Judicial Watch

Swamp Rules: Cui Bono?

Old swamps are the best swamps. Cui bono? famously asked the Roman consul Lucius Cassius, who benefits? Cassius knew a few things about swamps. He cleaned up Rome, instituted election reform, and even served as a special prosecutor. Cui bono has been a touchstone of criminal investigations for two thousand years.

Today, as in Cassius’s time, swamp benefits are matters of money and power. The stakes are enormous. The Treasury Department estimates that $300 billion in illegal cash washes through the U.S. financial system every year. Dirty money is hidden behind legal corporate structures such as shell companies, shelf companies, and limited liability entities. Congress has been trying to fix the problem for years.

There’s an “increasing flow of illegal money through our financial system,” Senator Chuck Grassley warned Congress earlier this year. “The lifeblood of criminal enterprises all over the world is their revenue. Money fuels terrorists, transnational criminal organizations, narco-terrorists and kleptocrats to grow, increase their power, and gain more influence.”

State regulations on “beneficial ownership” of business structures are the key to hiding illegal money. States do not require the disclosure of the true owner–the “beneficial owner”–of shell companies and their ilk. Secrecy is layered into the system. Corporate records are established for a shell company identifying, say, a second shell company, as the owner. That second shell company identifies a third shell as the owner of the second shell, and so on. The true owner–the one who benefits–is masked. Profits pour in. The recent Panama Papers investigation revealed more than 200,000 secretive business entities around the globe concealing billions in illicit money.

A decade ago, then-New York District Attorney Robert Morgenthau told Congress about the problems of beneficial ownership regulations. Systems “promoting opacity and secrecy are the best friend of the money launderer, the tax cheat, the fraudster, the corrupt politician, and indeed, the financier of networks of terror,” he said.

Beneficial ownership is big business.  Registry agencies and lawyers establish the companies. They’re often highly paid. State agencies rake in fees. Delaware, a mecca of corporate secrecy, earns more than $1 billion annually from registration fees.

The solution to the problem of beneficial ownership is remarkably simple: transparency.

“A simple requirement to identify beneficial owners on state incorporation forms,” Morgenthau’s successor, Cyrus Vance Jr., told Congress in 2015, “would vastly improve the capacity of law enforcement.”

Grassley and Senator Sheldon Whitehouse earlier this year introduced legislation that would identify beneficial owners on state incorporation forms. The bill would “require applicants forming corporations to include basic information about the actual human beings who own the companies,” the senators wrote in an op-ed. “The states would maintain and periodically update this information and make it available to law enforcement officers who present proper subpoenas or search warrants.”

But efforts in Washington to provide a transparency solution are drowning in the swamp. Congressional critics say the new law will impose financial burdens on small businesses. Financial industries and state agencies quarrel over who would do the due diligence. Powerful lobbying groups have lined up against the changes. The U.S. Chamber of Commerce called disclosure a “paperwork nightmare.” The real estate industry wants changes in the law. The American Bar Association opposed the Grassley-Whitehouse legislation as “burdensome and intrusive.”

Bottom line: those lucrative fees, beloved by law firms and state agencies, are likely to dry up under a more transparent regime.

Cassius would understand.

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Next week: Beneficial ownership, secrecy and campaign cash in New York State.

Micah Morrison is chief investigative reporter for Judicial Watch. Follow him on Twitter @micah_morrison. Tips: mmorrison@judicialwatch.org

Investigative Bulletin is published by Judicial Watch. Reprints and media inquiries: jfarrell@judicialwatch.org

Amazon HQ2: Magnet for Corruption, Creative Destruction

The Amazon HQ2 sweepstakes is over and the winner is Queens, New York. And some place in Virginia called National Landing. And Nashville, Tennessee.

New York and Virginia will split Amazon’s second headquarters, while Nashville gets a consolation prize operations center. The Amazon move cements Queens’ status as an icon of the new New York — dynamic, diverse, economically upward, technologically savvy, and largely low-crime. Forget about Brooklyn. The future is Queens.

But that future is about to get a massive stress test.

Deals like HQ2 are a magnet for corruption. Amazon claims the new Long Island City site will create 25,000 jobs with an average wage of more than $150,000 per year. Ditto Virginia. In exchange for this fairy tale, New York Governor Andrew Cuomo and Mayor Bill de Blasio ponied up more than $1.5 billion in tax breaks and grants to be overseen by Albany’s famously corrupt political culture. The state will seize control of the land. Amazon’s construction costs will be reimbursed. Jeff Bezos gets federal tax breaks for “distressed” property, a helipad, and a partridge in a pear tree. Instead of property taxes paid to the city, Amazon says it will contribute to an “Infrastructure Fund” for local improvements “developed through input from residents during the planning process.”  Watch for Amazon-aligned groups to magically appear to game this process. Watch for Albany-aligned special interests to start putting their hands in the pie.

As for oversight, forget about it. The governor and mayor agreed on a plan to cut out the New York City Council, which is specifically tasked to examine large land-use projects. City Council Speaker Corey Johnson is apoplectic, excoriating the deal as “extremely troubling” and “done behind closed doors, with zero community input.” Freedom of information requests about the project have been stonewalled and denied.

Now, there’s no doubt that HQ2 offers lots of good jobs — though I’ll believe 25,000 for New York at $150k when I see it — but it’s also true that Queens is about to get a lesson in Schumpeter’s law of creative destruction. The gale force wind of capitalism, Schumpeter wrote, “incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating the new one.” The Internet, digitalization, and smart phones are all part of the wave of job-creating creative destruction reshaping the world economy. Amazon is part of it. So is Google, which just announced its own New York deal.

It’s best to be on board for that ride. But the toll will be steep. Amazon continues to decimate retailers in New York and around the country. Johnson and other community leaders have raised concerns about the impact of HQ2 on local streets, sewers, subways, and schools. Housing prices took off on news of the deal — a harbinger of things to come, threatening to drive longtime residents from the area.

“I seen my opportunities and I took  ’em,” the corrupt Tammany Hall politician George Washington Plunkett declared in 1905. Plunkitt was a practitioner of what he called “honest graft” — essentially, gaming the system to benefit the powerful and well-connected. Times have changed, but they haven’t changed that much: honest graft — better known these days as crony capitalism — is still with us, as well as outright crime. HQ2 presents a wealth of opportunities for New York and Virginia, but there is little accountability, transparency, and oversight built into the deals. That’s a sign of trouble ahead.

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Micah Morrison is chief investigative reporter for Judicial Watch. Follow him on Twitter @micah_morrison. Tips: mmorrison@judicialwatch.org

Investigative Bulletin is published by Judicial Watch. Reprints and media inquiries: jfarrell@judicialwatch.org

The Murder Curtain

Are Veterans Administration hospitals the perfect hunting ground for serial killers? That’s one of the provocative suggestions in former VA special investigator Bruce Sackman’s new book, “Behind the Murder Curtain.”

Sackman was the special agent in charge of the VA’s Criminal Investigation Division’s Northeast Field Office, chasing crime from West Virginia to Maine. A maverick, he bucked the system and brought two prolific serial killers—Michael Swango and Kristen Gilbert—to justice. Both murdered veterans at VA hospitals.

“There have been plenty of hospital serial killers in the private sector throughout history,” Sackman writes. “But it sticks in my mind that a VA medical center is a perfect hunting ground. The VA facilities are filled with long-term care patients with serious debilitating illnesses,” making them easy marks for medical serial killers. Often, patients are isolated and vulnerable, with visits from family members few and far between.

“Behind the Murder Curtain,” co-authored with Michael Vecchione and Jerry Schmetterer, unfolds like a police procedural, taking us through the Swango and Gilbert cases. The authors make quick stops at other cases and offer a smart program for spotting trouble.
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Questions About FBI Surround Case of Murdered Police Chief

Greg Adams

On a December day in a small Pennsylvania town in 1980, a fugitive jewel thief murdered the police chief and vanished. The thief was a New England career criminal named Donald Eugene Webb. The chief was Gregory Patrick Adams, a former Marine and city cop who took the Pennsylvania job in search of quieter times. Webb went on the FBI’s “Ten Most Wanted” list and a thirty-seven-year manhunt of sorts ensued.

Last year, it ended. Webb’s remains were dug up in his wife’s back yard.

Her name is Lillian Webb. According to the FBI, her husband died around 1999 and Lillian buried him behind her home in North Dartmouth, Massachusetts, out by an old shed.

He remained there until 2017, when mysterious developments suddenly breathed new life into the case. But the biggest mystery of all is how Donald Webb eluded capture for nineteen years.

Documents reviewed by Judicial Watch suggest that most of the time—perhaps all of the time—he was living with Lillian. The documents raise new questions about Webb, the FBI, and the murder of Chief Adams. How did one of America’s most-wanted fugitives hide out for nearly two decades in his own home, right under the FBI’s nose?

FALL RIVER GANG

By the time of the Adams murder, Webb had a rap sheet going back twenty-five years. Law enforcement sources say he was an associate of the Fall River Gang, a loose confederation of criminals based in southeastern Massachusetts and specializing in burglaries of high-end homes and jewelry stores. The stolen goods allegedly were fenced through New England’s dominant Mafia group, the Patriarca crime family. But much remains murky about the true shape of the Fall River Gang and Webb’s Patriarca connection.

Investigators believe Webb was in tiny Saxonburg, Pennsylvania, casing a jewelry store when something caught Chief Adams’s attention. The chief, in his patrol car, pulled up to Webb’s rented white Mercury Cougar in an Agway parking lot. Webb had done prison time and was wanted in New York for burglary. He had told associates he wasn’t going back to jail.

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Legal Update: “What is the NYPD hiding?”

This is a story of a cop and the case that haunts him. Forty-six years ago, NYPD Patrolman Phillip Cardillo was gunned down inside Louis Farrakhan’s Nation of Islam Mosque #7 in Harlem. After a lengthy investigation strewn with roadblocks (detailed by Judicial Watch here and here) Detective Randy Jurgensen made an arrest. But evidence had disappeared, the crime scene had been erased, and a special prosecutor later determined there was “a concerted and orchestrated effort” by senior members of the NYPD to impede the murder investigation.

Jurgensen—a legendary NYPD detective who helped put away five cop-killers—believes he got the right man. Much of the law-enforcement community in New York agrees with him. But the trial of Lewis 17X Dupree resulted in a hung jury. At a second trial, he was acquitted. Jurgensen did not quit seeking answers. Years later, after his retirement from the NYPD, he wrote a book, Circle of Six, raising important questions about the case.

Following publication of Circle of Six, a prosecutor in the Dupree case, James Harmon, wrote a letter to then-Police Commissioner Ray Kelly. The letter was included in a paperback edition of the book. Harmon wrote: “Was there a conspiracy to lure police officers into the Mosque as part of a planned ambush, the purpose of which was to kill them?”

Cardillo and his partner had been lured to the mosque by a fake 10-13 “officer-in-distress call.” At the mosque, the front doors, usually manned by a Nation of Islam security detail, were open and unguarded. The officers rushed in.

Harmon also raised important questions about the role of the FBI in the incident. Police officers had “reported contact with unidentified FBI agents in the hours immediately following” the Cardillo shooting, Harmon wrote. He added, “In my long experience in law enforcement, this FBI presence was highly unusual and remains unexplained.”

Jurgensen’s book and Harmon’s letter led Kelly to re-open the Cardillo case in 2006, instructing the NYPD Major Case Squad to take a fresh look.

This was a high-level move. A cop was dead and no one had served a day in jail for the crime. The police commissioner himself was ordering a new look at the crime. Jurgensen and Harmon had several meetings with senior NYPD officials about the case, including Kelly.

Jurgensen assisted the Major Case investigation. He turned over his extensive personal files. He provided his copy of the 10-13 tape. He unearthed a secret NYPD report on the case, the so-called “Blue Book.”

NYPD officials told Jurgensen that the case material he provided, including the 10-13 tape, would be returned to him. They told him a final report on the murder was being prepared. They told him that copies of the report would be provided to him, the Cardillo family, and the Manhattan District Attorney.

None of that happened.

In 2011, Judicial Watch opened its own investigation. By then, according to several police sources, the Major Case Squad investigation had been closed.

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The NYPD’s Despicable Lie

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Saturday marked the 46th anniversary of the shooting of NYPD Patrolman Phillip Cardillo inside Louis Farrakhan’s Nation of Islam mosque in Harlem. A conspiracy of cover-up and silence immediately surrounded the case. Decades of controversy followed. No one served a day in jail for the murder. In March, Judicial Watch sued the New York City Police Department for records in the case.

The New York Daily News asked Saturday: “Could the secret to unraveling the Cardillo murder be in the withheld records of the NYPD? The Judicial Watch lawsuit may be the last chance to get to the bottom of New York’s most infamous cold-case killing.” The op-ed was written by legendary NYPD detective Randy Jurgensen, who literally wrote the book on the case, “Circle of Six.”

46 years after the Cardillo shooting, Jurgensen notes, “the NYPD won’t release investigative files, a promised report and an audio tape, preposterously claiming an investigation is still ‘active and ongoing.’” A ruling in the case is expected soon. Legal action also is moving forward in a parallel case against the FBI in Washington. Read more about Judicial Watch’s legal moves here. Read more about the Judicial Watch investigation into the Cardillo killing here.

The Cardillo murder has been pursued across the decades because of an abiding sense of injustice: that law-enforcement and politicians conspired to make the case go away; that evidence vanished; that the shooter was arrested and acquitted due to the earlier cover-up. The injustice continues with the NYPD’s despicable lie that there is today, 46 years later, an “active and ongoing” investigation.

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Clinton, Comey, Uranium One: Who Is John W. Huber?

Widespread head-scratching has followed Attorney General Jeff Sessions’ recent disclosure that U.S. Attorney John W. Huber is leading an investigation into 2016 election controversies. In a March 29 letter to Republican committee chairmen, Mr. Sessions said that Mr. Huber, the U. S. Attorney for Utah, had been appointed to “evaluate certain issues” raised by the GOP. He did not say which issues, but there are plenty.

In a July 27, 2017 letter, GOP leaders had called on Mr. Sessions to “appoint a second special counsel to investigate a plethora of matters connected to the 2016 election and its aftermath.” These included actions by Hillary Clinton, James Comey, Loretta Lynch and others, email controversies, mishandling of classified information, Fusion GPS and the Steele Dossier, FISA warrants, wire taps, leaks, grand juries, the Clinton Foundation and the Uranium One deal.

Mr. Sessions instead appointed Mr. Huber, “an experienced federal prosecutor,” and left the door open to a special counsel. Mr. Sessions noted that Mr. Huber “will make recommendations as to whether any matters not currently under investigation should be opened, whether any matters currently under investigation require further resources, or whether any matters merit the appointment of a Special Counsel.”

Translation: Mr. Huber is investigating the investigations, not the underlying allegations.

Mr. Huber was appointed Assistant U.S. Attorney in Utah in 2002. He was named U.S. Attorney in 2015 by Barack Obama. Mr. Huber has an important backer in Utah’s senior senator, Orrin Hatch. After President Trump requested the resignations of all sitting U.S. Attorneys, Mr. Sessions kept Mr. Huber alive with an interim appointment under the Federal Vacancies Act, until the president could be persuaded to re-nominate him. He was confirmed a second time for the post in August.

It’s a truism of law enforcement that if you want to pursue high-level political corruption, get yourself a junkyard dog—a strong prosecutor, good in a fight. Hickman Ewing Jr.—the former U.S. Attorney for the Western District of Tennessee and later the Whitewater Deputy Independent Counsel—comes to mind. Mr. Ewing had a long track record of pursuing political corruption before Kenneth Starr tapped him for the Whitewater probe. The Office of U.S. Attorney in Utah, by contrast, has been toothless. Mr. Huber has not been implicated in any wrongdoing, but for the last three years it has been his shop and his responsibility. Before that, it was his training ground.

In November, for example, a federal judge dismissed the last charges against Terry Diehl, a powerful Utah developer and former Utah Transit Authority board member. The government was widely seen as bungling the case. The Salt Lake Tribune noted that Diehl, “a well-known developer with friends in high places — including [Utah] House Speaker Greg Hughes, R-Draper — once stood charged with 14 felony counts that stemmed from allegations that he lied about or hid assets as part of a 2012 bankruptcy. Prosecutors had whittled the case down three times since early October, dropping counts of concealment and tax evasion.” Prosecutors acknowledged “missteps” to the newspaper, including getting wrong the amount of taxes Diehl allegedly did not pay.

Mr. Huber’s office also lost a 2017 case against real-estate mogul Rick Koerber, charged with running a multi-million-dollar Ponzi scheme. The case—the government’s second try—ended in a mistrial. A judge threw out an earlier case. The government will try again in September.

But the Rosetta Stone for understanding Utah’s corruption problems may be the sprawling saga of John Swallow and Mark Shurtleff, two former Utah attorneys general charged with a multitude of corruption charges. The case gripped the state for years. Mr. Huber’s office recused itself in 2013 from the investigations, transferring the case to Colorado. Later, the Justice Department declined to charge either man and Utah state prosecutors took over. Swallow was acquitted on all counts last year and the charges against Shurtleff were dropped in 2016 by Davis County Attorney Troy Rawlings, who bitterly complainedabout FBI and Justice Department conduct in the case.

That’s how the game is played in Utah, locals say. Power brokers have the state wired. Mr. Huber seems like a decent man, but his tenure at the top of Utah law enforcement has been short and undistinguished. Why appoint him to such a sensitive position in Washington?

One explanation is that Mr. Sessions knows precisely who Mr. Huber is and what he wants from him. Mr. Sessions went to bat for Mr. Huber in his re-appointment as U.S. Attorney and named him vice-chair of the prestigious Attorney General’s Advisory Committee. Mr. Huber, a political survivor, knows precisely who Mr. Sessions is and what the attorney general wants from him.

Another more intriguing explanation is that Mr. Sessions needs someone who knows Utah. One part of Mr. Huber’s mandate, as outlined in the GOP letter, is the “purchase of Uranium One by the company Rosatom, whether the approval of the sale was connected to any donations to the Clinton Foundation, and what role Secretary Clinton played in the approval of the sale.”

Uranium One’s assets included significant holdings in Utah and nearby states. Prosecutors—and the media, so transfixed by the Mueller probe that they decline to look elsewhere—should follow the Uranium One money in Utah and the rest of the West. And if Mr. Huber does recommend additional investigations or a second special counsel, Mr. Sessions should get himself a junkyard dog.

 

 

Arkansas & the Clinton Connection

 

Rumors have been floating up from Little Rock for months now of a new investigation into the Clinton Foundation. John Solomon advanced the story recently in a January report for The Hill. FBI agents in the Arkansas capital, he wrote, “have taken the lead” in a new Justice Department inquiry “into whether the Clinton Foundation engaged in any pay-to-play politics or other illegal activities while Hillary Clinton served as secretary of state.” Solomon reports that the probe “may also examine whether any tax-exempt assets were converted for personal or political use and whether the foundation complied with applicable tax laws.” Main Justice also is “re-examining whether there are any unresolved issues from the closed case into Clinton’s transmission of classified information through her personal email server,” Solomon notes.

Solomon is not alone. The Wall Street Journal is tracking the story. And earlier this month, investigative journalist Peter Schweizer cryptically told SiriusXM radio that federal authorities should “convene a grand jury” in Little Rock “and let the American people look at the evidence” about the Clinton Foundation.

Judicial Watch continues to turn up new evidence of Clinton pay-to-play and mishandling of classified information. In recent months, through FOIA litigation, Judicial Watch has forced the release of more than 2,600 emails and documents from Mrs. Clinton and her associates, with more to come. The emails include evidence of Clinton Foundation donors such XL Keystone lobbyist Gordon Griffin, futures brokerage firm CME Group chairman Terrence Duffy, and an associate of Shangri La Entertainment mogul Steve Bing seeking special favors from the State Department. Read more about Judicial Watch’s pay-to-play disclosures here.

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The Russian Dossier: Enter, Sid

The strange case of the Russian dossier got even stranger this week with a new report from the Guardian raising a name from the seamy side of Clinton past. A “second Trump-Russia dossier” has been turned over to the FBI, the Guardian reported. The second dossier was compiled by Cody Shearer, who the Guardian identifies as a “a controversial political activist and former journalist who was close to the Clinton White House in the 1990s.”

That’s putting it mildly. Shearer in fact has long been linked to the sleaziest aspects of the Clinton operation, mainly through his close relationship with Clinton confidant Sidney Blumenthal. Longtime observers of the Clinton ecosystem know that when Cody appears, Sid Blumenthal is not far behind. A ceaseless schemer, Blumenthal was so offensive to the Obama White House that he was banned from an official role at Mrs. Clinton’s State Department. But that barely slowed him down. As documented by Judicial Watch and others, Blumenthal was a constant presence by Mrs. Clinton’s side during her State Department years.

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Judicial Watch Sues NYPD, FBI for Cardillo Documents

This just in:

FOR IMMEDIATE RELEASE

Contact: 202-646-5188

January 4, 2018

Judicial Watch Sues DOJ, City of NY and NYPD for Information on Unsolved Murder of a New York Policeman at Nation of Islam Mosque

New York lawsuit refutes NYPD claim that investigation into 45-year-old murder ‘remains active and ongoing’

 FOIA lawsuit raises questions of possible FBI involvement, having provoked incident with fake ‘10-13’ officer in distress phone call

 (Washington, DC) – Judicial Watch announced today that it has filed suit against the Justice Department, as well as the City of New York and the New York Police Department (NYPD), to compel these state and federal agencies to release information regarding the April 14, 1972 murder of police officer Phillip Cardillo at a mosque in Harlem. Cardillo was killed while responding to a fake “10-13” officer in distress phone call.

Judicial Watch filed a Freedom of Information Act (FOIA) lawsuit against the Department of Justice after it failed to adequately search for records responsive to Judicial Watch’s May 15 FOIA request (Judicial Watch v. U.S. Department of Justice (No. 1:17-cv-024687)). Judicial Watch seeks:

  • All records concerning the Nation of Islam Mosque #7 in Harlem, Manhattan, New York City, or the building located at 102 West 116th Street. This request includes, but is not limited to, all informant, wiretap, electronic surveillance, and physical surveillance records relevant to the Nation of Islam Mosque #7, located at 102 West 116th Street, in New York City.
  • The time frame for the request was identified as January 1, 1970 to January 1, 1973.

Judicial Watch argues that the DOJ “has violated FOIA by failing and/or refusing to employ search methods reasonably likely to lead to the discovery of records responsive to accordingly, failing and/or refusing to produce any and all non-exempt records responsive to the [FOIA] request.”

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