Saturday, March 14, 2009

SURRENDER! Swindler & Enablers

Swing Out Sister Surrender
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Madoff stands alone, takes blame for Ponzi scheme


BY ANTHONY M. DESTEFANO; Staff writers John Riley and Rocco Parascandola contributed to this story.

March 13, 2009

From bail to jail - in just minutes.

Swindler Bernard Madoff stood all alone yesterday when he took the heat for carrying out the biggest Ponzi scheme in Wall Street history.

"I am so deeply sorry," Madoff told Judge Denny Chin, who revoked his bond and ordered him to the federal Metropolitan Correctional Center, in Manhattan, to await sentencing this summer.

For nearly 10 minutes, the 70-year-old Madoff stood in U.S. District Court in Manhattan as scores of his cheated investors watched. He described how for years he had picked their pockets from the very moment he started his investment adviser business. He implicated no one else in the scam, which he said started in the early '90s.

"Your honor, for many years, up until my arrest on Dec. 11, 2008, I operated a Ponzi scheme through the investment advisory side of my business," Madoff told Chin without a trace of emotion. "As I engaged in my fraud, I knew what I was doing was wrong, indeed criminal."

Then, in his first public act of contrition, with his family nowhere to be seen, Madoff apologized for his crimes "for which I am so deeply sorry and ashamed."

The admissions were a moment of high courtroom drama expected to consign Madoff to the rest of his life in prison when he is sentenced June 16. Madoff said he believed the scheme would end quickly and that he could pull himself and his clients out from under the self-destructive nature of the fraud, which pays off old investors with money taken from new ones.

"However, this proved difficult, and ultimately impossible, and as the years went by I realized that my arrest and this day would inevitably come," Madoff said.

Although Madoff's three-month period of luxurious house arrest on a $10-million bond since his December bust has been without incident, Chin revoked his bail, to the applause of investors.

At 11:14 a.m., as lead defense attorney Ira Sorkin watched, U.S. marshals handcuffed Madoff with his wrists behind his back and took him to the correctional center adjacent to the courthouse, said officials. Sorkin said he will appeal the bail revocation.

Madoff pleaded guilty to 11 charges - which included securities, mail and wire frauds and money laundering - in a scheme that investigators believe amounts to as much as $65 billion.

Although prosecutors said there is no plea agreement, a source familiar with the case who asked not to be named said Madoff is prepared to meet with special trustee Irving Picard to help his staff locate assets that could be used to pay back customers.

Madoff said his younger brother, Peter, and Madoff's sons, Andrew, 40, and Mark, 42, ran what he said was the "legitimate, profitable and successful" market making operation of his company.

However, law enforcement and legal sources have said investigators have focused some attention on Madoff's family, including his wife, Ruth, who has hired former federal prosecutor Peter Chavkin of Manhattan to represent her in civil lawsuits and regulatory matters.

No Madoff relatives have been accused of wrongdoing, but some employees are being scrutinized by investigators or approached for information.

Chin allowed some investors to speak in court, and one, George Nierenberg, glared at Madoff, stepped away from the lectern and taunted him to turn around and look at the victims. Madoff just stared straight ahead. Chin told Nierenberg to just address the court.

"I don't understand why conspiracy is not part of the plea," said Nierenberg.

Ronnie Sue Ambrosino, of Arizona, objected to the plea because she said it squandered an opportunity to find out who else was involved in the scheme.

Assistant U.S. Attorney Marc Litt told Chin the investigation was continuing and that there was no plea deal or agreement with Madoff, a signal that there is no arrangement to spare anyone.

Still, some lawyers were puzzled why Madoff decided to forgo indictment. Had he not, he could have stayed out on bail many more months, said Gerald Lefcourt, a Manhattan defense lawyer.

Jeffrey Lichtman, another Manhattan lawyer, said it is possible that Madoff is giving some unofficial cooperation.

"Why plead guilty to every single charge unless there is something in place to protect his family?" Lichtman said. "Just because there is no cooperation agreement doesn't mean there hasn't been a proffer [giving of information]."

Staff writers John Riley and Rocco Parascandola contributed to this story.


There will be a number of developments in the

Bernard Madoff case in the coming weeks and months. Here are some:

JAIL TERM BEGINS. Madoff will be processed into the Metropolitan Correctional Center in Manhattan where he is expected to be held until sentencing on June 16. If that center has space problems, he could be sent to the larger Metropolitan Detention Center in Sunset Park, Brooklyn.

PREPARATION FOR SENTENCING. Madoff will be interviewed by probation officials before sentencing, which is scheduled for June 16. Madoff faces a maximum of 150 years - or an effective life term - in prison and fines totaling at least in the millions of dollars.

EXPLORING NEW PROBES. Federal prosecutors will have to decide whether to pursue investigations of Madoff's family members - including his wife and two sons - or his former employees.

COOPERATION, OR NOT. Madoff himself will have to decide how much he wants to cooperate with special trustee Irving Picard, who is trying to locate assets and funds with which to repay investors.

ADDING UP RESTITUTION. Prosecutors and defense attorneys will file opposing papers dealing with the matter of restitution. Assistant U.S. Attorney Marc Litt calculated that $177 billion might be a restitution amount. Defense attorney Ira Sorkin said that number is a gross exaggeration.

CIVIL SUITS. Madoff will have to face numerous civil lawsuits filed by cheated investors. His wife, Ruth, already faces some lawsuits, said her attorney.


Lawyer, MDs Charged in Anna Nicole Smith Case

Two years after Anna Nicole Smith's fatal drug overdose, new developments: Authorities in Los Angeles have charged Smith's lawyer-turned-boyfriend, Howard K. Stern, and two of her doctors with conspiracy to provide the former Playboy Playmate with thousands of prescription pills before her death, the Associated Press reports.

Charges against Stern and physician Sandeep Kapoor -- who were released Thursday on $20,000 bond -- include conspiracy, unlawfully prescribing a controlled substance and prescribing, administering or dispensing a controlled substance to an addict. Investigators found 11 medications in Smith's hotel room at the time of her February 2007 death, some under aliases and others in Stern's name.

The second doctor, Khristine Eroshevich, is expected to surrender to authorities Monday. Her attorney acknowledged Eroshevich wrote some prescriptions using fake names for Smith, but said it was done for privacy reasons, not to commit fraud.

But prosecutors allege that all three "repeatedly and excessively furnished thousands of prescription pills to Anna Nicole Smith, often for no legitimate medical purpose." Stern faces six felony counts, and the doctors face seven each.

Wake judge orders home schoolers into public classrooms By Valonda Calloway


Mar. 12, 2009

A judge in Wake County said three Raleigh children need to switch from home school to public school. Judge Ned Mangum is presiding over divorce proceeding of the children's parents, Thomas and Venessa Mills.

Venessa Mills was in the fourth year of home schooling her children who are 10, 11 and 12 years old. They have tested two years above their grade levels, she said.

"We have math, reading; we have grammar, science, music,” Venessa Mills said.

Her lessons also have a religious slant, which the judge said was the root of the problem.

"My teaching is strictly out of the Bible, and it's very clear. It is very evident so I just choose to follow the Bible,” Venessa Mills said.

In an affidavit filed Friday in the divorce case, Thomas Mills stated that he "objected to the children being removed from public school." He said Venessa Mills decided to home school after getting involved with Sound Doctrine church "where all children are home schooled."

Thomas Mills also said he was "concerned about the children's religious-based science curriculum" and that he wants "the children to be exposed to mainstream science, even if they eventually choose to believe creationism over evolution."

In an oral ruling, Mangum said the children should go to public school.

"He was upfront and said that, 'It's not about religion.' But yet when it came down to his ruling and reasons why, 'He said this would be a good opportunity for the children to be tested in the beliefs that I have taught them,'" Venessa Mills said.

All sides agree the children have thrived with home school, and Vanessa Mills thinks that should be reason enough to continue teaching at home.

"I cannot sit back and allow this to happen to other home schoolers. I don't want it happening to my children,” Venessa Mills said.

Mangum said he wouldn't talk with WRAL News Thursday about the details of the case because he hasn't issued a written ruling yet. He said he expected to sign it in a few weeks.

An estimated 71,566 students were taught at home during the 2007-08 school year, according to figures released by the state Division of Non-Public Education. The enrollment amounts to about 4 percent of students ages 7 to 16 in North Carolina – students in that age range are required by state law to attend school. About two-thirds of the schools classified themselves as religious schools.

Home school students and their parents plan to come to Raleigh on March 24 to lobby at the state Legislature. They want to demonstrate they have a strong voice regarding education.

Friday, March 13, 2009

Bristol Palin & Fiancé Split By Lorenzo Benet


March 11, 2009

Bristol Palin and her fiancé Levi Johnston have broken up, two sources tell PEOPLE.

The split happened "a few weeks ago," according to a source close to the couple, but it's unclear what precipitated it. "It was a mutual thing," adds the source.

Bristol, the 18-year-old daughter of Alaska Governor Sarah Palin, spoke with FOX News in February and told Greta Van Susteren that she and Levi – who are parents to 2-month-old son, Tripp – expected to get married after they completed high school.

"It kind of just happened," says the source, referring to the split. "I thought they would stick it out. But I think they can work together to raise Tripp."

"I'm not sure what caused [them to break up] – it's common knowledge," says another source who knows the family.

Despite the breakup, Levi still sees the couple's son. Levi's dad, Keith Johnston, told PEOPLE recently that his son is a devoted and "proud father."

Plans for the Future
Bristol, meanwhile, is attending Wasilla High, taking a class to supplement course work she is completing at home. She also is considering enrolling in college next fall and studying nursing.

Bristol has been spotted around Wasilla shopping and exercising. She recently returned from Juneau where she was visiting her mother, who is spending the winter in the state's capital with daughter Piper and son Trig during the legislative session.

As for how she is holding up after the split, the source tells PEOPLE: "Bristol's doing okay. Tripp is fine."

Representatives for Gov. Palin have not returned calls for comment.

Obama Lied; the Economy Died by Tony Blankley


March 04, 2009

I am trying to capture the spirit of bipartisanship as practiced by the Democratic Party over the past eight years. Thus, I have chosen as my lead this proposition: Obama lied; the economy died. Obviously, I am borrowing this from the Democratic theme of 2003-08: "Bush lied, people died." There are, of course, two differences between the slogans.

Most importantly, I chose to separate the two clauses with a semicolon rather than a comma because the rule of grammar is that a semicolon (rather than a comma) should be used between closely related independent clauses not conjoined with a coordinating conjunction. In the age of Obama, there is little more important than maintaining the integrity of our language against the onslaught of Orwellian language abuse that is already a babbling brook and soon will be a cataract of verbal deception.

The other difference is that Bush didn't lie about weapons of mass destruction in Iraq. He merely was mistaken. Whereas Obama told a whopper when he claimed that he is not for bigger government. As he said last week: "As soon as I took office, I asked this Congress to send me a recovery plan by Presidents Day that would put people back to work and put money in their pockets, not because I believe in bigger government -- I don't."

This he asserted despite the fact that the budget he proposed the next day asks for federal spending as 28 percent of gross domestic product, higher by at least 6 percent than any time since World War II. Moreover, after 10 years, Obama's proposed spending as a percentage of GDP still would be 22.6 percent, nearly 2 percentage points higher than any year during the Bush administration despite the full costs of Sept. 11, the Iraq and Afghan wars and the rebuilding of New Orleans after Katrina.

Consider also this assertion in his not-quite-State of the Union address: "My administration has also begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs. As you can imagine, this is a process that will take some time. But we're starting with the biggest lines. We have already identified $2 trillion in savings over the next decade."

But lamentably, a few days later, The Washington Post reported: "A senior administration official acknowledged yesterday that the budget does not contain $2 trillion in spending cuts over the next decade. Instead, the figure represents Obama's total efforts at deficit reduction, including tax hikes (of more than $1 trillion) on families making over $250,000 a year. It also includes hundreds of billions of dollars 'saved' by not continuing to spend $170 billion a year in Iraq."

Only a big-government man would think of calling a trillion-dollar tax increase a spending cut or "saving." Technically, of course, it is true. A trillion-dollar tax increase would reduce spending by $1 trillion for those private citizens who were taxed. And from the perspective of the federal government, a trillion dollars taxed is a trillion dollars saved from the greed of the taxpayers who produced the wealth and might well want to spend or invest it in nongovernmental activities.

But the foregoing merely are pettifogging numbers compared with Obama's bigger ideas about energy and health care (regarding health care, more in future columns). Our president shares a fascinating idea about energy with most of what used to be known as the "small is beautiful" crowd. It is a curious phenomenon that one needs a very big government to enforce the beauty of small.

Obama's secretary of energy, Steven Chu, said last year that the price of electricity in America is "anomalously low." You see how much smarter that Nobel Prize winner is than you? You probably thought you already were spending enough on electricity and fuel.

And sure enough, Obama explained last week that in order to make alternative energy sources -- wind, solar, perhaps eventually human muscle power -- economically competitive, he intends to raise the price of carbon-based energy until it is so expensive that even solar power would be such a deal.

This level of destructive irrationality cannot be accomplished in the private sector. It would take a very big government indeed to bring such inanities into being. (Disclosure: Being rational, I give professional advice to carbon-based energy producers.)

If President Obama were to try to misrepresent his positions for the next four years, there would be nothing he could say that would approach the inaccuracy of his claim last week that he is not for big government. It is the essence of the man and his presidency. He doesn't like America the way it has been since its founding, and it would take an abusively big government to realize his dreams of converting America into something quite different. If you don't know that, you don't yet know Obama.

Tony Blankley served as press secretary to then Speaker of the U.S. House of Representatives, Newt Gingrich. He is the author of The West's Last Chance: Will We Win the Clash of Civilizations? .

Thursday, March 12, 2009

Just Say 'No' To Stimulus


By INVESTOR'S BUSINESS DAILY | Posted Wednesday, March 11, 2009 4:20 PM PT

Stimulus: South Carolina Gov. Mark Sanford is saying no to some federal bailout money. Good for him. Others now bellying up to the bailout bar will soon learn that oldest of maxims — there's no such thing as a free lunch.

Read More: Economy

Sure, Sanford would love some of the $787 billion in "stimulus" cash. But he understands what many others can't seem to grasp — that once the federal government gets into your business, it's hard to get it out again.

"Our objections to the so-called stimulus bill have been well-chronicled for the way it spends money that we don't have and for the way this printing of money could ultimately devalue the American dollar," he said.

Sanford: Profile in precaution.

Sanford: Profile in precaution.

Critics will note that Sanford will take some money from the government. He can't let his state suffer, while others gorge at the public trough. Still, any show of principle these days in rejecting federal aid is welcome.

"When one is in a hole the first order of business is to stop digging," Sanford wrote late last month, explaining his objections.

Hard to argue that logic. A number of other governors, all of them Republicans, have expressed similar concerns about the stimulus. To some, this smells of rank politics — GOP leaders trying to make President Obama look bad.

Fact is, the GOP may be the only hope left for reining in the out-of-control juggernaut that federal spending has become. On this, Sanford has credibility: In 1994, he was elected to the House, promising to limit himself to three terms and to be fiscally responsible.

As James Rose of McClatchy Newspapers recently pointed out, "While most of his colleagues abandoned their term-limit pledges, dropped plans to jettison the Department of Education and became less averse to federal spending, Sanford slept on a cot in his office, opposed most appropriations bills — and left after six years."

Compare that with, say, the government wastrels in California. They spent wildly for a decade, pushing their once-wealthy state close to bankruptcy with a $42 billion deficit. Now, they're licking their chops over the prospect of $31 billion in federal money to bail them out from the very problems they created.

Gov. Arnold Schwarzenegger hopes to get an added $20 billion by leveraging the state's outsized presence in the House and the Senate to get more grants in aid.

States that are greedily snapping up the taxpayers' money might want to ask someone who's been there, done that, what all this federal generosity means. Bankers, for example.

In recent weeks, a number of U.S. banks have asked to give back their taxpayer-funded government bailout money. The reason: too many strings attached. As the International Herald Tribune noted, the list of restrictions that comes with bailout money is a long one:

"U.S. financial institutions that are getting government bailout funds have been told to put off evictions and modify mortgages for distressed homeowners. They must let shareholders vote on executive pay packages. They must lower dividends, cancel employee training and morale-boosting exercises, and withdraw job offers to foreign citizens."

In short, despite White House denials, the federal government — not bankers — now runs our banking system. This is unhealthy in the extreme for our financial system and our economy.

Worse, it represents a kind of backdoor socialism and political control that will lead to a heavily regulated economy, and the dead hand of government lying on everything, smothering free enterprise with new rules, higher taxes and incompetent federal control.

So much for the pledges made that the government has "no interest" in interfering with the private sector. It does. Indeed, control, not "stimulus," is the plan.

The first step toward fiscal sobriety is saying no to money you don't deserve. No one gets anything for free. With every handout, you give up a little piece of control. The governors will learn this the hard way, as the federal government ties them down with new rules, requirements and diktats.

Wednesday, March 11, 2009

South Carolina's Sanford to become first governor to reject funds By James Rosen


March 10, 2009

WASHINGTON — South Carolina Gov. Mark Sanford is expected Wednesday to become the first governor to formally reject some of the federal stimulus money earmarked by Congress for his state.

The move will cement Sanford's growing reputation as a political powerhouse among Republican party stalwarts nationwide — though how much of the estimated $8 billion in stimulus funds destined for South Carolina will be affected is unclear. The law allows state legislative leaders to accept funds the governor rejects.

"Our objections to the so-called stimulus bill have been well-chronicled for the way it spends money that we don't have and for the way this printing of money could ultimately devalue the American dollar," Sanford said on Tuesday, even as he acknowledged that he'll accept some.

"Those of us opposed to this package lost the debate on these merits, and I now think it is important we look for creative ways to apply and use these monies in accordance with the long-term interests of our state," he said.

Still, Sanford's formal rejection will enhance his standing as a Republican willing to challenge President Barack Obama, a position Sanford first took Dec. 1, when he traveled to Philadelphia to challenge the then president-elect directly at a meeting with the nation's governors.

Since then, a handful of other governors — all Republicans, all talked about as possible 2012 presidential candidates — have joined Sanford in saying they'd reject at least some of their states' stimulus shares.

Sanford's outspoken aversion to using deficit spending to spark an economic recovery has garnered him national TV interviews, op-ed columns in the Wall Street Journal and articles about him in other prominent publications.

All the attention, plus Sanford's increased travel to address Republicans in Washington, Texas and beyond, have sparked talk that he's eyeing a 2012 presidential campaign.

"I don't have a clue whether he wants to run, but he obviously is one of our better-known Republican governors, having run the Republican Governors Association and been around the country and on TV a lot," said Charlie Black, a prominent Republican consultant who was a senior adviser to Sen. John McCain's losing White House bid last year.

"He's very popular," Black said. "His brand of conservatism emphasizing fiscal conservatism is very popular with our grassroots."

Sanford urged 1,000 activists, gathered in late February at the Ronald Reagan Banquet in a Washington hotel, to be prepared to lose, and to feel happy about it.

"Would you be willing to support a cause or a candidate that is likely to lose?" Sanford asked conventioneers at the Conservative Political Action Committee's annual gathering.

As the diners leapt to their feet and applauded, Sanford declared:

"The name of the game is staying true to the principles that got you into politics in the first place _ and letting the chips fall where they may."

Nicole Quinn, of Lancaster, Pa., who waited in a long line to hear Texas Rep. Ron Paul speak at the CPAC convention, said Sanford first came to her attention when he kept his term-limits promise and left Congress in 2000 after serving six years in the House of Representatives.

Now, Sanford's vocal opposition to Obama's $787 billion stimulus plan is prompting Quinn and others to hope he seeks the White House in 2012.

"I supported Ron Paul for president in 2008," Quinn said. "However, if Sanford runs in 2012, I would support him because he would do more than any other candidate to restore the Republican message. Unlike Ron Paul, Mark Sanford has the potential to win over mainstream voters. Whether or not he could beat Barack Obama, he would restore Republican credibility."

Sanford, 48, was elected to Congress in 1994 in a midterm election that gave Republicans control of the House for the first time in half a century.

While most of his colleagues abandoned their term-limit pledges, dropped plans to jettison the Department of Education and became less averse to federal spending, Sanford slept on a cot in his office, opposed most appropriations bills _ and left after six years.

In 2002, Sanford became the first South Carolina governor to rise to the state's highest office without first serving in the state's legislature.

If Sanford's firebrand fiscal austerity wins him activist followers, it also has sparked political clashes.

Republican legislators who control the South Carolina General Assembly have joined Democrats in overturning hundreds of Sanford's line-item vetoes, rebuffing his bid to slash the budget in one of the nation's poorest states.

State House Speaker Bobby Harrell, state Senate President Pro Tempore Glenn McConnell, state Senate Finance Committee chairman Hugh Leatherman and other Republican legislative leaders have worked with U.S. Rep. Jim Clyburn, the House majority whip, to ensure that the state doesn't get left off the stimulus gravy train.

Clyburn, a Columbia Democrat and the highest-ranking African-American in Congress, crafted several provisions in the stimulus bill aimed at bypassing Sanford and other governors who oppose it.

Tuesday, March 10, 2009

The President Politicizes Stem-Cell Research: Taxpayers have a right to be left out of it. By Robert P. George & Eric Cohen


MARCH 10, 2009

Yesterday President Barack Obama issued an executive order that authorizes expanded federal funding for research using stem cells produced by destroying human embryos. The announcement was classic Obama: advancing radical policies while seeming calm and moderate, and preaching the gospel of civility while accusing those who disagree with the policies of being "divisive" and even "politicizing science."

Mr. Obama's executive order overturned an attempt by President George W. Bush in 2001 to do justice to both the promise of stem-cell science and the demands of ethics. The Bush policy was to allow the government to fund research on existing embryonic stem-cell lines, where the embryos in question had already been destroyed. But it would not fund, or in any way incentivize, the ongoing destruction of human embryos.

For years, this policy was attacked by advocates of embryo-destructive research. Mr. Bush and the "religious right" were depicted as antiscience villains and embryonic stem-cell scientists and their allies were seen as the beleaguered saviors of the sick. In reality, Mr. Bush's policy was one of moderation. It did not ban new embryo-destructive research (the president had no power to do that), and it did not fund new embryo-destructive research.

"Moderate" Mr. Obama's policy is not. It will promote a whole new industry of embryo creation and destruction, including the creation of human embryos by cloning for research in which they are destroyed. It forces American taxpayers, including those who see the deliberate taking of human life in the embryonic stage as profoundly unjust, to be complicit in this practice.

Mr. Obama made a big point in his speech of claiming to bring integrity back to science policy, and his desire to remove the previous administration's ideological agenda from scientific decision-making. This claim of taking science out of politics is false and misguided on two counts.

First, the Obama policy is itself blatantly political. It is red meat to his Bush-hating base, yet pays no more than lip service to recent scientific breakthroughs that make possible the production of cells that are biologically equivalent to embryonic stem cells without the need to create or kill human embryos. Inexplicably -- apart from political motivations -- Mr. Obama revoked not only the Bush restrictions on embryo destructive research funding, but also the 2007 executive order that encourages the National Institutes of Health to explore non-embryo-destructive sources of stem cells.

Second and more fundamentally, the claim about taking politics out of science is in the deepest sense antidemocratic. The question of whether to destroy human embryos for research purposes is not fundamentally a scientific question; it is a moral and civic question about the proper uses, ambitions and limits of science. It is a question about how we will treat members of the human family at the very dawn of life; about our willingness to seek alternative paths to medical progress that respect human dignity.

For those who believe in the highest ideals of deliberative democracy, and those who believe we mistreat the most vulnerable human lives at our own moral peril, Mr. Obama's claim of "taking politics out of science" should be lamented, not celebrated.

In the years ahead, the stem-cell debate will surely continue -- raising as it does big questions about the meaning of human equality at the edges of human life, about the relationship between science and politics, and about how we govern ourselves when it comes to morally charged issues of public policy on which reasonable people happen to disagree. We can only hope, in the years ahead, that scientific creativity will make embryo destruction unnecessary and that as a society we will not pave the way to the brave new world with the best medical intentions.

Mr. George is professor of Jurisprudence at Princeton and co-author of "Embryo: A Defense of Human Life" (Doubleday, 2008). Mr. Cohen is editor-at-large of The New Atlantis and author of "In the Shadow of Progress: Being Human in the Age of Technology" (Encounter, 2008).