Without explanation, the US Supreme Court Tuesday dismissed a lawsuit brought by pension and investment funds against major Wall Street banks for their part in the massive financial fraud carried out by the Enron Corporation, the Houston-based energy trading giant.
The suit sought to recover some $40 billion that were lost when Enron went bankrupt in late 2001. It charged the banks, including Merrill Lynch, Credit Suisse Group, Barclays Plc and other leading financial houses, with helping company executives cover up a mounting cash flow problem by disguising loans as revenues, setting up off-the-books partnerships and hiding losses in order to defraud investors.
The rejection of the case—an appeal of a lower court ruling barring the funds from suing the banks—came just one week after a 5-3 ruling that protected banks and other businesses that help companies falsify their financial pictures in order to defraud investors from lawsuits based on the federal securities fraud laws.
That ruling, issued in the case of Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., together with the dismissal of the Enron appeal are only the latest in a series of pro-business, anti-investor decisions from the Court designed to kill securities fraud lawsuits.
The Stonebridge decision was written by Justice Anthony Kennedy, who failed to take part in the deliberations on the Enron case. While Kennedy offered no explanation for his absence, the justice’s son is an investment banker at Credit Suisse in New York City.
The Stonebridge case charged that an accounting fraud by Charter Communications Inc., a St. Louis cable operator, was carried out with the collaboration of cable-television box manufacturers Motorola and Scientific-Atlanta (now owned by Cisco systems).
According to the lawsuit, Charter overpaid Motorola and Scientific-Atlanta $17 million for cable boxes, which the two manufacturers then kicked back to the operators by purchasing advertising, allowing Charter to add the money to its books as phony revenue.
In writing the majority decision, Kennedy made it clear that a key consideration was that holding such companies accountable for investment fraud could be bad for Wall Street. Allowing shareholder suits in such cases, he wrote, “may raise the cost of being a publicly traded company under our law and shift securities offerings away from domestic capital markets.”
Justice Stephen Breyer did not participate in the case, because he is a stockholder in Cisco Systems Inc., Scientific-Atlanta’s parent company.
Even a brief review of the decision and the history of the federal antifraud securities laws reveals that the ruling is utterly cynical, dishonest and result-driven.
In the wake of the 1929 stock market crash and in response to widespread fraud in the securities industry, the US Congress enacted the Securities Act of 1933 and the Securities Exchange Act of 1934. The 1933 law regulates the initial distribution of company shares, and the 1934 Act, for the most part, regulates post-distribution trading.
The general anti-fraud provision of the 1934 Act, Section 10(b), states:
“It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange... To use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Securities and Exchange Commission [the SEC, a federal agency] may prescribe.”
In 1942 the SEC adopted such a Rule, 10b-5, which provides that “It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange, (a) To employ any device, scheme, or artifice to defraud, (b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or (c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person in connection with the purchase or sale of any security.”
Long ago, the Supreme Court approved suits for damages by private investors for violations of section 10(b) and SEC Rule 10b-5. Typically investors sue under the portion of Rule 10b-5 that forbids making false or incomplete statements. In those cases, the courts have required that the investors prove that they relied on fraudulent statements or a cover-up of information when buying or selling shares.
In a 1994 case, Central Bank of Denver v. First Interstate Bank, the Supreme Court decided that persons or businesses that knowingly or recklessly give “substantial assistance” to a company engaged in such deception cannot be held liable for defrauding investors. In a decision written by Justice Anthony Kennedy and backed by four other right-wing justices (former Chief Justice Rehnquist, retired Justice Sandra Day O’Connor and present Justices Antonin Scalia and Clarence Thomas), the Court refused, in the absence of a specific law passed by Congress, to apply the longstanding legal principle of aiding and abetting to those who help companies misrepresent or omit information in order to defraud investors, even if they themselves are not directly responsible for giving investors the misinformation.
In deciding the Central Bank case the Court however expressly recognized that the “commission of a manipulative act” was another, alternative basis for liability under 10(b) apart from directly making a misstatement. The Court decision said: “The absence of 10(b) aiding and abetting liability does not mean that secondary actors in the securities markets are always free from liability under the securities Acts. Any person or entity, including a lawyer, accountant, or bank, who employs a manipulative device or makes a material misstatement (or omission) on which a purchaser or seller of securities relies may be liable as a primary violator under 10b-5.” The Court stressed that the plaintiffs in the Central Bank case had conceded that the defendant bank had not committed a manipulative or deceptive act within the meaning of 10(b).
But in the Stoneridge case decided last week, the cable box manufacturers were charged with engaging precisely in such a manipulative or deceptive act.
The box suppliers knew that Charter wanted to use the kickback of money from the inflated cable box purchases in the form of advertising sales to inflate the company’s revenue picture by $17 million. Charter used the scheme to issue quarterly reports that would meet Wall Street expectations for operating cash flow and maintain its share price.
In order to keep Charter’s auditing firm from discovering the link between Charter’s increased payments for the boxes and the advertising purchases, the companies drafted documents to make it appear the transactions were unrelated and conducted in the ordinary course of business. The cable box companies sent documents to Charter falsely stating they had increased production costs on the boxes. Also, the new set-top box agreements were also backdated to make it appear that they were negotiated a month before the advertising agreements.
A class action lawsuit was filed on behalf of purchasers of Charter’s shares against not only Charter, but the cable box companies as well. The lawsuit charged that the companies were liable because they knowingly participated in a scheme that was aimed at and succeeded in inflating Charter’s revenue. If the companies had not assisted Charter, Charter’s auditor would not have been fooled, and the false financial statements would not have been issued.
Under this “scheme liability” legal theory, many banks and other companies had been successfully sued for assisting in massive accounting fraud by the likes of Enron and WorldCom in the 1990s. Nonetheless, the cable box companies succeed in getting the case dismissed in the lower courts.
Justice Kennedy, who wrote the majority decision in the Stonebridge case, was also the author of the 1994 decision. This time Kennedy was again joined by the far-right wing bloc of Justices—Scalia and Thomas, along with current Chief Justice John Roberts and Justice Samuel Alito.
In refusing to hold the cable box companies liable, Kennedy wrote that since they had not themselves made the public misstatements as to Charter’s revenues, to hold them liable would in effect permit the sort of aider and abettor liability thrown out in the Central Bank case. The investors, Kennedy wrote, were required to show they relied on these the manufacturing companies’ deceptive actions but could not do so “except in an indirect chain that we find too remote for liability.”
This is legal sophistry. Kennedy and the majority ignored that the conduct alleged was critically different from the Central Bank case because the bank in that case did not itself engage in a proscribed deceptive act and, therefore, did not itself directly violate section 10(b) and Rule 10b-5. In other words, they ignored their express recognition in Central Bank that such conduct is an additional ground for liability beyond that arising from publicly making a misstatement.
There is no reason to impose the requirement that investors prove they relied on misinformation produced by the companies’ actions to find them liable. Under the plain language of the statute banning deceptive practices, the real question is instead whether the defendants’ conduct caused the investors to purchase their shares under false pretenses.
In a dissenting opinion in the Stoneridge case, Justice John Paul Stevens argued that the acts of the cable box companies were enough to impose liability because they had the foreseeable effect of causing investors to purchase their shares under false pretenses. The law has long treated a misrepresentation made to a third person the maker intends or has reason to expect will be repeated or its substance communicated to the victim the same as direct falsehoods for liability purposes. For all practical purposes the sham transactions the manufacturing companies engaged in had the same effect on Charter’s profit and loss statement as if they had themselves made false entries directly on Charter’s books.
The Stoneridge ruling cannot be seen as anything other than a political decision to serve the reactionary economic interests of finance capital. In an interview with the New York Times, J. Edward Ketz, an associate professor of accounting at Pennsylvania State University’s Smeal College of Business, called the ruling “a travesty of justice” and a “huge step backwards in the fight to prevent further accounting frauds from harming investors and the American economy.”
The ruling provoked an audible sigh of relief on Wall Street and from such employers’ groups as the National Association of Manufacturers, because of fear that a ruling in the investors’ favor would have left large numbers of companies and banks vulnerable to lawsuits over the massive fraud that has characterized the US economy.
The ruling is particularly timely given the unwinding of the sub-prime mortgage scandal. Many investment and commercial banks that might otherwise face liability to investors under the securities laws will be able now to dodge it. The banks created all sorts of formally separate “off balance sheet” entities to foist packages of such mortgages onto investors. They will argue that, as in Stoneridge, only those entities and not the banks themselves should be liable for any fraud relating to the real value of these mortgages.
Source: Word Socialist Web Site
Wednesday, January 23, 2008
Monday, January 21, 2008
Selebi accepted R1.2m in bribes, NPA claims.
The National Prosecuting Authority (NPA) intends to tell the Pretoria high court that convicted drug dealer Glen Agliotti's friendship with Police Commissioner Jackie Selebi became corrupt at Selebi's insistence.
This is contained in the NPA's indictment against Selebi. The document was attached to the NPA's responding affidavit to Selebi's attempt to get the authority to halt his prosecution in the court yesterday.
Selebi is alleged to have accepted at least R1.2 million in bribes that "made no legitimate business sense" from Agliotti and others.
Source: Highbeam
This is contained in the NPA's indictment against Selebi. The document was attached to the NPA's responding affidavit to Selebi's attempt to get the authority to halt his prosecution in the court yesterday.
Selebi is alleged to have accepted at least R1.2 million in bribes that "made no legitimate business sense" from Agliotti and others.
Source: Highbeam
Saturday, January 19, 2008
Belgians killed in Yemen attack
Two female Belgian tourists and their driver have been killed after gunmen ambushed their convoy in eastern Yemen, officials say. Four other Belgians were hurt in the attack in the province of Hadramut. The Yemeni authorities have launched a hunt for the attackers, who they believe to be al-Qaeda militants. Last July, seven Spaniards and two Yemenis were killed when a suicide car bomber attacked a group of tourists visiting a temple in central Yemen.
The Belgian tourists were attacked as they travelled through Wadi Dawan, a desert valley about 300km (180 miles) east of the capital Sanaa. Survivor Karina Lambert said the convoy was ambushed by four gunmen hiding behind a truck parked at the side of the road. "They immediately started firing on three of the jeeps, the fourth one was further back so it was not hit," she said in a telephone interview with Belgian TV. "They wanted to kill, that's sure because after the first bursts of machine-gun fire, they approached the vehicles and fired into the cars." There are reports of a fourth fatality, with Reuters news agency citing the victim as a Yemeni national.
Belgian Foreign Minister Karel De Gucht identified one of the victims as Claudine Van Caille, 65, from Bruges. The family of the other female victim has not yet been informed. Mr de Gucht said he was horrified by the attack and that he had sent a "clear message" to the Yemeni government to hunt down the killers. Tourists are often drawn to Wadi Dawan area to visit the famous multi-storey mud buildings in the nearby town of Shibam. Al-Qaeda has been blamed for a series of attacks in Yemen, the ancestral home of the group's leader Osama Bin Laden.
In July 2006 seven Spanish tourists and their two local drivers died when a suicide bomber rammed his car packed with explosives into their vehicles. That was the most deadly attack on Westerners in the country since 17 US soldiers aboard the USS Cole were killed when the ship was attacked by al-Qaeda militants as it rested in port in Aden. In recent years Yemen's government has been fighting Islamists with the help of US special forces based in Djibouti, on the Horn of Africa.
Source: BBC
The Belgian tourists were attacked as they travelled through Wadi Dawan, a desert valley about 300km (180 miles) east of the capital Sanaa. Survivor Karina Lambert said the convoy was ambushed by four gunmen hiding behind a truck parked at the side of the road. "They immediately started firing on three of the jeeps, the fourth one was further back so it was not hit," she said in a telephone interview with Belgian TV. "They wanted to kill, that's sure because after the first bursts of machine-gun fire, they approached the vehicles and fired into the cars." There are reports of a fourth fatality, with Reuters news agency citing the victim as a Yemeni national.
Belgian Foreign Minister Karel De Gucht identified one of the victims as Claudine Van Caille, 65, from Bruges. The family of the other female victim has not yet been informed. Mr de Gucht said he was horrified by the attack and that he had sent a "clear message" to the Yemeni government to hunt down the killers. Tourists are often drawn to Wadi Dawan area to visit the famous multi-storey mud buildings in the nearby town of Shibam. Al-Qaeda has been blamed for a series of attacks in Yemen, the ancestral home of the group's leader Osama Bin Laden.
In July 2006 seven Spanish tourists and their two local drivers died when a suicide bomber rammed his car packed with explosives into their vehicles. That was the most deadly attack on Westerners in the country since 17 US soldiers aboard the USS Cole were killed when the ship was attacked by al-Qaeda militants as it rested in port in Aden. In recent years Yemen's government has been fighting Islamists with the help of US special forces based in Djibouti, on the Horn of Africa.
Source: BBC
Let's all arrest one another; South Africa
IT SEEMS, for the moment, as if South Africa's governing class is being engulfed by charges of corruption. Three weeks ago it was the turn of Jacob Zuma, the newly elected leader of the ruling African National Congress (ANC). He was charged with fraud, tax evasion and money laundering and is due in court in August.
This week it was the turn of Jackie Selebi, the head of the police. The National Prosecuting Authority says it will charge him with corruption and "defeating the ends of justice". He has been suspended from his job and he also resigned as head of Interpol, the international police body.
Source: Highbeam
This week it was the turn of Jackie Selebi, the head of the police. The National Prosecuting Authority says it will charge him with corruption and "defeating the ends of justice". He has been suspended from his job and he also resigned as head of Interpol, the international police body.
Source: Highbeam
Friday, January 18, 2008
Agliotti fingers Gauteng director general
Gauteng’s top official, provincial Director General Mogopodi Mokoena, co-owned a company with Brett Kebble’s murderer, Clint Nassif, and accepted a R250 000 cheque from him.
Mokoena’s links with Nassif were among issues raised by Glenn Agliotti in an affidavit the National Prosecuting Authority submitted to court last week in response to Jackie Selebi’s application to block his prosecution.
Agliotti stated: ‘Clint Nassif had a company with a member of the Gauteng local government [in reality, the provincial government] by the name of Machabudi [Mogopodi]. This was done, to secure other tenders from the government.”
Nassif and Agliotti were both involved with mining boss Kebble’s security and dirty tricks operation. Both have admitted to a role in Kebble’s ‘assisted suicide” and both have pleaded guilty in a massive drugs case.
Mokoena this week denied the company had pursued any government contracts and claimed that by the time he ‘pulled out” after the Mail & Guardian exposed Agliotti, Nassif and their links with Kebble and Selebi in May 2005, it had done no deals.
Mokoena also said: ‘If I knew who they were, I would not have met them or even had coffee with them.”
However, the M&G has independently established:
Mokoena accepted a R250 000 cheque from Nassif, supposedly to help him (Mokoena) buy a house at the luxury Zimbali resort in KwaZulu-Natal. Mokoena refused to confirm or deny this.
The company that Mokoena, Nassif and some of Nassif’s associates co-owned, the unusually named Add Kalusha to Legora Investment Holdings, owned major assets within Nassif’s Central National Security group. Mokoena claimed that if this was the case, it was after he had left.
It is alleged that Mokoena ‘pulled strings” to help a property developer acquire provincial government land by paying an ‘under the table” amount of more than R1-million. Mokoena denied knowing ‘anything about that”. He said he did not even know the name of the property developer, whose name the M&G is withholding for legal reasons.
Company records show that Mokoena, Nassif, and two of Nassif’s partners in the Central National Security group became directors of Add Kalusha to Legora Investment Holdings in November 2005, two months after Kebble’s death.
A source with direct knowledge, but who requested anonymity, told the M&G that Nassif wrote a R250 000 cheque for Mokoena soon after that. The source understood it to be to help Mokoena pay for the Zimbali house.
Mokoena refused to confirm or deny the payment, but reiterated that ‘Nassif doesn’t have any contracts from government, and I did not help him get contracts from government”.
The same source claimed that Mokoena had ‘pulled strings” to help the property developer acquire government land in the south of Johannesburg, and that the developer had made the ‘under the table” payment to be shared by Nassif, Mokoena and another person. The M&G has not been able to verify the allegation.
With regard to Add Kalusha, Mokoena said: ‘It was a company we were establishing to look at opportunities in general — We were going to buy properties. It was hardly six months. Immediately after that, when I knew who they were, I pulled out completely.”
Company records confirm that Mokoena resigned as a director effective May 31 2006, shortly after the M&G‘s exposé of Nassif and company. Mokoena claims that by that time Add Kalusha had done no deals and had no assets.
The M&G has established from a source close to the transaction that by the time Nassif and his associates sold Add Kalusha to Savika, another security group, it owned substantial assets in the security field, including the Central National Security group’s guarding, monitoring and response contracts and cars, radios and firearms.
This was about four months after Mokoena resigned, company records show.
Mokoena claimed that if Add Kalusha had such assets it would have acquired them after he left. This is partly contradicted by a businessman who knew Nassif well. He told the M&G his understanding was that ‘Mogopodi was supposed to be a shareholder in CNSG [Central National Security Group]”.
Source: Mail & Guardian
Mokoena’s links with Nassif were among issues raised by Glenn Agliotti in an affidavit the National Prosecuting Authority submitted to court last week in response to Jackie Selebi’s application to block his prosecution.
Agliotti stated: ‘Clint Nassif had a company with a member of the Gauteng local government [in reality, the provincial government] by the name of Machabudi [Mogopodi]. This was done, to secure other tenders from the government.”
Nassif and Agliotti were both involved with mining boss Kebble’s security and dirty tricks operation. Both have admitted to a role in Kebble’s ‘assisted suicide” and both have pleaded guilty in a massive drugs case.
Mokoena this week denied the company had pursued any government contracts and claimed that by the time he ‘pulled out” after the Mail & Guardian exposed Agliotti, Nassif and their links with Kebble and Selebi in May 2005, it had done no deals.
Mokoena also said: ‘If I knew who they were, I would not have met them or even had coffee with them.”
However, the M&G has independently established:
Mokoena accepted a R250 000 cheque from Nassif, supposedly to help him (Mokoena) buy a house at the luxury Zimbali resort in KwaZulu-Natal. Mokoena refused to confirm or deny this.
The company that Mokoena, Nassif and some of Nassif’s associates co-owned, the unusually named Add Kalusha to Legora Investment Holdings, owned major assets within Nassif’s Central National Security group. Mokoena claimed that if this was the case, it was after he had left.
It is alleged that Mokoena ‘pulled strings” to help a property developer acquire provincial government land by paying an ‘under the table” amount of more than R1-million. Mokoena denied knowing ‘anything about that”. He said he did not even know the name of the property developer, whose name the M&G is withholding for legal reasons.
Company records show that Mokoena, Nassif, and two of Nassif’s partners in the Central National Security group became directors of Add Kalusha to Legora Investment Holdings in November 2005, two months after Kebble’s death.
A source with direct knowledge, but who requested anonymity, told the M&G that Nassif wrote a R250 000 cheque for Mokoena soon after that. The source understood it to be to help Mokoena pay for the Zimbali house.
Mokoena refused to confirm or deny the payment, but reiterated that ‘Nassif doesn’t have any contracts from government, and I did not help him get contracts from government”.
The same source claimed that Mokoena had ‘pulled strings” to help the property developer acquire government land in the south of Johannesburg, and that the developer had made the ‘under the table” payment to be shared by Nassif, Mokoena and another person. The M&G has not been able to verify the allegation.
With regard to Add Kalusha, Mokoena said: ‘It was a company we were establishing to look at opportunities in general — We were going to buy properties. It was hardly six months. Immediately after that, when I knew who they were, I pulled out completely.”
Company records confirm that Mokoena resigned as a director effective May 31 2006, shortly after the M&G‘s exposé of Nassif and company. Mokoena claims that by that time Add Kalusha had done no deals and had no assets.
The M&G has established from a source close to the transaction that by the time Nassif and his associates sold Add Kalusha to Savika, another security group, it owned substantial assets in the security field, including the Central National Security group’s guarding, monitoring and response contracts and cars, radios and firearms.
This was about four months after Mokoena resigned, company records show.
Mokoena claimed that if Add Kalusha had such assets it would have acquired them after he left. This is partly contradicted by a businessman who knew Nassif well. He told the M&G his understanding was that ‘Mogopodi was supposed to be a shareholder in CNSG [Central National Security Group]”.
Source: Mail & Guardian
Thursday, January 17, 2008
NEC to discuss fate of Scorpions
The ANC's national executive committee (NEC) lekgotla, which starts on Friday, provides the new party leadership with its first real opportunity to put its policy stamp on the country, but budgetary and statutory constraints will force some painful compromises. Decisions on policy were taken at the party's national conference in December. Now the leaders must find a way - and the money - to implement them.
Among these decisions are the controversial plan to disband the National Prosecuting Authority's (NPA) Directorate Special Operations (the Scorpions) by June; providing free education to the poor up to undergraduate level; expanding "no-fee" schools to 60 percent by 2009; extending child support grants from 14 to 18 years; and providing antiretroviral treatment at all health facilities. Someone is going to have to pay. And although the newly empowered Left has long objected to President Thabo Mbeki and Finance Minister Trevor Manuel's budget surplus, ANC secretary-general Gwede Mantashe said this week the party would not deliberately eradicate that surplus in pursuit of greater social spending.
Most of the policy decisions are not new - some date back to the national conference of 1997 - but ANC leaders came under renewed pressure in Polokwane to speed up implementation. NEC members, ministers, directors-general and other government officials involved in policy implementation will therefore meet over the next three days to find a way to do this. The meeting takes place amid great division and uncertainty - government officials fear for their positions.
The new party leadership under Jacob Zuma will be imposing ANC policy on a government led by Mbeki, who is still smarting from his defeat in Polokwane. High on the list of things to do will be to decide the future of the Scorpions. The ANC plan involves moving Scorpions investigators back to the SAPS and sending its prosecutors to the NPA, effectively disbanding the crack crime-fighting unit. But this will not be as easy as it sounds.
Scorpions investigators are governed by the NPA Act (and derived regulations). The police are governed by the Public Service Act. Moving them to the SAPS will require a new law - something that will not be achieved within the six-month deadline. Since Scorpions investigators are better paid than their counterparts in the SAPS, they are unlikely to accept the unilateral amendment of their service conditions should they be incorporated into the SAPS. This also presents problems in terms of labour law. Similarly, SAPS officers are unlikely to accept a dual pay structure within the police force. It is hard to see how the party will get around these issues, and they will probably not be resolved by June.
In other policy, the party has recognised that the poor are likely to be hardest hit by the effects of climate change and committed itself to treat this issue as "a new threat on a global scale". The suggestion to make antiretroviral treatment available at all government medical institutions will no doubt be welcomed, but implementation will be hampered by costs and the lack of trained health care workers. The plan to classify HIV and Aids as a notifiable disease is likely to spark heated debate in Midrand.
The party also plans to scrap the unpopular floor-crossing legislation and develop a "regulatory architecture" for private funding of political parties.
The decision to establish a statutory Media Appeals Tribunal to compliment existing self-regulatory mechanisms in the print media environment will also be discussed.
Source: IoL
Among these decisions are the controversial plan to disband the National Prosecuting Authority's (NPA) Directorate Special Operations (the Scorpions) by June; providing free education to the poor up to undergraduate level; expanding "no-fee" schools to 60 percent by 2009; extending child support grants from 14 to 18 years; and providing antiretroviral treatment at all health facilities. Someone is going to have to pay. And although the newly empowered Left has long objected to President Thabo Mbeki and Finance Minister Trevor Manuel's budget surplus, ANC secretary-general Gwede Mantashe said this week the party would not deliberately eradicate that surplus in pursuit of greater social spending.
Most of the policy decisions are not new - some date back to the national conference of 1997 - but ANC leaders came under renewed pressure in Polokwane to speed up implementation. NEC members, ministers, directors-general and other government officials involved in policy implementation will therefore meet over the next three days to find a way to do this. The meeting takes place amid great division and uncertainty - government officials fear for their positions.
The new party leadership under Jacob Zuma will be imposing ANC policy on a government led by Mbeki, who is still smarting from his defeat in Polokwane. High on the list of things to do will be to decide the future of the Scorpions. The ANC plan involves moving Scorpions investigators back to the SAPS and sending its prosecutors to the NPA, effectively disbanding the crack crime-fighting unit. But this will not be as easy as it sounds.
Scorpions investigators are governed by the NPA Act (and derived regulations). The police are governed by the Public Service Act. Moving them to the SAPS will require a new law - something that will not be achieved within the six-month deadline. Since Scorpions investigators are better paid than their counterparts in the SAPS, they are unlikely to accept the unilateral amendment of their service conditions should they be incorporated into the SAPS. This also presents problems in terms of labour law. Similarly, SAPS officers are unlikely to accept a dual pay structure within the police force. It is hard to see how the party will get around these issues, and they will probably not be resolved by June.
In other policy, the party has recognised that the poor are likely to be hardest hit by the effects of climate change and committed itself to treat this issue as "a new threat on a global scale". The suggestion to make antiretroviral treatment available at all government medical institutions will no doubt be welcomed, but implementation will be hampered by costs and the lack of trained health care workers. The plan to classify HIV and Aids as a notifiable disease is likely to spark heated debate in Midrand.
The party also plans to scrap the unpopular floor-crossing legislation and develop a "regulatory architecture" for private funding of political parties.
The decision to establish a statutory Media Appeals Tribunal to compliment existing self-regulatory mechanisms in the print media environment will also be discussed.
Source: IoL
Tuesday, January 15, 2008
Who Really Killed Thomas Sankara?
As the Charles Taylor trial continues, African historian Carina Ray looks at the possibility that Taylor was complicit in Sankara's assassination.
In January 2008, after much delay, the trial of former Liberian president, Charles Ghankay Taylor, is scheduled to begin at the International Criminal Court in The Hague. Taylor faces an 11-count indictment for crimes against humanity, war crimes, and other violations of international humanitarian law. These charges stem from his involvement in the atrocities committed during Sierra Leone’s armed conflict dating back to 1996, and more specifically his support of the main rebel group, the Revolutionary United Front (RUF), headed by Foday Sankoh. The brutality of the war and its direct toll on the civilian population are most visible today in the thousands of amputees throughout Sierra Leone whose limbs were hacked off in a bid to stifle civilian resistance through fear. While Taylor’s path of destruction arguably came to its apex during the war in Sierra Leone, his history prior to that also deserves our scrutiny since we know his much longer record of wanton destabilization in West Africa is precisely what allowed him to wield so much power within the RUF.
In particular, Taylor’s return to West Africa from the United States in 1985 and the events that followed deserve our attention. Taylor arrived in Ghana after escaping from a prison in Boston, Massachusetts where he was being held pending extradition to Liberia on embezzlement charges levied against him by the Doe regime. Ghanaian authorities eventually jailed Taylor twice for his increasingly subversive activities. By 1987, however, he had arrived in Burkina Faso. The approximate timing of his appearance in the country coincided with the assassination of President Thomas Sankara, the charismatic revolutionary leader of Burkina Faso, on 15 October 1987.
While it is commonly accepted that Burkina Faso’s current head of state, Blaise Compaore, ordered Sankara’s assassination after their once close relationship soured, for years people have also been linking Taylor to the assassination. In 1993 Liberian economist, S. Byron Tarr, published an article in the respected academic journal, Issue: A Journal of Opinion, on the Economic Community of West African States Monitoring Group’s (ECOMOG) intervention in the Liberian civil war (1989-1996). Therein Tarr gave the most detailed account to date of Taylor’s movements prior to Sankara’s assassination. According to Tarr, in 1987 Taylor approached the Burkinabe embassy in Accra to ask for assistance in overthrowing the Doe regime in Liberia. The Burkinabe ambassador to Ghana, Madam Mamouna Ouattara, a Compaore loyalist, appears to have solicited Compaore’s assistance in getting the Ghanaian authorities to release Taylor into Burkinabe custody. This was facilitated by the fact that Ghana neither wanted to hand Taylor over to the Americans nor to Doe, and so Rawlings apparently released him to Compaore who had come to Accra as part of a mediation process Rawlings had undertaken to resolve the mounting disagreements between Sankara and Compaore. Tarr, notes that “Not long after Taylor was delivered to Compaore, Sankara was murdered.” In exchange for Taylor’s assistance in carrying out Sankara’s assassination, Tarr suggests that Compaore provided assistance to Taylor who was in the process of organizing the guerilla war that would eventually lead to the overthrow of the Doe regime. Crucially, Compaore is believed to have introduced Taylor to Libyan president, Muammar Qaddafi. Taylor and his recruits subsequently traveled to Libya where they underwent guerrilla training and formed a strategic alliance with Qaddafi who supported his desire to overthrow the Doe regime. The training he gained there was critical to his ability to launch the Liberian civil war in 1989 from his base in Ivory Coast. This general version of events has been echoed more recently in articles that have appeared in several other forums, including the Liberian Democratic Future’s (LDF) on-line newsmagazine, The Perspective, and The Liberian Mandingo Association of New York’s website.
It must be pointed out, however, that this version of events has been called into question. Ghanaian political scientist Eboe Hutchful who serves as the executive director of the Accra-based NGO, African Security Dialogue and Research, has suggested that his Ghanaian informants dispute the idea that Ghana released Taylor to Compaore; rather they contend that he was taken to the Ivorian border and released there. From Ivory Coast he is said to have made his way to Burkina Faso, “where the Libyans introduced him to Compaore,” rather than the other way around. Moreover, Hutchful suggests that Sankara may have already been killed by the time the Ghanaian authorities released Taylor.
The striking aspect of each of these sources is that they treat Taylor’s possible involvement in Sankara’s assassination as a side note. To date, the question of what role he played in organizing and carrying out Sankara’s murder has not been the focal point of investigation.
In March 2006 the United Nations Human Rights Committee ruled that Sankara’s family has “the right to know the circumstances of his death.” Any attempt to shed light on these circumstances, therefore, must seriously consider whether Taylor was involved in the assassination, and if so, to what extent and under whose direction.
Source: pambazuka
In January 2008, after much delay, the trial of former Liberian president, Charles Ghankay Taylor, is scheduled to begin at the International Criminal Court in The Hague. Taylor faces an 11-count indictment for crimes against humanity, war crimes, and other violations of international humanitarian law. These charges stem from his involvement in the atrocities committed during Sierra Leone’s armed conflict dating back to 1996, and more specifically his support of the main rebel group, the Revolutionary United Front (RUF), headed by Foday Sankoh. The brutality of the war and its direct toll on the civilian population are most visible today in the thousands of amputees throughout Sierra Leone whose limbs were hacked off in a bid to stifle civilian resistance through fear. While Taylor’s path of destruction arguably came to its apex during the war in Sierra Leone, his history prior to that also deserves our scrutiny since we know his much longer record of wanton destabilization in West Africa is precisely what allowed him to wield so much power within the RUF.
In particular, Taylor’s return to West Africa from the United States in 1985 and the events that followed deserve our attention. Taylor arrived in Ghana after escaping from a prison in Boston, Massachusetts where he was being held pending extradition to Liberia on embezzlement charges levied against him by the Doe regime. Ghanaian authorities eventually jailed Taylor twice for his increasingly subversive activities. By 1987, however, he had arrived in Burkina Faso. The approximate timing of his appearance in the country coincided with the assassination of President Thomas Sankara, the charismatic revolutionary leader of Burkina Faso, on 15 October 1987.
While it is commonly accepted that Burkina Faso’s current head of state, Blaise Compaore, ordered Sankara’s assassination after their once close relationship soured, for years people have also been linking Taylor to the assassination. In 1993 Liberian economist, S. Byron Tarr, published an article in the respected academic journal, Issue: A Journal of Opinion, on the Economic Community of West African States Monitoring Group’s (ECOMOG) intervention in the Liberian civil war (1989-1996). Therein Tarr gave the most detailed account to date of Taylor’s movements prior to Sankara’s assassination. According to Tarr, in 1987 Taylor approached the Burkinabe embassy in Accra to ask for assistance in overthrowing the Doe regime in Liberia. The Burkinabe ambassador to Ghana, Madam Mamouna Ouattara, a Compaore loyalist, appears to have solicited Compaore’s assistance in getting the Ghanaian authorities to release Taylor into Burkinabe custody. This was facilitated by the fact that Ghana neither wanted to hand Taylor over to the Americans nor to Doe, and so Rawlings apparently released him to Compaore who had come to Accra as part of a mediation process Rawlings had undertaken to resolve the mounting disagreements between Sankara and Compaore. Tarr, notes that “Not long after Taylor was delivered to Compaore, Sankara was murdered.” In exchange for Taylor’s assistance in carrying out Sankara’s assassination, Tarr suggests that Compaore provided assistance to Taylor who was in the process of organizing the guerilla war that would eventually lead to the overthrow of the Doe regime. Crucially, Compaore is believed to have introduced Taylor to Libyan president, Muammar Qaddafi. Taylor and his recruits subsequently traveled to Libya where they underwent guerrilla training and formed a strategic alliance with Qaddafi who supported his desire to overthrow the Doe regime. The training he gained there was critical to his ability to launch the Liberian civil war in 1989 from his base in Ivory Coast. This general version of events has been echoed more recently in articles that have appeared in several other forums, including the Liberian Democratic Future’s (LDF) on-line newsmagazine, The Perspective, and The Liberian Mandingo Association of New York’s website.
It must be pointed out, however, that this version of events has been called into question. Ghanaian political scientist Eboe Hutchful who serves as the executive director of the Accra-based NGO, African Security Dialogue and Research, has suggested that his Ghanaian informants dispute the idea that Ghana released Taylor to Compaore; rather they contend that he was taken to the Ivorian border and released there. From Ivory Coast he is said to have made his way to Burkina Faso, “where the Libyans introduced him to Compaore,” rather than the other way around. Moreover, Hutchful suggests that Sankara may have already been killed by the time the Ghanaian authorities released Taylor.
The striking aspect of each of these sources is that they treat Taylor’s possible involvement in Sankara’s assassination as a side note. To date, the question of what role he played in organizing and carrying out Sankara’s murder has not been the focal point of investigation.
In March 2006 the United Nations Human Rights Committee ruled that Sankara’s family has “the right to know the circumstances of his death.” Any attempt to shed light on these circumstances, therefore, must seriously consider whether Taylor was involved in the assassination, and if so, to what extent and under whose direction.
Source: pambazuka
Monday, January 14, 2008
Charges against Gerrie Nel withdrawn
Charges against Gerrie Nel, the head of the Directorate of Special Operations (DSO), or the Scorpions, in Gauteng, were withdrawn in the Pretoria Regional Court on Monday "After careful consideration of the evidence in the docket, the decision was made to withdraw the charges," chief prosecutor Matric Lupondo said during Nel's brief appearance.
Nel, who was dressed in a grey suit, managed to avoid the media, who were waiting outside court to get his reaction to the decision. "We are relieved with the outcome and Mr Nel just wants to go back to work and carry out his duties at the DSO," his legal counsel, Ian Small Smith, said. Nel was arrested at his Pretoria home in front of his wife and children at roughly 9pm last Tuesday by about 20 armed policemen. Although the charges were withdrawn, they could be reinstated at some stage, but Small Smith said he doubted this would happen. "They [the police] were widely criticised after the arrest, after [which] the senior prosecutor felt there wasn't a case, which means he should not have been arrested in the first instance, as there was not a case -- so I will be very surprised if there is another arrest," he said. He said should the police decide to recharge Nel, they could just ask him to hand himself over instead of arresting him again.
Small Smith believes that Nel should sue the state for wrongful arrest, but says this is for Nel to decide. "You have to understand that because of his position, there are other role-players here as well ...he is a responsible person and he will act responsibly," Small Smith said. Outside court, National Prosecuting Authority (NPA) spokesperson Tlali Tlali said: "In this particular case an investigation was carried out by the South African Police Service -- as a result of a lack of evidence in this matter, no case has to be answered by Mr Gerhard Nel."
On Wednesday last week, the Democratic Alliance (DA) had said that the arrest of Nel was a witch-hunt to protect police National Commissioner Jackie Selebi. Nel is heading the Scorpions' case against Selebi. "The axing of [suspended NPA head] Vusi Pikoli and now Gerrie Nel has all the appearance of a witch-hunt to protect Selebi," said DA spokesperson on Safety and Security Dianne Kohler Barnard. "The fact that it allegedly took 20 armed policemen to serve the warrant on Nel further reinforces this," she said.
Police spokesperson Superintendent Lungelo Dlamini had said Nel faced five charges including fraud, defeating the ends of justice and perjury. The charges are apparently related to offences allegedly committed between 2004 and 2005.
Meanwhile, Selebi's legal team were on Monday waiting for a date for a hearing for his application to stop an investigation against him after last week's attempt to have it heard urgently failed. "The judge president must provide a date for a full bench," said Selebi's advocate, Jaap Cilliers. Selebi stepped down from his post on Saturday and resigned as head of Interpol on Sunday. On Friday, the Pretoria High Court did not grant Selebi's application to have the matter heard urgently and it was struck off the roll, but the parties will arrange a date for the actual argument. In Selebi's notice of motion, he had wanted to ask for an interdict prohibiting the Scorpions and the Ministry of Justice and Constitutional Development from instituting any criminal prosecution against him, or taking any further steps in any envisaged criminal prosecution. He also wanted a copy of the allegations against him and an opportunity to answer them, to see copies of information justifying warrants of arrest issued against him, and copies of affidavits relating to him.
In court papers, the acting National Director of Public Prosecutions Mokotedi Mpshe said the NPA was ready to charge Selebi with corruption and defeating the course of justice. Alleged corrupt relations with murder accused Glen Agliotti, payments to the amount of R1,2-million and turning a blind eye to drug-smuggling were some of the reasons why they wanted to charge him, the court heard. "The charges against him are based on a strong prima facie case supported by the testimony of a range of witnesses and corroborated by real evidence," Mpshe said.
The NPA said it would meet this week to discuss how to proceed with the case. On Monday, Tlali said the options were either to go ahead with the Selebi matter regardless of Selebi's outstanding application, or to wait for the court to pronounce on Selebi's pending application. The NPA has said it would let Selebi know when it planned to make a move. "He will not be cuffed," said Tlali.
Cilliers said on Monday morning that as far as he knew, Selebi had not yet received notice that he would be wanted in court.
Source: Mail & Guardian
Nel, who was dressed in a grey suit, managed to avoid the media, who were waiting outside court to get his reaction to the decision. "We are relieved with the outcome and Mr Nel just wants to go back to work and carry out his duties at the DSO," his legal counsel, Ian Small Smith, said. Nel was arrested at his Pretoria home in front of his wife and children at roughly 9pm last Tuesday by about 20 armed policemen. Although the charges were withdrawn, they could be reinstated at some stage, but Small Smith said he doubted this would happen. "They [the police] were widely criticised after the arrest, after [which] the senior prosecutor felt there wasn't a case, which means he should not have been arrested in the first instance, as there was not a case -- so I will be very surprised if there is another arrest," he said. He said should the police decide to recharge Nel, they could just ask him to hand himself over instead of arresting him again.
Small Smith believes that Nel should sue the state for wrongful arrest, but says this is for Nel to decide. "You have to understand that because of his position, there are other role-players here as well ...he is a responsible person and he will act responsibly," Small Smith said. Outside court, National Prosecuting Authority (NPA) spokesperson Tlali Tlali said: "In this particular case an investigation was carried out by the South African Police Service -- as a result of a lack of evidence in this matter, no case has to be answered by Mr Gerhard Nel."
On Wednesday last week, the Democratic Alliance (DA) had said that the arrest of Nel was a witch-hunt to protect police National Commissioner Jackie Selebi. Nel is heading the Scorpions' case against Selebi. "The axing of [suspended NPA head] Vusi Pikoli and now Gerrie Nel has all the appearance of a witch-hunt to protect Selebi," said DA spokesperson on Safety and Security Dianne Kohler Barnard. "The fact that it allegedly took 20 armed policemen to serve the warrant on Nel further reinforces this," she said.
Police spokesperson Superintendent Lungelo Dlamini had said Nel faced five charges including fraud, defeating the ends of justice and perjury. The charges are apparently related to offences allegedly committed between 2004 and 2005.
Meanwhile, Selebi's legal team were on Monday waiting for a date for a hearing for his application to stop an investigation against him after last week's attempt to have it heard urgently failed. "The judge president must provide a date for a full bench," said Selebi's advocate, Jaap Cilliers. Selebi stepped down from his post on Saturday and resigned as head of Interpol on Sunday. On Friday, the Pretoria High Court did not grant Selebi's application to have the matter heard urgently and it was struck off the roll, but the parties will arrange a date for the actual argument. In Selebi's notice of motion, he had wanted to ask for an interdict prohibiting the Scorpions and the Ministry of Justice and Constitutional Development from instituting any criminal prosecution against him, or taking any further steps in any envisaged criminal prosecution. He also wanted a copy of the allegations against him and an opportunity to answer them, to see copies of information justifying warrants of arrest issued against him, and copies of affidavits relating to him.
In court papers, the acting National Director of Public Prosecutions Mokotedi Mpshe said the NPA was ready to charge Selebi with corruption and defeating the course of justice. Alleged corrupt relations with murder accused Glen Agliotti, payments to the amount of R1,2-million and turning a blind eye to drug-smuggling were some of the reasons why they wanted to charge him, the court heard. "The charges against him are based on a strong prima facie case supported by the testimony of a range of witnesses and corroborated by real evidence," Mpshe said.
The NPA said it would meet this week to discuss how to proceed with the case. On Monday, Tlali said the options were either to go ahead with the Selebi matter regardless of Selebi's outstanding application, or to wait for the court to pronounce on Selebi's pending application. The NPA has said it would let Selebi know when it planned to make a move. "He will not be cuffed," said Tlali.
Cilliers said on Monday morning that as far as he knew, Selebi had not yet received notice that he would be wanted in court.
Source: Mail & Guardian
Saturday, January 12, 2008
Selebi quits as Interpol chief
Police National Commissioner Jackie Selebi has quit as head of international crime-fighting body Interpol, the organisation said on Sunday.
Source: Mail & Guardian
Source: Mail & Guardian
Wednesday, January 9, 2008
Armed policemen arrest Scorpions boss
Scorpions boss Gerrie Nel was arrested at his Pretoria home on charges of corruption and defeating the ends of justice on Tuesday night, his attorney Ian Small Smith confirmed on Wednesday. Nel, the regional head of the Directorate of Special Operations, also known as the Scorpions, was arrested by about 20 armed policemen in front of his wife and children at his home at around 9pm on Tuesday. Police spokesperson Superintendent Lungelo Dlamini said Nel faced five charges including fraud, defeating the ends of justice and perjury. He is expected to appear in the Pretoria Magistrate's Court on Friday.
According to the arrest warrant the charges against Nel were corruption and defeating the ends of justice between 2004 and 2005. "The warrant was issued on the 22nd of November 2007 on a case registered in September 2007 for offences allegedly committed between 2004 and 2005," he said. "The police elected to withhold the warrant until the seventh of January before they arrested Advocate Nel under these peculiar, abusive and suspicious circumstances."
Nel's legal team was preparing an urgent application for Nel's release to the Pretoria High Court, "on the basis that the warrant of arrest is malicious and that the police obtained the warrant in bad faith". "His subsequent detention is unlawful and the court would be urged to order his release." Nel led the investigation into the shooting of mining magnate Brett Kebble and led the state's probe into alleged criminal activity by police National Commissioner Jackie Selebi. His arrest comes as pressure mounts on the NPA to disclose their decision on whether or not Selebi had a case to answer.
The NPA on December 16 said it had made the decision following a report received from a panel tasked with reviewing the criminal charges against Selebi. Selebi has come under fire over his involvement with convicted drug trafficker Glenn Agliotti, who is also accused of the murder of mining magnate Brett Kebble. An arrest warrant against Selebi was cancelled in September last year. It was obtained by Nel from the Randburg chief magistrate on September 10, for Selebi's arrest for alleged corruption, fraud, racketeering and defeating the ends of justice. In November last year, it emerged that Nel was the focus of a police investigation headed by one of the Gauteng province's top cops, Commissioner Richard Mdluli.
Acting national director of public prosecutions Mokotedi Mpshe on had held a high level Scorpions meeting in Cape Town where the case against Nel, and the possible reasons behind it, had topped the agenda. Two of the complaints against Nel were made by one of his own investigators, Andrew du Plooy. Du Plooy, who helped to expose allegedly corrupt former members of the unit, Cornwell Tshavhungwa and Geophrey Ledwaba, had opened a docket against Nel and investigator Piet Pieterse at the Silverton police station in Tshwane in 2007.
This was after Du Plooy had reported a complaint against the two men in 2006.
Source: Mail & Guardian
According to the arrest warrant the charges against Nel were corruption and defeating the ends of justice between 2004 and 2005. "The warrant was issued on the 22nd of November 2007 on a case registered in September 2007 for offences allegedly committed between 2004 and 2005," he said. "The police elected to withhold the warrant until the seventh of January before they arrested Advocate Nel under these peculiar, abusive and suspicious circumstances."
Nel's legal team was preparing an urgent application for Nel's release to the Pretoria High Court, "on the basis that the warrant of arrest is malicious and that the police obtained the warrant in bad faith". "His subsequent detention is unlawful and the court would be urged to order his release." Nel led the investigation into the shooting of mining magnate Brett Kebble and led the state's probe into alleged criminal activity by police National Commissioner Jackie Selebi. His arrest comes as pressure mounts on the NPA to disclose their decision on whether or not Selebi had a case to answer.
The NPA on December 16 said it had made the decision following a report received from a panel tasked with reviewing the criminal charges against Selebi. Selebi has come under fire over his involvement with convicted drug trafficker Glenn Agliotti, who is also accused of the murder of mining magnate Brett Kebble. An arrest warrant against Selebi was cancelled in September last year. It was obtained by Nel from the Randburg chief magistrate on September 10, for Selebi's arrest for alleged corruption, fraud, racketeering and defeating the ends of justice. In November last year, it emerged that Nel was the focus of a police investigation headed by one of the Gauteng province's top cops, Commissioner Richard Mdluli.
Acting national director of public prosecutions Mokotedi Mpshe on had held a high level Scorpions meeting in Cape Town where the case against Nel, and the possible reasons behind it, had topped the agenda. Two of the complaints against Nel were made by one of his own investigators, Andrew du Plooy. Du Plooy, who helped to expose allegedly corrupt former members of the unit, Cornwell Tshavhungwa and Geophrey Ledwaba, had opened a docket against Nel and investigator Piet Pieterse at the Silverton police station in Tshwane in 2007.
This was after Du Plooy had reported a complaint against the two men in 2006.
Source: Mail & Guardian
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