The Clinton-Mezvinsky nuptials took place about two hours before the end of Shabbat... The MasterLiving Blog

The MasterLiving Blog: The Clinton-Mezvinsky nuptials took place about two hours before the end of Shabbat.

read the rest on

Ships Ahoy

NEW YORK - JULY 15: Workers examine remnants of what is thought to be an 18th century ship at the site Ground Zero Construction Site in July 15, 2010 New York City. The wood hulled vessel is approximately 30 feet long and was found 20 to 30 feet below street level on Tuesday morning.

FP Passport | FOREIGN POLICY

Goldman Execs Blame Anti-Semitism - The Daily Beast

Charlie Gasparino reports that senior executives inside Goldman are in a panic over its image, trying to hire a "brand manager"-and even blaming a prejudice against the firm's Jewish chiefs.

Goldman Execs Blame Anti-Semitism

by Charlie Gasparino

August 20, 2009 | 11:31pm

Charlie Gasparino reports that senior executives inside Goldman are in a panic over its image, trying to hire a "brand manager"—and even blaming a prejudice against the firm's Jewish chiefs.

How worried are Goldman Sachs executives about their ability to manage the coming media tsunami when bonus season comes around?

Paranoia might not be too strong a word to describe the mind-set. People inside Goldman tell me that some senior executives say they believe the onslaught of negative stories detailing Goldman’s manifold ties to upper levels of government, charges that it somehow fraudulently profited from the subprime crisis, and now the press about the firm’s record earnings is so out of proportion to reality that the coverage contains an element of anti-Semitism—subtly playing off the racist myth of a conspiracy of Jewish bankers controlling the world for their own benefit. (Goldman was founded by a Jewish immigrant, and after years of being run by Gentiles Jon Corzine and Hank Paulson, is once again run by a Jew, Lloyd Blankfein.)

“Blankfein is scared to death about what might happen when the bonus numbers hit,” one executive says.

Blankfein, I am told, isn’t paranoid but really concerned about being placed in an untenable position for any CEO who needs to retain talent. If he doesn’t pay his people, many will simply jump ship to other firms—including private-equity firms—that will. If he does, he faces endless negative coverage about how Goldman is making its partners rich at the expense of taxpayers who bailed out the firm last year.

This quandary has resulted in some very serious discussions at Goldman to attempt to spin the bonus issue in the best possible (or least damaging) way. The Daily Beast has learned that Goldman is considering “a menu” of options: One possibility is to pay the vast majority of the bonus in stock. On Wall Street, executives receive a combination of stock and cash, with the cash portion comprising 65 percent of the total bonus. Goldman may just flip that around.

Another option, according to people close to the matter, is for Goldman to pay much smaller bonuses and just hand out larger salaries, meaning there won’t be a massive media event that occurs every year once all the bonuses, including Blankfein’s—which hit nearly $70 million for 2007, just months before Goldman’s bailout—are announced.

A third option, these people say, is for Goldman to forgo bonuses for the most part and just buy its stock in the open market. Because most of its executives have large pieces of their net worth tied up in shares of Goldman, the wealth effect would be bigger and less sensational than paying all those huge bonus packages at the end of the year.

Blankfein, of course, has a good reason to be worried. Brand and image is more important now than ever before, and the CEO’s internal research shows that Goldman is taking a beating like never before. Some of the criticism of Goldman is of course, absurd, like it committed securities fraud simply by shorting the housing market back in 2007.

Some of it isn’t: that the firm is now embracing the same type of risk that led to its near implosion back in 2008.

It almost doesn’t matter—it’s all starting to stick, and Goldman has suddenly replaced Citigroup, Merrill, and even Lehman as the leading culprit of Wall Street greed and abuse committed during the financial crisis. In the good old days, Goldman could just ignore the chattering class, make a lot of money, and tell the rest of the world to screw off.

No longer. The firm, like the rest of the former bastion of capitalism known as Wall Street, is protected by the federal government as a commercial bank. Goldman was bailed out with the rest of the financial system late last year, and while government bureaucrats don’t run Goldman like they run Citigroup, they are watching the firm like never before. And one thing government bureaucrats don’t like is bad publicity, even if it’s in fringe media publications.

That’s why Goldman has been looking for months for the right person to fill the job of “brand manager.” It’s the reason senior executives at the firm meet almost daily on how to repair the firm’s image. It’s the reason Blankfein “looks like shit,” according to one Wall Street CEO who considers himself a friend of the Goldman CEO and who says Blankfein has “become obsessed with the firm’s image problems.” And it’s the reason Goldman is weighing a menu of options that could soften what senior executives believe will be an onslaught of negative media attacks when the firm doles out bonuses to its best people at the end of the year.

“Blankfein is scared to death about what might happen when the bonus numbers hit,” one executive says.

Of course, there might not be any bonus money to hand out. The markets could implode over the next two months. The Fed could stop subsidizing Wall Street’s risk-taking and revoke Goldman’s charter as a commercial bank, meaning it is no longer Too Big to Fail and will have to pay more to finance trades and roll the dice in the bond markets. Goldman also could try to corner the market of drug stocks, betting President Obama’s health-care plan will fail, and guess what, the American people suddenly change their mind and embrace socialism and learn to love “the public option,” making Goldman’s trade an even worse bet than subprime debt back in 2007.

But barring any of this, Goldman will have a piggy bank of more than $11 billion to dole out in bonuses at year’s end, not exactly what most businesses would consider a problem, unless, of course, you’re Goldman and you’ve undergone the longest media-induced proctology exam in the firm’s long and storied history.

Spokesman Lucas Van Praag declined to discuss the specifics of the “menu” of options the bank is considering, but he said any stock-buyback program won’t be tied to bonuses.

What was interesting about Van Praag’s “denial” was that he won’t deny Goldman is weighing some large stock buyback. “I can’t comment on that,” he said before adding that analysts had been calling on the firm to do a stock buyback for some time.

One thing is certain: Goldman’s top executives might be getting much richer at the end of this year, but the firm’s reputation is sinking and may well sink further.

Consider this: Goldman produced record earnings in the second quarter, and if it just cranks out mediocre profits for the remaining two, Blankfein would be on course to receive a bonus of $50 million or more, according to people inside the firm.

This after Goldman was rescued from extinction (this is where I agree with the conspiracy theorists) nearly a year ago, when the financial crisis became most acute, with a $10 billion capital injection from the federal government, not to mention the tens of billions of dollars that flowed right to Goldman’s bottom line when the federal government bailed out AIG and honored all those insurance contracts Goldman held on its own portfolio of risky debt.

Of course, the flacks at Goldman would tell you that Goldman was among the first to repay its loan, and amazingly, they continue to spin that the firm wasn’t really bailed out when the Feds bailed out AIG. (Their rationale is too nonsensical to explain; trust me on this one, they’re full of shit.) Where they’re less full of shit on is the difficulties they face in dealing repairing the firm’s image.

The normally tight-lipped Van Praag put it this way: “We are obviously cognizant of the environment and the atmosphere that we’re operating in, but we also recognize that we have to pay our people to keep the firm competitive, which poses some issues for us.”

Van Praag also concedes that the recent attacks on the firm have hit home, particularly for Blankfein, after The New York Timesreported that former Treasury Secretary (and former Goldman CEO) Hank Paulson spoke to Blankfein far more than any other CEO during the height of the financial crisis last year, suggesting that Goldman received preferential treatment. “Is Lloyd worried about our image? Nobody likes negative publicity. It’s unpleasant,” the spokesman says.

Charles Gasparino is CNBC's On-Air Editor and appears as a daily member of CNBC's ensemble. He is a columnist for The Daily Beast and a frequent contributor to the New York Post, Forbes, and other publications. His book about the financial crisis, The Sellout, is scheduled to be published later in 2009.

URL: http://www.thedailybeast.com/blogs-and-stories/2009-08-20/goldman-execs-blame-anti-semitism/p/

N.J. Officials and Clergy Arrested - Video

Oy Vey!! 44 Charged by U.S. in New Jersey Corruption Sweep

44 Charged by U.S. in New Jersey Corruption Sweep

Louis Lanzano/Associated Press

Agents led suspects from F.B.I. headquarters in Newark on Thursday. The inquiry began with questions on money laundering.

By DAVID M. HALBFINGER

Published: July 23, 2009

A two-year corruption and international money-laundering investigation stretching from the Jersey Shore to Brooklyn to Israel and Switzerland culminated in charges against 44 people on Thursday, including three New Jersey mayors, two state assemblymen and five rabbis, the authorities said.

Multimedia

Graphic

How the Corruption Case Unfolded

Enlarge This Image

Robert Stolarik for The New York Times

Peter J. Cammarano III, leaving the courthouse in Newark, was elected Hoboken mayor in June. He is accused of agreeing to help a supposed developer with his projects in exchange for cash.

Enlarge This Image

Nadav Neuhaus for The New York Times

Ralph J. Marra Jr., above center, acting United States attorney in New Jersey, said average citizens “don’t have a chance” against the culture of corruption unearthed.

The case began with bank fraud charges against a member of an insular Syrian Jewish enclave centered in a seaside town. But when that man became a federal informant and posed as a crooked real estate developer offering cash bribes to obtain government approvals, it mushroomed into a political scandal that could rival any of the most explosive and sleazy episodes in New Jersey’s recent past.

It was replete with tales of the illegal sales of body parts; of furtive negotiations in diners, parking lots and boiler rooms; of nervous jokes about “patting down” a man who turned out to indeed be an informant; and, again and again, of the passing of cash — once in a box of Apple Jacks cereal stuffed with $97,000.

“For these defendants, corruption was a way of life,” Ralph J. Marra Jr., the acting United States attorney in New Jersey, said at a news conference. “They existed in an ethics-free zone.”

Mr. Marra said that average citizens “don’t have a chance” against the culture of influence peddling the investigation had unearthed.

Even veteran political observers were taken aback by the scope of the investigation. The mayors of Hoboken, Secaucus and Ridgefield were among those arrested.

“This is so massive,” said Joseph Marbach, a political scientist at Seton Hall University. “It’s going to just reinforce the stereotype of New Jersey politics and corruption.”

The arrests had immediate reverberations in the governor’s race, and a member of Gov. Jon S. Corzine’s administration was forced to resign after federal agents raided his home.

The authorities laid out two separate schemes, one involving money laundering that led to rabbis and members of the Syrian Jewish community in Brooklyn and in the Jersey Shore town of Deal, where many of them have summer homes. The other dealt with political corruption and bribery and involved public officials mostly in Jersey City and Hoboken, where the pace of development has been particularly intense in recent years.

Linking the two schemes was the federal informant who was not named in court papers but whom people involved with the investigation identified as Solomon Dwek, a failed real estate developer and philanthropist who was arrested in May 2006 on charges of passing a bad $25 million check at a bank in Monmouth County, N.J.

Early on, Mr. Dwek helped investigators penetrate an extensive network of money laundering that involved rabbis in the Flatbush section of Brooklyn, where the Syrian Jewish community is based, and in Deal and Elberon, towns on the Jersey Shore.

Mr. Dwek, a well-known member of the Syrian Jewish community whose parents founded the Deal Yeshiva, never concealed that he was facing bank fraud charges, instead telling targets, who included three rabbis in Brooklyn and two in New Jersey, that he was bankrupt and trying to conceal his assets, according to people involved in the case. The targets, in turn, accepted bank checks Mr. Dwek made out to charities that they oversaw, deducted a fee, and returned the rest to him in cash.

Much of the cash they provided him came from Israel, and some of that in turn came from a Swiss banker, prosecutors said. All told, some $3 million was laundered for Mr. Dwek since June 2007, prosecutors said.

The case shifted to focus on public corruption, prosecutors say, after one of the men accused of money laundering, Moshe Altman of Monsey, N.Y., a Hudson County developer, introduced Mr. Zwek to a politically connected building inspector in Jersey City, who then steered him to another city official, Maher Khalil.

Mr. Khalil, who is accused of accepting $30,000 in bribes from Mr. Dwek, made a series of referrals to what he called “players,” helping Mr. Dwek to branch out to a web of public officials, mayoral and council candidates, and their confidants.

Mr. Dwek — now operating under an assumed identity, according to people involved in the case — honed an approach: introduced to a local influence-peddler, he would say he was looking to build high-rises or other projects in their city or county.

He would offer $5,000 in cash for an upcoming campaign, or as a straight-up bribe, with the promise of more to come, and with earnest pleas that his official requests be “taken care of.” And he would pull the money out of the trunk of his car.

He also came up with a lingo: corrupt payments were “invitations,” approvals for development projects were “opportunities.” The communities where his pitch appears to have worked included Jersey City, Hoboken, Bayonne, Ridgefield and parts of Ocean County.

Among the public officials arrested were Mayor Peter J. Cammarano III of Hoboken, who was a City Council member before he took office as mayor on July 1, and Mayor Dennis Elwell of Secaucus, both Democrats; Assemblyman L. Harvey Smith of Jersey City, also a Democrat; and Assemblyman Daniel M. Van Pelt, a Republican from Ocean County.

Like some of the others arrested, Mr. Smith, a former teacher, ran for office on an anticorruption platform, telling The New York Times: “I don’t take cash. I don’t let people give me things.” He is charged with taking $15,000 in bribes.

Mr. Van Pelt, who sits on an assembly committee that oversees the Department of Environmental Protection, was accused of accepting money to help the informant obtain environmental permits. In a meeting in Atlantic City in February, prosecutors charged, Mr. Van Pelt assured Mr. Dwek that the environmental agency “worked for” him, then took $10,000 in cash and told the informant to call him “any time.”

The bulk of the corruption charges arose in Hudson County. The president of the City Council in Jersey City, Mariano Vega Jr., and the city’s deputy mayor, Leona Beldini, were also arrested. Mr. Vega took three $10,000 payments before and after the municipal elections in May, prosecutors said. Anthony R. Suarez, the mayor of Ridgefield, in Bergen County, was charged with accepting $10,000 in bribes.

The court papers suggest the ease, and the relatively modest payments, with which local officials seemed willing to be part of the scheme.

In Hoboken, prosecutors charge in their complaint, Mr. Cammarano, then a councilman running for mayor, eagerly agreed in a meeting at the Malibu Diner this year to help Mr. Dwek with his projects in exchange for cash. Prosecutors said that when Mr. Dwek asked for assurances that his requests would be expedited by the Hoboken City Council, Mr. Cammarano replied, “I promise you,” adding, “You’re going to be, you’re going to be treated like a friend.”

Mr. Dwek responded that he would give a middleman $5,000 in cash for Mr. Cammarano and another $5,000 after his election as mayor.

“O.K.,” Mr. Cammarano replied, according to the complaint. “Beautiful.”

And Mr. Cammarano expressed confidence that he would be elected no matter what, according to the complaint. “Right now, the Italians, the Hispanics, the seniors are locked down,” he is quoted as saying. “Nothing can change that now.”

“I could be, uh, indicted,” he continued, “and I’m still going to win 85 to 95 percent of those populations.”

It is not clear from the federal documents whether Mr. Dwek indeed owned any properties or whether any of the developments he proposed were ever built.

In the money laundering scheme, the rabbis arrested included Saul J. Kassin, 87, a leader of the Syrian Jewish community in Brooklyn and New Jersey; Mordchai Fish and Lavel Schwartz, both rabbis in Brooklyn; and Eliahu Ben Haim and Edmund Nahum, who lead congregations in Deal.

Rabbi Nahum, prosecutors said, told Mr. Dwek that he should spread his money through a number of rabbis. “The more it’s spread the better,” Rabbi Nahum said, according to the complaint.

Another man in Brooklyn, Levy-Izhak Rosenbaum, was accused of enticing vulnerable people to give up a kidney for $10,000 and then selling the organ for $160,000. Mr. Dwek pretended to be soliciting a kidney on behalf of someone and Mr. Rosenbaum said that he had been in business of buying organs for years, according to the complaint.

Weysan Dun, the special agent in charge of the Federal Bureau of Investigation’s Newark office, emphasized that the case was motivated by neither religion nor politics. That is an important point since New Jersey governor’s race pits a former United States attorney,Christopher J. Christie, a Republican, under whom the investigation began, against the Democratic incumbent, Mr. Corzine, whose administration was caught up in the arrests Thursday.

Agents raided the home of Joseph V. Doria Jr., commissioner of the state’s Department of Community Affairs. Mr. Doria, who is also the former mayor of Bayonne, resigned hours later at Governor Corzine’s request, officials said.

“Any corruption is unacceptable — anywhere, anytime, by anybody,” the governor said in a statement. “The scale of corruption we’re seeing as this unfolds is simply outrageous and cannot be tolerated.” He also called for the resignations of Mr. Smith and Mr. Van Pelt.

Mr. Christie called it a “really tragic day,” and said that he had worked “extraordinarily hard” to combat corruption in his seven years as a prosecutor, but that, “unfortunately, today is another example that there is much work still to be done.”

Outside Hoboken’s City Hall on Thursday, where a sign still had Mr. Cammarano’s predecessor’s name on it, residents chatted about the news. Some said they had come to expect as much from their politicians.

Others retained the capacity for shock. Carlos Ochoa, 63, a city street sweeper, said he had volunteered for the new mayor’s campaign. “I’m very disappointed,” he said. “I had a lot of expectations of him.”

Reporting was contributed by Kitty Bennett, David W. Chen, Kareem Fahim, William K. Rashbaum, Nate Schweber and Karen Zraick

Related

Life Can Imitate Art: Indictments Describe Deals More Fit for a Crime Movie (July 24, 2009)

Syrian Sephardic Communities Shaken by Charges Against a Leading Rabbi (July 24, 2009)

Millionaire, Patron and Now Informant (July 24, 2009)

Criminal Complaints in New Jersey Corruption Inquiry