Today's Stories

October 5, 2009

Pam Martens
Wall Street Titans Use Aliases to Foreclose on Families While Partnering with a Federal Agency

October 2-4, 2009

Alexander Cockburn
Geezer Renditions

Saul Landau
News From Raul Castro

Diana Johnstone
After the German Elections: Is Socialism Really Dead in Europe?

Greg Moses
Cramming for the Downside

William Blum
The Fall of the Berlin Wall: Another Cold War Myth

Brian Cloughley
Iran's Nuclear Program: Where's the Proof?

Russell Mokhiber
Welcome Back, Michael Moore

John Ross
Chomsky in Mexico

Ellen Brown
IMF Catapults From Shunned Agency to Global Central Bank

David Ker Thomson
Cop Shocks

David Macaray
The Audacity of Toyota

Gary Engler
Unions in a Rut

Robert Fantina
Meet the New Boss (Same as the Old Boss)

Lisa Stolarski / Naomi Archer
Pittsburgh: Still a (Coal) Company Town

Anthony Papa
Here is Your Chance to Help End the Failed War on Drugs

Joe Allen
The Good Wife: Bad View of a Corrupt System

Harry Browne
Tarantino Scalps His Audience

Ron Jacobs
Collective Fiction

Charles R. Larson
Cultural Warriors: Austrialian Aboriginal Art Triennial

David Yearsley
Hanns Eisler's Great National Anthem for East Germany is Available: Make It America's

Poets' Basement
Taylor, Gardner and Landau

Website of the Weekend
Wrongful Convictions of Youth

October 1, 2009

Andy Worthington
A Truly Shocking Gitmo Story

Carl Ginsburg
The Great Marginalization

Mary Lynn Cramer
Seniors on the Chopping Block

Col. Douglas Macgregor
The Bog of History in Afghanistan

Brian M. Downing
The Paradox of Financial Disorder

John V. Walsh
Mao's China at 60

Ramzy Baroud
The Big Diversion

Norman Solomon
Starting Another Year of War in Afghanistan

Dan Bacher
Undamming the Klamath

Brenda Norrell
Lazy Journalists are the Darlings of the Corporations

Website of the Day
Neoliberalism as Water Balloon

September 30, 2009

Vijay Prashad
McChrystal's Afghan Desolation

Gareth Porter
U.S. Story on Iran Nuke Facility Doesn't Add Up

Andy Thayer
The Fiasco Behind Chicago's Olympics Bid

Paul Craig Roberts
Another War in the Works

Dean Baker
Medicare Buy-In: What's Wrong With Giving People a Choice?

Ricardo Alarcón de Quesada
Mission Impossible

Laura Flanders
Punch in the Streets, But Not in the Suites

Dave Lindorff
The Baucus Excuse

Seumas Milne
Why British Workers Are Angry

Martha Rosenberg
What Integrity Means to Pfizer

Website of the Day
Why You Should Boycott Hyatt Hotels

September 29, 2009

Marshall Auerback
A Neoliberal Hijacking

Alan Farago
Recovery Without Feeling

Jeff Sher
Shopping for Health Care

Bruce Jackson
60 Minutes and the General

Gareth Porter
Fears of Defeat in Afghanistan

Jonathan Cook
Palestinians in the Israeli Army

Bouthaina Shaaban
Arabs in the International Balance

Dave Lindorff
Looking Under the TARP

Stephen Soldz
Spreading Hysteria About Swine Flu "Hysteria"

Sara Mann
The Party of No Meets the Island of No

Website of the Day
Cosmos, Autotuned

September 28, 2009

Laura Carlsen
The Sound and Fury of the Honduran Coup

Anthony DiMaggio
The U.S., Iran and Nuclear Terror

Paul Craig Roberts
More Lies, More Deceptions

Neve Gordon
On Palestinian Civil Disobedience

Bill Quigley
Street Report From the G20

Harvey Wasserman
Obama's LBJ Moment

Nicola Nasser
Stuck Between Two Failures

Ben Rosenfeld Murder in New Orleans: Remembering Kirsten Brydum

Website of the Day
The Short March

September 25-7, 2009

Alexander Cockburn
The Ruin of His Presidency

Daniel Wolff
Speculating on Education

Rev. William E. Alberts
How "White Magic" Makes the Ism of Race Disappear

Mike Roselle
Send Lawyers, Guns and Money

Saul Landau
Covert Memories From Miami

Eshan Azari
Why Afghan Intellectuals Live in National Despair

Winslow T. Wheeler
The Pentagon Feedlot

Robert Jensen
Is Obama a Socialist?

Jonathan Cook
Sleeping with the Enemy

Nelson P Valdés
Cuba, Hurricanes and the Internet

David Michael Green
Dumping Dubya

Ramzy Baroud
The Goldstone Report and Israeli Impunity

John V. Whitbeck
The Partition Straightjacket

Andy Worthington
Gitmo Trial Delayed ... Again

David Ker Thomson
The Lady Vanishes

Seth Sandronsky
Obama and Race Management

Jim Goodman
Why are Farmers Afraid of Michael Pollen?

Charles R. Larson
From Oppression to Opportunity

David Yearsley
Froberger's Travels

Kim Nicolini
Hardcore Capitalism

Lorenzo Wolff
Transparent Pink

Website of the Weekend
An Emergency Appeal in the Fight Against Big Coal

September 24, 2009

Steven Higgs
Even in Indiana, Doctors Support National Health Insurance

Christopher Brauchli
Death Pays

Marshall Auerback
The Shortfall at the FDIC

Stephanie Westbrook
Italy's Fallen Soldiers

Nadia Hijab
Know Your Dictator

Sen. Russell Feingold
Fixing the Patriot Act, Restoring the Constitution

David Macaray
Goodbye "Norma Rae"

Binoy Kampmark
Curry Bashings in Oz

Joe Allen
Dancing With the Hammer

Website of the Day
The Most Corrupt Members of Congress

September 23, 2009

Paul Craig Roberts
The Economy is a Lie, Too

Gabriel Kolko
The United States in Afghanistan: Eight Years Later

Uri Avnery
The Waldorf-Astoria Summit

Shamus Cooke
The First Shots of the Trade War

Missy Beattie
The Sound of Money

Gareth Porter
Taliban Rising

Mark Weisbrot
How Much Repression Will Hillary Clinton Support in Honduras?

Dr. Susan Block
The Murder of Annie Le

Norm Kent
Pot and the Right to Pursue Happiness

Richard Neville
Apocalypse Porno

Website of the Day
In Carver Country

September 22, 2009

Franklin C. Spinney The Huge Hole in Gen. McChrystal's Afghan Counterinsurgency Strategy

Russell Mokhiber
Who's the Pimp?

Greg Grandin
Zelaya's Brazilian Gambit

Nikolas Kozloff
Salvaging Democracy in Honduras Will Be Tricky

John Ross
Mexico Convulsed by Paranoia

Ron Jacobs
Gen. McChrystal's Salespitch

Tariq Ali
The Afghan Folly

Dave Lindorff
NYT Trashes Single-Payer

Harvey Wasserman
Tom Friedman's Idiocy Atomique

Vijay Prashad
Is Anything Better Than Nothing?

Kareem Shora
After the CIA Torture Report

Website of the Day
Did a State Dept Official Sell Nuclear Secrets?

September 21, 2009

JoAnn Wypijewski
Will Trumka or the Steelworkers Push Labor Into Battle?

Carl Finamore
Backstage at the AFL-CIO Convention

Uri Avnery
Sliming Goldstone and His Report

Nikolas Kozloff
Joe Wilson's Immigration Hypocrisy

Paul Simpson, M.D.
Why Your Doctor May Have PTSD

Alan Nasser
New Deal Liberalism Writes Its Obituary

Ray McGovern
CIA Torturers Running Scared

Dave Lindorff
Thoughts on Saving an Old Barn

Lina Thorne
Women, War and Afghanistan

Jeb Sprague
Confronting the G20

Website of the Day
Petition: Save the Yellowstone Grizzly

September 18-20, 2009

Alexander Cockburn
When Gossip Came Back and Our Modern Age was Born

Russell Mokhiber
Meet the Real Death Panels

Mike Whitney
The Post-Bubble Malaise

David Michael Green
Can America be Salvaged?

Jonathan Cook
Boycott Derails Jerusalem Rail Line

Nadia Hijab
Sinking the Goldstone Report

Mark Weisbrot
Recession, Recovery and Reform: Will Anything Change?

Michael Winship
Let's Make a Deal, Beltway Edition

Michael Leonardi
The Nuclear Dump in the Mediterranean Sea

Andy Worthington
The Kuwaiti Who Met Bin Laden

Fred Gardner
The Prohibitionists' Manifesto

David Macaray
What Happens in Congress Stays in Congress

David Rosen
System Failure and the Garrido Case

Jason Mark
Hacking the Sky

Mike Ferner
In Praise of Senator Baucus

Farzana Versey
The Great Indian Rope Trick

Ron Jacobs
Dr. Guillotin and Dr. Faustus: an Interview with Marc Estrin

elin o'Hara slavick
Flags for Hiroshima: Artist's Statement

Gilad Aztmon
Vengeance, Barbarism and Tarantino's Inglourious Basterds

David Yearsley
Mendelssohn as Organ Maestro

Charles R. Larson
Darkness, Dignity and Hope in Liberia

Lorenzo Wolff
Dialing Up The Clash

Website of the Weekend
Meet Your Conservative Movement

September 17, 2009

Joshua Frank
Max Baucus: the Slick Swindler

Brenda Norrell
Cry Me a River: Uranium and Genocide in Indian Country

Robert Weissman
The Financial Crisis, One Year Later

Pam Martens
The Filmmakers vs. the Capitalists

Franklin Lamb
Palestinian Camps Are Ready to Erupt

Ricardo Alarcón de Quesada
Cuban Five: An Insult to Humanity

Jed Bickman
Drone War Over Pakistan

Alan Farago
The Mayor of Coconut Creek Gets Butterflies

Website of the Day
C.R.O.C.

September 16, 2009

Ray McGovern
Torture and Accountability

Stephen Green
America's Strange Health Care Debate

Andy Worthington
Is Bagram Obama's New Secret Prison?

Dean Baker
Short Sellers: the Unsung Heroes of the Financial Crisis

Anthony DiMaggio
Killing the Messenger

Ricardo Alarcón de Quesada
Cuban Five: The Unheard Call

Benjamin Dangl
Justice Follows Direct Action

Robin Willoughby
The World Seed Conference: Good for Farmers?

Eric Walberg
EuroPeace, the Sounds of Silence

James Ridgeway
Bring That "Boy" Down

Website of the Day
Baucus' Bogus Bill

September 15, 2009

Mike Whitney
The Real Lesson of Lehman's Fall

Mutadhar al-Zaidi
The Story of My Shoe

Marshall Auerback
Government Spending is the Solution--Not the Problem

Afshin Rattansi
The Deal That Led to the Srebrenica Massacre: Former UN Spokeswoman Fingers Holbrooke and the Clinton Administration

Jonathan Cook
How US Tax Breaks Fund Israeli Settlers

Gareth Porter:
Niger Redux? IAEA Conceals Evidence Iran Nuke Docs Were Forged

Dave Lindorff
Congress Needs More Catcalls

Winslow T. Wheeler
Obama and Pentagon Pork

Franklin Spinney
Bin Laden's Latest Message and the Nuttiness of the War on Terror

Karen Korenoski /
Michael Yates
Up in Wood Smoke: Boulder's Dirty Little Secret

David Macaray
Government Cheese

Susie Day
President Mao-bama's Little Red Primer

Website of the Day
The Cotton Pickin' Truth: the Persistance of Slavery in Mississippi

September 14, 2009

Paul Craig Roberts
The Health Care Deceit

M. G. Piety
The Danes Do It (Health Care) Better

Shamus Cooke
Wall Street Under Obama: Bigger and Riskier

Bouthaina Shaaban
Three Faces and a Homeland

Alvaro Huerta
In Defense of the Undocumented: Immigrants and Health Care

John Ross
Mexico Loses Its History

Harvey Wasserman
The Supreme Court and Corporate Money

Adam Federman
The Plight of the Bumblebee

Stephen Fleischman
The Federal Twist

Robert Jensen
Can Journalism Schools be Relevant in a World on the Brink?

Website of the Day
The Origin of Sex Offender Registries

September 11-13, 2009

Alexander Cockburn
Obama's Big Speech: Math Trumps Rhetoric

JoAnn Wypijewski
Trumka Takes Over AFL-CIO

Carl Ginsburg
The Patient as Profit Center

Leonard Peltier
I am Barack Obama's Political Prisoner Now

Franklin Lamb
Ted Kennedy's Changing Take on Israel

Benjamin Dangl
Throwing Bullets at Failed Policies

Mike Whitney
How to Fight Deflation

John Berger
In Search of Antonello

Saul Landau
Watergate and Modern Scandals

Russell Mokhiber
Disgraceful Democrats

Ricardo Alarcón de Quesada
Pryor's Judgment

Felice Pace
NPR's Linda Gradstein Has Done It Again on Gaza

Jordan Flaherty
The Battle Over Discriminatory Housing Laws in New Orleans

Ron Jacobs
It's Time to be Impolite About Afghanistan

David Macaray
The Utility of Boycotts

David Correia
Welcome to the Business-Friendly Carpenter's Union

Robert Bryce
Wind Turbines and Bird Kills

Christopher Brauchli
Defenders of the Classroom

Paul Krassner
Aha! A Few Words About the 9/11 Truth Movement

Charles R. Larson
Deracination

Kim Nicolini
"Extract:" An Exercise in Economic Realism

David Yearsley
Tall Buildings: the Sound and the Silence

Lorenzo Wolff
In Defense of the One Hit Wonder

Poets' Basement
McEnteer and Corseri

Website of the Weekend
Pizarchik: the Wrong Choice

September 10, 2009

Joshua Frank
Inside Hanford's B Reactor: a Tour of the World's Most Toxic Nuclear Site

Dean Baker
Bernanke's Bad Money

Brian M. Downing
The State of U.S. National Security

Franklin C. Spinney
Portrait of an Afghan Firefight: Up Close and Personal

Andy Worthington
No Escape From Guantánamo

Chase Madar
Samantha Power and the Weaponization of Human Rights

Farzana Versey
A Tale of Two Slums

Ronnie Cummins
Whole Foods, Fair Trade and Organics

Binoy Kampmark
Health Care, Obama and the System

Timothy Lebrón
The Conservative Case for Health Care Reform

Charles R. Larson
A Solution to the Health Care Dilemma

Website of the Day
The Debtor's Revolt Begins!

September 9, 2009

Richard Neville
Trigger-Happy in Afghanistan

Melissa Checker
Double Jeopardy: Carbon Offsets and Human Rights Abuses

Nadia Hijab
Settling for ... Settlements?

Robert Weissman
The Stakes at the Supreme Court

Jonathan Cook
Israeli Arabs Call for General Strike

Russell Mokhiber
Pollan, Mackey, Whole Foods and Single Payer

James Ridgeway
The Dotty Factor: Will Demented Geezers Wreck the Economy?

Richard W. Behan
Obama's Imperative in Afghanistan

James McEnteer
The Photo and the Secretary: How to Appall Robert Gates

Martha Rosenberg
Hatchery Horrors

Website of the Day
Belmondo Verité

September 8, 2009

Henry A. Giroux
The Corporate Stranglehold on Education

Stephen Soldz
Psychologist Accused of War Crimes Opposes Investigations

John Ross
Rituals of the Absurd

Jeff Leys
Health Care vs. Warfare: the Future of the Afghan War

Mike Whitney Ashcroft: Repugnant to the Constitution

Shamus Cooke
Obama's Empty Labor Day Speech

Ellen Brown
Did Lehman Brothers Fall or Was It Pushed?

Norman Solomon Men With Guns: In Kabul and Washington

Deepak Tripathi
The Axis of Evil and the Great Satan

Laray Polk
Personality Cults, Indoctrination and Inculcation

Charles R. Larson
Just Who Does He Think He Is?

Website of the Day
The President is Not a Guidance Counselor

September 7, 2009

Vicente Navarro
Obama's Mistakes in Health Care Reform

Bouthaina Shaaban
In Praise of Admiral Mullen

David Macaray
Obama's Labor Day Report Card

Paul Craig Roberts
Indefensible Nation

Jonathan Cook
Israeli Ads Warn Against Marrying Non-Jews

Conn Hallinan
Brazil Flexes Its Muscles

Walter Brasch
The Origins of Labor Day, the Unknown Holiday

Mark Weisbrot
IMF Gives Honduran Government $175 Million

Carl Finamore
China's Birthday Stimulation

C. G. Estabrook
Advance Text of Obama's Big Speech

Website of the Day
One Down, 20,000 to Go

September 4-6, 2009

Alexander Cockburn
Deeper Into the Tunnel

Carl Ginsburg
Saving New Orleans' Charity Hospital

Jonathan Cook
The Missing Link in Israeli Organ Theft?

George Wuerthner
The Unintended Consequences of Wolf Hunting

Marc Levy
The Bling They Curse and Carry

Ray McGovern
Holbrooke's Afghan Benchmark

Ricardo Alarcón de Quesada
It Happened in Miami

Joe Paff
Organizing the Mission

Gareth Porter
Taliban's Tank-Killing Bombs Came From CIA, Not Iran

Devin Beaulieu
Scaremongering About Bolivia and Islam

Anthony Papa
Why Leslie Crocker Snyder Should Not Become New York City's New DA

David Ker Thomson
Love and Dekes in Utopia

Don Fitz
The Case of the Biodevastation 7: What the Police Won't Apologize For

Lee Sustar /
S. Sepehri
The Fallout From Iran's Elections

Jim Goodman
Why Honor Organized Labor?

Wajahat Ali
Domestic Crusaders: Making Muslim American Theater

Ron Jacobs
Agitator Journalism: Remembering Ramparts

Helen Redmond
The Lion Sleeps Tonight: the Crimes and Misdemeanors of Teddy Kennedy

John V. Walsh
Obama to Cindy Sheehan: Get Lost

Charles R. Larson
Mandanipour's Masterpiece: Censoring an Iranian Love Story

Mark Scaramella
Ho-Bleeping-Hum: a Few Well-Chosen Words About Valerie Plame's Book

David Yearsley
Cameron Carpenter's Amazing Organ Transplants

Ben Sonnenberg
Hooking, Breaking Friendships, Cross-Dressing and, Above All, Delphine Seyrig

Poets' Basement
Davies, Orloski and Bready

Website of the Weekend
Architectural Semiotics with Glenn Beck

September 3, 2009

Marcus Rediker
Inside Auburn Prison

Ron Jacobs
Embedded With the Taliban

Mike Whitney
How Bad Will It Get?

Ricardo Alarcón de Quesada
Untold Story of the Cuban Five: Indictment À La Carte

Saul Landau
Moby Dick and Asian Typhoons

Anat Matar
Israeli Academics Must Pay a Price to End Occupation

Tanya Golash-Boza
How Immigration Enforcement is Weakening National Security

Dave Lindorff
Which Side Are You On?

Andy Worthington
The Story of Gitmo's Two Syrians

Website of the Day
Plundering Appalachia

September 2, 2009

John Ross
Mexico's Plagues

Vijay Prashad
Hey Ram, the Things the Financial Times Group Does!

Rev. Jim Rigby
Why is Universal Health Care "Un-American"?

Joanne Mariner
What the Inspector General Found

Missy Beattie
Hejira: At Martha's Vineyard with Cindy Sheehan

Soren Ambrose
Multilateral Money

Diane Farsetta
Water: the Newest Wave of Corporate "Social Responsibility"

Nadia Hijab
Mulling Mullen's Message

Shamus Cooke
How to Lower the Deficit Without Killing Social Security

Charles R. Larson
Is Dick Cheney Running Scared?

Website of the Day
Inside the Egg Hatchery

September 1, 2009

Jeffrey St. Clair
The Wolf at Trout Creek

Paul Craig Roberts
Why Not Sanctions for Israel?

Mark T. Harris
The Whole Foods Boycott: It's About More Than CEO Hypocrisy

Dean Baker
Bank Profits Are Up: Did You Hear Anyone Say, "Thank You"?

Jeffrey Buchanan
Ending the Human Rights Crisis in KatrinaRitaVille

Robin Mittenthal
A Sea of Monocrops: Old MacDonald Never Had a Farm Like This

Ellen Brown
Mercury Mischief

Martha Rosenberg
Vytorin Marketing is Back

Website of the Day
Crazy Town Hall Protester Interviews

October 5, 2009

A CounterPunch Special Investigation: Part One of a Series

Wall Street Titans Use Aliases to Foreclose on Families While Partnering With a Federal Agency

By PAM MARTENS

A federal agency tasked with expanding the American dream of home ownership and affordable housing free from discrimination to people of modest means has been quietly moving a chunk of that role to Wall Street since 2002.  In a stealth partial privatization, the U.S. Department of Housing and Urban Development (HUD) farmed out its mandate of working with single family homeowners in trouble on their mortgages to the industry most responsible for separating people from their savings and creating an unprecedented wealth gap that renders millions unable to pay those mortgages. This industry also ranks as one of the most storied industries in terms of race discrimination.   Rounding out its dubious housing credentials, Wall Street is now on life support courtesy of the public purse known as TARP as a result of issuing trillions of dollars in miss-rated housing bonds and housing-related derivatives, many of which were nothing more than algorithmic concepts wrapped in a high priced legal opinion.  It’s difficult to imagine a more problematic resume for the new housing czars.

To what degree this surreptitious program has contributed to putting children and families out on the street during one of the worst economic slumps since the ’30s  should be on a Congressional short list for investigation.  HUD’s demand for confidentiality from all bidders and announcement of winning bids to parties known only as “the winning bidder”  deserves its own investigation in terms of obfuscating the public’s right to know and the ability of the press to properly fulfill its function in a free society. 

Despite three days of emails and phone calls to HUD officials, they have refused to provide the names of the winning bidders or the firms that teamed as co-bidders with the winning party.  Obtaining this information independently has been akin to extracting a painful splinter wearing a blindfold and oven mitts. 

That a taxpayer-supported Federal agency conducts a competitive bid program of over $2 billion and then refuses to announce the names of the winning bidders is beyond contempt for the American people.  If the Obama administration does not quickly purge this Bush mindset from these Federal agencies, he is inviting a massive backlash in the midterm elections.

The HUD program was benignly called Accelerated Claims Disposition (ACD) and was said to be a pilot program.  A pilot program might suggest to those uninformed in the ways of the new Wall Street occupation of America a modest spending outlay; a go slow approach.  In this case, from 2002 to 2005, HUD transferred in excess of $2.4 billion of defaulted mortgages insured by its sibling, the FHA, into the hands of Citigroup, Lehman Brothers and Bear Stearns while providing the firms with wide latitude to foreclose, restructure or sell off in bundles to investors. HUD retained a minority interest of 30 to 40 percent in each joint venture. Citigroup was awarded the 2002 and 2004 joint ventures; Lehman Brothers the 2003; Bear Stearns the 2005.  I obtained this information by reconciling the aliases used by these firms in foreclosures of HUD properties to the addresses of the corporate parents.  I further confirmed the information by checking the official records at multiple Secretaries of State offices where the firms must register their subsidiaries to do business within the state. 

What the program effectively did was allow the biggest retail banks in the country to get accelerated payment on their defaulted, FHA-insured, single family mortgage loans while allowing another set of the biggest investment banks to make huge profits in fees for bundling and selling off the loans as securitizations. Once the loans were securitized (sold off to investors) they were no longer the problem of HUD or the Wall Street bankers. The loans conveniently disappeared from the radar screen and the balance sheet. The family’s fate had been sold off by HUD to Wall Street in exchange for a small piece of the action.  Wall Street then sold off the family’s fate to thousands of investors around the world for a large piece of the action. 

HUD has attempted to spin this program as a win-win for everyone with the suggestion that families would have more options under this program.  In a HUD February 17, 2006 report titled “Evaluation of 601 Accelerated Claims Disposition Demonstration,” a few kernels of truth emerged.  It was noted on page 4 that the private partners “determine how best to maximize the return on the loan…Loans liquidated through note sales generally earn a higher return than property sales, so the JV [joint venture] has an incentive to maximize the share of note sales relative to property sales.”  Rather than evaluating the success of the program on how many families were able to get a loan modification and remain in their homes, the report notes that “The benchmark for progress is the share of loans that have reached resolution.”

From its 2002 joint venture, Citigroup dumped en masse 2,599 loans in one securitization alone in August 2004.  It sold another 1,177 at other unknown times.  From its 2004 joint venture, it dumped 1,814 in one fell swoop.  The 2006 HUD report notes that following securitization “there is no information available on the [home] retention after the sale.”

According to HUD’s web site, another major award of $400 million to $800 million in defaulted mortgages was slated for October 23 of last year in the midst of a foreclosure and eviction crisis.   Lemar Wooley, in HUD’s Office of Public Affairs, advises that the deal never happened as a result of  “no acceptable bids being received.”  Given that we have been promised change we can believe in, I would have much preferred to hear: “We’ve sacked this program as an abhorrent example of privatizing profits and socializing losses while turning our backs on the neediest of our society.”

While this was clearly not a win-win for families in financial distress, two other red flags come to mind.  The 2006 HUD report notes that to be eligible for this program, loans had to be four full payments past due (five full payments past due for the 2005 Bear Stearns deal).  But to securitize the loans, the Wall Street firms had to bring the loans into performing status, that is, up to date in their payments.  The question arises as to whether the investors in the securitizations were advised that these were heretofore defaulted HUD loans.  One might be forgiven for pondering that as a material fact required in a prospectus since there is much data available showing that loans once in default tend to redefault. Some of these investors might unknowingly be you and your family members.  The loans could be sitting right now in public employee pension funds, mutual funds held in 401(k)s, etc.

The second concern is that many of the homes in the deals were foreclosed on in 2006, 2007 and 2008.  By HUD not keeping these loans and insisting on its legal mandate for lenders to attempt loan modifications, special forbearance or partial claims to bring the loans current, what impact did this program have on the foreclosure glut and overall property value declines.
It is worth noting what happened to the firms that HUD deemed qualified for this program:  Lehman Brothers collapsed on September 15, 2008.  Bear Stearns required a weekend rescue by JPMorgan Chase and the Fed on March 16/17, 2008.  Citigroup, which got the lions share of the HUD deals, exists today only because of a $45 billion direct infusion from unwilling taxpayers (overruled by their Congress) and hundreds of billions of dollars more in various other government backstop operations – some still undisclosed despite Freedom of Information Act requests and litigation.
Future articles in this series will look at how these deals started under the Clinton administration with awards to Goldman Sachs, GE Capital, Blackrock and others, with the dubious protection of Merrill Lynch as the overseer for HUD.  This program also went virtually unnoticed until charges of rigged computers and bid rigging erupted in headlines.  We will also look at the human suffering resulting from this macabre rewriting of the social contract in America.  The series begins today with the most unlikely candidate of all for helping people in need: Citigroup.

* * *

In the early evening of June 26, 2009 I was cleaning up emails I had saved for more careful reading at a later date when I bolted in my chair.  A message from a reader whom I have permission to call Melissa X advised that she had documentation that Citigroup was engaging in dubious real estate transactions out west under an alias.  I immediately answered with a request for specifics and received the following response:

“…a friend asked me to pull the real property records on a house a few doors down from him that he had heard sold at a very low price in a foreclosure sale.  After pulling the property records I just couldn't believe the price this particular house sold for in the ‘foreclosure sale’ and started looking into the foreclosure purchaser, Liquidation Properties, Inc. (LPI).   I have been a litigation paralegal for 14 years, thus I have a good amount of investigation experience and also in real estate law as we have a considerable practice in real estate litigation.  Needless to say, my instinct told me something wasn't right about this and I Googled the Directors of LPI, who happened to be high level executives at Citigroup Global Markets.  At first I thought that LPI wasn't a subsidiary of Citigroup because when I was reviewing court records they have filings that say they are a privately owned company with no connection to a publicly traded company.  So, initially, I thought these high level Citigroup execs had formed this company that was purchasing these Citi foreclosures super cheap…one of the Directors of LPI is Jeffrey Perlowitz, who according to his online bio ran the trading desk at [Citigroup’s] Smith Barney during the housing ‘boom’ and is credited for ‘purchase, sales and trading of single family residential mortgages and asset backed securities…’  Then I ran LPI through Edgar [an SEC search engine] to see if I could find anything in SEC filings about this entity and that is how I ended up discovering LPI is actually a Citi subsidiary.  I know from reading your articles that you are well aware of how shady Citi is with their subsidiaries.  I particularly liked an article you wrote about the oil markets and how we can't expect the sleuths at Congress to figure out why the prices went out of control, and then you linked it to a little talked about Citi subsidiary.”

It took but a few minutes to confirm that Liquidation Properties, Inc. was indeed a subsidiary of Citigroup.  Exhibit 21.01 of Citigroup’s December 31, 2008 SEC filing lists Liquidation Properties Holding Company Inc. and Liquidation Properties Inc. as subsidiaries chartered in Delaware. (But how many people are going to notice that when Citigroup has over 2,000 subsidiaries.) A quick click at the Secretary of State web site for Massachusetts, one of the many states in which Liquidation Partners, Inc. conducts business, revealed the following officers as of March 14, 2007: Randall Costa, President; Scott Freidenrich, Treasurer; Robyn Gomez, Secretary; Jeffrey Perlowitz, Director; Mark Tsesarsky, Director. But just as Melissa X had noticed, there was nothing on this filing to connect this firm with Citigroup or any publicly traded company.  In fact, the form indicated that there were only 200 shares of common stock outstanding.  Citigroup, on the other hand, has an unprecedented and unfathomable 22.9 billion (yes, billion) common shares outstanding, now withering in value alongside the faded dreams of financial security for its shareholders and customers.
I reviewed two other documents Melissa X had sent along: two foreclosure filings by Liquidation Properties, Inc. in the U.S. District Court for the Northern District of Ohio stating that it was not a “party, a parent, a subsidiary or other affiliate of a publicly owned corporation.”

One other item stood out in this filing: the address of this firm was listed as 388 Greenwich Street in the trendy neighborhood of Tribeca, New York City.  That is where the raucous trading of exotic derivatives, commodities and mortgage securities has traditionally been handled.  The legacy of the swashbuckling culture of the notorious Salomon Brothers, a predecessor firm whose traders rigged the two-year note auction of  U.S. Treasurys in 1991, remains alive in these trading rooms.  Indeed, Jeffrey Perlowitz was a Salomon protégé.  The seminal book on the Salomon culture, Michael Lewis’ “Liar’s Poker,” assigns mortgage traders a philosophy of “ready, fire, aim.”
In other words, this is the address of the investment bank of Citigroup with whom these individuals are involved, not the calm bean counters at the retail bank, Citibank.  The investment bank specializes in mergers and acquisitions, lending and trading, with a sophisticated customer base of corporations, governments and institutions.  An investment bank is an unfit place for conducting or even overseeing the hand holding and financial counseling of frightened families who need urgent and sincere help to avoid loosing the roof over their heads.   

Call it divine intervention or call it happenstance, but Melissa X had chosen to electronically communicate with a stranger on the other side of the country who just happened to have an indelibly forged mental picture of  388 Greenwich Street in Tribeca. 

At 1 pm on May 20, 1997 an eclectic group of protesters filled the sidewalk in front of 388 Greenwich Street.  I was one of them.  My group, which included Gloria Steinem, came to name the firm (then known as Smith Barney) a Merchant of Shame for its privatized justice system which barred employees, as a condition of employment, from suing the firm in a public court setting.  Tribeca residents spontaneously joined us as they walked by to raise hell about the company’s bizarre selection of signage.

Cemented into the middle of the sidewalk in front of the firm was a 16 foot, 5300 pound, red steel umbrella representing the company’s logo at the time and, I imagined, the physical equivalent of Sandy Weill’s ego, then CEO of the firm. A Business Week article once quoted a former employee saying Weill would steal pennies off a dead man’s eyes.  Mr. Weill’s pennies, plucked from the dying firm’s eyes, eventually added up to $1 billion and he retired not long before the tens of billions of losses squirreled away in Structured Investment Vehicles (SIVs) in the Cayman Islands came home to roost.

In what I now recognize as the electronic manifestation of the whoring of Wall Street, a four-story red neon lighted umbrella was mounted near the top of this 39-floor building.  Both the sidewalk and building umbrellas were later removed but I did note in a recent visit to Manhattan that giant and bizarre electronic signs flash messages to pedestrians from the formerly sedate wealth management offices of major Wall Street firms in midtown.

Having verified Melissa X’s information that Liquidation Properties, Inc. was indeed a subsidiary of Citigroup with officers employed by the firm, endowed with the uncanny knack of capturing an inordinate amount of winning bids at foreclosure auctions in depressed neighborhoods, I sat about unraveling the multitude of Byzantine transactions in which it was involved.

The trail led to four more entities: Reo Management 2002, Reo Management 2004, SFJV-2002, and SFJV-2004.  (Reo is an acronym for real estate owned by a bank, typically after an unsuccessful foreclosure auction.) SFJV, I would later learn, was the name of the HUD joint ventures, an acronym for Single Family Joint Venture. SFJV-2002 and SFJV-2004 were, indeed, subsidiaries of Citigroup and being used to facilitate the transfer of foreclosed homes around the country.

The Reo Management firms were listed as subsidiaries of Residential Capital Corp. (ResCap) on its July 15, 2005 filing with the SEC but filings with the Secretary of State in Massachusetts showed the same Citigroup officials at 388 and 390 Greenwich Street in Tribeca as officers and directors:  Costa, Freidenrich, Perlowitz, Tsesarsky.  Filings with other Secretaries of State showed these same four individuals along with numerous other officials at Citigroup.  Reo Management 2002 showed 200 shares of stock issued to unnamed parties while Reo Management 2004 said stock details were not available online. 

Why on earth would Citigroup managers be officers of a competitor?  I called people in the know on Wall Street.  No one had ever heard about it or could offer an explanation.   I called Jeffrey Perlowitz’ secretary and sent her an email requesting an explanation from Mr. Perlowitz.  Mr. Perlowitz took the same position as HUD: silence.

ResCap's operations include GMAC Mortgage and GMAC-RFC.  Until 2006, GMAC was a wholly owned subsidiary of General Motors, a company that had been around since 1919 to provide car financing to GM dealers and customers.  In 2006, a majority stake was sold to Cerberus Capital Management, a private equity/hedge fund whose investors are a tightly held secret.  The firm is now known as GMAC Financial Services.  In 2008 the Federal Reserve waived its magic wand and GMAC became a bank holding company (now called Ally Bank) and TARP gave $5 billion of taxpayer funds to the entity.  Another $7.5 billion was provided in 2009.  As of June 30th of this year, you and I involuntarily own 35.4 per cent of the firm with Cerberus and its secret investors owning 22 percent.

Since all of us hold the largest block of stock, I felt I might get some answers.  I emailed GMAC and asked what all of this was about.  A spokeswoman responded that “the loans which we acquired from the [HUD] auction happened to be those in which we co-bid with Citi.  The Reo Management 2002 and 2004 entities were set up as subs of those joint ventures to hold the resulting Reo properties until they were resolved.”  I countered with: “Why were officials of Citigroup serving as principals and directors of subsidiaries of ResCap?”   The spokesperson replied that both Reo Management 2002 and Reo Management 2004 had been dissolved and she had no further information.

After scrutinizing every scrap of paper available through HUD on these deals for endless weeks, I was, as a taxpayer, more than a little nonplussed that I had seen nary a word about co-bidders.  Citigroup operating under an alias in consumer real estate transactions was scary enough, but allowed to team up with another giant player also operating under an alias, all under the imprimatur of a Federal agency, that was beyond rational comprehension.

It’s not like the Federal government didn’t know Citigroup was a serial rogue.  Our tax dollars have been used since this Frankenbank was created to investigate serious crimes, while letting the company off with a fine so it could live on to create even bigger problems the next time around.  In 2001, Citigroup settled with the Federal Trade Commission for $215 million for predatory lending at one of its divisions.  In 2003, Citigroup paid $400 million to U.S. regulators for fraudulent research reports and improper handling of new stock offerings.  In 2004, Citigroup paid $2.65 billion to WorldCom stock and bond holders over its role in the demise of the firm.  Also in 2004 its private bank was kicked out of Japan for money laundering.  In 2005 Citigroup was fined $26 million by Europe’s Financial Services Authority for conducting a trade it internally named “Dr. Evil” that roiled the European bond market.  In that same year, it settled with the SEC for $101 million for helping Enron inflate cash flows and under report debt.  Also in 2005, it settled a private litigation over its role in the bankruptcy of Enron for $2 billion.

HUD’s own Regional Inspector General wrote in a 45-page report issued on November 13, 2008 that CitiMortgage, a unit of Citigroup, placed the FHA insurance fund at an increased risk of loss on one-third of the loans HUD audited at CitiMortgage as result of improper underwriting practices.
Melissa X took her concerns not just to me but to the U.S. Attorney’s office.  In one passage of an email to this U.S. Attorney she wrote: “It is such a disappointment to me that our Government has failed us so, and only continues to do so…One must wonder how much the American people will take of this before a total revolution occurs…”

While I was researching this story, a friend forwarded a video clip of Laura Flanders of Grit-TV interviewing the filmmakers of  “American Casino,” Andrew and Leslie Cockburn.  (Yes, they’re all – Laura included - part of that intrepid Cockburn clan whose spirit resides here at CounterPunch in the form of Alexander Cockburn.)  Carefully observe the face of Flanders, the Cockburns and the victims in the film clips.  They all muster  a brave front but I sense an ever present emotion to hang one’s head and weep for the nation. At one point Flanders asks:  “So you think it was all really a scam to transfer money from the vulnerable and the poor to the wealthy?  There was no positive interest in home ownership distribution involved?”  The answers from the Cockburns go to the heart of this crisis.  Both this clip and the movie “American Casino,” playing now in theatres across the U.S.,  provide a critical foundation for understanding that while our government and mighty military chased down men in caves in Afghanistan, the ivy league educated enemy within sacked our nation.  The film premiered in the U.S. in April, ironically, in Tribeca, just moments away from the real, live American Casino, Citigroup.  Watch the interview and clips from the film here: http://www.americancasinothemovie.com/

Pam Martens worked on Wall Street for 21 years; she has no security position, long or short, in any company mentioned in this article other than that which the U.S. Treasury has thrust upon her and fellow Americans involuntarily through TARP. She writes on public interest issues from New Hampshire. She can be reached at pamk741@aol.com 

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