Culture of Corruption: Obama and His Team of Tax Cheats, Crooks, and Cronies (19 page)

I have written about Paradigm extensively before as it has an unfortunate habit of being associated with scams. Absolute Alpha was not difficult to do due diligence on. It took me only 40 minutes to work out that they were needing very close scrutiny. It does not speak well to the due-diligence of a fund of hedge funds (which is what Paradigm claims to be) that they keep being associated with cases like this.

The Biden connection was what prompted me to look at Absolute Alpha and hence what led me to write my “Markopolos letter” to ASIC and hence what rapidly led to the closure of Astarra and Trio....

Paradigm—the Biden’s firm—had unwittingly got involved in another funds management firm which has been closed by regulators or been exposed as Ponzis. That is four I know of now—and I have yet another one that I suspect of being unsound.
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Does Paradigm invest in any funds that aren’t scams?

BIDEN’S SLEAZY REZKO CONNECTION

Perhaps the Bidens’ unfortunate interlude with Paradigm was an anomalous case of bad luck. Or perhaps it was symptomatic of the company the Bidens keep. Senator Biden’s good friend of thirty years, Joseph Cari, served as Biden’s Midwest field director for the 1988 Biden for President campaign. Cari raised money for the Democratic Party for decades, serving as a key fundraiser for former president Bill Clinton, former vice president Al Gore, the Democratic Senatorial and Congressional Campaign Committees, the Democratic National Committee, and scores of individual candidates. Biden returned to Cari for advice on his second presidential run in 2008. Cari’s advice should have been: Stay away from me, buddy.

Three years earlier, Cari had confessed to his role in an $850,000 kickback scandal tied to the political fund-raising operation of Illinois Governor Rod Blagojevich (who was later impeached). The scheme was directed by Barack Obama’s old Chicago crony, Tony Rezko. Cari pleaded guilty to attempting to commit extortion in his role as a partner and managing director of a private equity firm that had received $35 million from the Illinois state teachers’ public pension plan.
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Cari threatened to withhold $85 million in teacher retirement system funds from a real estate investment firm unless it hired a consultant of his choosing. At the behest of co-defendant Stuart Levine, who sat on the Teachers Retirement System board, Cari executed a plan to squeeze political or charitable contributions from their cherry-picked consultants, who were to be hired by the private firms in exchange for public pension fund investments.
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A superseding indictment from February 2005 illuminates the Rezko connection in this convoluted fraud scheme:

The Scheme To Defraud: 2. Beginning no later than in and about the spring of 2003 and continuing through at least in or about July 2004, in the Northern District of Illinois, Eastern Division, and elsewhere, STUART LEVINE and ANTOIN REZKO, also known as “Tony Rezko,” defendants herein, together with Joseph Cari, Steven Loren, Jacob Kiferbaum, Individual A, and others known and unknown to the Grand Jury, devised and intended to devise, and participated in, a scheme and artifice to defraud the beneficiaries of TRS [The Teachers’ Retirement System of the State of Illinois] and the people of the State of Illinois, of money, property, and the intangible right to LEVINE’s honest services, by means of materially false and fraudulent pretenses, representations, and promises, and material omissions, and in furtherance thereof used the United States mails and other interstate carriers, and interstate and foreign wires, which scheme is further described below.

Overview of the Scheme: 3. It was part of the scheme that defendants REZKO and LEVINE, with the assistance of Cari, Loren, Kiferbaum, Individual A, Individual B, and others, fraudulently used and sought to use the position and influence of LEVINE and other members of the TRS Board of Trustees and the Planning Board to obtain financial benefits for REZKO, LEVINE, and their nominees and associates. In the course of the scheme, REZKO and LEVINE solicited and demanded millions of dollars in undisclosed kickbacks and payments, and received and directed hundreds of thousands of dollars in actual undisclosed kickbacks and payments, for the benefit of REZKO, LEVINE, and their nominees and associates, from investment firms seeking to do business with TRS, and from Kiferbaum.
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The
Chicago Sun-Times
reported this gem of a coincidence:

On the day Cari’s name first surfaced in the federal probe of the state Teachers Retirement System, the former finance chairman for the Democratic National Committee and for the Democratic Senatorial Campaign Committee was to have hosted a Biden fund-raiser in Chicago. Cari was a no-show at that July 25, 2005, event.

Offering Cari a vote of confidence at the time, Biden said, “All I know is Joe Cari is a friend, and he’s an honorable guy, but I don’t know anything beyond that.”
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“Honorable guy?” In the midst of his extortion scheme, federal prosecutors quoted Cari telling a target: “This is how things are done in Illinois.”
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Cari would move on to testify at the federal corruption trial of Obama pal Tony Rezko, shining light on pay-to-play promises offered to Cari by disgraced Illinois Governor Rod Blagojevich.

Birds of a feather corrupt the system together. But as usual, Go Along-Get Along Joe don’t know nuthin’.

RIDING THE RAILS

One thing Joe does know is trains. And he made sure everyone in America knew about his love for taxpayer-subsidized Amtrak. He repeatedly told the folksy story of riding the rails from Wilmington to Washington, D.C., and back—just your ordinary working dad taking public transportation daily to earn a living and get back home to his family. He brought journalists with him on the journey and schmoozed with passengers to demonstrate his Everyman cred. Citing his train travel, Beltway journalist turned Obama flack Linda Douglass gushed about Biden: “He’s not a creature of Washington.”
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She dug deeper: “He goes home on the train, eats dinner with his family, he’s the epitome of a regular guy.”

This Joe the Commuter narrative demonstrates the exact opposite—that Biden is indeed the consummate creature of Washington. As an Amtrak-designated Champion of the Rails, he has lobbied for decades to preserve the government-funded, money-losing Amtrak operation. He signed on as a co-sponsor of legislation reauthorizing the beleaguered government enterprise, which received $1.3 billion in federal subsidies in 2008. Former President George Bush signed the bill in October 2008, doubling funding for Amtrak to an estimated $13 billion over five years. The rail line is important to Biden’s home state’s economy; the tiny state of Delaware doesn’t have commercial air service .
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Joe Biden’s daily trips to D.C. on the high-speed Acela line were out of reach for your average blue-collar Joes. It’s a $172 round trip from Wilmington, or more than $1,000 for a monthly pass. Unlike ordinary folks, U.S. Senate members are eligible for a federal discount—or, like Joe Biden, they can use campaign money to pay for trips if they involve a campaign-related meeting or event. The
New York Times
found that Biden’s Amtrak campaign expenses “have remained high even in years without elections, when he was not actively campaigning and his committee retained a handful of part-time staff members and almost no consultants. In 2003, for instance—after he had just easily won re-election to another six-year term—his committee spent $10,874 on Amtrak tickets; that same year, the campaigns of Senator [Tom] Carper and Representative [Mike] Castle spent $1,257 and $589, respectively.”
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Another perk not available to the average rider: when Biden was late getting to the station, his friends at Amtrak waited for his arrival—causing the trains on the Eastern corridor to run late.
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Making it a family affair once again, Biden’s son Hunter was nominated to serve on the Amtrak reform board in 2006. Like his father, Hunter extolled the virtues of the government rail service, which he used to commute to New York for his hedge fund job before it went awry. As a quasi-governmental institution, Amtrak is forbidden by law from lobbying Congress. But as
Politico
reported, Hunter served as an “effective advocate” for the government railroad system.
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In February 2009, President Obama signed the $787 billion, pork-stuffed “economic stimulus” package into law. During his address to a Joint Session of Congress after signing the bill, Obama designated Vice President Biden the stimulus spending watchdog to be perched at a new website—
www.recovery.gov
—and in charge of ensuring the money is spent wisely. A few weeks later, spending cop Biden announced that his beloved sinkhole Amtrak would get $1.3 billion of stimulus funds to expand passenger rail capacity and boost Delaware’s economy.
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Biden couldn’t be bothered to remember the name of his own website (he created a gaffe-tastic TV moment in late February 2009 when he blanked out on the Internet address of
recovery.gov
). But Joe the Back-Slapper never forgot to take care of his Amtrak cronies. “Amtrak is not bent at the trough. Amtrak has been left out,” Biden complained at an event celebrating the stimulus bounty. “I’m tired of apologizing for help for Amtrak.” And now, as head of the appropriately named “RAT” Board (Recovery Accountability and Transparency Board), Biden will have wide-ranging powers over the inspectors general who’ve been tasked to independently investigate stimulus waste, fraud, and abuse. He’ll have the power to initiate such probes, but more importantly for entrenched Democrats protecting powerful constituencies, the power to forestall such probes.
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“Nobody messes with Joe,” he bragged.
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Apparently, the rich irony of appointing a deal-making, big government Washington insider who shuns transparency and accountability to head up stimulus monitoring efforts was completely lost on the White House. It was not, however, lost on local officials who heard Vice President Biden threaten them if they squandered the funds on things like bike paths, swimming pools, and golf courses. (Which is, of course, precisely what’s happening.)

JOSEPH BIDEN, Vice President of the United States: Because of the rules, the president and I can’t stop you from doing some things, but I’ll show up in your city and say, “This was a stupid idea.” You think I’m kidding? This is the only part the president was right about: Don’t mess with Joe, because I mean it. I’m serious, guys. I’m serious. I’m absolutely serious.
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Biden’s audience did what more and more audiences are doing when he opens his mouth: they laughed at him. Why? Because as his lifelong public record shows, when it comes to ethical self-policing that puts taxpayer interests above electoral and special interests, Joe Biden doesn’t have a serious bone in his body.

CHAPTER 4

MEET THE MESS

INSIDE THE CROOKED CABINET

W
hen asked why they were voting for Barack Obama, young people across the country cited his outsider status. José Villanueva, twenty-one, a senior at Claremont McKenna College in California, told
Time
magazine: “He’s new and modern and breaking with the past.” Eighteen-year-old Neil Stewart, a freshman at the University of Colorado in Boulder, echoed this sentiment. “I like that he’s new,” Stewart enthused. “We need some freshness in our government right now.”
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Internet entrepreneurs cranked out Obama t-shirts emblazoned with “Hope is the New Black” and “Change is fresh.”

A comprehensive look at the men and women serving Barack Obama, however, exudes the freshness of a bologna sandwich left in a Lincoln Town Car parked in the muggy heat of Washington, D.C., in the middle of August with the windows rolled up for a week. Within days of President Obama’s swearing in, the lemon-fresh scent of “Hope and Change” had been overpowered by the fetid odor of Beltway swamp business as usual.

Without further ado, I have compiled for you a handy guide to Obama’s team of moldy oldies, rancid hacks, and rank tax evaders. Perform an act of public service and share it with your favorite starry-eyed young Obama supporters.

This is not the “new” they thought they knew.

CIA INTELLIGENCE DIRECTOR LEON PANETTA: LIFESTYLES OF THE RICH AND ENTRENCHED

New York Democrat Senator Charles Schumer once called Leon Panetta “the perfect government servant.”
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He’s also the perfect illustration of the Beltway swamp creature. After serving sixteen years in Congress, four years in the Clinton administration as budget director and chief of staff, and a lifetime schmoozing in the halls of power, Panetta cashed in big. According to
Washingtonian
magazine, Panetta, seventy, is one of the administration’s wealthiest members with up to $4 million in assets—“demonstrating once more how lucrative government positions can be once they’re no longer held (see also: Clinton, Bill).”
³

While he has zero experience in intelligence matters, he has extensive experience in how to parlay his past political tours of duty into lucrative speaking gigs, consulting fees, and stock options. Indeed, the only central intelligence-gathering duties Panetta has performed are at D.C. cocktail parties and corporate boardroom meetings picking up gossip.

Team Obama wanted a nominee unstained by ties to Bush-era War on Terror policies. What they settled for was a nominee unstained by any intellectual, managerial, or hands-on operational record on War on Terror policies at all—unless you count his nasty office battles with former CIA director James Woolsey over agency budget cuts during the Clinton era
⁴
or his op-ed against torture in the
Washington Monthly
in 2008.
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