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Socialism - Liberalism Quotation
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American socialist, 1948
Showing posts with label Inspector Generals. Show all posts
Showing posts with label Inspector Generals. Show all posts
The Inspector General of the Securities and Exchange Commission (SEC), David Kotz, announced that he will investigate the timing of the SEC's fraud charges against Goldman Sachs, and presumably will look into any connection the SEC may have had with Obama administration to further his desire for financial reform. Needless to say, it is illegal for the independent SEC to cavort with the White House.
The Securities and Exchange Commission offered Goldman Sachs a chance to take a fine over this. They refused to do that because their position is that they have done nothing illegal, and all it is is a civil fine. And they're going to take a hit here, there's no question, but I think they're in on it. I think they're happy to take the hit here, pay the fine, and roll on.
There's no way this is a coincidence, and Barney Frank is even out there saying that this fraud case will increase the chances that the financial reform bill will pass. (doing Frank impression) "That's what he th'aid! He's not even afraid (lisping) facts." He doesn't even want to hide it.
Rep. Darrell Issa (D-CA), the ranking member of the Committee on Oversight and Government Reform asked for the investigation. In a letter to Kotz, Issa cited The New York Times publishing information on the SEC's lawsuit before the SEC had released an official announcement. Issa claims that news of the lawsuit "leaked from the Commission via unofficial channels.
On the same date, April 20th, Issa wrote to Mary Schapiro, Chairman of the SEC. (portions)
We are writing to request that you provide documents and information to this Committee regarding any sort of prearrangement, coordination, direction from, or advance notice provided by the Commission to the Administration or Congressional Democrats regarding last Friday's filing against Goldman.
The Commission's canons of ethics require its members to "reject any effort by representatives of the executive or legislative branches of the government to affect their independent determination of any matter being considered by the Commission. Moreover, the Commission is prohibited from using its resources to influence the passage of legislation.
Nevertheless, the events of the past five days have fueled legitimate suspicion on the part of the American people that the Commission has attempted to assist the White House, the Democratic Party, and Congressional Democrats by timing the suit to coincide with the Senate's consideration of financial regulatory legislation, or by providing Democrats with advance notice.
In fact, the aggressive campaign by Democrats in support of the legislation neatly coincided with the Commission's announcement of the suit.
For example:
~ The Commission approved the Goldman suit in a vote that split along party lines -- a rare occurrence for approvals of enforcement litigation.
~ Before the Commission had released its announcement, The New York Times published on its website a story describing the suit.
~ Less than half an hour after the Times story's publication, Organizing for america, the successor organization to Obama for america and now a project of the Democratic National Committee ("DNC") sent millions of supporters an e-mail message from President Obama urging support for Wall Street Reform."
~ Within hours, the Democratic National Committee had purchased AdWords advertising from Google, Inc. The DNC's Google campaign fundraising advertisement, headed "Fight Wall Street Greed," appeared whenever a user ran a Google search for the phrase "Goldman Sachs SEC." It read, "Help Pres. Obama Reform Wall Street and Create Jobs. Families First!" and included a link to www.BarackObama.com, the website for Organizing for America.
There is more, but the important thing is that SEC Inspector General Kotz is launching an investigation. Click to read a pdf of the two letters.
New documents have been released on the firing of Inspector General Gerald Walpin by the Obama White House. This is a long and convoluted story, and I have linked to all the relevant background at the bottom of this article.
Gerald Walpin
Here's the short story before the new information below:
(1) Inspectors General work
independently from the White House and can only be fired after certain
Senate-mandated procedures are followed. The Obama White House ignored
those procedures.
(2) Gerald Walpin's investigation into AmeriCorp found $75 million misused by the organization.
(3) Gerald Walpin's investigation found that AmeriCorp had
allowed former NBA star and current Mayor of Sacramento, Kevin Johnson
to divert funds from AmeriCorp for his own personal use. Johnson was
the founder of the St. Hope Academy, a non-profit organization, and
further found that Mr. Johnson was accused of inappropriate behavior
with three young girls. Last week, it was revealed by a former St. Hope
employee that Michelle Rhee, the current Chancellor of the Washington,
D.C. schools, served on the board of St. Hope. When one of the girls
made accusations against Johnson, Rhee allegedly told the employee she
"would take care of it." Rhee and Johnson are recently engaged to be
married. And, of course, Kevin Johnson is said to be personal friends with Obama and a donor.
Pressed for the reason Walpin was fired, Eisen [special counsel] told House and Senate
aides that the White House conducted an "extensive review" of
complaints about Walpin’s performance before deciding to dismiss him.
According to the new report, Eisen told Congress that "his
investigation into the merits of removing Gerald Walpin involved
contacting members of the Corporation for National and Community
Service [CNCS] board to confirm the existence of a 'consensus' in favor
of removal." But Republican investigators later discovered that during
that "extensive review," the White House did not even seek the views of
the corporation's board -- the very people whose "consensus"
purportedly led to Walpin's firing.
Other than board chairman Alan Solomont, the Democratic mega-donor and
Obama supporter who originally told the White House of his
dissatisfaction with Walpin, "no member of the CNCS board had any
substantive input about whether the removal of Gerald Walpin was
appropriate," according to the report. Only one other board member,
vice-chairman Stephen Goldsmith, was even called by the White House,
and that was on June 10, a few hours before Walpin was fired.
According to the report, Goldsmith told investigators that "the White
House had already decided to remove Walpin and wanted to confirm
[Goldsmith's] support for the action."
The new documents show the White House scrambling, in the days after
the controversy erupted, to put together a public explanation for the
firing. On June 11, less than 24 hours after Walpin received the call
from Eisen, the board held a conference call. The next day, Ranit
Schmelzer, who is part of the corporation's press office, sent an email
to board members giving them talking points to use if contacted by
reporters seeking information about the matter.
"Indicate that you support the president's decision to remove IG
Walpin," was Schmelzer's first instruction to the board. Then: "If
asked why he was removed, indicate that the president lost confidence
in Mr. Walpin." And then: "If the reporter continues to press, say
that you can't get into details on a personnel matter, but you
understand there were some performance-based issues." Finally,
Schmelzer advised the board to avoid "getting into any specifics about
IG Walpin's performance-based issues. The WH has stayed away from this
and has counseled us to do the same."
Senator Charles Grassley (R-IA) and Rep Darrell Issa (R-CA) have been
on this from the beginning and are determined to see that the integrity
of the Inspectors General program does not become a political puppet. Read York's entire story here.
Michelle Rhee is the Chancellor of the Washington, D.C. Public School system. She recently became engaged to Kevin Johnson, the former NBA basketball star and current mayor of Sacramento, California. Johnson, a good friend and donor to Barack Obama, is in the middle of a financial and sexual scandal involving underage girls. Former Inspector General Gerald Walpin ran smack into the Johnson controversy when he began an investigation in AmeriCorps. See video below. See update below:
Michelle Rhee
The result of Walpin's investigation showed that AmeriCorps misused $75 million of taxpayer monies, and Kevin Johnson was a part of that misuse - he diverted funds from AmeriCorp for his personal use. That's not all, three young girls accused him of inappropriate behavior. When Walpin's report went to Congress, Barack Obama fired the IG without cause, according to Senator Charles Grassley.
Now, through Grassley, we find that the powerful Ms. Rhee, was in the middle of a coverup for her future husband, Kevin Johnson. According to Grassley, Rhee was on the board of Johnson's St. Hope Academy. A former employee at St. Hope allegedly says that Rhee told her "she would take care of the situation." Shortly after, one of the girl's at St. Hope said Kevin Johnson's personal attorney visited the girl and offered her $1,000 a month during the rest of her time at the non-profit St. Hope.
Michelle Rhee (38), according to some in Washington, D.C. is "one of the most feared Asian Americans." She has two children, ages 10 and 7, in the DC public school system. Rhee, while feared by teachers performing less than adequately, is also considered a powerful role model. She has championed both school vouchers and charter schools - yet she allegedly tried to cover-up Johnson's despicable behavior. And even if it found this allegation is untrue, she knows the details of these charges. What is she thinking?
Rhee, responsible not to a school board but only to the mayor, went on a spree almost as soon as she arrived. She gained the right to fire
central-office employees and then axed 98 of them. She canned 24
principals, 22 assistant principals, and, at the beginning of this
summer, 250 teachers and 500 teaching aides. She announced plans to
close 23 underused schools and set about restructuring 26 other schools
(together, about a third of the system). And she began negotiating a
radical performance-based compensation contract with the teachers union
that could revolutionize the way teachers get paid.
The Kevin Johnson story is an ugly one. When Walpin submitted his report to Congress, Johnson was attempting to move into his position as Sacramento mayor. He had a huge problem on his hands, as no federal monies could come to his city because of the St. Hope scandal. Attorneys got involved and claimed that Walpin overstepped his authority.
Barack Obama and Kevin Johnson
In the meantime, an acting U.S. Attorney struck a deal with the government for some funds to be paid back by Kevin Johnson and St. Hope and AmeriCorp. That little deal got Johnson into the Mayor's office. Gerald Walpin objected.
The deal was made by Brown and top officials at the Corporation for
National and Community Service -- Walpin was cut out of the process.
He strongly disagreed with the arrangement, suspecting that it came
about more for political reasons than prosecutorial ones. The new
report takes his side, saying Brown's "motivation to reach a settlement
was not to protect the financial interests of the United States, but
rather to remove Johnson from the suspended parties list in order to
ensure Sacramento's eligibility to receive stimulus funds."
Walpin continued investigating St. Hope and found that the organization had destroyed evidence. From there, things began to spiral down for Walpin who was eventually fired by Obama's White House counsel, and it looks like the firing was due to the information Mr. Walpin revealed.
For an Inspector General to be fired by the White House, there are specific guidelines that must be followed. Obama's only reason for firing Walpin was that he had "lost confidence" in him. Walpin was recently cleared of any misuse of his authority by an independent panel, and the White House has still not met the procedural guidelines for his firing. Now it has come to light that Walpin's replacement was instructed by the White House to shred documents concerning Walpin's investigation - which the acting Inspector General, Kenneth Bach, did! Senator Charles Grassley is outraged.
Gerald Walpin
Now we learn that this school Chancellor, Michelle Rhee, was allegedly willing to attempt a cover-up of sexual misconduct with minors, and then became engaged to the perpetrator, Kevin Johnson. What a great pairing. A woman with two children still in elementary school, who runs the D.C. school district and an accused sexual predator. I have written many articles about Gerald Walpin, Kevin Johnson and AmeriCorps. Please browse through those, listed below the video, and understand the corruption coming right out of the White House. It is a sordid story of corruption at the highest levels, including the DOJ, and it exposes the lengths AmeriCorp will go to, to hijack taxpayers.
Kevin Johnson (video)
Update 11-20-09
Related and background:
Johnson's home town paper has the story now. He was in Boston and could not be reached for comment. Rhee wasn't talking either.
Update 10-8-10: Chris at WyBlog has an informative and insightful update on Michelle Rhee.
Former Attorney General and federal judge, General Michael Mukasey said President Barack Obama "violated" the the law when he fired Inspector General Gerald Walpin without following Senate statutes.
General Michael Mukasey
As background, IG Walpin investigated AmeriCorp and found they misused $75 million of taxpayer funds. That's not all, he implicated Obama's friend and former NBA star, Kevin Johnson who is currently the Mayor of Sacramento, California for diverting funds from AmeriCorp and more. Walpin's report went to Congress, the White House [counsel Greg Craig] telephoned Walpin and gave him one hour to resign or be fired. Walpin refused to resign. The reason for the firing given by the White House: Obama lost confidence in Walpin. That ridiculous statement does not meet Senate statutes.
This week we learned that an ethics committee has investigated Gerald Walpin's actions and cleared him of overstepping his authority. Walpin has sued and wants his job back.
Back to Mukasey: Speaking at the Federalist Society Walpin was asked to introduce the General. Here's what Mukasey had to say:
"Gerry served as an inspector general until he was not
only unceremoniously, but in any reasonable view of the law, unlawfully
removed from that position, something he has chosen not to suffer but
to fight, as he usually does against injustice," Mukasey declared.
Mukasey praised Walpin for his lawsuit challenging his firing and noted
that the former IG is pursuing the case "at considerable expense to
himself but, I would add, with the support of his friends."
Back in June when Walpin was fired for doing his job a bit too well, and a bit too inconveniently for Barack Obama, who is exceedingly fond of AmeriCorp, many came to the defense of the Inspector General:
A letter signed by a former Republican U.S. attorney general, a former
Democratic White House Counsel, and 144 other prominent lawyers is
challenging the White House’s claim that fired AmeriCorps Inspector
General Gerald Walpin was “confused” and “disoriented."
“We have known Gerald Walpin as a leading member of the New York bar for many years,” said the letter signed by former Bush Attorney General Michael Mukasey and former
Clinton White House Counsel Bernard Nussbaum. “Many of us have seen him
and heard him speak, including at this month’s meeting of the Second
Circuit Judicial Conference and last week’s meeting of the Board of the
Federal Bar Council.”
A tidbit of news broke on this story yesterday: An "agency" directed by the White House, erroneously e-mailed White House documents to the acting Inspector General, Kenneth Bach, who took Walpin's place. Thirteen minutes later, an "agency" spokeswoman emailed Bach, said those documents were not to come to you, please shred immediately and let me know when you have complied. Bach followed the orders! and did the shredding! The documents pertained to Gerald Walpin's firing.
This is a case that should interest all Americans. We have Inspectors General for a reason. They do not work for the White House, for a reason. IGs are apolitical. They "inspect" government agencies. They look for waste, theft, fraud and misconduct of any kind. In this case Gerald Walpin did his job in an excellent manner, and his efforts should have saved taxpayers huge sums of money. The White House handling of Mr. Walpin is shameful. Congress needs to fix it, because this process is broken.
Gerald Walpin was the Inspector General (IG) for AmeriCorps. He believes he was fired by the White House (WH) for an incriminating report on AmeriCorp showing the abuse of $75 million dollars of taxpayer monies. Walpin is suing to get his job back, but evidently, documents perhaps pertaining to his case have been shredded at the request of the White House, by the very man who replaced him.
The acting inspector general of AmeriCorps said he shredded White House
documents at the request of an agency press spokeswoman that pertained
to the controversial firing of the previous inspector general, Gerald
Walpin, who was ousted after investigating a political ally of
President Obama.
The e-mail message from agency spokeswoman Ranit Schmelzer seemed
urgent, as she wrote: “WH documents were sent in error. Can you please
destroy them? And can you confirm you receive this e-mail?” Acting IG
Kenneth Bach responded 13 minutes later writing, “Confirmed, documents
were shredded.”...
The documents
referenced in the Bach-Schmelzer email exchange included a draft of a
letter to be signed by President Obama that would be sent to House
Speaker Nancy Pelosi (D-Calif.) to inform her that Obama was firing
Gerald Walpin as inspector general for the Corporation for National and
Community Service (CNCS), which runs AmeriCorps, and also a set of
talking points to be used in explaining to the media why Walpin was
being fired.
When an Inspector General is fired, there is a procedure for doing so, none of which those sympathetic to Gerald Walpin believe, happened, including Senator Chuck Grassley (R-IA). To date, President Obama has only said that he "lost confidence" in Walpin.
Not only did Walpin expose fraud at AmeriCorps, he also exposed a politician - a friend of Barack and Michelle Obama, who misused charitable funds. The politician is former NBA star and current Mayor of Sacramento, California Kevin Johnson. Johnson's past is fraught with scandal - inappropriate touching of at least one minor, recruiting AmeriCorps personnel to work in his own non-profit, St. Hope Academy, and to work for him personally. Walpin's report charged that the supplemented St. Hope salaries by "converting" AmeriCorp grant funds and more.
So let's take a look at Kevin Johnson, and keep in mind that Walpin's
investigation was correct and it is documented that Johnson misused
federal funds, at times for his personal benefit. That fact is not
being disputed by anyone.
Walpin, who has been exonerated from any wrong doing says such a request from an "agency spokeswoman" is "shocking," as well as acting Inspector General Kenneth Bach's compliance.
The following is a breakdown of Inspector General Neil Barofsky's report before the House Committee on Financial Services, Subcommittee on Oversight and Investigations, ending June 30, 2009. Don't run away. You need to know this.
Rep. Barney Frank (D-MA) is the chairman of the House Committee on Financial Services. Rep. Dennis Moore (D-KS) is the chairman of the Subcommittee on Oversight and Investigations. I do not see this report linked on the webpages. Perhaps it is there, but I have not found it.
The following is the essence of the report, in my estimation. Below the "essence" is the full text. When you see text in between brackets [ ], those are my comments. I have used some short cuts in the "essence" but have not changed the meaning in anyway (you can check that for yourself as I have provided the page numbers.
Note that I have interchanged SIGTARP (Special Inspector General TARP) with "we."
Page 3
Transparency: ...repeatedly failed to adopt recommendations believed essential to providing basic transparency.
Use of Funds Generally: Other than in a few agreements...Treasury has declined to adopt this recommendation, calling any such reporting "meaningless"...
Valuation of the TARP Portfolio: Treasury has retained asset managers and is receiving such valuation data...but has not committed to providing such information except on the statutorily required annual basis [does that mean no valuations have been provided as TARP is not yet a year old?]
Page 3 and 4
Regular disclosure of PPIF Activity, Holdings, and Valuation: ...the taxpayer will be providing a substantial portion of the funds that will be used to purchase toxic assets in the Public-Private Investment Funds (PPIF)...all trading activity, holdings, and valuations of assets...Not only should the disclosure be required as a matter of basic transparency in light of the billions of taxpayer dollars at state,...but the disclosure would serve well one of Treasury's stated reasons for the program in the first place: the promotion of "price discovery" in the illiquid market. Treasury has indicated that it will not require such disclosure.
In the need to balance transparency...Treasury's default position should always be to require more disclosure rather than less...provide the American taxpayers as much information about what is being done with their money as possible. Unfortunately, in rejecting basic transparency recommendations, TARP has become a program in which taxpayers (1) are not being told what most of the TARP recipients are doing with their money, (ii) have still not been told how much their substantial investments are worth, and (iii) will not be told the full details of how their money is being invested....
Imposition of Information Barriers, or "Walls," in PPIP: we noted conflicts of interest and collusion vulnerabilities were inherent in the design of PPIP...PPIF managers will have significant power to set prices in a largely illiquid market...PPIF managers having an incentive to overpay significantly for assets or otherwise using the valuable, proprietary PPIF trading information to benefit not the PPIF, but rather the manager's non-PPIF business interests. We made recommendation to impose strict conflicts of interest rules....Treasury adopted many of the recommendations...HOWEVER, Treasury has declined to adopt on of our most fundamental recommendations - the requirement for imposition of an informational barrier or "wall" between the PPIF fund managers making investment decisions on behalf of the PPIF and those employees of the fund management company who manage non-PPIF funds. Treasury has deceided not to impose such a wall...despite that it has been done in other Government bailout-related programs...the risk is the reputational risk that Treasury could face if a PPIF manager should generate massive profits in its non-PPIF funds as a result of an unfair advantage...leaving Treasury vulnerable to an accusation that has already been leveled against it...that Treasury is using TARP to pick winners and losers...benefiting a chosen few at the expense of the dozens of firms that were rejected, of the market as a whole, and of the American taxpayer...putting in jeopardy the fragile trust the American people have in TARP and the government.
Pages 5 - 8
Discussion that $643.1 billion of the $700 billion will be spent in 12 programs. To date, $643.1 billion has been committed, $441 billion has actually been spent. There is a chart on page 6 of Total Potential Funds Subject to SIGTARP Oversight as of June 30, 2009. On page 7 is a chart of Incremental Financial System Support, by Federal Agency.
Details the Special Inspector General's Investigations Division and the misdeeds of programs around the country who have taken client's monies while falsely identifying themselves as TARP.
Through June 30, 2009, SIGTARP has 35 ongoing criminal and civil investigations. These investigations include complex issues concerning suspected accounting fraud, securities fraud, insider trading, mortgage servicer misconduct, mortgage fraud, public corruption, false statements, and tax investigations. Two of SIGTARP’s investigations have recently become public: [see the list inside the document below
Page 9
Future Audits - Assessment of use of fund by TARP recipients, including the Making Home Affordable Mortgage Modification Program
Page 9 and 10
[We're told how the IG's office is putting people to work in America - expecting that final number to be 160 new hires] [That's 160 people just to watchdog the hundreds already being paid to do so, including Joe Biden] SIGTARP did not know their own budgetary needs when the FY2010 budget was put together, and have asked for a budget of $23,300,000.00. THAT'S TWENTY THREE MILLION, THREE HUNDRED THOUSAND DOLLARS!
[Don't get me wrong, the Inspector Generals are the good guys in this scenario and if they can make Treasury be transparent, and then put those in prison who deserve to be in prison, if and when fraudulent and criminal, then $23,300,000.00 is a bargain, I guess.]Page 10
Ends with making nice and saying that basically Treasury has cooperated with SIGTARP's information requests - AND while SIGTARP and Treasury have disagreed "vociferously,"...SIGTARP believes that Treasury has engaged actively in consulting with SIGTARP about it's concerns. [Problem is, as you can see above, Treasury has consulted and then rejected the consultations.]
Follows Statement of Neil Barofsky, Special Inspector general Troubled Asset Relief Program:
Barofsky Testimony
FOR OFFICIAL USE ONLY UNTIL RELEASED BY THE HOUSE COMMITTEE ON FINANCIAL SERVICES SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS STATEMENT OF NEIL BAROFSKY SPECIAL INSPECTOR GENERAL TROUBLED ASSET RELIEF PROGRAM BEFORE THE HOUSE COMMITTEE ON FINANCIAL SERVICES SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS July 22, 2009 Chairman Moore, Ranking Member Biggert and Members of the Committee, I am honored to appear before you today to deliver to this Committee my quarterly report to Congress. In the nine months since the Emergency Economic Stabilization Act of 2008 (“EESA”) authorized creation of the Troubled Asset Relief Program (“TARP”), the U.S. Department of the Treasury (“Treasury”) has created 12 separate programs involving Government and private funds of up to almost $3 trillion. From programs involving large capital infusions into hundreds of banks and other financial institutions, to a mortgage modification program designed to modify millions of mortgages, to public-private partnerships using tens of billions of taxpayer dollars to purchase “toxic” assets from banks, TARP has evolved into a program of unprecedented scope, scale, and complexity. Moreover, TARP does not function in a vacuum but is rather part of the broader Government efforts to stabilize the financial system, an effort that includes dozens of inter-related programs operated by multiple Federal agencies. WARRANTS Pursuant to one of the initial TARP programs, the Capital Purchase Program (“CPP”), Treasury allocated $250 billion to provide funds to qualified financial institutions to build capital, increase the flow of financing, and support the economy. As of March 2009, Treasury forecast spending only $218 billion in this program. The economic terms of the CPP transactions were that, in exchange for the TARP infusions, Treasury received senior preferred stock of the banks that pays a 5% dividend for five years and 9% thereafter. Consistent with the terms of EESA, Treasury also received warrants – option to purchase additional stock. For publicly traded banks, Treasury received warrants of common stock; for privately held banks, Treasury received warrants for additional preferred shares, which were immediately exercised. As banks repurchase their CPP investments, they have the option to purchase the warrants. How those warrants are valued is an important matter that greatly affects the taxpayers’ return on these investments. As a part of SIGTARP’s oversight efforts, we have been coordinating our efforts with other agencies to avoid duplication, and it has been my pleasure to work with my co-panelist from the Government Accountability Office (“GAO”), Thomas McCool, and with the Congressional Oversight Panel (“the Panel”), chaired by co-panelist, Professor Elizabeth Warren. As a part of this coordination, on June 10, 2009, SIGTARP entered into a special coordinated effort with the Panel to examine the pricing of warrants in the context of the return of CPP funds by TARP-recipients. The Panel issued a July 10, 2009, report valuing the warrants that Treasury had bought to date. SIGTARP plans to conduct an audit of the warrant repurchase/sale process and will have the benefit of the Panel valuations as context. SIGTARP’s audit will examine several key questions, including exanimation of the process Treasury has established to value the warrants for re-purchase, whether Treasury follows a clear and consistent process in considering potentially differing valuations of warrants, and the extent to which Treasury has established an objective basis for its ultimate valuation decisions. SIGTARP, if appropriate, will issue recommendations with the report of this audit. OTHER AREAS OF INTEREST SIGTARP has made a variety or recommendations concerning the TARP program and has worked hard to advance the general understanding of the TARP. With respect to recommendations, one of SIGTARP’s most important oversight responsibilities is to provide recommendations to Treasury so that TARP programs can be designed or modified to facilitate effective oversight and transparency and to prevent fraud, waste, and abuse. SIGTARP’s reports detail these recommendations and provide updates on their implementation. Two categories of recommendations, however, are worth highlighting in particular: Transparency in TARP Programs Although Treasury has taken some steps towards improving transparency in TARP programs, it has repeatedly failed to adopt recommendations that SIGTARP believes are essential to providing basic transparency and fulfill Treasury’s stated commitment to implement TARP “with the highest degree of accountability and transparency possible.” SIGTARP’s July 21, 2009, Quarterly Report includes one new recommendation and there are several other additional unadopted recommendations from prior quarterly reports: • Use of Funds Generally: One of SIGTARP’s first recommendations was that Treasury require all TARP recipients to report on the actual use of TARP funds. Other than in a few agreements (with Citigroup, Bank of America, and AIG), Treasury has declined to adopt this recommendation, calling any such reporting “meaningless” in light of the inherent fungibility of money. SIGTARP continues to believe that banks can provide meaningful information about what they are doing with TARP funds — in particular what activities they would not have been able to do but for the infusion of TARP funds. That belief has been supported by SIGTARP’s first audit, in which nearly all banks were able to provide such information. Valuation of the TARP Portfolio: SIGTARP has recommended that Treasury begin reporting on the values of its TARP portfolio so that taxpayers can get regular updates on the financial performance of their TARP investments. Notwithstanding that Treasury has now retained asset managers and is receiving such valuation data on a monthly basis, Treasury has not committed to providing such information except on the statutorily required annual basis. Disclosure of TALF Borrowers Upon Surrender of Collateral: In TALF, the loans are non-recourse, that is, the lender (Federal Reserve Bank of New York) will have no recourse against the borrower beyond taking possession of the posted collateral (consisting of assetbacked securities (“ABS”)). Under the program, should such a collateral surrender occur, TARP funds will be used to purchase the surrendered collateral. In light of this use of TARP funds, SIGTARP has recommended that Treasury and the Federal Reserve disclose the identity of any TALF borrowers that fail to repay the TALF loan and must surrender the ABS collateral. Regular Disclosure of PPIF Activity, Holdings, and Valuation: In the PPIP Legacy Securities Program, the taxpayer will be providing a substantial portion of the funds (contributing both equity and lending) that will be used to purchase toxic assets in the Public- • • • Private Investment Funds (“PPIFs”). SIGTARP is recommending that all trading activity, holdings, and valuations of assets of the PPIFs be disclosed on a timely basis. Not only should this disclosure be required as a matter of basic transparency in light of the billions of taxpayer dollars at stake, but such disclosure would also serve well one of Treasury’s stated reasons for the program in the first instance: the promotion of “price discovery” in the illiquid market for MBS. Treasury has indicated that it will not require such disclosure. Although SIGTARP understands Treasury’s need to balance the public’s transparency interests, on one hand, with the interests of the participants and the desire to have wide participation in the programs, on the other, Treasury’s default position should always be to require more disclosure rather than less and to provide the investors in TARP — the American taxpayers — as much information about what is being done with their money as possible. Unfortunately, in rejecting SIGTARP’s basic transparency recommendations, TARP has become a program in which taxpayers (i) are not being told what most of the TARP recipients are doing with their money, (ii) have still not been told how much their substantial investments are worth, and (iii) will not be told the full details of how their money is being invested. In SIGTARP’s view, the very credibility of TARP (and thus in large measure its chance of success) depends on whether Treasury will commit, in deed as in word, to operate TARP with the highest degree of transparency possible. Imposition of Information Barriers, or “Walls,” in PPIP In the April 21, 2009, Quarterly Report, SIGTARP noted that conflicts of interest and collusion vulnerabilities were inherent in the design of PPIP stemming from the fact that the PPIF managers will have significant power to set prices in a largely illiquid market. These vulnerabilities could result in PPIF managers having an incentive to overpay significantly for assets or otherwise using the valuable, proprietary PPIF trading information to benefit not the PPIF, but rather the manager’s non-PPIF business interests. As a result, SIGTARP made a series of recommendations in the April Quarterly Report, including that Treasury should impose strict conflicts of interest rules. Since the April Quarterly Report, Treasury has worked with SIGTARP to address the vulnerabilities in PPIP, and SIGTARP made a series of specific recommendations, suggestions, and comments concerning the design of the program. Treasury adopted many of SIGTARP’s suggestions and has developed numerous provisions that make PPIP far better from a compliance and anti-fraud standpoint than when the program was initially announced. However, Treasury has declined to adopt one of SIGTARP’s most fundamental recommendations — that Treasury should require imposition of an informational barrier or “wall” between the PPIF fund managers making investment decisions on behalf of the PPIF and those employees of the fund management company who manage non-PPIF funds. Treasury has decided not to impose such a wall in this instance, despite the fact that such walls have been imposed upon asset managers in similar contexts in other Government bailout-related programs, including by Treasury itself in other TARPrelated activities, and despite the fact that three of the nine PPIF managers already must abide by similar walls in their work for those other programs. If nothing else, the reputational risk that Treasury and the program could face if a PPIF manager should generate massive profits in its non-PPIF funds as a result of an unfair advantage, even if that advantage is not strictly against the rules, justifies the imposition of a wall. Failure to impose a wall, on the other hand, will leave Treasury vulnerable to an accusation that has already been leveled against it — that Treasury is using TARP to pick winners and losers and that, by granting certain firms the PPIF manager status, it is benefitting a chosen few at the expense of the dozens of firms that were rejected, of the market as a whole, and of the American taxpayer. This reputational risk is not one that can be readily measured in dollars and cents, but is rather a risk that could put in jeopardy the fragile trust the American people have in TARP and, by extension, their Government. TARP in Context During the last 36 hours there has been considerable media coverage and interest in section 3 of SIGTARP’s July Quarterly Report, which attempts to place the TARP into context in terms of how it has evolved and of the greater government-wide effort. TARP, as originally envisioned in the fall of 2008, would have involved the purchase, management, and sale of up to $700 billion of “toxic” assets, primarily troubled mortgages and mortgage-backed securities (“MBS”). That framework was soon shelved, however, and TARP funds are being used, or have been announced to be used, in connection with 12 separate programs that, as set forth in Table 1 below, involve a total (including TARP funds, loans and guarantees from other agencies, and private money) that could reach nearly $3 trillion. Through June 30, 2009, Treasury has announced the parameters of how $643.1 billion of the $700 billion would be spent through the 12 programs. Of the $643.1 billion that Treasury has committed, $441 billion has actually been spent. TOTAL POTENTIAL FUNDS SUBJECT TO SIGTARP OVERSIGHT, AS OF 6/30/2009 ($ BILLIONS) Total Projected Funding at Risk ($) $218.0 ($70.1) Projected TARP Funding ($) $218.0 ($70.1) Program Capital Purchase Program (“CPP”) Brief Description or Participant Investments in 649 banks to date; 8 institutions total $134 billion; received $70.1 billion in capital repayments GM, Chrysler, GMAC, Chrysler Financial; received $130.8 million in loan repayments (Chrysler Financial) Government-backed protection for auto parts suppliers Government-backed protection for warranties of cars sold during the GM and Chrysler bankruptcy restructuring periods Purchase of securities backed by SBA loans Automotive Industry Financing Program (“AIFP”) 79.3 79.3 Auto Supplier Support Program (“ASSP”) 5.0 5.0 Auto Warranty Commitment Program (“AWCP”) 0.6 0.6 Unlocking Credit for Small Businesses (“UCSB”) Systemically Significant Failing Institutions (“SSFI”) Targeted Investment Program (“TIP”) Asset Guarantee Program (“AGP”) Term Asset-Backed Securities Loan Facility (“TALF”) Making Home Affordable (“MHA”) Program Public-Private Investment Program (“PPIP”) 15.0 15.0 AIG investment 69.8 69.8 Citigroup, Bank of America investments Citigroup, ring-fence asset guarantee FRBNY non-recourse loans for purchase of asset-backed securities Modification of mortgage loans 40.0 301.0 1,000.0 40.0 5.0 80.0 75.0 50.0 Disposition of legacy assets; Legacy Loans Program, Legacy Securities Program (expansion of TALF) Capital to qualified financial institutions; includes stress test Potential additional funding related to CAP; other programs 500.0 – 1,000.0 75.0 Capital Assistance Program (“CAP”) TBD TBD New Programs, or Funds Remaining for Existing Programs Total 131.4 131.4 $2,365.0 – $2,865.0 $699.0 Note: See Table 2.1 in Section 2 for notes and sources related to the information contained in this table. As massive and as important as TARP is on its own, it is just one part of a much broader Federal Government effort to stabilize and support the financial system. Since the onset of the financial crisis in 2007, the Federal Government, through many agencies, has implemented dozens of programs that are broadly designed to support the economy and financial system. In our most recent quarterly report, we summarize these programs and the total potential support to the financial system as of 6/30/09, there is approximately $3.0 trillion outstanding, $4.7 trillion is the total support to date, including money that has been paid pack and programs that have ended. In total, the potential federal support through all of these programs is approximately $23.7 trillion, as indicted below: INCREMENTAL FINANCIAL SYSTEM SUPPORT, BY FEDERAL AGENCY SINCE 2007 ($ TRILLIONS) Maximum Total Potential Current Balance Federal Reserve FDIC Treasury — TARP (including Federal Reserve, FDIC components) Treasury — Non-TARP Other: FHFA, NCUA, GNMA, FHA, VA Total $1.4 0.3 0.6 0.3 0.3 $3.0 Balance as of 6/30/2009 $3.1 0.3 0.6 0.3 0.3 $4.7 Support Related to Crisis $6.8 2.3 3.0 4.4 7.2 $23.7 Notes: Numbers affected by rounding. Amounts may include overlapping agency liabilities, “implied” guarantees, and unfunded initiatives. Total Potential Support does not account for collateral pledged. See the “Methodology for Estimating Government Financial Exposure” discussion in this section for details on the methodology of this chart. Other agencies include: FHFA, National Credit Union Administration (“NCUA”), Government National Mortgage Association (“GNMA”), Federal Housing Administration (“FHA”), and U.S. Department of Veterans Affairs (“VA”). For a full description of the backup for these numbers and the methodology for calculating them see Section 3 of our July Quarterly report. Oversight Activities of SIGTARP The oversight activities discussed above and all other SIGTARP efforts to date are detailed in SIGTARP’s reports dated February 6, 2009, 1 April 21, 2009,2 and July 21, 2009. Additionally, on July, 20, 2009, SIGTARP issued an audit report concerning how recipients of CPP funds reported their use of such funds.3 In February 2009, SIGTARP sent survey letters to more than 360 financial 1 See http://www.sigtarp.gov/reports/congress/2009/SIGTARP_Initial_Report_to_the_Congress.pdf. See http://www.sigtarp.gov/reports/congress/2009/April2009_Quarterly_Report_to_Congress.pdf. 2 3 See http://www.sigtarp.gov/reports/audit/2009/SIGTARP_Survey_Demonstrates_That_Banks_Can_Provide_Meaningfu_%20Information_On_Their_Use_Of_TARP_Funds.pdf. and other institutions that had completed TARP funding agreements through January 30, 2009. The audit report finds that, although most banks reported they did not segregate or track TARP fund usage on a dollar-for-dollar basis, they were able to provide insights into their actual or planned future use of TARP funds. For some respondents the infusion of TARP funds helped to avoid a “managed” reduction of their activities; others reported that their lending activities would have come to a standstill without TARP funds; and others explained that they used TARP funds to acquire other institutions, invest in securities, pay off debts, or that they retained the funds to serve as a cushion against future losses. In light of the audit findings, SIGTARP renews its recommendation that the Secretary of the Treasury require all TARP recipients to submit periodic reports to Treasury on their use of TARP funds. SIGTARP’s Investigations Division has developed rapidly and is quickly becoming a sophisticated white-collar investigative agency. Through June 30, 2009, SIGTARP has 35 ongoing criminal and civil investigations. These investigations include complex issues concerning suspected accounting fraud, securities fraud, insider trading, mortgage servicer misconduct, mortgage fraud, public corruption, false statements, and tax investigations. Two of SIGTARP’s investigations have recently become public: • Federal Felony Charges Against Gordon Grigg: On April 23, 2009, Federal felony charges were filed against Gordon B. Grigg in the U.S. District Court for the Middle District of Tennessee, charging him with four counts of mail fraud and four counts of wire fraud. The charges are based on Grigg’s role in embezzling approximately $11 million in client investment funds that he garnered through false claims, including that he had invested $5 million in pooled client funds toward the purchase of the TARP-guaranteed debt. Grigg pleaded guilty to all charges and is scheduled for sentencing on August 6, 2009. FTC Action Against Misleading Use of “MakingHomeAffordable.gov”: On May 15, 2009, based upon an action brought by the Federal Trade Commission (“FTC”), a Federal district court issued an order to stop an Internet-based operation that pretended to operate “MakingHomeAffordable.gov,” the official website of the Federal Making Home Affordable program. According to the FTC’s complaint, the defendants purchased sponsored links as advertising on the results pages of Internet search engines, and, when consumers searched for “making home affordable” or similar search terms, the defendants’ ads prominently and conspicuously displayed “MakingHomeAffordable.gov.” Consumers who clicked on this link were not directed to the official website, but were diverted to sites that solicit applicants for paid loan modification services. The operators of these websites either purport to offer loan modification services themselves or sold the victims’ personally identifying information to others. SIGTARP is providing assistance to FTC during the investigation. • More than 50% of SIGTARP’s ongoing investigations were developed in whole or in part through tips or leads provided on SIGTARP’s Hotline (877-SIG-2009 or accessible at www.SIGTARP.gov). Over the past quarter, the SIGTARP Hotline received and analyzed more than 3,200 tips, running the gamut from expressions of concern over the economy to serious allegations of fraud. Further, SIGTARP is in the process of completing audit reports concerning executive compensation restriction compliance, controls over external influences on the CPP application process, selection of the first nine participants for funds under CPP (with a particular emphasis on Bank of America), AIG bonuses, and AIG counterparty payments. In addition, SIGTARP is undertaking a series of new audits, as follows: • Follow-up Assessment of Use of Funds by TARP Recipients: This audit will examine use of funds by recipients receiving extraordinary assistance under the Systemically Significant Failing Institutions program, the Automotive Industry Financing Program, as well as insurance companies receiving assistance under CPP. Governance Issues Where U.S. Holds Large Ownership Interests: The audit, being conducted at the request of Senator Max Baucus, will examine governance issues when the U.S. Government has obtained a large ownership interest in a particular institution, including: (i) What is the extent of Government involvement in management of companies in which it has made sizeable investments, including direction and control over such elements as governance, compensation, spending, and other corporate decision making? (ii) To what extent are effective risk management, internal controls, and monitoring in place to protect and balance the Government’s interests and corporate needs? (iii) Are there performance measures in place that can be used to track progress against long-term goals and timeframes affecting the Government’s ability to wind down its investments and disengage from these companies? (iv) Is there adequate transparency to support decision making and to provide full disclosure to the Congress and the public? Status of the Government’s Asset Guarantee Program with Citigroup: The audit examining the Government’s Asset Guarantee Program (“AGP”) with Citigroup, based upon a request by Representative Alan Grayson, will address a series of questions about the Government’s guarantee of certain Citigroup assets through the AGP such as: (i) How was the program for Citigroup developed? (ii) What are the current cash flows from the affected assets? and (iii) What are the potential for losses to Treasury, the Federal Deposit Insurance Corporation, and the Federal Reserve under the program? Making Home Affordable Mortgage Modification Program: This audit will examine the Making Home Affordable mortgage modification program to assess the status of the program, the effectiveness of outreach efforts, capabilities of loan servicers to provide services to eligible recipients, and challenges confronting the program as it goes forward. • • • Operational Status Regarding SIGTARP’s operational status, we continue to filling out our ranks. As of July 20, 2009, we have hired 70 personnel, and have several new hires to begin over the coming weeks. Currently, SIGTARP’s senior and upper-level management ranks are for the most part in place, and, thus, we anticipate that hiring will proceed rapidly. SIGTARP’s efforts have been assisted by dual compensation and direct hire authorities that it has been provided via statute and regulation. We are very pleased with our progress, and we are confident that SIGTARP will achieve its current goal of approximately 160 full-time employees by the second quarter of FY 2010. Nonetheless, section 121(j) of EESA, as amended, provided $50 million for SIGTARP, but this figure will not be sufficient to fund SIGTARP’s activities through FY 2010. SIGTARP had not been established when Treasury submitted its initial FY 2010 budget request to the Office of Management and Budget (“OMB”), during the summer of 2008. Additionally, SIGTARP was not in a position to definitively project its FY 2010 needs when OMB reopened the FY 2010 budget in the early spring of 2009 (i.e., SIGTARP’s key management and budget personnel either had not yet been hired or had just arrived). Thus, SIGTARP was effectively precluded from submitting a substantive request for additional funds when the budget was reopened. SIGTARP, accordingly, submitted to Treasury a request for an amendment of the FY2010 budget request in the amount of $23,300,000. Cooperation In spite of accounts in the media, to date, Treasury has cooperated with SIGTARP’s information requests. Moreover, although SIGTARP and Treasury have disagreed, sometimes vociferously, over the design and implementation of TARP programs, SIGTARP believes that Treasury has engaged actively in consulting with SIGTARP about its concerns. Chairman Moore, Ranking Member Biggert and Members of the Committee, I want to thank you again for this opportunity to appear before you, and I would be pleased to respond to any questions that you may have.
President Obama says he sees a lack of humility among bankers today. He said the industry "should be more focused on products we're providing consumers. Let's make sure we're operating in a more secure, safe fashion." Weigh that against the Treasury's lack of humility and their complete failure to operate in a "more secure, safe fashion."
Rush has interesting commentary.
Inspector General Gerald Walpin has filed a lawsuit to get his job back. Walpin was fired by President Barack Obama but the lawsuit was filed against the Corporation for National and Community Service (CNCS) which is the umbrella corporation for AmeriCorps. Thank you to Always on Watch. See update 11-10-09 below.
Gerald Walpin
CNCS employed Mr. Walpin, however, Walpin has been said to serve at the pleasure of the President, as well as said not to work for the White House.
An Inspector General is essentially a watchdog - tasked with watching an assigned project and reporting unethical misdeeds. That's exactly what IGWalpin did. The problem is, he reported on the unethical misdeeds of one of Obama's friends.
Because Inspector Generals are non-partisan, Congress has laws mandating how the firing of an Inspector General should be handled. The idea is that an IG cannot be fired simply because someone doesn't like his reporting. Instead, Congress is to be notified 30-days before a planned firing and during that time, Congressional oversight investigates.
None of that happened with Gerald Walpin. He received a telephone call from a White House attorney one evening and was given one hour to resign. Walpin refused. He was fired.
Some in Congress complained that this is not the way IG's are handled, so the White House then claimed that Walpin was "confused and disoriented" at a CNCS board meeting.
Mr. Walpin's lawsuit, filed in U.S. District court for the District of Columbia, alleges that his firing was "unlawful," politically driven," "procedurally defective" and "a transparent and clumsily-conducted effort t circumvent the protections" given to inspectors general under the Inspectors General Reform Act of 2008.
Named along with CNCS are Nicola Goren, acting CNCS CEO, Frank Trinity, CNCS general counsel and Raymond Limon, CNCS "chief human capital officer."
According to the Washington Examiner, Walpin has not asked for damages, other than payment of his attorney fees. He wants the Court to declare that his firing was unlawful and he wants to be re-instated to his previous position of Inspector General.
There are many elements to the Walpin firing. I can give you the flavor of just a few of them and you'll "get it" immediately - Walpin blew the whistle on a friend of Barack and Michelle Obama. That friend is former NBA star Kevin Johnson. Mr. Johnson, who was elected Mayor of Sacramento, CA in November 2008, is accused of abusing the funds of his own non-profit...and more, there's much more to the Johnson story. Walpin was in the way, and he was in the way enough that it appears the President did not follow mandated Congressional procedure to relieve him of his duty.
In the course of his investigation, Walpin found Johnson and St. HOPE had failed to use the federal money they received for the purposes specified in the grant and had also used federally-funded AmeriCorps staff for, among other things, "driving [Johnson] to personal appointments, washing his car, and running personal errands."
Walpin came to the conclusion that Johnson and St. HOPE should be subject to suspension and debarment. But it was not Walpin's decision to make; there is another official at the Corporation whose job it is to make that call. In September 2008, after reviewing Walpin's evidence, the official decided to order a suspension, with the distinct possibility that it would lead to a permanent debarment.
With Walpin's findings, and with Johnson now in the Mayor's office, there was a real possibility that the city of Sacramento would not be eligible for federal funds due to Johnson's possible debarment.
Panic broke out in the city of Sacramento.
Eventually, acting U.S. Attorney General Larry Brown worked a deal that essentially let Johnson off the hook and arranged a repayment of misused funds that everyone knew could not be repaid.
Taxpayers once again had funded a charitable organization, and once again the taxpayer and those in need of the taxpayer funds were screwed. Walpin said that it was a "terrible deal" for the U.S. Government. Walpin protested and the next thing he knew, he was barred from all discussions, negotiations and settlement talks.
Update 11-10-09:
Announced today that Gerald Walpin has been cleared of charges that he overstepped his authority in his investigation of AmeriCorps and Kevin Johnson. Read the story here.
Here is background, and of special interest are Nos. 2, 3 and 8:
An important question lingered. Who at the Corporation for National and Community Service (CNCS) asked Inspector Gerald Walpin to investigate Kevin Johnson and St. HOPE in the first place? - and why? And why hasn't this question been investigated? Maybe because there is a need to make it appear that Walpin was on a witch hunt, but the request came from Governor Arnold Schwarzenegger. He asked the "federal government" to investigate Johnson. Did the "federal government" mean a U.S. Attorney, or the federal agency, CNCS, the corporation that administers AmeriCorps? Whichever, AmeriCorps then turned the Kevin Johnson investigation over to Gerald Walpin. See update 11-10-09 below.
Arnold Schwarzenegger
What was known even before Gerald Walpin became involved? Here's the answer: (The Sacramento Union, dated May 1, 2008):
A Sacramento-based nonprofit run by former NBA star and Sacramento mayoral candidate Kevin Johnson is facing scrutiny after a teenager complained of inappropriate touching by Johnson.
Gov. Arnold Schwarzenegger’s office asked the federal government to investigate because the nonprofit, St. HOPE, has received money in the past from the federal AmeriCorps program.
The governor’s California Volunteers office administers AmeriCorps money coming to the state and is required to report such allegations.
Marta Bortner, a spokeswoman for the state volunteer office, says the request was made to the AmeriCorps inspector general last week. It was triggered by a report filed a year ago with Sacramento County Child Protective Services.
So Walpin investigated at the request of AmeriCorps via Schwarzenegger, and the investigation began with a sexual abuse allegation into Johnson, who founded St. HOPE Academy, an AmeriCorp recipient.
As the investigation progressed and unearthed misuse of federal monies, AmeriCorp and CNCS didn't like the results. Perhaps a President Barack Obama was only a distant possibility in the Spring of 2008.
Who knew what was coming? Who knew that soon-to-be president, Barack Obama, planned a "civilian national security force that's just as powerful, just as strong, just as well-funded" as our military.
Let's get it straight about who employed Gerald Walpin during the time of his investigations. He worked for a the CNCS which is a federal agency. Congress has established rules to protect the sanctity of all Inspector Generals to protect them from political motivation. Here is how Walpin explained his position to another CNCS division, Learn and Serve America grantees, October 23, 2008.
Finally, you should know that there are Inspectors General working at every Federal agency under a system established by Congress in 1978 under the Inspector General Act. I’m a presidential appointee and I was confirmed by the U.S. Senate. I serve at the pleasure of President Bush. Only the president, not the head of the agency my office oversees, can remove me from office. And even the President’s power to remove me is subject to the transparency requirement that he must explain to Congress his reason for doing so. This system guarantees my independence.
In 2007 when Walpin was confirmed by the Senate to the Inspector General position, David Eisner, a former AOL executive, was the CNCS CEO. CNCS, with a big red tab "About AmeriCorps" on it's homepage, announced Walpin's confirmation and extolled his accomplishments:
For over 40 years, Walpin was a partner with the New York City law firm KattenMuchin and RosenmanLLP, chairing the firm’s litigation department, and is now Counsel to that firm. His practice included the determination of the existence of fraud within corporations, and recoveries resulting from such fraud. Before his private practice, he was law secretary to two Federal District Court Judges, served in the United States Air Force J.A.G., and was the Chief of Special Prosecutions for the United States Attorney in the Southern District of New York.
He also served as President of the Federal Bar Council, the bar association of attorneys practicing in the Second Circuit Federal Courts, from 2002 to 2004. He received a bachelor’s degree from City College of New York and graduated cum laude from Yale Law School.
The numerous recognitions of Walpin’s legal expertise include the American Inns of Court Professionalism Award, which was presented by Supreme Court Justices Ruth Bader Ginsberg and Stephen Breyer and Court of Appeals Chief Judge John Walker during the 2003 Second Circuit Judicial Conference for outstanding professionalism as an attorney and mentoring of young lawyers. He is a frequent lecturer and writer on legal topics.
In addition to his professional accomplishments, he has received numerous awards for his charitable and philanthropic activities.
The CNCS administers many organizations, including AmeriCorps, which is actually a "division" of CNCS. In this case, AmeriCorps is definitely a part of the story of Gerald Walpin, and Kevin Johnson is central to why the investigation began in the first place, and I think, why Walpin was fired.
The Obama administration is in the midst of discrediting former Inspector General Gerald Walpin in a particularly egregious manner, with the attempt to show him as senile or some version of senile, although they have not used those words.
The claim is he was "confused and disoriented" during a May 20thCNCS board meeting. Walpin said the Board called for a break in the middle of his testimony. He left the room and when he returned, his report had become "disorganized," intimating, I think, that someone jumbled or shuffled his report.
As you read through the squeals from the White House and the charge from acting U.S. Attorney Brown saying Walpin handled his reports incorrectly, especially when he "recommended" that Kevin Johnson no longer be able to get his hands on federal funds, Gerald Walpin answered that charge in full, and remember that the CNCS was still Walpin's employer when his report was turned over the U.S. Attorney's office.
Update 11-10-09:
Announced today that Gerald Walpin has been cleared of charges that he
overstepped his authority in his investigation of AmeriCorps and Kevin
Johnson. Read the story here.
Background below on Walpin firing, and former NBA start and current Sacramento Mayor, Kevin Johnson's illegal misuse of federal taxpayer money, as well as misuse of AmeriCorps volunteers:
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