Blagojevich Found Guilty Of Corruption

June 28th, 2011

CBSNews.com

Stunned and nearly speechless after hearing the verdicts against him, former Illinois Gov. Rod Blagojevich will wake up Tuesday to the stark reality that he is likely headed to federal prison within months, leaving behind his wife, two young daughters and comfortable home in a leafy Chicago neighborhood.

A jury convicted him Monday on 17 charges, including trying to sell or trade President Obama’s old Senate seat and attempting to shake down executives for campaign cash. The convictions carry a combined maximum prison sentence of around 300 years, but legal experts say a federal judge is likely to send him away for around a decade, give or take a few years.

An irrepressible Blagojevich had said before the retrial began that he refused to even contemplate the prospect of prison. But red-eyed, his face drawn and frowning, he hurried out of the courthouse after the verdict was read.

The broke and impeached ex-governor told reporters that he and his wife, Patti, “have to get home to our little girls and talk to them and explain things to them and then try to sort things out.” His two daughters are 8 and 14.

Uncharacteristically, the 54-year-old Democrat had little more to say, adding only that he was stunned by the verdict.

“Well, among the many lessons I’ve learned from this whole experience is to try to speak a little bit less, so I’m going to keep my remarks kind of short,” Blagojevich said.

He is almost certain to appeal the convictions, and his defense attorneys filed a number of motions to lay the groundwork for that.

If he does end up in prison, Blagojevich would follow a path well-trodden by Illinois governors, including Blagojevich’s predecessor, former Republican Gov. George Ryan — now serving 6½ years in a federal penitentiary in Terre Haute, Ind.

In Illinois’s book of political infamy, though, Blagojevich’s chapter may go down as the most ignominious because of the allegations he effectively tried to hock an appointment to Obama’s Senate seat for campaign cash or a job.

Blagojevich will probably receive around 10 years in prison, with little chance he would get more than 15, said former Chicago-based federal prosecutor Jeff Cramer said. Another former prosecutor, Phil Turner, said Judge James Zagel might look to Ryan’s sentence and mete out a similar one for Blagojevich.

Zagel did not set a sentencing date, but Gal Pissetzky, a Chicago attorney who defends clients in federal court, said it’s likely Blagojevich would be sentenced late this year. When he is, Pissetzky said there is a chance he could end up serving in the same prison as George Ryan.

The verdict, coming after his first trial ended last year with the jury deadlocked on most charges, was a bitter defeat for Blagojevich, who spent 2½ years professing his innocence on reality TV shows and later on the witness stand. His defense team insisted that hours of FBI wiretap recordings were just the ramblings of a politician who liked to think out loud.

After hearing the verdict, Blagojevich turned to defense attorney Sheldon Sorosky and asked “What happened?” His wife, Patti, slumped against her brother, then rushed into her husband’s arms.

Before the decision was read, the couple looked flushed, and the former governor blew his wife a kiss across the courtroom, then stood expressionless, with his hands clasped tightly.

The verdict capped a long-running spectacle in which Blagojevich became famous for blurting on a recorded phone call that his ability to appoint Obama’s successor to the Senate was “f—-ing golden” and that he wouldn’t let it go “for f—-ing nothing.”

The case exploded into scandal when Blagojevich was awakened by federal agents on Dec. 9, 2008, at his Chicago home and was led away in handcuffs. Federal prosecutors had been investigating his administration for years, and some of his closest cronies had already been convicted.

Blagojevich was swiftly impeached and removed from office.

The verdict provided affirmation to U.S. Attorney Patrick Fitzgerald, one of the nation’s most prominent prosecutors, who, after the governor’s arrest, had condemned Blagojevich’s dealings as a “political corruption crime spree.”

The key question for the jury was whether to accept the defense suggestion that Blagojevich’s activities amounted to “the kind of political wheeling and dealing that is common in Illinois and around the country.”

“That,” said Fitzgerald, his voice rising, “couldn’t be any further from the truth. … Selling a Senate seat, shaking down a children’s hospital and squeezing a person to give money before you sign a bill that benefits them is not a gray area. It’s a crime.”

Fitzgerald pledged to retry the governor after the first jury failed to reach a decision on all but the least serious of 24 charges against him.

The jury voted to convict on 17 of 20 counts after deliberating nine days heading into Monday. Blagojevich also faces up to five additional years in prison for his previous conviction of lying to the FBI; Pissetzky said Zagel would almost certainly sentence Zagel for all the convictions at once.

Judges have enormous discretion in sentencing and can factor in a host of variables, including whether a defendant took the stand and lied. Prosecutors have said that Blagojevich did just that.

Blagojevich was acquitted of soliciting bribes in the alleged shakedown of a road-building executive. The jury deadlocked on two charges of attempted extortion related to that executive and funding for a school.

Zagel has barred Blagojevich from traveling outside the area without permission. A status hearing to discuss sentencing was set for Aug. 1.

All 12 jurors — 11 women and one man — spoke to reporters after the verdict, identifying themselves only by juror numbers. Their full names were to be released Tuesday.

Jurors said the evidence that Blagojevich tried to secure a high-paying, high-powered position in exchange for the appointment of Obama’s successor in the Senate was the clearest in the case.

“There was so much more evidence to go on,” said Juror No. 140. Jury members said they listened and re-listened to recordings of Blagojevich’s phone conversations with aides. They also acknowledged finding the former governor likable.

“He was personable,” Juror No. 103 said. “It made it hard to separate what we actively had to do as jurors.”

Richard Kling, a professor at Chicago-Kent College of Law who watched much of the trial, said the defense had no choice but to put Blagojevich on the stand, even though doing so was risky.

“The problem was with some of his explanations,” Kling said. “It reminded me of a little kid who gets his hand caught in a cookie jar. He says, `Mommy I wasn’t taking the cookies. I was just trying to protect them and to count them.”‘

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Hedge Fund Manager Found Guilty On 14 Counts Of Insider Trading

May 13th, 2011

The Huffington Post

In what has been a heavily-watched insider trading case, Galleon Group hedge fund manager Raj Rajaratnam has been found guilty on all 14 counts of securities fraud and conspiracy, according to multiple reports. The announcement was made in a lower Manhattan federal court.

(Update: Analysts react to the Rajaratnam verdict below.)

For now, Rajaratnam, who ran one of the world’s largest hedge funds, will be free on bail, but will be fitted with an electronic monitoring device. Reuters has more on the Rajaratnam verdict:

Rajaratnam, a one-time billionaire, will remain free on bail until sentencing on July 29, U.S. District Judge Richard Holwell ruled after the jury delivered its verdict.

Rajaratnam was expressionless during the verdict reading by a courtroom deputy.

He could face 15-1/2 to 19-1/2 years in a federal prison under sentencing guidelines, prosecutors said.

The Manhattan federal jury announced its unanimous verdict on the 12th day of deliberations in what many legal experts said was a strong prosecution case using FBI phone taps and testimony of three former friends and associates of Rajaratnam.

The jury convicted Rajaratnam of nine counts of securities fraud and five counts of conspiracy for what prosecutors describe as the money manager’s central role in the most sweeping probe of insider trading at hedge funds on record.

During the two-month trial, prosecutors hammered at their argument that Rajaratnam cheated to gain an unfair advantage in the stock market from 2003 to March 2009, reaping an illicit $63.8 million.

Defense lawyers had stuck consistently to their main theme that Rajaratnam’s trades were guided by a trove of research and public information, not secrets leaked by highly-placed corporate insiders.

Sri Lankan-born Rajaratnam, 53, was ordered to be fitted with an electronic monitoring device while out on bail.

Prosecutors had asked the judge to jail Rajaratnam pending sentencing, but the judge rejected that request.

The case is USA v Raj Rajaratnam et al, U.S. District Court for the Southern District of New York, No. 09-01184.

The Wall Street Jorunal has a nice round-up of some of the key moments that may have swayed the jury. For example, Rajaratnam apparently told a colleague: “I heard yesterday from somebody who’s on the board of Goldman Sachs that they are going to lose $2 per share. The Street has them making $2.50.” Because this information came from a key bank employee and was sufficiently outside of the consensus view, the WSJ reports, prosecutors deemed it “material” information.

In 2009, Forbes estimated Rajaratnam’s net worth at $1.3 billion, ranking him 559 on the magazine’s list of the world’s richest people.

Update: Below are analyst reactions to the Rajaratnam verdict:

Yahoo! economics editor Daniel Gross dismisses somewhat the significance of the trial, calling it “a sideshow to the larger financial scandals” of recent years. “Its impact on the economy pales in comparison to the Lehman Brothers debacle,” Gross writes. “The sums of money and institutional failures involved were much less dramatic than in the Bernard Madoff affair.”

What makes Rajaratnam’s case significant, he says, is that it signifies the increasing prominence of South Asians in U.S. pop culture.

Charles Ferguson, director of the Academy Award-winning Inside Job, agrees that the focus on Rajaratnam’s trial is misguided. “The total amounts of money and the consequences in insider trading are trivial,” says Ferguson, according to The New York Times, “compared to the damage caused by the behavior that caused the financial crisis[.]”

Not everyone agrees. Anthony Michael Sabino, a professor at St. John’s University, said in a statement that this could be a turning point in the larger fight against white collar crime. “For more than 30 years, the government has had a spotty history in insider trading cases, reflecting the difficulty of gathering evidence, explaining the machinations of high finance to a jury, and reconciling sometimes conflicting legal theories,” the statement reads, according to the Washington Post.

“It is a defining case,” says Wayne State University law professor Peter Henning, who went on to say Rajaratnam “joins the pantheon of [convicted stock trader] Ivan Boesky and [fictional Wall Street character] Gordon Gekko,” according to Bloomberg.

The trial could also be a boon for the well-meaning trader. “The honest hedge fund managers should breathe a sigh of relief,” San Diego State professor of finance Dan Seiver says, according to Reuters. “This will make the competition fairer… That’s why we need these laws and cases to level the playing field.”

The conviction hasn’t seemed to rattle Wall Street thus far. “There is no market reaction,” says Joe Saluzzi, co-manager of trading at Themis Trading, according to Reuters. “(But) it’s the talk of the Street, no doubt about it.”

Click here for the full report from the Huffington Post

Italian Judge Finds 3 Google Execs Guilty Of Privacy Invasion

February 26, 2010

The New York Times

By Rachel Donadio

Three Google executives were convicted of violating Italian privacy laws on Wednesday, the first case to hold the company’s executives criminally responsible for the content posted on its system.

The verdict, though subject to appeal, could have sweeping implications worldwide for Internet freedom: It suggests that Google is not simply a tool for its users, as it contends, but is effectively no different from any other media company, like newspapers or television, that provides content and could be regulated.

The ruling further complicates the business environment for Google in Europe, where it faces a wave of antitrust complaints. And it comes shortly after Google threatened to withdraw from China, citing sophisticated attacks by hackers there and Chinese demands that it restrict information available to local users.

Google’s enormous search and advertising business depends heavily on its reach into every corner of the global Internet and on providing users access to as much digital content as possible, regardless of its origins or ownership.

The Italian move to hold the company or its executives responsible for text, photographs or videos made available by third parties through Google and its online services, like YouTube, poses a significant challenge to the company’s business model, along with those of other Internet companies like Facebook and Twitter.

In Italy, where Prime Minister Silvio Berlusconi owns most private media and indirectly controls public media, there is a strong push to regulate the Internet more assertively than it is controlled elsewhere in Europe. Several measures are pending in Parliament here that seek to impose various controls on the Internet. Critics of Mr. Berlusconi say the measures go beyond routine copyright questions and are a way to stave off competition from the Web to public television stations and his own private channels — and to keep a tighter grip on public debate.

“It’s a deliberate effort to control the means of communication,” said Juan Carlos de Martin, the founder of the Nexa Center at Turin’s Polytechnic University, which studies Internet use in Italy.

Italy has one of the lowest rates of Internet use and e-commerce in Europe, and experts warned that the ruling on Wednesday could erode the nation’s position further and limit information to young people, who watch television less than their parents.

In Milan, Judge Oscar Magi sentenced the Google executives in absentia to six-month suspended sentences for violation of privacy. Prosecutors said Google did not act fast enough to remove from the site a widely viewed video posted in 2006 showing a group of teenage boys harassing an autistic boy.

But Judge Magi, who has 90 days to issue his reasoning, cleared the Google executives of defamation charges. The three were Peter Fleischer, chief privacy counsel; David Drummond, senior vice president and chief legal officer; and George Reyes, a former chief financial officer. A fourth defendant, Arvind Desikan, charged only with defamation, was acquitted.

Internet activists and the American ambassador to Italy cried foul about the ruling, which some likened to punishing the mailman for delivering a nasty letter.

A spokesman for Google, Bill Echikson, called the ruling “astonishing” and said the company would appeal. In its blog, Google added that the ruling “attacks the very principles of freedom on which the Internet is built.”

Prosecutors said Google waited to remove the video until after complaints to the police by Vivi Down, an Italian group representing people with Down syndrome, whose name was mentioned by the boys in the video.

Google said it removed the video within two hours of receiving a formal complaint from the Italian police, two months after the video was first posted.

The boys, all minors, were not charged by prosecutors, but were sentenced by a different judge to community service. Prosecutors named the Google executives because Italian law holds corporate executives responsible for a company’s actions.

Google maintains that the ruling contradicted a European Union directive on electronic commerce that gives service providers safe harbor from liability for the content they host.

But prosecutors argued that because Google handled user data — and used content to generate advertising revenue — it was a content provider, not a service provider, and therefore broke Italian privacy law. It prohibits the use of someone’s personal data with the intent of harming him or making a profit.

“To say this is about censorship has a big media effect, but is false,” said Alfredo Robledo, one of the prosecutors. “This is about finding a balance between free enterprise and the protection of human dignity.”

Still, the upshot of the ruling, if it prevails on appeal, is that Google will be expected in Italy to monitor the content it hosts. Mr. Echikson, the Google spokesman, said that would be impossible considering that 20 hours of video are uploaded to its site every minute.

Click here for the full report

Bayer Admits GMO Contamination is Out of Control

December 18, 2009

Organic Consumers

 Bayer has admitted it has been unable to control the spread of its genetically-engineered organisms despite ‘the best practices [to stop contamination]‘(1). It shows that all outdoors field trials or commercial growing of GE crops must be stopped before our crops are irreversibly contaminated.

$2 million US dollar verdict against Bayer confirms company’s liability for an uncontrollable technology

Greenpeace welcomes the United States federal jury ruling on 4 December 2009 that Bayer CropScience LP must pay $2 million US dollars to two Missouri farmers after their rice crop was contaminated with an experimental variety of rice that the company was testing in 2006.

This verdict confirms that the responsibility for the consequences of GE (genetic engineering) contamination rests with the company that releases GE crops.

Bayer has admitted it has been unable to control the spread of its genetically-engineered organisms despite ‘the best practices [to stop contamination]‘(1). It shows that all outdoors field trials or commercial growing of GE crops must be stopped before our crops are irreversibly contaminated.

A report prepared for Greenpeace International concluded that the total costs incurred throughout the world as a result of the contamination are estimated to range from $741 million to $1.285 billion US dollars.(2) The verdict indicates that Bayer is liable for what could turn out to be a large proportion of these costs, as it awards damages in the first two of more than 1,000 currently pending lawsuits. The decision must be used to support all claims for losses incurred by other US farmers whose crops have suffered from GE contamination.

Click here for  full report