Reports & analysis by award-winning investigative journalist Lucy Komisar “”

Archive for the Category ‘Crime & Corruption’

Ex-employee who claimed firing over opposition to Haiti bribery settles suit against IDT

Ex-employee who claimed firing over opposition to Haiti bribery settles suit against IDT

Jan 24, 2011 – The lawsuit filed by a former employee against the Newark-based global telecom IDT is over. J. Michael Jewett, who was an IDT executive, claimed in 2004 that he was fired for opposing bribes to Haitian officials. Lawyers for both sides agreed to drop the complaint and counterclaims in an accord filed with the U.S. District Court in Newark on January 13th. This has not been reported before now.

IDT spokesman Bill Ulrey said, “We have no comment…as usual. Thank you.” Jewett’s attorney William Perniciaro also declined to discuss the matter. When both sides don’t talk about an agreement to dismiss a case, that normally means a confidential settlement has been reached.

Shells, Shams and Corporate Scams

Shells, Shams and Corporate Scams

The American Interest, Jan-Feb 2011 (online Dec 9, 2010)

Corporate secrecy, which involves hiding the identities of company owners from tax and other legal authorities, is itself no secret. It is well known that offshore banking centers such as Switzerland, Liechtenstein and the Cayman Islands have for many years enabled fraudsters all over the world to carry out scams, launder illicit profits, stash stolen loot and hide money from tax authorities.

What most people do not know, however, is that there is a vast and growing American offshore. Foreign crooks prize states such as Nevada, Wyoming and especially Delaware for state laws that don’t require them to list owners or even company officials when a new company is formed. Corporate interests and the Obama administration are blocking congressional efforts to change that.

A Lingering Problem for IDT — CEO admits company official met with Aristide on contract

A Lingering Problem for IDT — CEO admits company official met with Aristide on contract

Barron’s, Sept 20, 2010 –

Scoop summary: Howard Jonas, CEO of U.S. telecom IDT, in an interview with Lucy Komisar, acknowledges for the first time that then Haiti President Jean-Bertrand Aristide in 2003 met with an IDT official during discussions about a contract to pay Haiti Teleco for calls from U.S. customers. That contract included agreement for IDT to send payments to a shell company in the offshore Turks and Caicos Islands. Jonas said IDT got an “ethics letter” from a law firm clearing the deal, but the lawyer said in a memo filed with the court, published here for the first time, that he simply told IDT to do “due diligence.” IDT signed the contract the next day.

A former IDT official, who objected to the deal, was fired and is suing the company; trial is set for Nov 9th. The Justice Department and Securities and Exchange Commission are investigating violation of the Foreign Corrupt Practices Act. Jonas’s revelations are likely to have a major impact in the trial and investigations.

IDT’s Voodoo Economics: Inside Justice Dept’s probe of telecom bribes in Haiti

IDT’s Voodoo Economics: Inside Justice Dept’s probe of telecom bribes in Haiti

The Big Money, March 11, 2010

When the devastating earthquake hit Haiti in January, IDT, the New Jersey-based global phone company, moved fast to help.

It announced it was setting up calling stations at hotels and other sites so Haitians could use its Internet calling-service to reach family and friends around the world. It cut rates on its U.S. prepaid calling-card to 2 cents a minute to Haiti (at least for 12 days), donated 4,000 $2-prepaid calling-cards to Haitian community groups in New York and Florida, and said it would give some proceeds from prepaid calls to Haitian Red Cross relief.

Such a warm, fuzzy response from a U.S. corporation often wins plaudits, though, of course, IDT has a business interest in the impoverished island. In 2005, in its latest publicly available figures, the company reported $4 million in profits from $17 million in revenues for routing calls there.

The Real AIG Scandal: How the Game is Rigged at Wall Street’s Casino

The Real AIG Scandal: How the Game is Rigged at Wall Street’s Casino

AlterNet, March 26, 2009 –

Congress has deftly avoided the real story of AIG’s collapse, which will make a few million in bonuses seem like peanuts.

Most legislators at a House Finance subcommittee hearing last week deftly avoided the real story of AIG’s collapse. Instead, they homed in on the public relations disaster of hundreds of top AIG officials and staff getting $165 million (later revealed as over $218 million) in bonuses.

The key issue ignored by the congressmen and women was the potential catastrophe represented by as much as $2.7 trillion in AIG derivative contracts and how AIG and the U.S. government are dealing with them. To put that number in context, we’ve so far provided the company only about $170 billion.

Geithner – Treasury Nominee Failed to Halt Bond Scam

Inter Press Service (IPS), Jan 19, 2009 –

U.S. Senators at Timothy Geithner’s confirmation hearing for Treasury Secretary Wednesday may want to ask him about a failure to act that is costing the U.S. a lot more than the amount he evaded on taxes.

The Federal Reserve Bank of New York, which he has led since 2003, conducts the operations on Wall Street of the Federal Reserve in Washington, the country’s central bank.

The New York Fed under Geithner’s presidency has failed to stop massive naked short selling of U.S. Treasury bonds that threatens the stability of the market and sale of the bonds.

Ironically, the scam, enabled by a lack of regulation at the behest of Wall Street brokerage houses, makes it more expensive for the U.S. to bail out those same financial institutions.

Courter to leave IDT; NYSE threatens delisting; stock in free fall

Courter to leave IDT; NYSE threatens delisting; stock in free fall

Oct 6, 2008

From alleged kickbacks to Aristide to a company that’s tanking.

Jim Courter, the former New Jersey Republican Congressman who quit as a McCain national finance co-chair after IDT, the global telecommunications company he heads, was fined $1.3 million by the Federal Communications Commission, now has much bigger problems. IDT announced Friday that Courter will quit the company. IDT’s filing with the SEC the same day shows the company in a free fall. Its stock is tanking, and the New York Stock Exchange has threatened to delist it.

The FCC fine imposed for IDT’s failure to file its contract with Haiti was first reported by the author in July. The contract revealed that IDT was sending Haiti fees to a Turks & Caicos shell company instead of to a Haiti Teleco account. A whistleblower charged kickbacks.

The company said Courter would leave as CEO when his contract expires next October. In the meantime, his 2009 salary will be paid entirely in stock, which he cannot cash in till his departure. That could mean paltry pickings. IDT stock has fallen to 69 cents from more than $24 in 2004 and $1.93 in June.

IDT could be in for some more trouble with the FCC if a new administration decides to enforce its regulations. According to FCC responses to Freedom of Information Act requests, IDT has never filed its contracts with any of the 140 major international carriers to which it claims to supply service. This violation could bring fines of $7,000 a day for each case, but the agency has given the company a pass on obeying its rules.

Off the Trail: IDT chief quits McCain campaign

Off the Trail: IDT chief quits McCain campaign

Condé Nast Portfolio, July 15, 2008

Jim Courter, one of Senator John McCain’s top fundraisers, has resigned from the McCain campaign just days after Lucy Komisar reported on portfolio.com that Courter’s company had been fined by regulators.

The Federal Communications Commission last week levied a fine of $1.3 million against IDT, a New Jersey telecommunications company headed by Courter, for failing to disclose its 2003-04 long-distance phone agreements with Haiti.

McCain ‘Trailblazer’ Burned

McCain ‘Trailblazer’ Burned

Condé Nast Portfolio, July 11, 2008

The FCC hits James Courter’s IDT with a $1.3M fine for a cloudy deal in Haiti.
James Courter, photo by Terry Ashe, Time-Life Pictures/Getty Images

IDT, the New Jersey telecommunications outfit run by one of John McCain’s top fundraisers, Jim Courter, was fined $1.3 million by the Federal Communications Commission for failing to file a contract for telephone service to Haiti in 2004.

Courter, a former New Jersey Republican congressman, is one of 20 McCain national finance co-chairs, and joined the campaign in February 2007. He’s a “Trailblazer” for McCain, meaning he raised at least $100,000. The IDT PAC has contributed $84,850 in 2008.

IDT’s work with Haiti has been put under scrutiny since a former employee, Michael Jewett, then IDT’s manager for the Caribbean, sued the company. His suit claims he was fired when he balked at negotiating a scheme that routed a portion of the company’s long distance revenue from Haiti calls to a shell company, Mount Salem in the Turks & Caicos, which he was told was owned by then-president Jean-Bertrand Aristide.

French Finance Minister not “sufficiently aware” of frigates case

French Finance Minister not “sufficiently aware” of frigates case

Oct 23, 2007 – In the continuing saga of the Frigates of Taiwan, involving about $1 billion in bribes and kickbacks paid by the French company Thomson to win a bid on the sale of six war frigates to Taiwan in the early 90s, I asked French Finance Minister Christine Lagarde, at the Council on Foreign Relations yesterday, if she would continue the cover-up on a corruption case that could be the largest (known) in French history.

Madame Lagarde wasn’t “sufficiently aware” of the case that has been exhaustively reported by French print and broadcast media for more than a decade.

Corruption: Another Lead in Siemens Bribery Probe?

<em>Corruption</em>: Another Lead in Siemens Bribery Probe?

Inter Press Service (IPS), Aug 30, 2007

U.S. officials from the Securities and Exchange Commission, the Justice Department and the Federal Bureau of Investigation met with Munich prosecutors this week regarding the 1.3-billion-dollar bribe fund run by Siemens, the German multinational technology company.

After talking to the Germans about tracking the financial flows of the largest illicit slush-fund ever discovered, the U.S. investigators would do well to visit Luxembourg on Germany’s western border.
Clearstream list of Siemens accounts 2001
There they could seek information from Clearstream, the international financial clearing house, that might tell them how Siemens moved so much money and where it went. That is because Siemens has the unusual status of being one of only four non-financial companies among 2,500 Clearstream members. It gained membership on the insistence of a former CEO who was fired after a scandal.

Siemens has a $1.3-billion bribe fund; did it move payoffs through Clearstream?

Siemens has a $1.3-billion bribe fund; did it move payoffs through Clearstream?

Aug 15, 2007

Siemens, the German-based multinational technology company that made massive payoffs to get international contracts, has, according to the German press, a bribery slush fund of more than $1.3 billion. Siemens It moved money through a network of front companies, mostly in offshore Liechtenstein and the United Arab Emirates. Siemens is being investigated by the U.S. Justice Department and the Securities and Exchange Commission as well as by public prosecutors in Germany and Italy.

How did Siemens officials move so much money about? Investigators ought to take a look at Siemens’ transactions through Clearstream, the international financial clearing house in Luxembourg, whose clients do not undergo the same due diligence scrutiny that regular banks apply.

Siemens is one of only four non-financial companies (out of 2500) with Clearstream accounts. Here — published for the first time — are listings of Siemens’ Clearstream accounts for 1995, 2000 and 2001.

Politicizing the Justice Department, Bush takes a page from his father

Politicizing the Justice Department, Bush takes a page from his father

May 27, 2007

President Bush’s attorney general, Alberto Gonzales, has come under fire for politicizing the U.S. Justice Department for his dismissals of eight U.S. attorneys, apparently because they didn’t target Democrats. But using the Justice Department for political ends isn’t simply an invention of Gonzales or of the President; it’s an old Bush family tradition.

In politicizing the Justice Department, Bush takes a page from his father. The George H.W. Bush Justice Department 25 years ago balked at investigating and prosecuting the key players in the scandal of the criminal, terrorist-friendly bank, BCCI, and moved only, and in limited fashion, after New York District Attorney Robert Morgenthau forced its hand.

Central Intelligence AgencyBush had a strong reason to want Justice to block pursuit of the case: the CIA used BCCI for its “black ops,” including funneling some of the $2 billion Washington sent to client Osama bin Laden and running money for the illegal Iran-Contra operation.

Questions Linger About Bushes and BCCI

Questions Linger About Bushes and BCCI

Inter Press Service (IPS), April 4, 2007

Now that the U.S. Congress is investigating the truth of President George W. Bush’s statements about the Iraq war, they might look into one of his most startling assertions: that there was a link between Saddam Hussein and Osama bin Laden.

BCCI logo on buildingCritics dismissed that as an invention. They were wrong. There was a link, but not the one Bush was selling. The link between Hussein and Bin Laden was their banker, BCCI. But the link went beyond the dictator and the jihadist — it passed through Saudi Arabia and stretched all the way to George W. Bush and his father.

Offshore Scorecard: US Safra Bank moves Brazilian politician’s kickbacks to Jersey account

Offshore Scorecard: US Safra Bank moves Brazilian politician’s kickbacks to Jersey account

March 11, 2007

A few days ago, Manhattan District Attorney Robert Morgenthau announced the indictment of Paulo Maluf, the former governor and mayor of Sao Paulo, Brazil, and four co-conspirators, for stealing more than $11.6 million from a Brazilian public works project. Safra BankThe money moved through the Safra Bank in New York. It was only part of the $130 million that Maluf passed through Safra in 18 months alone.

The case offers another example of how the offshore banking system, controlled by the global banks, helps the world’s crooks.

Exclusive: Sealed evidence in the IDT Haiti bribery case is revealed

<em>Exclusive</em>: Sealed evidence in the IDT Haiti bribery case is revealed

March 8, 2007

Until now, IDT, the giant U.S. telecom accused of bribing former Haiti President Jean-Bertrand Aristide Jean Bertrand Aristideto get a lucrative phone contract, has managed to keep details of the case under wraps. That is because IDT lawyers succeeded in getting the U.S. District Court Judge, Mark Falk, to gag whistleblower D. Michael Jewett and seal his testimony.

But somehow, three weeks ago — unaccountably in the face of Jewett’s lawyer’s unsuccessful attempts to unblock the court record — the statements of Jewett and of the top IDT officials were posted on Pacer, the US government court website.

What interesting reading those documents make, especially Jewett’s detailed account of what may happen in a major corporation when a lone employee stands up against corruption.

Exclusive: Confessions of a Citibanker

Is Citibank Spain a tax cheat?
New Internationalist, Aug 2006
Citigroup

With help from a whistleblower, I followed the money trail through the offshore operations of Citigroup, the world’s biggest bank, and discovered that Spanish bankers handling their client’s offshore accounts were getting commissions via an internal accounting system instead of on the regular books.

It is the same internal system that Citigroup used in the 1970s to compensate currency traders in Paris, London, Frankfurt and elsewhere who “booked” trades in the tax haven Nassau, the Bahamas. They were exposed by an insider, were investigated by the SEC and Congress, and had to pay millions in back taxes. Is this happening again?

France & UK Ignore Corporate Bribery: One Hand Launders the Other

France & UK Ignore Corporate Bribery: One Hand Launders the Other

Inter Press Service (IPS), Dec 29, 2006

Investigators find evidence that Siemens (German electronics & engineering firm), Total (French oil company), and BAE (British arms conglomerate) paid multi-millions of dollars in bribes through bank accounts in Switzerland and other offshore centers.
Siemens, Total, BAE logos

France and the UK argue “national security” to block inquiries. Concern is more likely the “security” of top officials who got kickbacks.

Spain’s discovery that funding for Basque terrorist group ETA goes through tax havens is dramatic proof that “national security” lies not in protecting but in dismantling the global offshore secrecy network.

Poisoned Russian linked to investigation of possible bribes by ex-Yukos official

Poisoned Russian linked to investigation of possible bribes by ex-Yukos official

Dec 27, 2006

Who might have killed former Russian spy Litvinenko? Julia Svetlichnaya, a Russian living in London, told the press there that she had met Litvinenko and learned that he was collecting information about mega-rich Russian entrepreneurs to use for blackmail.

It has not been reported before that Litvinenko’s collaborator, Yevgeny Limarev, had visited Elena Collongues-Popova (shown here), a Russian woman in Paris, to seek information connecting ex-Yukos official Alexei Golubovich to bribery of the former president of Lithuania. And Svetlichnaya hasn’t told the press that she worked for the very same Golubovich.

US/Haiti: Govt Corruption Suit Stalls for Lack of Funds

US/Haiti: Govt Corruption Suit Stalls for Lack of Funds

Inter Press Service (IPS), Oct 26, 2006

The U.S. Justice Department is withholding agreement to share assets seized from Haitian drug traffickers to finance a lawsuit by the Haitian government charging former President Jean-Bertrand Aristide with taking bribes.

The suit is based on allegations by a former executive of the telecom company IDT that before Aristide left the country in 2004, he took hundreds of thousands of dollars in kickbacks from IDT, which is connected to prominent U.S. Republicans.

Justice Dept. Criminal Division chief wrote “lawyer’s letter” clearing GOP ex-congressman’s firm

Justice Dept. Criminal Division chief wrote “lawyer’s letter” clearing GOP ex-congressman’s firm

Sept 18, 2006
Is top Justice official protecting a former client accused of bribery?

The Justice Department’s Criminal Division, headed by a Bush political appointee who gave legal advice to a company accused of bribing Haiti’s former president, is blocking an agreement to share seized Haitian drug money that would help Haiti pursue the bribery case in U.S. courts. The accused company is run by a former Republican congressman.

Alice Fisher

The Criminal Division chief, Alice Fisher, formerly a registered lobbyist for HCA, the healthcare company founded by the father of Republican Senate Majority Leader Bill Frist, is a recess appointee. Her approval was blocked by Senators concerned about her qualifications and about her participation in a government meeting on abusive interrogations at the U.S. military prison camp at Guantanamo.

Haiti Telecom Kickbacks Tarnish Aristide

Haiti Telecom Kickbacks Tarnish Aristide

CorpWatch, Dec 29, 2005

Two U.S. lawsuits charge that former Haitian President Jean-Bertrand Aristide and his associates accepted hundreds of thousands of dollars in kickbacks from politically connected U.S. telecom companies.

Lawsuits filed this Fall challenge the former priest’s image of political purity and raise claims that both he and U.S. corporate executives scammed illegal profits off the hemisphere’s poorest population.

In one suit, a fired executive charged his former employer, the U.S. telecom IDT (Newark, NJ), with corruption, defamation, and intimidation under the New Jersey anti-racketeering law. In the second, the government of Haiti contends that IDT, Fusion (New York, NY) and several other North American telecoms violated the federal RICO anti-racketeering statute. Both suits allege that Aristide, now in exile in South Africa, and his associates, took kickbacks.

Follow Aristide’s Money Offshore: How Haiti was looted with the help of tax haven shell companies & secret bank accounts and U.S. citizens & corporations

Follow Aristide’s Money Offshore: How Haiti was looted with the help of tax haven shell companies & secret bank accounts and U.S. citizens & corporations

Haiti Democracy Project, Nov 10, 2005

Add former Haitian president Jean-Bertrand Aristide to the long list of corrupt and repressive officials who have used Western banks and companies and offshore tax havens to plunder their countries and launder the stolen money.

Aristide and his associates looted government coffers, wrote checks to front companies for nonexistent purchases, padded invoices to get kickbacks from vendors, secretly owned companies that cheated Haiti of taxes, and laundered the money they stole through shell companies and secret bank accounts set up in the United States and the offshore tax havens of Turks and Caicos and the British Virgin Islands.

Check from account of Aristide

Nearly $20 million has been documented as stolen between 2001, when Aristide took office as president for the second time, and 2004, when he fled or was forced out of the country according to varying accounts.

U.S. Investigators Missed Russian Mob in N.Y. Bank Scandal

U.S. Investigators Missed Russian Mob in N.Y. Bank Scandal

Pacific News Service, Aug 6, 2002

An aggressive European investigation of international crime has revealed alleged Russian mafia leaders operating in the United States. The U.S. Justice Department dropped the ball three years ago during the Bank of New York scandal, which now threatens to explode.

NEW YORK–Nearly three years ago, the Justice Department called the Bank of New York (BoNY) money-laundering scandal “just” a Russian tax-evasion scheme. Now, European investigations show that BoNY was a channel for organized crime. And according to a document obtained by Pacific News Service, some of the alleged Russian mafia leaders have operated freely in the United States.

SVP-Politiker dealte mit Uran

SVP-Politiker dealte mit Uran

Von Lucy Komisar*, Beat Kraushaar Und Henry Habegger, Mitarbeit: Laurent Duvane SonntagsBlick (Zurich) 9 Dezember 2001 BERN – 600 Kilo nukleares Material wollten Ex-SVP-Nationalrat Bernard Rohrbasser und Notar R. verkaufen – an die Saudis. Verwickelt in den dubiosen Handel ist auch das Departement für auswärtige Angelegenheiten. Jetzt ermittelt die Bundesanwaltschaft. Diesen Mittwoch erhielt die Bundesanwaltschaft […]