Military Commanders and Harassment in Canada

The Barometer had to read the article twice just to be certain that she had the facts right.  Jonathan Vance, Canada’s former chief of defense staff, entered a guilty plea to charges of obstruction of justice.

It seems that the commander (now retired) contacted one of the women who made complaints against him, Major Kellie Brennan. Mr. Vance asked her to give false statements to investigators while the investigation was ongoing.

Maj. Brennan is one of several women who came forward with complaints about then-Commander Vance’s sexual harassment.  Maj. Brennan has gone public and testified before Parliament.  During that testimony she disclosed that Mr. Vance is the father of two of her eight children.

Yes, you read that correctly.  The harassment continued through two pregnancies. Allegations of harassment are always serious.  However, some advice for victims might be to walk away and report at least after the first pregnancy.

Ian Austen, “Canada’s Ex-Military Chief Pleads Guilty in Sex Scandal,” New York Times, March 31, 2022, p. A7.

 

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Credit Suisse and Cut and Pasted Client Signatures

It is tough to believe that any banker, following the Wells Fargo debacle, would fool around with customer signatures. Nonetheless, Credit Suisse private banker, Patrice Lescaudron, admitted cutting and pasting his client’s signature to make unauthorized, high-risk stock transaction.stock bets. The client was Bidzina Ivanishvili, and Credit Suisse was ordered to pay the client $555 million. Mr. Ivanishvili sued the bank for breach of contract and fiduciary duty. However, Credit Suisse’s defense was, “Hey, we got hoodwinked too by the guy.”

However, Mr. Ivanishvili, who had invested $1 billion with the bank over a ten-year period, was able to establish that Mr. Lescaudron repeatedly broke bank rules. Managers turned a blind eye to the antics because Mr. Lescaudron brought in $25 million in annual revenue to Credit Suisse. Unfortunately, he brought very little revenue to Mr. Ivanishvili. The court awarded him the money he would have made had Mr. Lescaudron just opted for medium-risk investments — the $555 million.

The best part of the story is that Credit Suisse is appealing. Mr. Ivanishvili is shocked, shocked that Credit Suisse is still refusing to pay. Mr. Ivanishvili should have checked on Credit Suisse. The bank recently set aside additional funds for legal fees as it cleans up other messes. Julie Steinberg, “Credit Suisse Warns of Dent to Earnings From Legal Costs,” Wall Street Journal, January 26, 2022, p. B11. $545 million there. $500 million here. Pretty quick you have a billion invested in fighting legal woes or repaying clients. And this dear bank has been hauled in before Congress to explain hy it ordered clients to destroy documents about their investments at the bank. Russian oligarchs are involved in this one because there are questions about the bank’s compliance with financials sanctions on Russia. Margot Kidder, “Credit Suisse Probed Over Compliance with Sanctions,” Wall Street Journal, March 29, 2022, p. A7. After the Archegos losses of $5.5 billion, Credit Suisse lost two chief compliance officers just four months apart. The new one barely got her feet wet before she was out the door. Dylan Tokar, “Compliance Head Quits Swiss Bank,” Wall Street Journal, July 13, 2021, p. B9.

A tip for the new chief compliance officer: Pay attention to the enforcement processes and sanction. And never let even top private bankers off the hook. Mr. Lescaudron was a push-the-envelope kind of guy and had a history of having breaches of bank rules ignored, glossed over, or lightly addressed. Employees don’t wake up one day and start forging their clients’ signatures. They take a descending path into illegality with tiny steps that are, well, ignored, glossed over, or lightly addressed. And, like Mr. Lescaudron, they are ignored. He was sentenced to five yers. He was released from prison in 2019 and killed himself in 2020. We worry about the small things because they ripen into BIG things, often tragic things.

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“I lied a lot.”

Tim Leissner, former Goldman Sachs partner, and the federal government’s star witness in the criminal trial of another former Goldman partner, Roger Ng.

But not to worry. Mr. Leissner assures that he is not very good at lying despite his extensive portfolio. Some examples? He showed his now estranged third wife a fake divorce decree so that she would marry him.

He used $10 million he made from the fraud (for which he has yet to be sentenced) to buy a $10 million house for a girlfriend so that she would not disclose what he was doing at work along the lines of fraud. It was unclear which girlfriend, potential wife, or ex-wife got the house. Matthew Goldstein, “Case Hinges On a Banker Who’s Lied,” New York Times, March 14, 2022, p. B1. If I were the girlfriend/wife/ex-, I’d check the title on that house.

There were six days of cross-examination of this righteous dude.

Ah, but not to worry about the impact on the case. A legal ethics expert says that you can have “a horrible person,” a “serial liar,” but you can persuade the jury that the witness has had a “come-to-Jesus moment.” Wow — not sure that will work. Mr. Leissner has spent too much time in the devil’s workshop.

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“May I Disinherit My Right-Wing Daughters?”

Now there’s a loving mother for you. This was a question posed to the New York Times resident ethicist in Sunday’s magazine (March 6, 2022), p. 14. The Ethicist responded that it was not ethical to change the will because you are angry. However, it would be oethical to change the will because “people with their views are doing a great deal of harm.”

There is a great deal of harm coming from the other side — partial-birth abortion tugs at the heartstrings of those malevolent right-wingers. Be that as it may, most parents come to the realization (most later rather than sooner) that they raise children not to control them as adults (or their views). Heaven help us, as it were, if we decide to attempt control from the grave. The mother added, “I am distraught by this and have considered changing my will and leaving it all to a good cause.”

My dear lady, your children, with all their flaws and misguided views (from your perspective), are still a good cause. Love them for who they are.

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Half-Truths: Are They a Form of Lying?

In his state-of-the-union address, President Biden said that he was “the only President ever to cut the deficit by more than one trillion dollars in a single year.” Well, that would be true. The bragging rights belong to this president EXCEPT:

1. That claim will not be true if Mr. Biden passes his “Build Back Better” spending extravaganza, something that he say must be passed.
2. That claim does not cover COVID relief spending, something he asked for again for 2022.
3. That claim does not take into account that the reduction is based on the 2020 budget that included $2 trillion in COVID relief.
4. In December 2020, Congress added another $900 million to that 2020 budget.
5. In March 2021, Congress added another $2 trillion.

If the deficit is indeed declining, it is because the extraordinary COVID spending is not in Mr. Biden’s budget proposal — a total of $4.9 trillion in reductions. Despite all of those reductions, the deficit will still be $1 trillion. And that pesky deficit will remain at that level for a decade. Also, that $1 trillion deficit is actually higher than it was in 2019– the deficit that year was $984 billion and that was a normal year. No COVID spending in that year.

So, the bragging rights, even without the deficit additions of BBB spending, are actually that the deficit has increased, not decreased. It takes some math and detail to understand that, Nonetheless, President Biden has set his claim for bragging rights that are misleading. No one reads the footnotes on thesesclaims. Heck, no one writes the footnotes on these claims.(with the exception of the Wall Street Journal “Joe Biden Tells A Budget Whopper,” March 3, 2022, p. A20) that did the computations (except for the 2019 deficit) No one knows these claims except as claims that sound pretty good. If a claim is false and no one notices or explains why, is it still a lie? In the mysterious world of government accounting we are back to the great philosophical question, “If a tree falls in the woods and no one is there to hear it, does it still make a noise?”

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Medina Spirit Stripped of Kentucky Derby Win, Posthumously

Medina Spirit, a Bob-Baffert-trained-horse, won the Kentucky Derby in May 2021, tested positive for betamethasone (a corticosteroid injected in the joints) after the race, died of a heart attack in December 2021, and was stripped of the Derby title in February 2022. Fast start, fast finish. Oh, the ignominy of it all. For Baffert more so than the horse. These pages have offered insights on Bob Baffert and his history with horses and excuses when his horses test positive for prohibited drugs.

RE: Medina Spirit, Mr. Baffert says that they applied a cream for a skin rash, that there was no injection. In another race, one of the stable guys had used arthritis cream for his own ailments and the horse had it in its system via the touch of the trainer’s hands. In yet another race, Baffert said the prohibited drug was in the feed.

Appeals on Medina Spirit (now aptly named) are planned. Pity the poor horse betters. Those who went with Medina Spirit keep their winnings. Those who bet on Mandaloun (the second-placer elevated to first place now) still have their losing tickets, but a class-action lawsuit is pending. Hell hath no fury like mint-julepped race fans cheated out of a winning ticket. Their hats and plaid pants may give the appearance of fools, but they are not.Bookies beware.

Meanwhile, criminal trials surrounding the trainer for also disqualified 2019 Derby winner are pending. Just charges of secretly doping horses to to beat the beting public. Bettors beware. The run for the roses is now held in the underworld.

What a sport!

See Joe Drape, “Medina Spirit Is Stripped of Victory in the Kentucky Derby,” New York Times, February 22, 2022, p. B10.

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“Flash-Mob Thieves Use Apps to Plan”

Wall Street Journal, December 14, 2021. One has to wonder where all the cancel folks of social media were on this one. Note to the self-righteous on new screening criteria: The site will not tolerate advance planning of group theft.

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“I knew it was illegal. I wanted this to be done for Goldman Sachs. I wanted to be a hero at Goldman Sachs.”

Timothy Leissner, former Goldman Sachs partner, in his testimony at the trial of another former Goldman Sachs partner, Roger Ng. Ng and Leissner were both charged with conspiracy to launder money and to violate the Foreign Corrupt Practices Act in securing a $6.5 billion bond offering for Goldman Sachs. The two worked with Jho Lo on a bond offering for iMalaysia Development Bhd (IMBD), a state-controlled economic development company. Goldman got $600 million. Leissner entered a guilty plea and turned state’s evidence against Ng, a friend. What a company! James Fanelli, “Ex=Goldman Partner Spells Out Scheme,” Wall Street Journal, February 17, 2022p. B10.

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A Mess of an Olympics

Journalists got dragged off camera. NBC pulled journalist who mentioned the Uyghurs. And as for 15-year-old Russian skater, Kamila Valieva, well, that initial quadruple turned into the quadruple that roared. Her drug test came back positive for a banned heart medication. Generally, when athletes test positive for banned substances, they cannot claim their win nor can they compete. Disqualification is the penalty. How the drugs got into her system is not the issue. Whether she took them voluntarily or aggressive coaches foisted them upon her, the penalty must be the same to prevent both athletes and coaches from crossing that line into performance enhancing drugs.

However, the bumbling IOC decided, with Russia shelling kindergartens in Ukraine, that now was not a good time to banish that country’s athletes. So, the young skater could continue competing but there would not be an awards ceremony if she won. In what universe was this a good idea let alone a means for upholding rules and standards? Now that the young girl blew her performance in her final competition and had a crying jag, the IOC is outraged at her treatment.

The mental gymnastics, as it were (of Olympic proportion), are stunning. Is there a clear thinker anywhere in Beijing? Nope. These Olympics were ill-fated when the IOC allowed the CCP to host the 2022 games. The whole effort was a facade that began to develop layers of facades. Those brave ambassadors who staged a diplomatic boycott, whatever that means. Those obsequious toadies from NBC. The IOC officials creating new rules, new solutions, and new outrage at what those new things wrought. Where in the world is there principle?

Peradventure, on the tennis courts, or not on the tennis courts is more accurate. In that sport they ban athletes from competition who prefer not to put medications in their bodies. No exceptions to that requirement even when science demonstrates natural immunity affords the same or greater protection. If only Djokovic were Russian. He would have a chance to break the rules and still compete.

Politics and sports do not mix. Indeed, once you start it is a slippery slope on which a quadruple is impossible.

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“Inflation Remains Stable, Well Below Its October Peak”

Now there’s a silver-lining-in-a-cloud headline. New York Times, February 13, 2022, p. BU9. Nothing to see here, folks.The article gives reasons and ways to calm down.The pandemic caused it, quit looking at gas prices too often, and just reframe the Consumer Price Index news. Now this is real journalism — don’t report the facts, just reframe the headlines and content. Baghdad Bob and decades of dictatorships dreamed up this approach to reporting long before the New York Times decided it was time to see inflation in a whole different light. Are you going to believe your empty pockets or what the ray-of-sunshine headlines tell you at the Times? Oh, and just calm down.

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“I am saddened that some relatively junior former members of staff are facing very serious regulatory sanctions at an early point in their careers.”

Jon Holt, CEO of KPMG, UK. The “relatively junior former staff members” have been accused of forging documents and providing misleading information in their audit work of Carillion PLC, a company that went under in 2018 and Blanco Technology Group PLC, which, ;luckily for them, is still around.

Someone ought to assist Mr. Holt in his statements. This statement sounds as if he is saying, “We usually don’t have conduct like this at KPMG until they are partners.” One or two of KPMG senior partners have done time for their conduct. Now they are losing the junior staffers too.

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Microsoft to Acquire Activision for $75 Billion: Birds of a Feather and All

Bill Gates, who left the Microsoft board while it was looking into his conduct involving female employees at Microsoft, Cascade (his investment firm), and the Bill and Melinda Gates Foundation. The allegations against him involve comments and advances, including e-mail invitations to dinner. He must have picked up on Activision’s similar problems with its workplace. At Activision, the EEOC is dealing with a complaint that women at the company were groped and were the subjects of comments and advances. Gatesmust have looked over Activision and decided, “This is my kind of company. I’ll take it.” Allysia Finley, “How Did Activision Pass the ESG Test?” Wall Street Journal. Bill’s kind of people.

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Walmart: Under the Regulatory Microscope of the Chinese Government

Just days after its dustup over sourcing of goods from Xinjiang (the “alleged” area of Uyghur labor camps), Walmart received notice of 19 vulnerabilities in its internet system. Ergo, Walmart had violated China’s cybersecurity laws and was apparently too slow to fix the flaws. The Chinese government police records show that Walmart had been punished “in accordance with relevant laws.” Liza Lin, “Walmart Cited Over Cybersecurity,” Wall Street Journal, January 7, 2022 p. B1.

For those of you keeping score, Walmart has experienced boycotts, social media tongue-lashings, and now punishments “in accordance with relevant laws.” Companies operating in China face a difficult choice: Comply with U.S. law and suffer the losses, penalties, and social media attacks or ignore the U.S. laws and remain a happy and beloved retailer in China.Tthere is no easy way out of that dilemma. But the root cause analysis is worth noting: When companies evaluate whether to do business in a country with billions of potential consumers, the nature of the government there matters. Totalitarians are no respecters of persons or corporations. They have some fairly large thumbs for squashing both those in labor camps and corporations that address those labor camps. Even when corporations are between a rock and a hard place. The problem is the companies never trotted down the “What if?” path to explore the harsh side of doing business with Communists. Walmart is now in its own labor camp. The government is forcing behaviors on Walmart. The singular difference is that Walmart has the opportunity to escape. Does it have the courage to do so?

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“I think there’s been a lot of backsliding on ethics.”

Bryson B. Morgan, former investigative counsel for the Office of Congressional Ethics. The New York Times is reporting that ethics inquiries are increasingly met with uncooperative lawmakers. The targets of the ethics investigation simply refuse to turn over requested documents. Luke Broadwater, “Ethics Inquiries Are Increasingly Met by Uncooperative Lawmakers,” New York Times, December 29, 2021, p. A17.

The largest area for Congressional Ethics Office investigations is violations of the STOCK Act (Stop Trading on Congressional Knowledge Act). The STOCK Act is a federal law that requires members to report stock trades within 45 days of their transactions. Yes, Congress passed the act, but Congress also ignores the act. Business Insider found that 52 members of Congress violated the act in 2021. The fines are minimal — $200 — and members have a 30-day grace period to report after being reminded. Still, the members see it as a no-big-deal kind of thing. Let’s see — you know which industries are going to get slammed with new restrictions. Positioning yourself short and timing things along with the legislative schedule is not bad work if you can get it.

Speaker Nancy Pelosi is having none of this ethics stuff. She does not agree on any prohibitions on member stock activity or failure to report. “We’re a free-market economy. They should be able to participate in that.” Mrs. Kettle does not want to point a finger at all the pots who would then clank loudly about all the speaker’s investment opportunities and coups.

Ah, the free market for me, but not for thee, all you insider traders.

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