Corporate Corruption News Stories

Excerpts of Key Corporate Corruption News Stories in Major Media

Below are key excerpts of revealing news articles on corporate corruption from reliable news media sources. If any link fails to function, a paywall blocks full access, or the article is no longer available, try these digital tools.

Note: This comprehensive list of news stories is usually updated once a week. Explore our full index to revealing excerpts of key major media news stories on several dozen engaging topics. And don't miss amazing excerpts from 20 of the most revealing news articles ever published.

Congress is about to sell us the biggest fraud in American history. It's been highly touted as an economic stimulus bill that will help millions of Americans. As part of the bill, Congress is set to rush through an increase in the mortgage loan limits for Fannie Mae and Freddie Mac (and Federal Housing Administration insurance, too) - from $417,000 to $729,750 - the first step toward a massive financial disaster in which taxpayers will end up paying through the nose. Now, thanks to Congress, junk bond investors will be able to pawn off their bad debt to Fannie and Freddie. This shift will certainly doom Fannie Mae and Freddie Mac, so don't be surprised if we, the taxpayers, have to bail out poor Fannie and Freddie - to the tune of more than $1 trillion. The irony here is that the collapse in housing prices could make Fannie insolvent even without raising the loan limit. Increasing Fannie's limit is like going on a spending spree with your credit cards because you know you are going to file for bankruptcy in a few months. Only here the taxpayer is left holding the bag. Our children will pay interest on this debt in perpetuity. It is our debt. It is inescapable. In the coming months, Fannie and Freddie will buy up mortgages based on old, fraudulent appraisals and on loans with bogus inflated incomes. Unfortunately, many of these loans will still default. Expansion of Fannie and Freddie's reckless lending is exactly what Congress wants because it's plausibly deniable. Teary-eyed lawmakers can take to the airwaves a year from now and declare: "We had no idea Fannie could go under, but we can't cut and run now. Those same lawmakers won't mention the fact that they get paid far more by real estate lobbyists than they do from our Treasury.

Note: The author wrote this article seven months before the collapse of Fannie Mae and eight months before the huge banking bailout. For more news articles suggestion major manipulations to transfer public tax monies to the banking sector, click here.

Scientists at a California company reported yesterday that they had created the first mature cloned human embryos from single skin cells taken from adults, a significant advance toward the goal of growing personalized stem cells for patients suffering from various diseases. Creation of the embryos -- grown from cells taken from the company's chief executive and one of its investors -- also offered sobering evidence that few, if any, technical barriers may remain to the creation of cloned babies. The study leader, who is also the medical director of a fertility clinic ... emphasized that he has no interest in cloning people. "It's unethical and it's illegal, and we hope no one else does it either," said Samuel H. Wood, chief executive of Stemagen in La Jolla, whose skin cells were cloned and who led the study. The closely held company hopes to make embryos that are clones, or genetic twins, of patients, then harvest stem cells from those embryos and grow them into replacement tissues. Opponents of research on human embryos lashed out at the approach. "This study seems to confirm that human cloning ... is technically possible," said Richard Doerflinger of the U.S. Conference of Catholic Bishops. "It does not answer the ethical or social questions about the mass-production of developing human lives in order to destroy them. It only tells us that these questions are more urgent than ever." Other critics noted that scientists in Japan and Wisconsin recently discovered a way to "reprogram" stem cells directly from skin cells, without having to make embryos as a middle step. "In light of the recent cell reprogramming developments, cloning-based stem cell research is less justified than ever," said Marcy Darnovsky of the Center for Genetics and Society.

Wall Street's five biggest firms are paying a record $39 billion in bonuses for 2007. It was a year when three of the firms suffered their worst quarterly losses in history and shareholders lost over $80 billion. Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns together awarded $65.6 billion in compensation and benefits last year to their 186,000 employees. That means year-end bonuses, at 60% of the total, exceeded the $36 billion distributed in 2006 when the industry reported all-time high profits. The firms have said they are eliminating at least 6,200 jobs amid mounting losses from the subprime mortgage mess. The payouts come as the economy slows, with unemployment rising, retail sales declining and new home foreclosures surging to a record. The industry's bonuses are larger than the gross domestic products of Sri Lanka, Lebanon or Bulgaria, and the average bonus of $219,198 is more than four times higher than the median U.S. household income in 2006, according to Census Bureau data. Shareholders in the securities industry endured their worst year since 2002, as Merrill and Bear Stearns slumped more than 40% and the CEOs at both firms gave up their jobs. Morgan Stanley fell 21% and Lehman dropped 16%. Only Goldman rose, gaining 7.9%.

Note: For lots more on escalating income inequality, click here.

Bristol-Myers Squibb Co. and a former subsidiary have agreed to pay more than $515 million to settle federal and state investigations into their drug marketing and pricing practices. The civil settlement ... resolves a broad array of allegations against Bristol-Myers Squibb, dating from 1994 through 2005. Among them was a charge that the ... company illegally promoted the sale of Abilify, an anti-psychotic drug, for pediatric use and to treat dementia-related psychoses. Neither use is approved by the U.S. [FDA]. Although physicians are permitted to prescribe drugs for off-label uses, drug companies are prohibited from marketing them for uses that have not been approved by the FDA. U.S. Attorney Michael Sullivan said when pharmaceutical companies market drugs for unapproved uses, there is a potential risk that patients could be harmed, because the drugs have not been tested as rigorously as they are during the FDA approval process. The government also alleged the company paid illegal inducements in the form of consulting fees and trips to luxury resorts to influence doctors and other health care providers to buy and prescribe the company's drugs. The company's former generic drug subsidiary, Apothecon Inc., also was accused of giving illegal enticements to induce retail pharmacy and wholesale customers to buy its products. Bristol-Myers Squibb misreported its best price for the anti-depression drug Serzone, violating a law that requires drug companies to report their lowest price to Medicaid, prosecutors said. The company was selling Serzone to a larger commercial purchaser at a lower price, prosecutors said. Bristol-Myers Squibb and Apothecon also inflated prices for an assortment of oncology and generic drugs knowing that federal health care programs established reimbursement rates based on those prices, Sullivan said.

Note: For lots more on corporate corruption, click here.

The U.S. Department of Agriculture yesterday asked U.S. farmers to keep their cloned animals off the market indefinitely even as Food and Drug Administration officials announced that food from cloned livestock is safe to eat. Bruce I. Knight, the USDA's undersecretary for marketing and regulatory programs, requested an ongoing "voluntary moratorium" to buy time for "an acceptance process" that Knight said consumers in the United States and abroad will need, "given the emotional nature of this issue." Yet even as the two agencies sought a unified message -- that food from clones is safe for people but perhaps dangerous to U.S. markets and trade relations -- evidence surfaced suggesting that Americans and others are probably already eating meat from the offspring of clones. Executives from the nation's major cattle cloning companies conceded yesterday that they have not been able to keep track of how many offspring of clones have entered the food supply, despite a years-old request by the FDA to keep them off the market pending completion of the agency's safety report. At least one Kansas cattle producer also disclosed yesterday that he has openly sold semen from prize-winning clones to many U.S. meat producers in the past few years, and that he is certain he is not alone. "This is a fairy tale that this technology is not being used and is not already in the food chain," said Donald Coover, a Galesburg cattleman and veterinarian who has a specialty cattle semen business. "Anyone who tells you otherwise either doesn't know what they're talking about, or they're not being honest." Last year, [only] 22 percent of Americans who responded to a major survey said they had a favorable impression of food from clones.

Note: For lots more reliable information on how big business takes huge risks with the food we eat, click here.

The Defense Department's top watchdog has declined to investigate allegations that an American woman working under an Army contract in Iraq was raped by her co-workers. The case of former Halliburton/KBR employee Jamie Leigh Jones gained national attention last month. An ABC News investigation revealed how an earlier investigation into Jones' alleged gang-rape in 2005 had not resulted in any prosecution, and that neither Jones nor Democratic and Republican lawmakers have been able to get answers from the Bush administration on the state of her case. In letters to lawmakers, DoD Inspector General Claude Kicklighter said that because the Justice Department still considers the investigation into Jones' case open, there is no need for him to look into the matter. "We're not satisfied with that," a Nelson spokesman said. Jones' lawyers also professed disappointment. Despite deferring to the Justice Department, Kicklighter's office told Nelson it was willing to pursue other questions Nelson raised about Jones' case. Kicklighter agreed to explore "whether and why" a U.S. Army doctor handed to KBR security officials the results of Jones' medical examination, a so-called "rape kit," which would have contained evidence of the crime if it had occurred. In a separate letter, Kicklighter's office said that the State Department had said its security officials had Jones' rape kit in their possession at one point.

Note: For a treasure trove of reliable reports on government corruption from major media sources, click here.

The Food and Drug Administration is set to announce as early as next week that meat and milk from cloned farm animals and their offspring can start making their way toward supermarket shelves. The decision would be a notable act of defiance against Congress, which last month passed appropriations legislation recommending that any such approval be delayed pending further studies. Moreover, the Senate version of the Farm bill ... contains stronger, binding language that would block FDA action on cloned food, probably for years. The FDA has hinted strongly in the past year that it is ready to lift its "voluntary moratorium" on the marketing of milk and meat from clones and their offspring, saying that the science led them to that decision. But public opinion has been negative on the issue, with some saying that not enough safety studies have been conducted and others concerned about the health of the clones, which are far more likely than ordinary farm animals to die early in life. A handful of U.S. companies have pushed for marketing approval. Margaret Mellon of the Union of Concerned Scientists, an advocacy group, said she had read the entire 678-page draft risk assessment and found it to be "long on assumptions and short on data, and especially short on the data that are directly relevant to food consumption safety." Of particular concern, she said, was that even though the vast majority of clones die either before birth or soon after, those that survive are deemed normal. She said the FDA should withhold approval at least until it has a regulatory plan in place that will give it an ability to track food from clones and watch for human health impacts. Others have called for mandatory labeling so consumers can avoid products from clones. The FDA has said that lacking any safety concerns, it will not demand such labels. The Agriculture Department has also declared that meat from clones cannot be deemed organic.

Note: For lots more reliable information on how big business takes huge risks with the food we eat, click here.

U.S. drug companies spend almost twice as much on marketing and promoting medications [as] on research and development, a new Canadian study says. "These numbers clearly show how promotion predominates over R&D in the pharmaceutical industry, contrary to the industry's claim," the authors write in this week's peer-reviewed journal Public Library of Science Medicine. Using data from two market research companies, the University of Quebec's Marc-André Gagnon and York University's Joel Lexchin found U.S. drug companies spent $57.5 billion US on promotional activities in 2004 compared with $31.5 billion on research and development. Promotional activities included free samples, visits from drug reps, direct-to-consumer advertising of drugs, meetings with doctors to promote products, e-mail promotions, direct mail and clinical trials designed to promote the prescribing of new drugs rather than to generate scientific data. The authors say their figure of $57.5 billion US is likely an underestimate, citing other avenues for promotion such as ghostwriting of articles in medical journals by drug company employees, or the off-label promotion of drugs. Drug companies have long argued they are driven primarily by research, while critics charge that marketing and profits are their primary concerns. There were extensive U.S. government reviews of the pharmacy business in the 1950s and '60s and again in the 1980s. But there hasn't been a comprehensive study of drug industry profits and spending in more than a decade.

Note: For a powerful overview of corruption in the pharmaceutical industry, click here.

Three Florida fruit-pickers, held captive and brutalised by their employer for more than a year, finally broke free of their bonds by punching their way through the ventilator hatch of the van in which they were imprisoned. Once outside, they dashed for freedom. When they found sanctuary one recent Sunday morning, all bore the marks of heavy beatings to the head and body. One of the pickers had a nasty, untreated knife wound on his arm. Police would learn later that another man had his hands chained behind his back every night to prevent him escaping, leaving his wrists swollen. The migrants were not only forced to work in sub-human conditions but mistreated and forced into debt. They were locked up at night and had to pay for sub-standard food. If they took a shower with a garden hose or bucket, it cost them $5. Their story of slavery and abuse in the fruit fields of sub-tropical Florida threatens to lift the lid on some appalling human rights abuses in America today. Between December and May, Florida produces virtually the entire US crop of field-grown fresh tomatoes. Fruit picked here in the winter months ends up on the shelves of supermarkets and is also served in the country's top restaurants and in tens of thousands of fast-food outlets. But conditions in the state's fruit-picking industry range from straightforward exploitation to forced labour. Tens of thousands of men, women and children – excluded from the protection of America's employment laws and banned from unionising – work their fingers to the bone for rates of pay which have hardly budged in 30 years. Until now, even appeals from the former president Jimmy Carter to help raise the wages of fruit-pickers have gone unheeded. Fruit-pickers, who typically earn about $200 (Ł100) a week, are part of an unregulated system designed to keep food prices low and the plates of America's overweight families piled high.

[BBC Radio] uncovers details of a planned coup in the USA in 1933 by right-wing American businessmen. The coup was aimed at toppling President Franklin D Roosevelt with the help of half-a-million war veterans. The plotters, who were alleged to involve some of the most famous families in America (owners of Heinz, Birds Eye, Goodtea, Maxwell [House] and George Bush’s grandfather, Prescott [Bush]) believed that their country should adopt the policies of Hitler and Mussolini to beat the great depression. Why [is] so little ... known about this biggest ever peacetime threat to American democracy?

Note: The highly decorated General Smedley Butler, author of the landmark book War is a Racket, was approached by the plotters for assistance in carrying out this coup. He at first played along, but then eventually exposed the coup plot in Congressional testimony. Yet news of this huge plot was squelched by both the government and media. To understand why, read a two-page summary of General Butler's book by clicking here and listen to the gripping, 30-minute BBC broadcast at the link above.

Federal officials are routinely asking courts to order cellphone companies to furnish real-time tracking data so they can pinpoint the whereabouts of drug traffickers, fugitives and other criminal suspects, according to judges and industry lawyers. In some cases, judges have granted the requests without requiring the government to demonstrate that there is probable cause to believe that a crime is taking place or that the inquiry will yield evidence of a crime. Privacy advocates fear such a practice may expose average Americans to a new level of government scrutiny of their daily lives. The requests and orders are sealed at the government's request, so it is difficult to know how often the orders are issued or denied. "Most people don't realize it, but they're carrying a tracking device in their pocket," said Kevin Bankston of the privacy advocacy group Electronic Frontier Foundation. "Cellphones can reveal very precise information about your location, and yet legal protections are very much up in the air." In a stinging opinion this month, a federal judge in Texas denied a request by a Drug Enforcement Administration agent for data that would identify a drug trafficker's phone location by using the carrier's E911 tracking capability. E911 tracking systems read signals sent to satellites from a phone's Global Positioning System (GPS) chip or triangulated radio signals sent from phones to cell towers. "Law enforcement routinely now requests carriers to continuously 'ping' wireless devices of suspects to locate them when a call is not being made . . . so law enforcement can triangulate the precise location of a device and [seek] the location of all associates communicating with a target," wrote Christopher Guttman-McCabe, vice president of regulatory affairs for CTIA -- the Wireless Association.

Note: For many major media reports on serious new threats to civil liberties, click here.

They were smart, scrappy brothers who rose from modest circumstances in Baltimore to become lacrosse stars at Princeton, succeed in business and land big government jobs. Now the Krongard brothers — who have carried childhood nicknames, Buzzy and Cookie, through long careers — are tied up in the tangled story of Blackwater, the security contractor accused in the deaths of at least 17 Iraqis while guarding a State Department convoy in Baghdad. The shorthand version boils their involvement down to that Washington catchall conflict of interest. The full story appears more complicated. Alvin [Buzzy] Krongard, 71, ... left a $4 million-a-year job in investment banking to serve in top posts at the Central Intelligence Agency from 1998 to 2004. Buzzy Krongard spoke [to the New York Times] in his 15,000-square-foot Georgian mansion, Torch Hill, north of Baltimore. After rising to the helm of Alex. Brown & Sons, the venerable Baltimore investment banking firm, Buzzy Krongard oversaw its acquisition by Bankers Trust in 1997 and left the next year for the C.I.A., as a counselor to George J. Tenet, then the director of central intelligence. He became executive director, the No. 3 post, in 2001 and helped design the agency’s secret detention program after the Sept. 11 attacks. Buzzy Krongard vigorously defends Blackwater’s record in Iraq. “It’s very easy to second-guess them when you’re sitting back in an air-conditioned office,” he said.

Note: Buzzy Krongard took quite a cut in pay to move from Bankers Trust to the comparatively modest salary of even a high-ranking CIA position. Bankers Trust was purchased by the same company that placed the highly unusual and suspicious "put options" on United Airlines stock just days before 9/11. For a powerful summary of similarly strange, unexplained facts related to 9/11, click here.

"I am not my brother's keeper," Howard "Cookie" Krongard, the State Department's inspector general, testified to the House Oversight and Government Reform Committee yesterday. As Cookie surely must know, that excuse hasn't worked since Genesis. In this case, the players weren't Cain and Abel, but Cookie and his brother Buzzy. Cookie, under fire for allegedly quashing probes of the infamous Blackwater security contractor, began his testimony by angrily denying the "ugly rumors" that his brother, former CIA official Alvin "Buzzy" Krongard, is on Blackwater's advisory board. But during a recess, Cookie called Buzzy and learned that -- gulp -- the ugly rumors are true: His brother is on the board. When the lawmakers returned, Cookie revised and extended his testimony. "I had not been aware of that," Cookie told the congressmen. "I hereby recuse myself from any matters having to do with Blackwater." The lawmakers reacted with Old Testament fury. The swaggering Cookie -- he alternately addressed the lawmakers with his thumb in his waistband, slouching in his chair, rolling his eyes and making baffled glances -- had spent the morning aggressively denying the allegations lodged against him: that he had impeded investigations into contracting fraud, including weapons smuggling by Blackwater, and that he had abused his underlings. But then came Buzzy's bombshell -- and Cookie's credibility crumbled. Either he had lied to Congress, or his own brother had lied to him. It was only the latest bit of strangeness for the powerful but eccentric Brothers Krongard. Buzzy [is] known for his cigar chomping, martial arts and recreational workouts with SWAT teams. "Krongard once punched a great white shark in the jaw," his hometown Baltimore Sun reported when he took the No. 3 job at the CIA a decade ago. More recently, Buzzy joined the advisory board of Blackwater, the firm known for its ready trigger fingers in Iraq.

Note: Alvin "Buzzy" Krongard was the Executive Director (the third-highest position) at the CIA on 9/11, and had until 1998 been the head of the firm used to buy many of the "put" options on United Airlines stock made just prior to 9/11 that were never claimed, though this received little media coverage.

According to a former AT&T employee, the government has warrantless access to a great deal of Internet traffic should they care to take a peek. As information is traded between users it flows also into a locked, secret room on the sixth floor of AT&T's San Francisco offices and other rooms around the country -- where the U.S. government can sift through and find the information it wants, former AT&T employee Mark Klein alleged Wednesday at a press conference on Capitol Hill. "An exact copy of all Internet traffic that flowed through critical AT&T cables -- e-mails, documents, pictures, Web browsing, voice-over-Internet phone conversations, everything -- was being diverted to equipment inside the secret room," he said. Klein ... said that as an AT&T technician overseeing Internet operations in San Francisco, he helped maintain optical splitters that diverted data en route to and from AT&T customers. One day he found that the splitters were hard-wired into a secret room on the sixth floor. Documents he obtained [from] AT&T showed that highly sophisticated data mining equipment was kept there. Conversations he had with other technicians and the AT&T documents led Klein to believe there are 15 to 20 such sites nationwide, including in Seattle, Los Angeles, San Jose, San Diego and Atlanta, he said. Brian Reid, a former Stanford electrical engineering professor who appeared with Klein, said the NSA would logically collect phone and Internet data simultaneously because of the way fiber optic cables are intertwined. He said ... the system described by Klein suggests a "wholesale, dragnet surveillance." Of the major telecom companies, only Qwest is known to have rejected government requests for access to data. Former Qwest CEO Joseph Nacchio, appealing an insider trading conviction last month, said the government was seeking access to data even before Sept. 11.

A wave of foreclosures and evictions is about to sweep the United States in the wake of the sub-prime mortgage lending crisis. This could destabilise the US housing market and may also lead to further turmoil in financial institutions, who collectively own $1 trillion (Ł480.6bn) worth of sub-prime debt. Cleveland, Ohio, is an industrial city on the banks of Lake Erie in the US "rust belt". It is the sub-prime capital of the United States. One in ten homes in the city is now vacant, and whole neighbourhoods have been blighted by foreclosed, vandalized and boarded-up homes. Cleveland is facing a rising crime wave, and the cost of demolishing the vacant houses alone will cost the city $100m of its tax base. According to Jim Rokakis, the County Treasurer for Cleveland's Cuyahoga County, "Wall Street strategies that made the cycle of no-money-down, no-questions-asked lending possible have sucked the life out of my city". As the credit crunch continues to bite "families all over the country continue to lose homes in record numbers, stripping families of their wealth and destroying entire neighbourhoods," says Michael Calhoun of the Center for Responsible Lending, which tracks these issues. There have already been 1.7 million foreclosure proceedings in the US in the first eight months of 2007, and up to 2 million families are expected to lose their homes over the next two years, according to estimates by the US Congress's Joint Economic Committee. Many of these mortgages were sold by unscrupulous and little regulated mortgage brokers, who received handsome commissions for selling expensive and unsuitable products. Some customers were not told that their interest rates would go up sharply after two years; others were promised they could refinance their home before higher rates took effect. Others found that when they had difficulties paying, huge unexplained fees were added to their bills, putting them further in debt.

Pharmaceutical ingredients exported from China are often made by chemical companies that are neither certified nor inspected by Chinese drug regulators, The New York Times has found. Because the chemical companies are not required to meet even minimal drug-manufacturing standards, there is little to stop them from exporting unapproved, adulterated or counterfeit ingredients. The substandard formulations made from those ingredients often end up in pharmacies in developing countries and for sale on the Internet, where more Americans are turning for cheap medicine. [At a pharmaceutical trade show in Milan], the Times identified at least 82 Chinese chemical companies that said they made and exported pharmaceutical ingredients — yet not one was certified by the State Food and Drug Administration in China, records show. Nonetheless, the companies were negotiating deals at the pharmaceutical show, where suppliers wooed customers with live music, wine and vibrating chairs. In China, chemical manufacturers that sell drug ingredients fall into a regulatory hole. Pharmaceutical companies are regulated by the food and drug agency. Chemical companies that make products as varied as fertilizer and industrial solvents are overseen by other agencies. The problem arises when chemical companies cross over into drug ingredients. “We have never investigated a chemical company,” said Ms. Yan [Jiangying], deputy director of policy and regulation at the State Food and Drug Administration. “We don’t have jurisdiction.” China has an estimated 80,000 chemical companies, and the United States Food and Drug Administration does not know how many sell ingredients used in drugs consumed by Americans. The Times examined thousands of companies selling products on major business-to-business Internet trading sites and found more than 1,300 [Chinese] chemical companies offering pharmaceutical ingredients.

Note: For many other reliable reports concerning health, click here.

Executives at the two biggest phone companies contributed more than $42,000 in political donations to Senator John D. Rockefeller IV this year while seeking his support for legal immunity for businesses participating in National Security Agency eavesdropping. The surge in contributions came from a Who’s Who of executives at the companies, AT&T and Verizon, starting with the chief executives and including at least 50 executives and lawyers at the two utilities, according to campaign finance reports. The money came primarily from a fund-raiser that Verizon held for Mr. Rockefeller in March in New York and another that AT&T sponsored for him in May in San Antonio. Mr. Rockefeller, chairman of the Senate Intelligence Committee, [has emerged] as the most important supporter of immunity in [the Senate]. Mr. Rockefeller’s office said ... that the sharp increases in contributions from the telecommunications executives had no influence on his support for the immunity provision. “Any suggestion that Senator Rockefeller would make policy decisions based on campaign contributions is patently false,” Wendy Morigi, a spokeswoman for him, said. AT&T and Verizon have been lobbying hard to insulate themselves from suits over their reported roles in the security agency program by gaining legal immunity from Congress. The effort included meetings with Mr. Rockefeller and other members of the intelligence panels. Mr. Rockefeller received little in the way of contributions from AT&T or Verizon executives before this year, reporting $4,050 from 2002 through 2006. From last March to June, he collected a total of $42,850 from executives at the two companies. The increase was first reported by the online journal Wired, using data compiled by the Web site OpenSecrets.org. [Telecommunications] industry executives have given significant contributions to a number of other Washington politicians, including two presidential contenders, Senators Hillary Rodham Clinton and John McCain.

As record numbers of homeowners default on their mortgages, questionable practices among lenders are coming to light in bankruptcy courts, leading some legal specialists to contend that companies instigating foreclosures may be taking advantage of imperiled borrowers. Because there is little oversight of foreclosure practices and the fees that are charged, bankruptcy specialists fear that some consumers may be losing their homes unnecessarily or that mortgage servicers, who collect loan payments, are profiting from foreclosures. Bankruptcy specialists say lenders and loan servicers often do not comply with even the most basic legal requirements, like correctly computing the amount a borrower owes on a foreclosed loan or providing proof of holding the mortgage note in question. “Regulators need to look beyond their current, myopic focus on loan origination and consider how servicers’ calculation and collection practices leave families vulnerable to foreclosure,” said Katherine M. Porter, associate professor of law at the University of Iowa. In an analysis of foreclosures in Chapter 13 bankruptcy, the program intended to help troubled borrowers save their homes, Ms. Porter found that questionable fees had been added to almost half of the loans she examined, and many of the charges were identified only vaguely. Collectively they could raise millions of dollars for loan servicers at a time when the other side of the business, mortgage origination, has faltered. In one example, Ms. Porter found that a lender had filed a claim stating that the borrower owed more than $1 million. But after the loan history was scrutinized, the balance turned out to be $60,000. And a judge in Louisiana is considering an award for sanctions against Wells Fargo in a case in which the bank assessed improper fees and charges that added more than $24,000 to a borrower’s loan.

The Prince Group, the holding company that owns Blackwater Worldwide, has been building an operation that will [develop] intelligence ... for clients in industry and government. The operation, Total Intelligence Solutions, has assembled a roster of former ... high-ranking figures from agencies such as the CIA and defense intelligence. Its chairman is Cofer Black, the former head of counterterrorism at CIA known for his leading role in many of the agency's more controversial programs, including the rendition and interrogation of ... suspects and the detention of some of them in secret prisons overseas. Its chief executive is Robert Richer, a former CIA associate deputy director of operations who was heavily involved in running the agency's role in the Iraq war. Because of its roster and its ties to owner Erik Prince, the multimillionaire former Navy SEAL, the company's thrust into this world highlights the blurring of lines between government, industry and activities formerly reserved for agents operating in the shadows. Richer, for instance, once served as the chief of the CIA's Near East division and is said to have ties to King Abdullah of Jordan. The CIA had spent millions helping train Jordan's intelligence service in exchange for information. Now Jordan has hired Blackwater to train its special forces. "Cofer can open doors," said Richer, who served 22 years at the CIA. "I can open doors. We can generally get in to see who we need to see. We ... can deal with the right minister or person." "They have the skills and background to do anything anyone wants," said RJ Hillhouse, who writes a national security blog called The Spy Who Billed Me. "There's no oversight. They're an independent company offering freelance espionage services. They're rent-a-spies."

In a major legal action alleging misdeeds in the mortgage business, New York's attorney general [Andrew Cuomo] has accused appraisers of helping fuel the nation's foreclosure crisis by pumping up home values at the behest of lenders and other real estate professionals. The lawsuit said that First American eAppraiseIT, a subsidiary of Fortune 500 company First American Corp., caved in to pressure from Washington Mutual to rely on "proven appraisers" who were willing to inflate home prices. Washington Mutual profited from the artificially high appraisals because they allowed the company to close more home loans at greater values, the lawsuit said. First American, a provider of business information, title insurance and related services, wanted to win more business from Washington Mutual, the suit said. The lawsuit comes in the midst of the nation's subprime lending crisis, which industry experts say could cause up to 2 million homes to be lost to foreclosure over the next couple of years. Most subprime foreclosures are caused by a confluence of two factors: mortgage payments that rise when adjustable loans reset, and home prices that are lower than the amount owed on the mortgage. A moribund real estate market has caused prices to flatten or fall. But if home prices were artificially high to begin with - which would be the case if appraisers inflated values, as the lawsuit alleged - the likelihood increases of homeowners owing more on the mortgage than their properties are worth. Cuomo said fraudulent appraisal practices were pervasive in the industry. At a news conference announcing the lawsuit, he said lenders, mortgage brokers, real estate agents and others frequently pressured appraisers to "come in with the right number, the number that justifies the transaction" so that everyone in the chain would receive commissions.

Important Note: Explore our full index to revealing excerpts of key major media news stories on several dozen engaging topics. And don't miss amazing excerpts from 20 of the most revealing news articles ever published.