NY TIMES– Since the government took over Fannie Mae and Freddie Mac, taxpayers have spent more than $160 million defending the mortgage finance companies and their former top executives in civil lawsuits accusing them of fraud. The cost was a closely guarded secret until last week, when the companies and their regulator produced an accounting at the request of Congress.

The bulk of those expenditures — $132 million — went to defend Fannie Mae and its officials in various securities suits and government investigations into accounting irregularities that occurred years before the subprime lending crisis erupted. The legal payments show no sign of abating.

Documents reviewed by The New York Times indicate that taxpayers have paid $24.2 million to law firms defending three of Fannie’s former top executives: Franklin D. Raines, its former chief executive; Timothy Howard, its former chief financial officer; and Leanne Spencer, the former controller.

Late last year, Randy Neugebauer, Republican of Texas and now chairman of the oversight subcommittee of the House Financial Services Committee, requested the figures from the Federal Housing Finance Agency. It is the regulator charged with overseeing the mortgage finance companies and acts as their conservator, trying to preserve the company’s assets on behalf of taxpayers.

“One of the things I feel very strongly about is we need to be doing everything we can to minimize any further exposure to the taxpayers associated with these companies,” Mr. Neugebauer said in an interview last week.

It is typical for corporations to cover such fees unless an executive is found to be at fault. In this case, if the former executives are found liable, the government can try to recoup the costs, but that could prove challenging.

Read more about the Mortgage Giants Leaving Legal Bills to Taxpayers

Photo by flickr user respres

© COPYRIGHT NY TIMES, 2011

THE NEW YORK TIMES – Erik Prince, the founder of the international security giant Blackwater Worldwide, is backing an effort by a controversial South African mercenary firm to insert itself into Somalia’s bloody civil war by protecting government leaders, training Somali troops, and battling pirates and Islamic militants there, according to American and Western officials.

The disclosure comes as Mr. Prince sells off his interest in the company he built into a behemoth with billions of dollars in American government contracts in Iraq and Afghanistan, work that mired him in lawsuits and investigations amid reports of reckless behavior by his operatives, including causing the deaths of civilians in Iraq. His efforts to wade into the chaos of Somalia appear to be Mr. Prince’s latest endeavor to remain at the center of a campaign against Islamic radicalism in some of the world’s most war-ravaged corners. Mr. Prince moved to the United Arab Emirates late last year.

With its barely functional government and a fierce hostility to foreign armies since the hasty American withdrawal from Mogadishu in the early 1990s, Somalia is a country where Western militaries have long feared to tread. The Somali government has been cornered in a small patch of Mogadishu by the Shabab, a Somali militant group with ties to Al Qaeda.

This, along with the growing menace of piracy off Somalia’s shores, has created an opportunity for private security companies like the South African firm Saracen International to fill the security vacuum created by years of civil war. It is another illustration of how private security firms are playing a bigger role in wars around the world, with some governments seeing them as a way to supplement overtaxed armies, while others complain that they are unaccountable.

Click to continue reading full article on founder of Blackwater, Erik Prince, backing Somalia mercenaries.

Article by Mark Mazzetti and Eric Schmitt

© NY TIMES, 2011

 

 

The Story of Stuff Project presents the Story of Electronics: Why ‘Designed for the Dump’ is Toxic for People and the Planet. Annie Leonard teaches us that electronics today are hard to upgrade, easy to break and impractical to repair. Her short film takes us through the life of electronics – before and after they are throw away – and explains the consequences of this kind of production and consumption.

 

 

THE TIMES-PICAYUNE – The president’s Oil Spill Commission has concluded that systemic failures, not a rogue BP management style, caused the disastrous Gulf of Mexico oil well blowout in April.

“The blowout was not the product of a series of aberrational decisions made by rogue industry or government officials that could not have been anticipated or expected to occur again,” says the commission’s final report, released late Wednesday. “Rather, the root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur.”

That conclusion could prove devastating to the oil and gas industry, which is waiting with bated breath to see whether a new regulatory agency will issue new drilling permits in time for idle rigs currently under contract through the spring to return to work in the Gulf of Mexico.

The chapter of the report focusing on what caused the April 20 blowout makes it clear that poor management, mostly by BP, doomed the rig, leading to the death of 11 rig workers and considerable damage to the Gulf from nearly 5 million barrels of spilled oil.

But the chapter also raises serious questions about the actions of Halliburton, a leading provider of cement to seal wells, and also takes aim at rig owner Transocean for a December 2009 “near-miss” in the North Sea that had nothing to do with BP.

Click to continue reading the full article on the Oil Spill Commission’s findings.

Article by David Hammer

©COPYRIGHT THE TIMES-PICAYUNE, 2011

Photograph by Flicker user: Deepwater Horizon Response

LOS ANGELES TIMES – Another big California health insurer has stunned individual policyholders with huge rate increases — this time it’s Blue Shield of California seeking cumulative hikes of as much as 59% for tens of thousands of customers March 1.

Blue Shield’s action comes less than a year after Anthem Blue Cross tried and failed to raise rates as much as 39% for about 700,000 California customers.