand his arrest, and an online petition has more than 500,000 signatories.

Students protested in front of a court building in Sanford, the community where the shooting happened, and on the campus of Florida A&M University in Tallahassee.

Civil rights leader Al Sharpton plans a rally on Tuesday at a Sanford church.

More than 500,000 people have signed a global online petition asking for Mr Zimmerman, a neighbourhood watch volunteer, to be prosecuted. Read more at the BBC…

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