Friday, November 30, 2007

Why We Need Federalism-3

"The Justice Department has decided not to file criminal charges against nine former Delphi Corp. officials involving allegations of accounting fraud. ... An SEC probe found Delphi manipulated earnings from 2000 to 2004, using illegal schemes to boost its profit, including concealing a $237 million transaction in 2000 with GM involving warranty costs", WSJ, 28 November.

"Robert Morgenthau, the Manhattan [DA] who investigated BCCI, tells us that Abu Dhabi 'has been responsible' since BCCI. ... Morgenthau also recounted that the elder Sheik Zayed once called to inform the State Department that, if Mr. Morgenthau indicted anyone in the royal family over the scandal, he would pull his billions out of the U.S. and make no further investments here. Mr. Morgenthau says this message was passed to him via the Justice Department. His reply: 'Tell them that that you don't control that cranky S.O.B. in New York'. As a long-time New York DA, Mr. Morgenthau could stand up to such political pressure the way the Justice Department might not", my emphasis, WSJ, 29 November.

I remember the BCCI scandal and how the DOJ tried to stop Morgenthau's investigation. This WSJ is the same WSJ which opposes letting the plaintiffs' bar tangle with the Wall Street powers that be, favoring DOJ and SEC discipline of Wall Street. Feh. Imagine: the DOJ can't stand up to political pressure from Abu Dhabi. How much does Saudi Arabia influence it?

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