Wednesday, December 24, 2008

Army captain named head of Guinea junta

Captain Moussa Dadis Camara was named Wednesday as head of the military junta which claims to have seized power in Guinea, a statement read on national radio said.

Camara, who commanded the fuel section of the armed forces supplies department, had been appointed "president of the National Council for Development and Democracy," the statement said. He was acting as spokesman for the junta on the radio following the reported coup early Tuesday in the wake of the death of President Lansana Conte.

Source: AFP

Monday, December 22, 2008

Guinea's long-time military leader Conte dies


Guinea's President Lansana Conte, who ruled the West African nation with an iron fist for 24 years, has died aged 74, National Assembly Speaker Aboubacar Sompare told state television early Tuesday. In power since 1984, the ailing Conte, who relied on the army to put down growing discontent, was a chain smoker who suffered from chronic diabetes and was at one time diagnosed with leukemia. "We regret to announce to the people of Guinea the death of General Lansana Conte , after a long illness, at 6:45 pm," Sompare said.

Prime Minister Ahmed Tidiane Souare and armed forces chief of staff General Diarra Camara then confirmed the news on television. Sompare officially asked the president of the supreme court to declare the presidency vacant and to apply the constitution. If the supreme court rules that there is a vacancy in the top job, the speaker of the assembly takes over temporarily and has to organize a presidential election within 60 days.

Lansana Conte, a career soldier, came to power through a coup d'etat on April 3, 1984, one week after the death of Guinea's first president, Ahmed Sekou Toure. Top officials of the regime met overnight in the capital Conakry to discuss a successor to Conte, a source close to the presidential palace said. Among the officials meeting in emergency session at the People's Palace, seat of the national assembly, were Prime Minister Souare, Sompare, the president of the supreme court and military leaders. "All the members of the government were asked to go to the People's Palace," a minister told AFP.

Last week government spokesman Tibou Kamara had scolded "bearers of false reports" speculating about the president's state of health. Conte, who told AFP last year "I am the boss, others are my subordinates," has undergone frequent hospital treatments abroad.

Source: AFP

Friday, December 19, 2008

Zapiro, Zuma and (another) defamation threat

I see Jacob Zuma has again issued a threat to sue Zapiro, this time for R7 million based on the infamous cartoon in which Zapiro depicted Mr Zuma as preparing to rape lady liberty. This is not the first time Mr Zuma has threatened to sue Zapiro or other columnists and newspapers but those claims have gone nowhere.

I am on record criticising this cartoon because it debases and cheapens rape and may create the impression that Mr Zuma is a rapist despite him being acquitted of rape. However, if I was Zapiro I would not be too worried about this latest threat either. Not that he seems too perturbed, because a report in the Cape Times reports as follows:

Asked if he thought the R7m was a reasonable amount, Shapiro referred to a 2006 cartoon he had drawn in response to Zuma’s initial lawsuit. It showed an outraged Zuma telling Shapiro, ‘I’m suing for damage to my reputation!!’ and the cartoonist responding: ‘Would that be your reputation as a disgraced chauvinistic demagogue who can’t control his s exual urges and who thinks a shower prevents AIDS?’ Shapiro pointed out that ‘I could say the same thing now’. He had not expected Zuma to sue again as the initial case seemed ‘to be going nowhere’.

There are of course very good legal and political reasons why Mr Zuma has not sued any of the cartoonists or columnists he has threatened to sue and why this is almost certainly not going to happen now either.

First, since the SCA and the Constitutional Court developed the common law of defamation to bring it in line with the spirit and purport of the Bill of Rights, it is not so easy to win a defamation case – especially if one is a public figure like Mr Zuma.

But second, a defamation case could be politically disasterous for Mr. Zuma. Defendents in defamation cases very often use the same tactics used by rape defendents: they attack the character of the person suing for defamation.

Imagine a scenario in which Zapiro is sued by Zuma and before the court the whole rape case saga is dredged up again along with the various utterances Mr Zuma and his supporters have made about (i) women; (ii) gay men and lesbians; (iii) judges; (iv) HIV/AIDS (v) …..add any number of other issues here….. Imagine the awkward questions Mr Zuma might face regarding his relationship with convicted fraudster Shabir Shaik!

Mr Zuma’s reputation (if any) will be put on trial and it won’t be pretty.

If I was Mr Zuma I would not go near any court for a defamation claim (or a criminal case for that matter, but that is a story for another day) as I would be far too worried that the little that is left of my reputation would be torn to shreds. If I was advising Mr Zuma I would whisper only one name in his ear:Oscar Wilde.

Wilde famously sued his lovers’ father who had alleged that Wilde was fiddling with men only to be exposed on the stand. While cross-examined the following exchange occurred which sealed his fate and exposed him to a criminal trial which landed him in jail:

Carson’s cross-examination reached its climax with reference to Walter Grainger:

How old is he?- He was about sixteen when I knew him. He was a servant at a certain house in High Street, Oxford, where Lord Alfred Douglas had rooms. I have stayed there several times. Grainger waited at table. I never dined with him. If it is one’s duty to serve, it is one’s duty to serve; and if it is one’s pleasure to dine, it is one’s pleasure to dine.

Did you ever kiss him?- Oh, dear no. He was a peculiarly plain boy. He was, unfortunately, extremely ugly. I pitied him for it.

Was that the reason why you did not kiss him?- Oh, Mr. Carson, you are pertinently insolent.

Did you say that in support of your statement that you never kissed him?- No. It is a childish question.

Did you ever put that forward as a reason why you never kissed the boy?- Not at all.

Why, sir, did you mention that this boy was extremely ugly?- For this reason. If I were asked why I did not kiss a door-mat, I should say because I do not like to kiss door-mats. I do not know why I mentioned that he was ugly, except that I was stung by the insolent question you put to me and the way you have insulted me throughout this hearing. Am I to be cross-examined because I do not like it?

Why did you mention his ugliness?- It is ridiculous to imagine that any such thing could have occurred under any circumstances.

Then why did you mention his ugliness, I ask you?- Perhaps you insulted me by an insulting question.

What was the reason why you should say the boy was ugly?-

At this point, the record of proceedings (which does not purport to be a verbatim transcript, in the modern form) continues:

Here the witness began several answers almost inarticulately, and none of them he finished. His efforts to collect his ideas were not aided by Mr. Carson’s sharp staccato repetition: ‘Why? Why? Why did you add that?’ At last the witness answered: ‘You sting me and insult me and try to unnerve; and at times one says things flippantly when one ought to speak more seriously. I admit it.’

We already know Mr Zuma is not very fast on his feet and says very stupid things under cross examination (i.e. if one takes a shower after sex one reduces the risk of contracting HIV), so, Oscar Wilde, Mr Zuma, remember him. He died a broken man after serving two years in Reading jail after being convicted of “gross indecency”….

Source: Pierre de Vos: Constitutionally Speaking

Thursday, December 18, 2008

Gay Rights Are Pressed at the U.N.

An unprecedented declaration seeking to decriminalize homosexuality won the support of 66 countries in the United Nations General Assembly on Thursday, but opponents criticized it as an attempt to legitimize pedophilia and other “deplorable acts.”

The United States refused to support the nonbinding measure, as did Russia, China, the Roman Catholic Church and members of the Organization of the Islamic Conference. The Holy See’s observer mission issued a statement saying that the declaration “challenges existing human rights norms.”

The declaration, sponsored by France with broad support in Europe and Latin America, condemned human rights violations based on homophobia, saying such measures run counter to the universal declaration of human rights. “How can we tolerate the fact that people are stoned, hanged, decapitated and tortured only because of their sexual orientation?” said Rama Yade, the French state secretary for human rights, noting that homosexuality is banned in nearly 80 countries and subject to the death penalty in at least six.

France decided to use the format of a declaration because it did not have the support for an official resolution. Read out by Ambassador Jorge Argüello of Argentina, the declaration was the first on gay rights read in the 192-member General Assembly itself. Although laws against homosexuality are concentrated in the Middle East, Asia and Africa, more than one speaker addressing a separate conference on the declaration noted that the laws stemmed as much from the British colonial past as from religion or tradition.

Navanethem Pillay, the United Nations high commissioner for human rights, speaking by video telephone, said that just like apartheid laws that criminalized sexual relations between different races, laws against homosexuality “are increasingly becoming recognized as anachronistic and as inconsistent both with international law and with traditional values of dignity, inclusion and respect for all.”

The opposing statement read in the General Assembly, supported by nearly 60 nations, rejected the idea that sexual orientation was a matter of genetic coding. The statement, led by the Organization of the Islamic Conference, said the effort threatened to undermine the international framework of human rights by trying to normalize pedophilia, among other acts.

The Organization of the Islamic Conference also failed in a last-minute attempt to alter a formal resolution that Sweden sponsored condemning summary executions. It sought to have the words “sexual orientation” deleted as one of the central reasons for such killings.

Ms. Yade and the Dutch foreign minister, Maxime Verhagen, said at a news conference that they were “disappointed” that the United States failed to support the declaration. Human rights activists went further. “The Bush administration is trying to come up with Christmas presents for the religious right so it will be remembered,” said Scott Long, a director at Human Rights Watch.

The official American position was based on highly technical legal grounds. The text, by using terminology like “without distinction of any kind,” was too broad because it might be interpreted as an attempt by the federal government to override states’ rights on issues like gay marriage, American diplomats and legal experts said. “We are opposed to any discrimination, legally or politically, but the nature of our federal system prevents us from undertaking commitments and engagements where federal authorities don’t have jurisdiction,” said Alejandro D. Wolff, the deputy permanent representative.

Gay-rights advocates brought to the conference from around the world by France said just having the taboo broken on discussing the topic at the United Nations would aid their battles at home. “People in Africa can have hope that someone is speaking for them,” said the Rev. Jide Macaulay of Nigeria.

Source: New York Times
for more information see UN declaration on sexual orientation and gender identity

UN 2008 Declaration for the global decriminalization of GLBT activity

The declaration, which is non-binding, was co-sponsored by France and the Netherlands. The 192 member states of the UN were almost evenly divided on the declaration: It passed with support from 66 countries. However 57 were opposed and 69 abstained.

The European Union of 27 countries, Australia, Canada, Japan, Mexico, New Zealand and 34 other countries -- including most of the countries of Latin America -- supported the declaration. The 56 predominately Muslim countries belonging to the Organization of the Islamic Conference, and a few other countries either abstained or voted against the declaration. China, Russia, and the United States abstained.

The United States was notable as the only western country not voting for the declaration. The vote was taken a few weeks before the end of the Bush administration; the US's vote may have been different if it had been held during the incoming Obama administration.

Opposition to equal rights for homosexuals and transgendered persons is one of the very few principles over which the predominately Muslim countries belonging to the Islamic Conference of States (ICS) and the Vatican can agree.

Source: Ontario Consultants on Religious Tolerance

Wednesday, December 10, 2008

Human Rights in the Occupied Territories

June 2007 marked the 40th anniversary of Israel's occupation of the West Bank and the Gaza Strip. During this entire period, Israel has denied millions of Palestinian residents their basic rights and has prevented them from taking part in decisions affecting their fate. The occupation permeates every aspect of Palestinians' daily lives, with violations of the right to life and bodily integrity, freedom of movement, employment, family life, housing, health, education, and human dignity forming an inescapable part of their reality.

In the field of human rights in the Occupied Territories, ACRI is a key player in the struggle to ensure the fundamental rights of the Palestinian population. ACRI's efforts are designed to redress the broad range of human rights violations while bringing pressure to bear on the Israeli government to fulfill its obligations under international law to ensure the protection and well-being of the Palestinian civilian population under occupation.

Source: Association for Civil Rights in Israel

Bribery is big business in SA

An average of 1.5 million South Africans pay bribes every year for some or other reason. Most of these were paid for speeding offences, matters related to policing and getting a particular job.

These were some of the shocking statistics announced at a Western Cape Government Anti-corruption Summit held at the Cape Town International Convention Centre on Tuesday. In his presentation, Willie Hofmeyr, head of the Special Investigation Unit, referred to the 2004 National Victims of Crime Survey that cited corruption as the most common crime after housebreaking. "It remains a huge challenge to totally eradicate corruption."

Hofmeyr said there was a worrying increase in serious organised crime where syndicates were infiltrating government departments.

Source: Die Burger

Tuesday, December 9, 2008

Ginwala report of enquiry into NDPP Vusi Pikoli


This document, released by the South African government, is the long-awaited Ginwala report of enquiry into the National Director of Public Prosecutions.

It can be accessed here

Source: Polity

Monday, December 8, 2008

Former Vlakplaas agent wants parole

Former Vlakplaas operative Almond Nofemela may soon be a free man. Nofemela turned to the Pretoria High Court in an attempt to be freed following a 21-year stint in jail. He was recommended for parole by the parole board in February.

The recommendation was awaiting the signature of Correctional Services Minister Ngconde Balfour, Nofemela's attorney, Julian Knight, said. "The document has been on Balfour's desk since March and he has done nothing about it. I wrote to ask him to make up his mind, not to place Nofemela on parole, but to make a decision to either rubber stamp the approval or refuse it," he said. Nofemela went to court in an urgent bid to get answers. Correctional Services, represented by a senior and a junior advocate, asked for a two-week postponement, as the department was not ready to go ahead. The matter was eventually postponed for a week, and on Friday the minister agreed to consider Nofemela's placement on parole. The agreement was made an order of court by Judge Eberhard Bertelsmann. Knight said if the minister refused Nofomela parole, he would go to the Constitutional Court.

On the eve of his intended execution in the 1980s for the non-political killing of a Skeerpoort farmer, Nofemela spilled the beans on the security police hit squad operating from the Vlakplaas base. His death sentence was later commuted to a life sentence.

NPA: Pikoli still suspended head

The National Prosecuting Authority considers Vusi Pikoli its suspended national director of public prosecutions until the parliamentary process to fire him is finalised, spokesperson Tlali Tlali said on Monday.

"We understand that it is a process... it is a process that is provided for in the [NPA] Act. That does not mean there is a vacuum in the NPA. "We understand that advocate Vusi Pikoli is still on his suspension. The president has announced the decision, but it is a decision that has to be processed before Parliament," said Tlali.

Mokotedi Mpshe also remained the acting NDPP until that process had been completed. "We understand that advocate Mokotedi Mpshe will stay on in that position until a different communique will have been sent." In terms of the act, President Kgalema Motlanthe refers his decision to fire Pikoli to Parliament, where it is put to the vote and is either confirmed or rejected.

The African Christian Democratic Party and the Democratic Alliance have indicated that they will not vote in favour of his removal. The ANC, which introduced legislation to remove the NPA's investigative arm the Scorpions at the height of an investigation against its president Jacob Zuma, is the majority party in Parliament.

Source: News 24.com

Sunday, November 30, 2008

Official suspended for R1,1m grant

Paul Mogotlhe, the North West agriculture official reported in the Mail & Guardian to have authorised a R1,1-million government grant to himself, has been suspended. His boss, provincial agriculture minister Jan Serfontein, is also in the firing line. The North West legislature has asked the auditor general to investigate Mogotlhe's claim that he declared the grant and Serfontein approved it.

In a management report in September the auditor general said the department had also awarded contracts worth R2,5-million to Serfontein's Smokey Mountain Trading and bought chickens worth more than R480 000 from his company, Serfontein Kuikens. Last week a furious provincial legislature unanimously voted for Mogo­tlhe's suspension and a probe by the auditor general. DA leader Chris Hattingh tabled the motion after reading the M&G story.

Mogotlhe tried to head off the legislature debate by threatening legal action. Serfontein told the legislature his department would investigate the claims, but members felt the department could not investigate itself. Hattingh then asked for Serfontein's suspension.

Only North West Premier Edna Molewa can suspend Serfontein and the pair are understood to be close. Serfontein said this week that Smokey Mountain Trading was an empowerment company he helped to establish. He said he was a director of the company, but resigned after he was appointed to his current position. He denied that he had a direct interest or shareholding in Serfontein Kuikens, adding that he had never held any directorship or managerial position in the company.

Source: Mail & Guardian

Friday, November 28, 2008

Breakthrough in Chad president's son murder

Paris police have detained four people in connection with the murder in 2007 of Brahim Deby, the 27 year-old son of Chadian President Idriss Deby Itno, sources close to the enquiry said on Friday. A fifth suspect has been arrested in Romania, the source said.

Deby was found dead in the underground car park of his apartment building in the western Paris suburb of Courbevoie in July 2007, apparently having choked to death with powder from a fire extinguisher. Closed circuit television footage at the scene showed that he was attacked by several masked men, investigators said. French police have ruled out a political motive for the murder, saying it was more likely a criminal underworld affair. The president's son was convicted a year before his death of possession of drugs and weapons after he was detained outside a Paris nightclub carrying a handgun.

Following the arrest, the Chadian president signed a decree stripping his son of his post as a technical adviser. He was then widely seen as having fallen out of favour with his father.

Source: IoL

Zimbabwe Land SADC Tribunal

On Nov. 28, the farmers gathered in Windhoek, Namibia, to hear the final ruling of five judges of the S.A.D.C. tribunal. As Justice Luis Antonio Mondlane of Mozambique read the full 60-page decision aloud, it dawned on the farmers that they had won.

The tribunal found that the government had breached its obligations under the trade bloc’s treaty, which committed it to respecting human rights, democracy and the rule of law, by denying the farmers compensation for their farms and court review of the government’s confiscation of them.

More broadly, it rejected the government’s claim that the land redistribution program was meant to right the wrongs of a colonial era when a white minority ruled what was then Rhodesia. Instead, the court found that the government had itself racially discriminated against the white farmers.

In a stinging rebuke, the tribunal, citing an earlier legal case, said it would have reached a different conclusion had the government not awarded “the spoils of expropriation primarily to ruling party adherents.”

Source: New York Times

Thursday, November 27, 2008

Dozens still held hostage in Mumbai after night of terror attacks

Dozens of people were being kept hostage by gunmen in India's financial capital Mumbai today, more than 12 hours after coordinated attacks on luxury hotels, popular restaurants, a rail terminus and an ultra-orthodox Jewish centre. The Maharashtra state police chief, AN Roy, said the hostage situation had ended at the Taj Mahal hotel but there were still apparently hostages in the Oberoi hotel.

The death toll has risen to 101 with more than 300 people injured. Police and gunmen exchanged heavy gunfire early this morning. Several people managed to flee the Taj hotel, the roof of which was destroyed after heavy fires raged through the night. "People who were held up there [Taj hotel], they have all been rescued," Roy told the NDTV news channel. "But there are guests in the rooms, we don't know how many." "That is why the operation is being conducted more sensitively to ensure there are no casualties of innocent people."

At noon local time (6.30am GMT) two bodies covered with white sheets were wheeled out of the Taj hotel entrance and put in ambulances. During the night a series of explosions had rocked the building. At the nearby Oberoi hotel, soldiers could be seen on the roof of neighboring buildings. A banner hanging out of one window read "Save us. We did not know anything, we just heard gunshots. It was a long night for us," said Nasim Desai, a South African visiting her family in India.

Indian television reported that a Singaporean woman had called her embassy and asked Indian security forces not to attack the Oberoi or the terrorists would kill her. Officials at Bombay hospital, speaking on condition of anonymity, said a Japanese man had died there and nine Europeans had been admitted, three of them in a critical condition with gunshot wounds. All had come from the Taj Mahal hotel, the officials said.

Gunmen seized the Mumbai headquarters of an ultra-orthodox Jewish outreach group, Chabad Lubavitch. Indian commandos surrounded the building this morning and witnesses said gunfire could be heard from inside. A spokesman for the Lubavitch movement in New York, Rabbi Zalman Shmotkin, said attackers "stormed the Chabad house" in Mumbai. "It seems that the terrorists commandeered a police vehicle which allowed them easy access to the area of the Chabad house and threw a grenade at a gas pump nearby," he said. The home secretary for Maharashtra state, Bipin Shrimali, said four suspects were killed when they tried to flee in cars, while four more gunmen were reported killed at the Taj Mahal hotel. Officials said nine more had been arrested but gave no further details.

Mumbai has frequently been targeted in terrorist attacks blamed on Islamist militants, including a series of bombings in July 2006 that killed 187 people. An Indian media report said a previously unknown group calling itself the Deccan Mujahideen [it was later established that Lashkar-e-Taiba had claimed responsibility for the latest attacks in emails to several media outlets. There was no way to verify the claim. Mumbai was today turned into a ghost town, with the normally chaotic and crowded streets eerily still. The only movement was by police, army and commando units making their way through labyrinthine back alleys. The state government ordered schools, colleges and the Bombay stock exchange to close for the day. "We blame the intelligence - the government spends so much money and nothing happens. Then these people come and do whatever they want," said one local resident, Richard Madhavan, 34.

Many Mumbai residents have experienced similar violence before, either in the form of bombings or gunfights between mobsters and police. But no one was prepared for the running gun battles or the coordinated execution of last night's violence. "Bombay's streets are used to violence," said Dinesh Bhandari, 41. "Tomorrow we'll be back to work."

Source: The Guardian
More informatio can he found here.

Try to upgrade at your peril

I'm not convinced I want a smartphone but I have a constant headache from lugging my 17kg iBook everywhere I go. And my iPod. And my Sony Ericsson phone. And chargers for all three. So, I decided that the advertising must be right: I need a phone that can browse, handle email and drown out the guy beside me on the Jo'burg to Cape Town red-eye. Apparently South Africa's major providers of mobile telephony disagree.

I think it's time the Competition Commission looked at the industry because it's clear to me that there is not a competitive market for high-end cellular services. It started with the iPhone. When my contract with Vodacom expired I decided to wait until the advent of the Jesus handset before renewing it. When Christmas came, some time in September, I wandered into a gleaming flourescent kiosk at Cape Town's waterfront and asked for one. "Oh, you don't want one of those, it's really just a toy," said the guy behind the counter. This surprised me as I had read that it was a mobile computer. But he had lots of gel in his hair and a black shirt with lilac pinstripes, so I figured he must be right.

On his advice I wandered over to a nearby Vodashop -- different name, slightly less fluorescent, more handsets on display, actually the same chain -- and I got the same advice. Apparently the i was not the Phone I'd been waiting for. That would be the Blackberry Bold. Better email, no pesky touch-screen typing, lovely display. It would be available in a month. So I reconciled myself to the Sony, with its paltry battery life, wonky charger and pointless email support, while I waited a bit longer. I wanted to be the smug dude who had eschewed Steve Job's wunderwerk for the less obvious alternative. Eventually the Vodasmurf called: "We've got the Blackberry Bold," he said, squeaky with excitement, "but they are going fast, so come quickly."

I needed no more encouragement to drop my work, womble over to the retail cave and fondle the thing. "I'll take it," I said, "if you give me a discount." "Done," he replied after a quick call to the Vodahub, and there it all began to go wrong. There was a systems snarl-up in the Vodabrain, the "dealsheet" was not forthcoming. I should come back in an hour, no, a day, or three. Or a week. They would keep the handset, and the paperwork, against my return. But they didn't, and there were no more Bold Blackberries to be had in the land. The Vodaserf, let's call him Julian, because that's his name, was nowhere to be found. Transferred, or on leave, or wherever they go when they leave the retail cave. "Don't worry," said the other smurfs. "We'll have more next month, but you'll have to pay more because the rand has weakened."

I threatened to "churn" to MTN, taking my fat monthly bill with me. Actually, I tried. I looked for a Yello shop but I don't think there are any. Then I sent an email via the bit of the Yello website that says subscribe. Then I called the telephone number for people who want to sign up for contracts, got lost in a thicket of voicemail prompts and promptly gave up.

Months have gone by since I started trying to upgrade, and my shoulder is getting worse. I keep getting SMSes from the Vodabrain telling me of the wonderful world that awaits me when I re-up with it. A nice Vodasmurfette, who we will call Lesa because that is how she spells her name, promised a fortnight ago to make it all better, but nothing has happened.

So MTN doesn't want me, Vodacom takes me for granted and neither Virgin nor Cell-C are my type. I am switching to pay-as-you-go; at least you know what kind of relationship you are getting into.

Source: Mail & Guardian

Tuesday, November 25, 2008

The Restriction of Political Space in the Democratic Republic of Congo

This 96-page report documents the Kabila government's use of violence and intimidation to eliminate political opponents. Human Rights Watch found that Kabila himself set the tone and direction by giving orders to "crush" or "neutralize" the "enemies of democracy," implying it was acceptable to use unlawful force against them.

Source: Human Rights Watch

"We are very sorry": Malema

ANC Youth League leader Julius Malema has apologised for creating the impression that he was inciting violence with his "kill for Zuma" statements, a spokesman confirmed on Tuesday. "People are uncomfortable with the way in which we have spoken before and we are indeed very, very sorry for that," said ANCYL spokesman Floyd Shivambu, a day after the national executive committee of the ANC met and discussed, among other things, Malema's controversial statements.

Shivambu confirmed that Malema's apology, in an interview on Talk Radio 702 on Monday afternoon, was in the context of his "kill for Zuma" statements. "If we did sound like we're inciting violence, we are very sorry," Malema said. "That was not our intention; we'll never incite violence. We will never do anything unconstitutional. We are law-abiding citizens of this country and we will protect the Constitution of this republic. "We fought for it and we stand by it," said Malema.

He was replying to an SMS from a listener which stated: "Stop inciting violence". Shivambu said that even though the ANCYL did not believe it was inciting violence with the "kill for Zuma" statements, it was sorry if that impression was created. While the ANC has defended Malema, its president Jacob Zuma recently said he had advised Malema to stop making controversial statements.

Malema's statements have been used as ammunition by ANC breakaway party, the Congress of the People, whose leader Terror Lekota has accused the youth leader of acting in an unconstitutional manner. Malema last year said the youth league would kill for ANC leader Jacob Zuma. Since then, apparently after ANC leaders rebuked him in private, he has replaced the word "kill" with "eliminate" in similar statements. More recently, Malema accused Northern Cape premier Dipuo Peters of being "bought" by business.

He also called Cope co-leader Mbhazima Shilowa, the former premier of Gauteng, a "security guard" who had defaulted on child support payments. The ANC on Monday accused the media of "Malemaphobia" and said the only Malema statement it could find fault with was the "kill for Zuma" remark.

Meanwhile, Cope's youth leader Anele Mda is in the hot water for saying South Africa would have a "government that is going to make raping official", referring to the rape charge on which Zuma was acquitted last year. Cope is expected to issue a statement related to her remarks on Tuesday.

Source: Polity

"We are very sorry": Malema

ANC Youth League leader Julius Malema has apologised for creating the impression that he was inciting violence with his "kill for Zuma" statements, a spokesman confirmed on Tuesday. "People are uncomfortable with the way in which we have spoken before and we are indeed very, very sorry for that," said ANCYL spokesman Floyd Shivambu, a day after the national executive committee of the ANC met and discussed, among other things, Malema's controversial statements.

Shivambu confirmed that Malema's apology, in an interview on Talk Radio 702 on Monday afternoon, was in the context of his "kill for Zuma" statements. "If we did sound like we're inciting violence, we are very sorry," Malema said. "That was not our intention; we'll never incite violence. We will never do anything unconstitutional. We are law-abiding citizens of this country and we will protect the Constitution of this republic. "We fought for it and we stand by it," said Malema.

He was replying to an SMS from a listener which stated: "Stop inciting violence". Shivambu said that even though the ANCYL did not believe it was inciting violence with the "kill for Zuma" statements, it was sorry if that impression was created. While the ANC has defended Malema, its president Jacob Zuma recently said he had advised Malema to stop making controversial statements.

Malema's statements have been used as ammunition by ANC breakaway party, the Congress of the People, whose leader Terror Lekota has accused the youth leader of acting in an unconstitutional manner. Malema last year said the youth league would kill for ANC leader Jacob Zuma. Since then, apparently after ANC leaders rebuked him in private, he has replaced the word "kill" with "eliminate" in similar statements. More recently, Malema accused Northern Cape premier Dipuo Peters of being "bought" by business.

He also called Cope co-leader Mbhazima Shilowa, the former premier of Gauteng, a "security guard" who had defaulted on child support payments. The ANC on Monday accused the media of "Malemaphobia" and said the only Malema statement it could find fault with was the "kill for Zuma" remark.

Meanwhile, Cope's youth leader Anele Mda is in the hot water for saying South Africa would have a "government that is going to make raping official", referring to the rape charge on which Zuma was acquitted last year.

Cope is expected to issue a statement related to her remarks on Tuesday.

Monday, November 24, 2008

Barred From Zimbabwe, but Not Silent

JOHANNESBURG — Zimbabwe’s president, Robert Mugabe, 84, managed to keep three members of the Elders, founded by Nelson Mandela to tackle intractable problems, out of Zimbabwe over the weekend. But the members gave Mr. Mugabe and leaders from across southern Africa an earful on Monday about Zimbabwe’s grave humanitarian crisis and their responsibility to act more assertively to resolve it.

Kofi Annan, the former United Nations secretary general, bluntly told the heads of state in the 15-nation regional bloc, the Southern African Development Community, which is often accused of coddling Mr. Mugabe, “It’s obvious that S.A.D.C. could have and should have done more.”

Graça Machel, a women’s rights advocate who is married to Mr. Mandela, said after three days of listening to stories of heartbreak from Zimbabwe in conversations here with refugees and others, “Either the leadership doesn’t have a clear picture of the suffering of their own people, or they don’t care.”

Source: New York Times













Source: Wikipedia

Friday, November 21, 2008

Mashatile's mystery fund

Quietly and with the blessing of his predecessor, Mbhazima Shilowa, Gauteng Premier Paul Mashatile has created a controversial equity fund in the provincial fiscus that could see contracts worth millions of rands being outsourced without public tenders.

The Mail & Guardian can disclose that the provincial treasury has already pumped R40-million into the Gauteng Fund, of which R28-million has been spent on consultants, overseas travel and salaries in the past financial year. The fund, to which Gauteng's fiscus is to contribute R500-million before the end of the year, is due to be launched officially next week. The fund will aim to raise another R6,5-billion from the private sector for investment in infrastructure and service delivery projects in the province.

The M&G is in possession of a presentation marked "secret" that was presented to Shilowa in September last year and an information memorandum on the fund dated March 2007. The documentation is frank about the fund's selling point: to provide private investors with preferential access to a "pipeline of projects" in which the fund can commercially invest. This means that when a municipality or government department in Gauteng wants something done it must first give the Gauteng Fund "preferential access" to the project before putting the contract out to tender.

This is not the first time questions have been asked about Mashatile's adherence to good governance practices. The M&G reported previously on his friends benefiting from Gauteng contracts and his daughter being employed by an IT firm awaiting the outcome of huge Gauteng tenders. Senior researcher at the Institute for Democracy in South Africa (Idasa) Len Verwey told the M&G the fund "clearly blurs the distinction between public and private and in effect promises to use public power to secure private gains … This blurring is the problem with the fund from a good governance perspective. It has potential conflicts of interest as well as kickbacks and the like written all over it."

The M&G can further reveal:

* The fund's project director, Abigail Puente, was suspended from the Gauteng Enterprise Propeller (GEP) after she pursued the establishment of an equity fund against the will of chief executive David Morobe.
After her suspension Puente was moved to Mashatile's department of economic development, where she continued putting together the fund.

* Puente, who is being paid by Gauteng to operate the fund, is a director of Freetel Telecommunications, a company in the Sandton-based Freetel group. Another company in the group, Freetel Capital, was appointed by the province to operate the Gauteng Fund.

* No approval was sought from the national treasury to establish a private equity fund in Gauteng. Treasury spokesperson Thoraya Pandy confirmed to the M&G that no approach was made by the province to launch the fund and that such a scheme would have to be approved by treasury Director General Lesetja Kganyago.

Mashatile, then provincial minister of finance and economic development, announced in his budget speech in February that R500-million would be made available as "seed capital" for the establishment of the fund. A "shortfall in government revenues" is given as the reason for the establishment of the fund. The ultimate aim of the fund is to raise R7-billion and use it to obtain further debt of R35-billion to be spent on "pressing needs". These include the rollout of the massive Blue Umbrella/Gauteng Link broadband network, the building of hospitals in Soweto and Ekurhuleni, the implementation of the Gauteng freeway improvement scheme, and the construction of the Tshwane International Cargo Airport and Amakhosi stadium precinct in Krugersdorp.

Some of these projects fall under other Gauteng agencies or departments, but will be moved to the fund if investment is secured. "The most disturbing aspect of the Gauteng Fund is, of course, that of "preferential access" to deal flows," says Verwey, whom the M&G asked for an opinion on the fund's structure. "As I understand it, in effect Gauteng would be putting pressure on municipalities and departments to use its preferred suppliers and to conduct their operations in a way which ensures the success of a fund which it deems outside the direct ambit of political accountability."

The M&G is also in possession of a legal opinion requested by Mashatile's former department from senior counsel Vincent Maleka on whether the Gauteng Fund qualifies as an "organ of state" in terms of the Constitution. If it does, legislation governing procurement will apply to the fund's projects. Maleka concluded that the fund would not be regarded as an organ of state if it will be involved only in the funding of projects. However, it will qualify as an organ of state if it becomes involved in the implementation of the projects it is funding and the selection of operators related to them. But, says Verwey, the legal opinion is "not that useful" because any entity that receives money from provincial revenue must remain politically accountable for its use. "In essence the fund is trying to seduce the private sector by giving them quasi-monopolistic privileges, which would include the tacit right to set prices hard. This is the problem with the Gauteng Fund; and yes, it is undoubtedly anti-competitive in this sense."

The auditor general, in its annual report on the fund's finances, gave the fund a qualified opinion and reported that no proof could be found that consulting services of R26-million were put out to tender. GEP's board gave Puente, who started to work as chief operating officer of GEP in July 2006 the task of investigating the possibility of establishing an equity fund. Puente clashed with Morobe, who allegedly perceived her to be working in isolation and refusing to take orders. Morobe subsequently suspended Puente, who was swiftly moved to the department of economic development and later to the treasury, where she is now the Gauteng Fund's project director. Puente is allegedly a close associate of Freetel head Enos Banda and joined his Freetel Telecommunications as a director in June this year. Banda is the former deputy chair of GEP, who quit his position early this year and is indicated in documentation on the Gauteng Fund as the fund manager.

Source: Mail & Guardian

Red Ants 'cornered man, killed him'

A resident was brutally killed at an RDP settlement in Ekurhuleni, allegedly by Red Ants guarding new houses against illegal occupation.

But this assertion has been denied by the Gauteng Department of Housing, which had contracted the Red Ants and who said the death was a result of a fight between members of the community about occupation of houses.

The incident has resulted in a furious standoff between the Red Ants and the enraged community of Eden Park Extension 5, who called for the guards in red overalls to be taken out of the area yesterday.

Meanwhile, a police statement said the Red Ants had attacked 34-year-old Alfred Ngubeni shortly after they had assaulted his 25-year-old wife, Ayanda Zulu.

Source: The Star

Thursday, November 20, 2008

The Next Subprime Crisis Looms

As if they haven't done enough damage. Thousands of subprime mortgage lenders and brokers -- many of them the very sorts of firms that helped create the current financial crisis -- are going strong. Their new strategy: taking advantage of a long-standing federal program designed to encourage homeownership by insuring mortgages for buyers of modest means.

You read that correctly. Some of the same people who propelled us toward the housing market calamity are now seeking to profit by exploiting billions in federally insured mortgages. Washington, meanwhile, has vastly expanded the availability of such taxpayer-backed loans as part of the emergency campaign to rescue the country's swooning economy.

For generations, these loans, backed by the Federal Housing Administration, have offered working-class families a legitimate means to purchase their own homes. But now there's a severe danger that aggressive lenders and brokers schooled in the rash ways of the subprime industry will overwhelm the FHA with loans for people unlikely to make their payments. Exacerbating matters, FHA officials seem oblivious to what's happening -- or incapable of stopping it. They're giving mortgage firms licenses to dole out 100-percent-insured loans despite lender records blotted by state sanctions, bankruptcy filings, civil lawsuits, and even criminal convictions.

More Bad Debt

As a result, the nation could soon suffer a fresh wave of defaults and foreclosures, with Washington obliged to respond with yet another gargantuan bailout. Inside Mortgage Finance, a research and newsletter firm in Bethesda, Md., estimates that over the next five years fresh loans backed by the FHA that go sour will cost taxpayers $100 billion or more. That's on top of the $700 billion financial-system rescue Congress has already approved. Gary E. Lacefield, a former federal mortgage investigator who now runs Risk Mitigation Group, a consultancy in Arlington, Tex., predicts: "Within the next 12 to 18 months, there is going to be FHA-insurance Armageddon."

The resilient entrepreneurs who populate this dubious field are often obscure, but not puny. Jerry Cugno started Premier Mortgage Funding in Clearwater, on the Gulf Coast of Florida, in 2002. Over the next four years, it became one of the country's largest subprime lenders, with 750 branches and 5,000 brokers across the U.S. Cugno, now 59, took home millions of dollars and rewarded top salesmen with Caribbean cruises and shiny Hummers, according to court records and interviews with former employees. But along the way, Premier accumulated a dismal regulatory record. Five states -- Florida, Georgia, North Carolina, Ohio, and Wisconsin -- revoked its license for various abuses; four others disciplined the company for using unlicensed brokers or similar violations. The crash of the subprime market and a barrage of lawsuits prompted Premier to file for U.S. bankruptcy court protection in Tampa in July 2007. Then, in March, a Premier unit in Cleveland and its manager pleaded guilty to felony charges related to fraudulent mortgage schemes.

But Premier didn't just close down. Since it declared bankruptcy, federal records show, it has issued more than 2,000 taxpayer-insured mortgages -- worth a total of $250 million. According to the FHA, Premier failed to notify the agency of its Chapter 11 filing, as required by law. In late October, an FHA spokesman admitted it was unaware of Premier's situation and welcomed any information BusinessWeek could provide.

You'd think the government would have had Premier on a watch list. According to data compiled by the FHA's parent, the U.S. Housing & Urban Development Dept. (HUD), the firm's borrowers have a 9.2 percent default rate, the second highest among large-volume FHA lenders nationally.

Now, members of the Cugno family have started a brand new company called Paramount Mortgage Funding. It operates a floor below Premier's headquarters in a three-story black-glass office building Jerry Cugno owns in Clearwater. In August 2007, only weeks after Premier sought bankruptcy court protection, the FHA granted Paramount a license to issue government-backed mortgages. "I am the only person in the country who really understands FHA," Cugno says with characteristic bravado.

One day recently, Nicole Cugno, his 27-year-old daughter and a Paramount vice-president, was on the phone at her desk, giving advice to new branch managers. Despite past troubles with Premier, the family says Paramount dutifully serves borrowers. The Cugnos stress that the two companies are legally separate organizations.

Similarly worrisome stories are playing out around the country. In Tucson, First Magnus Financial specialized in risky "Alt-A" mortgages, which didn't require borrowers to verify their income. State and federal regulators cited the company for misleading borrowers, using unlicensed brokers, and other infractions. It shut down last summer and laid off its 5,500 employees. But in May, the FHA issued a group of former First Magnus executives a new license to make taxpayer-insured home loans. They have opened a company called StoneWater Mortgage in the same office building that First Magnus had occupied.

G. Todd Jackson, an attorney for StoneWater, said in a written statement that the new company "is not First Magnus." StoneWater employs "a new business model, with different loan products, in a different market," he added. First Magnus had "a long record of compliance," he said. "Isolated incidents and personnel problems occurred, but none were remotely systemic, and all were promptly addressed and corrected by management when discovered."

Back to Life

Nationstar Mortgage, based in suburban Dallas, closed its 75 retail branches in September 2007 after the subprime market crashed. But in August, Chief Information Officer Peter Schwartz told the trade paper American Banker that Nationstar now plans to emphasize FHA-backed loans, which he called a "high-growth channel." The lender received federal approval in March to offer government-guaranteed loans. Just a year earlier, it agreed to pay the Kentucky Financial Institutions Dept. a $105,000 settlement -- one of the largest of its kind in that state -- to resolve allegations that Nationstar employed unlicensed loan officers and falsified borrowers' credit scores. Nationstar didn't admit wrongdoing in the case.

"All loans we originate conform to industry best practices, as well as all applicable federal and state laws," says Executive Vice-President Steven Hess. The settlement in Kentucky, he adds, isn't "relevant to our FHA status."

Lend America in Melville, N.Y., uses cable television infomercials and a toll-free number (1-800-FHA-FIXED) to encourage borrowers in trouble with adjustable-rate mortgages to refinance with fixed-rate loans guaranteed by the FHA. Anticipating the real estate crash, the Long Island firm switched its strategy in 2005 from subprime to FHA-backed mortgages, says Michael Ashley, Lend America's chief business strategist. This year, the company will make 7,500 FHA loans, worth $1.5 billion, he says. "FHA is a big part of the future," Ashley adds. "It's the major vehicle for the government to bail out the housing industry."

But why the federal government would want to do business with Lend America is perplexing. Ashley has a long history of legal scrapes. One of them led to his pleading guilty in 1996 in federal court in Uniondale, N.Y., to two counts of wire fraud related to a mortgage scam at another company his family ran called Liberty Mortgage. He was sentenced to five years' probation and ordered to pay a $30,000 fine. His father, Kenneth Ashley, was sentenced to nearly four years in prison. "I was just a pawn in a chess game between my father and the government," says the younger Ashley, who is 43. "It doesn't affect my ability to do lending." The default rate on Lend America's current FHA loans is 5.7 percent, or 53 percent above the national average, according to government records.

Asked about FHA oversight of former subprime firms, agency spokesman Lemar Wooley says: "FHA has taken appropriate actions, where necessary, with these lenders with respect to their participation in FHA programs." First Magnus, Nationstar, and Lend America met all applicable federal rules, Wooley says. But on two occasions since 2000 one office of Lend America in New York temporarily lost its authority to originate FHA-backed loans because of an excessive default rate, he says. Wooley says the FHA wasn't aware that Lend America's Ashley had been convicted. The firm didn't list Ashley as a principal, Wooley says. FHA lenders are required to disclose past regulatory sanctions and are forbidden to employ people with criminal records.

Founded during the New Deal, the FHA is supposed to promote first-time home purchases. Open to all applicants, it allows small down payments -- as little as 3 percent -- and lenient standards on borrower income, as long as mortgage and related expenses don't exceed 31% of household earnings. In exchange for taxpayer-backed insurance on attractively priced fixed-rate loans, buyers pay a modest fee. Lenders and brokers can get a license to participate in FHA programs if they demonstrate industry experience and knowledge of agency rules.

During the subprime boom, the FHA atrophied as borrowers migrated to the too-good-to-be-true deals that featured terms such as extremely low introductory interest rates that later jumped skyward. But since the subprime market vaporized in 2007, FHA-backed loans have become all that's available for many borrowers. By fall 2008, FHA loans accounted for 26 percent of all new mortgages being issued nationwide, up from only 4 percent a year earlier. As of Sept. 30, the most recent date for which data are publicly available, the FHA had 4.4 million single-family mortgages under guarantee, worth a total of $475 billion.

A Swelling "Tsunami"

Congress and the Bush Administration are strongly encouraging lenders to apply for FHA approval and tap into the government's loan-guarantee reservoir. In September, the agency guaranteed 140,000 new loans, up from 60,000 in January. In October, as Congress and the White House scrambled to respond to the spreading financial disaster, the FHA began to extend $300 billion in additional loan guarantees under the banner of a new program called HOPE for Homeowners. The limit on the amount buyers may borrow will rise in January to $625,000 from $362,790 in 2007.

Some current and former federal housing officials say the agency isn't anywhere close to being equipped to deal with the onslaught of lenders seeking to cash in. Thirty-six thousand lenders now have FHA licenses, up from 16,000 in mid-2007. FHA "faces a tsunami" in the form of ex-subprime lenders who favor aggressive sales tactics and sometimes engage in outright fraud, says Kenneth M. Donohue Sr., the inspector general for HUD. "I am very concerned that the same players who brought us problems in the subprime area are now reconstituting themselves and bringing loans into the FHA portfolio," he adds.

FHA staffing has remained roughly level over the past five years, at just under 1,000 employees, even as that tsunami has been building, Donohue points out. The FHA unit that approves new lenders, recertifies existing ones, and oversees quality assurance has only five slots; two of those were vacant this fall, according to HUD's Web site. Former housing officials say lender evaluations sometimes amount to little more than a brief phone call, which helps explain why questionable ex-subprime operations can reinvent themselves and gain approval. "They are absolutely understaffed," says Donohue, "and they need a much better IT system in place. That is one of their great vulnerabilities."

Low Income? No Problem

Joseph McCloskey, a former director of FHA's single-family asset management branch, says workers reviewing lender applications have had difficulty for years tracking whether executives of previously disciplined mortgage firms were applying for new FHA licenses. "Technologically, they are challenged," McCloskey, now a consultant to FHA lenders, says of his overmatched former colleagues.

The FHA's Wooley disputes these criticisms. The agency can cross-check names and thoroughly examine lender applications, he says.

Foreclosures have spiked in the wake of the subprime crisis, leading to a number of businesses, like this one in Rio Vista, CA, having to close.
AFP

Foreclosures have spiked in the wake of the subprime crisis, leading to a number of businesses, like this one in Rio Vista, CA, having to close.
Like Flies to Honey

There are numerous law-abiding FHA lenders and brokers, just as there are subprime mortgage firms that behaved honestly and cautiously in recent years. But the current economic crisis has turned the FHA into a profit magnet for all kinds of financial players. Major Wall Street investment firms are finding their own angles, which are entirely legal.

In April 2007, Goldman Sachs purchased a controlling stake in Senderra Funding, a former subprime lender in Fort Mill, S.C. Goldman, which has received $10 billion in direct federal rescue money, converted Senderra into an FHA lender and refinance organization. The strategy appears likely to produce hefty margins. In September, Goldman paid 63¢ on the dollar in a $760 million deal with Equity One, a unit of Banco Popular, for a batch of subprime mortgage and auto loans. Through Senderra, Goldman plans to refinance at least some of the mortgages into FHA-backed loans. Because of the government guarantee, it can then sell those loans to other financial firms for as much as 90¢ on the dollar, according to people familiar with the mortgage market. That's a profit margin of more than 40 percent.

Goldman's dealings suggest another reason FHA-insured lending is booming: The federal guarantee creates an incentive for banks to buy FHA loans and bundle them as securities to be sold to investors. This is happening as the securitization of subprime and conventional mortgages has largely ceased.

Operating far from Wall Street, the Cugno clan of Clearwater exemplifies a certain indefatigable American spirit in the face of economic setbacks. Whether that enterprising drive is always something to celebrate is less clear.

The Cugnos concede that their older mortgage firm, Premier, had its flaws. "My dad's company got too big," says Nicole Cugno. "It was too hard to control." At its peak in 2006, Premier originated $1 billion in loans each month and had annual revenue of more than $200 million. It sold what amounted to franchises to brokers around the country who frequently operated with little supervision from the 200-employee home office. "Everybody had a few bad apples, and I had a few of them," Nicole's father, Jerry, says. "If they got in trouble, we fired them."

Mark Pearce, deputy commissioner of banks in North Carolina, one of the five states that banned Premier, counters that the company seems to have invited abuses. North Carolina investigators concluded that Premier's branch in Charlotte allowed, among other deceptive practices, unlicensed brokers from around the country to "park" loans there for a fee. The aim was to make it appear that the mortgages were associated with a licensed broker trained and supervised by a substantial firm. "This is a company that should not be doing business in North Carolina," Pearce says.

But the Cugnos are very much staying in business. While Premier's bankruptcy proceedings continue in Tampa, members of the family are employing essentially the same model with their new company, Paramount. Only this time they are stressing federally guaranteed FHA loans. Paramount charges branches $1,625 a month to use its name, FHA license, and software. On its Web site, it tells brokers that FHA loans are "the new subprime."

"We're taking some of the things Premier did and tweaking [them]," says Barry McNab, a former Premier executive who now heads FHA lending for Paramount. About 9 out of 10 Paramount loans have FHA backing, he explains. It's difficult to evaluate most of those guaranteed loans, since they are so new. But a look at the experiences of some past Premier borrowers isn't encouraging.

U.S. District Judge Richard Alan Enslen in Kalamazoo, Mich., began a June 2007 written opinion about Premier's practices with this observation: "The crooks in prison-wear (orange jump suits) are easy to spot. Those in business-wear are not, though they do no less harm to their unsuspecting victims."

The case before Judge Enslen concerned Marcia Clifford, 53. She won a civil verdict that Premier had violated federal mortgage law when it replaced the fixed-rate loan it had promised her with one bearing an adjustable rate. Enslen also found that Premier had misrepresented Clifford on her application as employed when she was out of work and living on $700 a month in disability payments. Despite his ire, the judge decided to award Clifford, who did sign the deceptive documents, only $3,720 in damages, an amount based on unauthorized fees Premier had pocketed.

Clifford's name now appears along with a lengthy list of Premier's other creditors in the bankruptcy court in Tampa. Unable to make her $600 monthly mortgage payment, she received an eviction notice in June and says she is likely to lose her three-bedroom house in Belding, Mich. "It was a bait and switch," Clifford says, sobbing. "The folks at Premier are coldhearted."

Janice Dixon is also owed money by Premier. In March 2006 an Alabama jury awarded her $127,000 in damages related to a fraudulent refinancing in which, she alleged, the company didn't disclose the full costs of her borrowing. "Who will fix this?" Dixon, 49, asks. "They will continue to do these same things over and over."

Wooley, the FHA spokesman, says the agency noticed Premier's default rate rising earlier this year. But he adds that both Premier and Paramount met FHA requirements.

Low Income? No Problem

Like the Cugnos, Hector J. Hernandez lately has shifted his mortgage business away from subprime and toward FHA loans. The Coral Gables (Fla.) lender has a different twist on the business: He uses FHA-backed loans to help hard-pressed borrowers buy condominiums in buildings he owns.

Sascha Pierson was an unlikely borrower. She had no employment income when she bought a three-bedroom condo in Palmetto Towers, a Hernandez property in Miami, in July 2007 for $318,000. She borrowed almost the entire purchase price from Great Country Mortgage Bankers, Hernandez's loan company. Pierson, 29, says she is pursuing a psychology degree online from Kaplan University. She lives on a $42,000 annual educational grant from the government of the Cayman Islands, where she is a citizen. But the grant ends this year, and even with two roommates, she doesn't know how she's going to pay the $2,600 monthly bill for her mortgage and condo fee. "I am seriously worried about defaulting on my loan," she says.

Less extreme versions of Pierson's situation seem common at Palmetto Towers, a pair of eight-story stucco buildings Hernandez acquired in 1996. BusinessWeek interviewed eight condo owners at the complex, all of whom had obtained FHA-backed loans from Great Country. All eight, including Pierson, say they agreed to terms that required them to make mortgage and condo-fee payments that total considerably more than the FHA's guideline of 31 percent of their monthly income. Four of the eight owners say they received cash payments at closing of $10,000 or more as incentives to buy. The payments, which the FHA says are prohibited, were included in the loans. Pierson says she received $19,500. "They called it a 'cash-back opportunity,'" she explains.

Her neighbor, Lorena Merlo, 27, received a Great Country check for $14,640 at the closing in April on her $316,375 three-bedroom unit. Merlo, a part-time legal assistant, and her husband, Renny Rivas, a drywall laborer, earn a total of $52,000 a year and have two young sons. Their monthly home payments amount to 58% of their gross income, way over the FHA limit. "We are four months behind on our mortgage," says a mournful Merlo.

Defaults and Denials

Of the 158 units in Palmetto Towers, 66 are in foreclosure, records show. An additional 33 are unsold. Great Country has originated 1,855 FHA mortgages since November 2006; 923 of those were in default proceedings as of Oct. 31. The firm's 50 percent default rate is the highest in the entire FHA program.

Hernandez blames the high failure rate on the disastrous South Florida real estate market, not Great Country's practices, which he says are all legitimate. Asked in a phone interview whether he encourages buyers to purchase condos they can't afford, paying them questionable cash incentives, he says flatly, "That is not true." He adds: "(The buyers) are lying. They are disappointed by falling prices."

In October, however, the FHA decided it had seen enough. It ended Great Country's guaranteed-lending privileges in the Miami and Orlando markets where it had been active. Borrowers on nearly half of the company's defaulted loans made payments for only three months or less; 105 borrowers never made any payments at all. Brian Sullivan, another FHA spokesman, says the agency has referred the case to its inspector general's office. In response to BusinessWeek's questions, the Florida Financial Services Dept. has started a separate investigation, a person close to the state agency says.

But don't assume that Hernandez is through with FHA-guaranteed loans. At the Palmetto Towers sales office, Alexis Curbelo, a loan officer for Great Country, explains in an interview that buyers can now obtain FHA loans through Ikon Mortgage Lenders in Fort Lauderdale. Public records show Ikon closed a Palmetto Towers FHA loan in September for $222,957. Edgard Detrinidad, Ikon's president and a former business associate of Hernandez, denies he is financing any other loans for Hernandez's buyers.

Source: SPIEGEL

SECURITY OF TENURE: DEFINITION OF ‘OCCUPIER’ AND CALCULATION OF THRESHOLD INCOME

Halle & another v Downs (LCC78R/2007) [2008] ZALCC 15 (20 November 2008)

This judgment deals with the scenario where an elderly couple had breached the terms of their lease agreement. When the property owner applied for their eviction, they relied on the provisions of the Extension of Security of Tenure Act 67, 1997 (‘ESTA’) and alleged that they were ‘occupiers’ for purposes of this Act and that they should therefore be provided the benefits of ‘security of tenure’ as contained therein. On the facts, the court found that they were not ‘occupiers’ as defined in the Act, that their continued occupation of the land constituted unlawful occupation as defined in the Prevention Illegal Eviction from and Unlawful Occupation of Land Act 19, 1998 (‘PIE) and that they should therefore be evicted from the property in terms of the latter Act.

The judgment is an interesting example of the application and interaction between the ESTA and PIE Acts and is a worthwhile read for practitioners specialising in the application of these acts.

The judgment can be viewed here.

Facts:

Mr and Mrs Halle, both over 60 years old, were married out of community property. Mrs Halle purchased a farm in [1983] and they have lived on the farm [since 1966]. Due to financial difficulties [1], Mrs Halle sold the farm to Downs in 1994. The agreement included the provision that Mr & Mrs Halle could remain in residence on the farm and would for a period of 5 years have the right to buy back the farm at the same price that Downs had paid for it. Subsequently Mr Halle and Downs entered into a lease agreement in respect of a portion of the farm. At some stage Mr Halle fell into arrears with the lease and subsequently also refused to re-negotiate the terms of the lease with Downs.

Downs accordingly applied to Court for an order evicting Mrs & Mrs Halle from the premises. Their defence was that they are long-term occupiers, over the age of 60 and had resided on the farm for longer than 10 years - and that they accordingly are protected in terms of the Extension of Security of Tenure Act 67, 1997 (‘ESTA’).

The Magistrate’s Court found that they did not fall within the definition of ‘long-term occupiers’ as provided for in ESTA and granted the eviction order in terms of ESTA. Mr & Mrs Halle then appealed to the Land Claims Court.

Held:

ESTA defines an occupier as a person residing on land that belongs to another and who had consent to so reside on 04/02/1997 or thereafter, but excluding a person who uses the land mainly for industrial, mining or commercial farming and excluding a person who has an income in excess of R 5000 a month.

In this matter however the Court agreed with the Magistrate's Court finding that Mr and Mrs Halle did not fall within the definition of an 'occupier'. In the first place, with regard to the position of Mrs Halle, the Court found that she was not an ‘occupier’ in her own right since it was her husband who had concluded the lease agreement with Downs; Mr Halle was the ‘occupier’.

Secondly, with regard to the income requirement in the definition of ‘occupant’ the Court held that in order to avoid absurdities the income referred to in the definition should be interpreted as the income accruing to spouses jointly. To hold otherwise would result in the situation that spouses can claim the protection of ESTA in circumstances where one spouse has the required consent to occupy property but receives a minimal income, while the other (who may not be an occupier in his own right) is wealthy and earns a substantial income.

Furthermore, in order to qualify as an occupier, the spouses must have had a joint income of less than R 5000[2] for a full period of at least 10 years.

On the facts is was apparent that at least for certain periods Mr and Mrs Halle earned an income in excess of R 5000 per month which they earned from running business activities from the farm.

However, the Court noted that even if it was found that Mr and Mrs Halle were ‘occupiers’ for purposes of ESTA, the action would still not succeed because they had committed breaches as contemplated in section 10 of ESTA. The section reads as follows:

“10

(1) An order for the eviction of a person who was an occupier on 4 February 1997 may be granted if -

(a) the occupier has breached section 6(3) and the court is satisfied that the breach is material and that the occupier has not remedied such breach;

(b) the owner or person in charge has complied with the terms of any agreement pertaining to the occupier’s right to reside on the land and has fulfilled his or her duties in terms of the law, while the occupier has breached a material and fair term of the agreement, although reasonably able to comply with such term, and has not remedied the breach despite being given one calendar month’s notice in writing to do so;

(c) the occupier has committed such a fundamental breach of the relationship between him or her and the owner or person in charge, that it is not practically possible to remedy it, either at all or in a manner which could reasonably restore the relationship; or …”

On the [available] evidence, Mr Halle breached the terms of the lease agreement by refusing to tender payment in terms of the lease agreement. He thereafter also refused to enter into consultations with Downs to re-negotiate a lease agreement and has thereby breached the relationship with the property owner.

Taking the above into account the Court held that the Halle pair could not avail themselves of any of the protection afforded under ESTA.

How should they then be dealt with? The Court held that in the circumstances Mr and Mrs Halle are ‘unlawful occupiers’ for purposes of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19,1998 (‘PIE’). Since Downs had complied with the necessary notification procedures as laid down in PIE, the Court was at liberty to grant an eviction order. It was also shown that Mr & Mrs Halle were not destitute in that their children were willing to and in a position to accommodate them.

The order was accordingly granted and Mr and Mrs Halle were evicted from the farm.

Moral of the story: It is important to be aware that for purposes of the definition of 'occupier' in ESTA, the joint income of the spouses are used as a guideline. Moreover, applying for protection in terms of ESTA requires fair play on the side of the occupier. In terms of section 10 of ESTA the occupier is obliged to maintain bona fides in his or her dealings with the property owner failing which he or she may forfeit the protection that the Act can provide.

Source: gqwetha Training Academy

[1] The court did not inquire as to the nature of the financial difficulty

[2] This threshold has not been amended since the inception of ESTA, despite cost of living increases

Friday, November 14, 2008

Hit squad whistleblower still in jail

The man who exposed the apartheid security force hit squads is trying to get out of jail - but Minister of Correctional Services Ngconde Balfour is ignoring him. Butana Almond Nofemela is in Pretoria Central Prison and has spent 21 years behind bars for a non-politically related murder. His request for parole was approved months ago and the documents were sent to Balfour, as legally required, in March.

Balfour has still not made a decision, Nofemela said in papers filed with the Pretoria High Court, citing the minister. Correctional Services is opposing Nofemela's application, although the court action is a demand for a decision from Balfour, not for parole." The department will defend the case although we have thus far received only a letter of demand," said Correctional Services Ministry spokesperson Manelisi Wolela. He did not respond to requests for further comment. Nofemela has been trying to secure parole for a year. "During November 2007 I was seen by the case management committee of the Pretoria Local Prison, who recommended my placement on parole," Nofemela said in an affidavit supporting his application. The request was then approved by the parole board, then forwarded to the National Council for Correctional Services which is headed by Judge Siraj Desai. The council's recommendation to grant parole was forwarded to Balfour in March, but Balfour had "failed, neglected and/or refused to consider" it, said Nofemela.

Nofemela's lawyer, Julian Knight, wrote to Balfour's office asking for a decision but received no response. Knight said it was "completely unacceptable" that the minister would neglect since March to make a decision, not just for Nofemela but for an unknown number of other parole applicants. "It displays callous disregard for the constitutional rights of prisoners," he said.

Judge Desai confirmed having dealt with Nofemela's case, but would not say what the decision was. It's not known how many other prisoners serving life sentences are also still waiting for decisions by the minister. It's understood that usually the parole board makes the decision, which is then endorsed by the minister. Judge Desai said his 20-member council had met three times this year and dealt with "30 or 40 cases". Another 20 are due to be discussed next month. Once the cases are referred to the minister, the council doesn't see them again as the minister refers his decisions to the department to implement. Judge Desai said there was an increase in parole applications by life-sentence prisoners because the death penalty was abolished about 20 years ago.

Democratic Alliance MP and party spokesperson on correctional services James Selfe said that in terms of the law, an inmate sentenced to life imprisonment could not get parole until he had served at least 25 years, or 15 years if he was over 65 years old. However, he said the act had been amended, which could affect Nofemela's case, or he could have qualified for "special or meritorious remission of sentence. Decisions about releasing inmates on parole should be taken by independent parole boards (or, in serious offenders' cases, by the Parole Review Board) after they have satisfied themselves that the inmate has corrected his behaviour and is rehabilitated," said Selfe. "Such decisions should not be made by any politician, particularly one as inefficient as Ngconde Balfour."

Nofemela was convicted of murder and sentenced to death in September 1987 for the murder of farmer Johannes Hendrik Lourens at Skeerpoort near Brits in September 1986.

In 1989, the night before he was due to be executed, Nofemela got an urgent application to stay the execution when he confessed to being an askari - a turned guerrilla working for the police - involved in a security police hit squad which operated from Vlakplaas near Pretoria. This was the first confirmation of a security force hit squad, and Nofemela's execution was put on hold while his claims were investigated.

Nofemela's story was supported by his former Vlakplaas police commander Captain Dirk Coetzee and fellow askari David Tshikalanga. Their story was also told to the Harms Commission of inquiry into hit squads, which ultimately did not confirm that there were any hit squads. In September 1994 Nofemela's death sentence was commuted to life imprisonment but he remained in jail due to his conviction for Lourens' murder, as this was not politically related but a robbery. Nofemela and Coetzee were later granted amnesty for killing human rights lawyer Griffiths Mxenge in Durban in November 1981. Nofemela was refused amnesty for Lourens' killing.

Last month Clive Derby-Lewis, jailed for killing SACP leader Chris Hani in 1993, brought an application in the Pretoria High Court to demand parole. The matter has been postponed. Derby-Lewis, 72, has been in jail for 15 years and is eligible to apply for parole because of his age.

Source: IoL

Thursday, November 6, 2008

Vodafone takes control of Vodacom

Vodafone, the world's biggest mobile phone group by revenue, will take control of South Africa's largest, Vodacom Group, after announcing on Thursday it had agreed to buy a further 15% stake for R22,5-billion. The British firm said it will buy the stake from fixed-line group Telkom to add to its existing 50% stake, as it pushes further into emerging economies.

Telkom and Vodafone had been in talks since June over the group which has strong market positions in South Africa, Democratic Republic of Congo, Lesotho, Mozambique and Tanzania. Shares in Telkom were up 3,1% at 9.40am GMT while shares in Vodafone were down 3% in a weaker London market.

Vodafone expects the deal to complete in the first half of 2009 and said it would dilute adjusted earnings per share after acquired intangible asset amortisation for three years but be accretive thereafter. "We will continue to support the management team in their strategy of transforming Vodacom into a full service provider in Africa," Vodafone chief executive Vittorio Colao said. "We are confident that the transaction will deliver value to our shareholders."

Telkom says the Vodacom sale would lower headline earnings by 38%. Telkom said earlier this month that its board and the South African government -- a shareholder -- backed the offer. Vodacom Group will be listed on the Johannesburg Stock Exchange and the remaining 35% of Vodacom Group will be demerged by Telkom to its shareholders.

Telkom said the sale would unlock significant value for Telkom shareholders in volatile markets and it would focus after the deal on its fixed-line business and expansion opportunities. As part of the deal, the Vodacom identity will remain visible on the African continent and it will be the exclusive investment vehicle through which Vodafone will make acquisitions in sub-Saharan Africa, excluding Ghana and Kenya where Vodafone is already present.

Source: Mail & Guardian - Reuters

Monday, November 3, 2008

Statement of the Socialist International Commission on Global Financial Issues, meeting in Vienna, Austria

It is today beyond dispute that the current global financial crisis is the worst in the last twenty-five years and may well be the worst since the Great Depression.

A first response to the crisis was to bail out financial institutions in the developed economies, at an enormous cost for tax payers, with stark differences of opinion on the best way to proceed. Progressive forces and governments moved for accountability, transparency and guarantees for the average citizen, so they would not become the victim of the reckless acts and irresponsibility of those who provoked the crisis.

From the very beginning, at the centre of our concerns have been people’s jobs, housing, pensions, access to health and education services, in short the livelihood and social protection of citizens severely threatened by this crisis.

The social democratic vision of the economy and financial markets is that they should serve the citizens of our society. Financial markets are a means to an end, not an end in themselves. It is not necessarily the case that what is good for Wall Street or other financial centres is good for the rest of the economy. Moreover, trickle down economics - the notion that helping those at the top will benefit all - has been repeatedly rejected.

Four principles continue to guide the social democratic response: solutions to the crisis must be consistent with basic values of social justice and social solidarity as well as basic notions of fairness. The bonds of social solidarity must go across national boundaries; we cannot take actions which help ourselves at the expense of those in the developing world. They must reflect an understanding of the necessary balance between government and markets. Fourthly, any response must respect basic principles of democratic due process, including full transparency.

These principles take on a greater sense of urgency today, as what started as a financial crisis has become very quickly one of the real economy, with the threat of recession a reality around the world, and as we enter a new phase where emerging and developing economies are suffering the consequences of this crisis as well.

Lack of financial regulation triggered the crisis, while fiscal weakness and large public debts have hindered many governments’ ability to formulate policies to tackle it. At the same time, serious deficiencies in the global financial system have also been exposed, such as the limitations of the Bretton Woods institutions to guard against macroeconomic imbalances and provide liquidity to those economies in need; inadequate supervision of financial markets in developed economies and under-representation of emerging economies in the governance of the main multilateral lending institutions.

We will not be able to restore confidence in our financial markets unless we change their behaviour, through regulation. And regulation must be comprehensive. Too often, the regulatory process has been captured by those who were supposed to be regulated. The voice of those injured as a result of inadequate regulation—pensioners who lose their life savings, homeowners who lose their homes, workers who lose their jobs—has to be paramount. Such regulation could encourage real innovation, not the kind that has marked financial markets in recent years, like the derivatives that were supposed to manage risk but instead created it; but innovations that might allow average citizens to remain in their homes in the face of the economic vicissitudes which they face. Banks were allowed to become too big to fail and that was dangerous for all of us.

Given that the restructuring of global finance will take time, the Commission on Global Financial Issues proposes five immediate programmes to protect people today in countries most directly affected by the crisis:


The creation of a Social Protection Fund to assist developing countries that have inadequate or underfunded social protection schemes to set up social security systems to provide minimum social protections, including provisions for the unemployed, for health, and for retirees;



The creation of a Small Enterprises Development Fund to facilitate credit and capital flows to small businesses, as a sector which provides the major source of employment and a large contribution to the GDP, and assisting their technological development and expanding decent work;



The creation of a Financing Infrastructure Fund to help stimulate the economy. Such a fund would simultaneously stimulate the economy in the short run and help our societies meet the long run challenges they face; some funds might be directed, for instance, towards helping meet the challenges posed by global warming; others might be directed at the informal economy from which so many poor earn their living, for example with local programmes for small power plants, rural roads and markets, and technology parks.



The Commission equally supports the immediate and urgent establishment by the International Monetary Fund of a short-term liquidity line for emerging and developing economies which face a liquidity crisis caused not by deficient domestic policies but by sources of financing being severed due to the systemic crisis, as internationally active banks hoard liquidity, capital is repatriated to financial centres and rich countries’ GDP contract. This liquidity facility must allow access to countries by broadening the eligibility criteria in a fair way, so giving support to hundreds of millions of people who are now unwitting victims of this crisis; and it should be provided without the severe conditionalities often imposed in the past.



New sources of funding, and new lending facilities, have to be given urgent consideration. There is a growing consensus that there are insufficient financial resources in multilateral institutions and regional development banks to provide adequate support for the many economies that may face difficulties. Since the sources of liquid funds in the world today are in countries that have inadequate representation within the IMF, the World Bank, and other existing multilateral institutions, it will be imperative to create new governance structures for these lending facilities that are more representative. These new governance structures should be thought of as a precursor to the more fundamental reforms in the global economic governance that have long been demanded, and may entail more active involvement of other international institutions with wider and more diverse representation, including the various agencies of the UN family, such as UNDP and the International Labour Organisation.

Transparent and sustainable financial governance requires robust regulation of the world of finances which, as stated by the Presidium of the Socialist International, should include the establishment of a World Financial Organisation. The nature and extent of such regulation should itself emerge from global, democratic processes. Well designed regulation should focus on financial institutions and products whose failure puts the entire economy at risk. Elements will include, but not be limited to, demands for more transparency, restrictions on compensation schemes, especially those that encourage short sighted and excessively risky behaviour, restrictions on conflicts of interest, oversight of credit rating agencies, and control of other aspects of the behaviour of financial institutions that have imposed large social costs, without commensurate social benefits. Deficiencies in corporate governance that have given rise to compensation schemes that have benefited corporate managers at the expense of other stakeholders, including even shareholders, need to be given urgent consideration. Tax havens should be ended; and, a tax on short-term transactions considered.

There are other reforms to the international financial system that must be addressed if we are to have a more stable, prosperous, and equitable global economy. These include a reform of the global reserve system, better macro-economic coordination, with more attention paid to the consequences of policies for unemployment, and better ways of dealing with cross border bankruptcies and defaults, including those of sovereigns. The system in which countercyclical monetary and fiscal policies were pursued in the advanced industrial countries while pro-cyclical policies were imposed on developing countries has contributed to global volatility and imposed huge costs on developing countries. The current crisis has given new urgency to these long delayed reforms.

The reform process itself must be open, transparent, inclusive, and democratic; this means that the reform of the global regulatory framework or the way in which financial markets are regulated and supervised must take into account opinions and views of all. For this reason, we propose that discussion about reforms to the regulatory and financial framework for private markets be broadened to include the emerging economies, while at the same time providing a role for contributions from existing institutions that are less representative, such as the Financial Stability Forum.

Social democrats have always stood for markets with social responsibility. Markets that put citizens first. For a role for government in the economy with rules and regulation in the market. 75 years ago John Maynard Keynes explained how government action could help the economy recover from the Great Depression. Today his ideas have become part of conventional wisdom. Social democratic policies and their proposals for preventing another such calamity, as the one we are living through today, will in time also be accepted as conventional wisdom. But time is of the essence: the quicker governments can act, the shorter will be our downturn, and the fewer the number of innocent bystanders whose lives and dreams will be dashed in this tragic episode. We are living in a man-made crisis that should never be allowed to happen again. Our Commission is committed to contributing to that end, by constructing a roadmap, in which democracy, inclusion, fairness and green development will find a place in a new political, social and economic vision required for these times.

Source: Socialist International

Tackling the global financial crisis: For a new relationship between government and the market

First meeting of the Socialist International Commission on Global Financial Issues, Vienna, Austria

The SI Commission on Global Financial Issues met in Vienna on 3 November, for the first of a series of meetings, and in advance of the Socialist International Council in Mexico on 17-18 November where tackling the global financial crisis will be at the top of the agenda.

Hosted by the Chancellor of Austria, Alfred Gusenbauer, a member of the Commission, the discussions highlighted the principles guiding the global social democratic response to the world financial crisis and, given the new phase of the crisis affecting emerging and developing countries and the urgency of the situation of many people around the world today, the Commission set out five concrete initiatives to assist those directly affected by the crisis.

Calling for a new relationship between government and the market, the Commission underlined that confidence would not be restored in the financial markets unless behaviour was changed through comprehensive and robust regulation, accompanied by far-reaching reforms made to the international financial system.

Concerned for people who are unwitting victims of the crisis, losing their homes, jobs, pensions and social services, the Commission put forward the creation of a Social Protection Fund to aid developing countries with inadequate social protection schemes; the creation of a Small Enterprises Development Fund to support small business, as a sector which employs the majority of workers, contributes to the GDP and can expand decent work; the creation of a Financing Infrastructure Fund to help stimulate the economy; support for a short-term liquidity line for emerging and developing countries to be immediately and urgently established by the IMF; tackling the issue of insufficient financial resources in multilateral institutions and regional development banks by seeking new sources of funding and lending facilities, as well as more fundamental reforms in the global economic governance. These proposals emanating from the discussion were expanded upon in a statement of the Commission, called “For a new relationship between government and the market".

The Commission, established by the Socialist International Presidium at its meeting at the United Nations, New York, at the end of September, brings together political leaders, ministers and experts from all continents, and its members include: Professor Joseph Stiglitz from the United States, Nobel laureate and Chair of the Commission; Anatoly Aksakov, Member of the Board of the Russian Federation Central Bank and Member of Russian State Duma, For a Just Russia Party; Dr Héctor Alexander, Minister of Economy and Finances of Panama, Democratic Revolutionary Party, PRD; Cuauhtémoc Cárdenas, Founder of the Party for Democratic Revolution, PRD, Mexico and Honorary President of the Socialist International; Elio Di Rupo, Leader of the Socialist Party, PS, Belgium, and SI Vice-President; Alfred Gusenbauer, Chancellor of Austria and SI Vice-President; Eero Heinäluoma, Finnish Social Democratic Party and SI Vice-President; Ibrahim Boubacar Keita, Former Prime Minister of Mali and Leader of the Assembly for Mali, RPM; Pia Locatelli; President of Socialist International Women; Fathallah Oualalou, Former Minister of Finance, Socialist Union of Popular Forces, USFP, Morocco; Professor Shri Arjun K. Sengupta, Member of Parliament, Indian National Congress Party; Antolin Sánchez Presedo, Member of the European Parliament, Spanish Socialist Workers’ Party, PSOE, Spain; Peer Steinbrück, Federal Finance Minister of Germany and Deputy Chair of the Social Democratic Party; Andres Velasco, Minister of Finance, Chile; and Fozia Wahab, Member of the Pakistan National Assembly and Chair of the National Finance Committee of the Parliament. A member of the Commission from France will be appointed following the Socialist Party’s upcoming Congress.

George Papandreou, President of the Socialist International and Luis Ayala, Secretary General of the Socialist International, participated alongside the Commission members who took part in this first meeting. Juan Somavia, Director-General of the International Labour Organisation, joined the discussions as an invited guest. And from Austria, Christoph Matznetter, Secretary of State, Federal Ministry of Finance; and, Andreas Schieder, Secretary of State, Civil Service and Administrative Reform, also attended.

A progress report on the Commission’s work will be given by Commission members at the upcoming SI Council meeting in Mexico which takes the global social democratic response to the crisis as its main theme. The Council discussions, incorporating the entire membership of the organisation, will address this issue and a special document prepared by the Chair of the Commission on the social democratic principles towards a new financial architecture will be presented for adoption.

Future meetings of the Commission are envisaged, including seminars with academics and experts and a major Conference in the second half of 2009, to contribute to constructing a roadmap to deal with this crisis, in which democracy, inclusion, fairness, green development and protection for the environment will find their rightful place.

TESTIMONY BEFORE THE US CONGRESS HOUSE COMMITTEE ON FINANCIAL SERVICES
Joseph E. Stiglitz, University Professor, Columbia University, 21 October 2008  

CRISE FINANCIERE MONDIALE :
NOTE POUR L’INTERNATIONALE SOCIALISTE
Elio Di Rupo, President of the Socialist Party, PS, Belgium     

- La crise financière et les limites du libéralisme non régulé
- La nouvelle crise et les prémisses d'un monde multipolaire
- Le Maroc face aux effets de la crise

Fathallah Oualalou, Socialist Union of Popular Forces, USFP, Morocco  

REFORMING AND STRENGTHENING THE GLOBAL FINANCIAL SYSTEM
Andrés Velasco, Minister of Finance, Chile    

SOCIAL CONSEQUENCES AND RESPONSES TO THE FINANCIAL AND ECONOMIC CRISIS
Discussion paper for the Chief Executives Board (CEB) of the United Nations, presented by ILO Director-General Juan Somavia, New York, October 2008   

Source: Socialist International