Sunday, February 22, 2009

The Bank Nationalization Begins In The US

U.S. Eyes Large Stake in Citi
Taxpayers Could Own Up to 40% of Bank's Common Stock, Diluting Value of Shares
Comments (78)

Citigroup Inc. is in talks with federal officials that could result in the U.S. government substantially expanding its ownership of the struggling bank, according to people familiar with the situation.

While the discussions could fall apart, the government could wind up holding as much as 40% of Citigroup's common stock. Bank executives hope the stake will be closer to 25%, these people said.

Any such move would give federal officials far greater influence over one of the world's largest financial institutions. Citigroup has proposed the plan to its regulators. The Obama administration hasn't indicated if it supports the plan, according to people with knowledge of the talks.


Grip on Bank Would Tighten If Deal Is Set
When federal officials began pumping capital into U.S. banks last October, few experts would have predicted that the government would soon be wrestling with the possibility of taking voting control of large financial institutions. The potential move at Citigroup would give the government its biggest ownership of a financial-services company since the September bailout of insurer American International Group Inc., which left taxpayers with an 80% stake.

The talks reflect a growing fear that Citigroup and other big U.S. banks could be overwhelmed by losses amid the recession and housing crisis. Last week, Citigroup's share price fell below $2 to an 18-year low. Bank executives increasingly believe that the government needs to take a larger ownership stake in the institution to stop the slide.

Under the scenario being considered, a substantial chunk of the $45 billion in preferred shares held by the government would convert into common stock, people familiar with the matter said. The government obtained those shares, equivalent to a 7.8% stake, in return for pumping capital into Citigroup.

The move wouldn't cost taxpayers additional money, but other Citigroup shareholders would see their stock diluted. A larger ownership stake by the government could fuel speculation that other troubled banks will line up for similar agreements.

Bank of America Corp. said Sunday that it isn't discussing a larger ownership stake for the government. "There are no talks right now over that issue," said Bank of America spokesman Robert Stickler. "We see no reason to do that. We believe the goal of public policy should be to attract private capital into the bank, not to discourage it."

Shareholders' Fears
Citigroup's low share price already reflects, at least in part, a fear among shareholders that their stakes might be further diluted. A government move to take a big stake could backfire, potentially spurring investors to flee other banks, even healthier ones.

There's no universal agreement on what constitutes nationalization of a bank. In the U.K., the government already owns 43% of Lloyds Banking Group PLC, and last week moved to increase its ownership of Royal Bank of Scotland Group PLC to 70% from 58%. Those two banks have been classified as "public-sector entities," and as much as £1.5 trillion ($2.136 trillion) of their liabilities have been moved over to the country's balance sheet.

The White House has knocked down recent speculation that the government is preparing to nationalize several large U.S. banks.

The U.S.'s intentions with Citigroup remain unclear. For instance, it's not yet known whether the government would seek a stronger hand in the New York company's management or day-to-day operations.

As part of the plan, Citigroup officials hope to persuade private investors that have bought preferred shares -- such as the Government of Singapore Investment Corp., Abu Dhabi Investment Authority and Kuwait Investment Authority -- to follow the government's lead in converting some of those stakes into common stock, according to people familiar with the matter. That would further bolster an obscure but increasingly pivotal measure of banks' capital known as "tangible common equity," or TCE.

The TCE measurement, one of several gauges of a bank's financial strength, gives weight to common shares -- thus the interest in converting preferred shares to common stock.

Details of the rescue remain in flux. Key questions, such as the price at which the government will convert its preferred stock into common shares, haven't been resolved.

And it's possible that other options will emerge to stabilize the company. For example, the Obama administration could decide to sit tight until the results of several new "stress tests" on major banks -- broad examinations of financial health now being mandated -- are known in a couple months, one official said.

If the deal gets nailed down, it will be Washington's third effort to aid Citigroup since last fall. In October, the Treasury Department put a total of $125 billion into eight giant financial institutions, including $25 billion to Citigroup, in exchange for preferred shares and warrants to buy stock.

Then, shortly before Thanksgiving, the government agreed to infuse another $20 billion into Citigroup as its stock tumbled. It also agreed to protect the banking company against most losses on a $301 billion pool of assets.

Among the question marks looming over the current discussions is the future of Citigroup Chief Executive Vikram Pandit and the company's board.

Pandit's Future
In November, as part of the sweeping rescue, federal officials privately discussed the possibility of replacing Mr. Pandit, who became CEO in December 2007. But the government decided not to remove him, in large part due to a dearth of qualified replacements. Still, top government officials warned Mr. Pandit that a third trip to the taxpayer trough would probably cost him his job.

However, since the latest talks don't involve the possibility of Citigroup receiving additional government capital, it isn't clear whether Mr. Pandit's job is on the line. A Citigroup spokeswoman declined to comment.

Federal officials have been pushing Citigroup executives and the board's lead independent director, Richard Parsons, to shake up the 15-member board. Already, three directors, including former Treasury Secretary Robert Rubin, have announced plans to step down this spring.

There are at least two catalysts for the recent talks with the government.

First, Citigroup's shares have fallen to historic lows. That doesn't pose a direct threat to the company's stability. But if it spooks customers into pulling their business, that could push the bank toward a dangerous downward spiral.

Second, bank regulators this week will start performing their battery of stress tests at the nation's largest banks as part of the Obama administration's industry-bailout plan. As part of those tests, the Federal Reserve is expected to dwell on the TCE measurement as a gauge of bank health, according to people familiar with the matter.

The crisis is triggering a deep re-examination of the way bank health is measured in the U.S. financial system. This complex exercise boils down to calculating various ratios of capital to a bank's total assets.

Until recently, TCE -- essentially a gauge of what common shareholders would get if an institution were dissolved -- has been one of the less prominent ways to measure a bank's vigor. TCE is also among the most conservative measures of financial health.

Bankers and regulators generally prefer to use what is known as "Tier 1" ratio of a bank's capital adequacy. It takes into account equity other than common stock. By Tier 1 measurements, most big banks, including Citigroup, appear healthy. Citigroup's Tier 1 ratio is 11.8%, well above the level needed to be classified as well-capitalized.

By contrast, most banks' TCE ratios indicate severe weakness. Citigroup's TCE ratio stood at about 1.5% of assets at Dec. 31, well below the 3% level that investors regard as safe.

The regulators' new focus on TCE represents an important shift. The government's recent injections into hundreds of institutions were predicated on the idea that Tier 1 was key. Because the investments weren't in the form of common stock, they didn't affect the companies' TCE ratios.

—Dan Fitzpatrick, Deborah Solomon and Damian Paletta contributed to this article.
Write to David Enrich at and Monica Langley at

Iran's First Nuclear Plant Goes On Line Wednesday

TEHRAN, Iran — Iran's first nuclear plant will begin long-delayed pilot operations on Wednesday, the state atomic energy agency said.

A nuclear official in Russia, which is helping build the plant, however, said no major milestone is expected on that day.

"The pilot stage operation of the power plant will start on Wednesday," Iranian atomic agency spokesman Mohsen Delaviz told the state news agency on Sunday.

He added that the preliminary phase will take place during a visit by Sergei Kiriyenko, the head of Russia's state nuclear agency.

The long-awaited 1,000-megawatt light-water reactor, which was built in the southern Iranian port of Bushehr with the help of Russia under a $1 billion contract, was previously scheduled to become operational in fall 2008. Some 700 Iranian engineers were trained in Russia to operate the power plant.

Rosatom spokesman Sergei Novikov, however, said no major milestone in the preparations for Bushehr's start-up is expected during Kiriyenko's visit.

Novikov said that Rosatom expects it to be a "just a working visit" and that as before, the reactor's physical start-up is expected by the end of the year. "Everything is on schedule," he told The Associated Press.

"It is a regular meeting on the site, with Russians and the Iranian organizations which are working on the project," Novikov said of Wednesday's event.

Story continues below

He said he could not be more specific about when the reactor could be switched on, citing uncertainty about the process of integrating what has been built recently and the existing facilities at the site.

Novikov said it was possible the "pilot stage operation," described by Delaviz, could refer to the point when the plant begins to generate electricity for its own limited use during the "pre-commissioning" period, which he said is already under way. This generation normally occurs a few months before the reactor's start-up, he said.

The plant dates backs to 1974, when Iran signed an agreement to build the reactor with the German company Siemens, which withdrew from the project after 1979 Islamic revolution toppled the pro-Western Shah Mohammad Reza Pahlavi.

In 1992, Iran signed an agreement with Russia to complete the project and work began on it in 1995.

The reactor was supposed to be completed by 1999 but has been plagued by delays.

The U.S. has long opposed the deal, citing concerns that it could help Tehran develop nuclear weapons, but it softened its position after Iran agreed to return spent the nuclear fuel from the reactor to Russia _ a measure aimed to ensure it doesn't extract plutonium to make atomic bombs.

Russia says there is no evidence that Iran is seeking nuclear weapons and has joined China in weakening Western-backed sanctions in the U.N. Security Council, arguing that punishing Tehran too harshly for its nuclear activities would be counterproductive.

The U.S. and its allies accuse Iran of using its nuclear program as a cover for weapons development. Iran has denied the claim, saying its uranium enrichment program is aimed at generating electricity.

The U.N. Security Council has passed three sets of sanctions against Iran over its uranium enrichment program, which can be used to produce both nuclear fuel and the material for weapons.

The Bushehr plant will use enriched uranium imported from Russia, rather than domestically produced fuel. Fuel deliveries began in 2007.

Tehran also plans to build a 360-megawatt nuclear power plant in Darkhovin, in the southwestern Khuzestan province that would use locally produced enriched uranium.


Associated Press Writer Steve Gutterman contributed to this report from Moscow.

A South African Newspaper Praises Montreal In The Winter

Celebrate the bright side of winter in Montreal
February 19 2009
By Sarah Barrell

Montrealers, having made it to midwinter, congratulate themselves with the High Lights Festival, an 11-day arts and culture event that this year celebrates its 10th anniversary with a gala line-up.

The city is famed for high-profile summer festivals – such as the Jazz Festival and Just for Laughs – but sub-zero temperatures and banks of snow don't bring life, cultural or otherwise, to a halt.

Until March 1 exhibitions, shows, street parades, and concerts take place across the city, including an "all-nighter" on 28 February when cultural venues stay open for 24 hours.

If the thought of such blistering winter weather gives you cold feet, take comfort in Montreal's "underground city" a comprehensive 32km labyrinth of well-heated tunnels, malls and subway stations.

And there are some truly great restaurants; a diverse and ever-changing ethnic population shapes Montreal's vibrant dining scene. The gourmet element of this month's festival will see more than 30 top chefs flown in from Paris and paired up with local restaurateurs to provide warming eats and winter treats.

Don't miss ...

Its wooded summit offers sparkling white panoramic views Mont Royal, the mountain around which the city is centred, doubles as an outdoor playground, come sun or snow. In the winter its lakes become skating rinks, its slopes toboggan runs and its wooded summit offers sparkling white panoramic views.
Notre Dame Basilica. In a city founded by the church, visitors are not short of historic places of worship to visit, but Montreal's most impressive holy site is this vast masterpiece of Gothic Revival architecture which looms over the lovely cobbled streets of Old Montreal; just one of the stellar sights of the pretty old town.

The Museum of Archaeology and History. In the old town, on the site where Montreal was founded by the French in 1642, it traces the city's past with hi-tech exhibits and excavations.

The Musée Beaux Arts, with its encyclopaedic collection of North American and international fine arts. Expansion work has begun on a new pavilion dedicated to French colonial art, and to convert the beautiful Romanesque Revival church next door into a concert hall.

Atwater Market, a fabulous 1930s covered market selling local farmers' produce, meats and baked goods, just a stone's throw from the new foodie hub of Little Burgundy (see below).


Little Burgundy

Converted warehouses and new-builds have become the norm in this neighbourhood Little Burgundy, whose colourful terraced houses were once home to Irish dockworkers, has been undergoing gentrification for some years now. Converted warehouses and new-builds have become the norm in this neighbourhood on the Lachine Canal.
But alongside the shops that give its hub, rue Notre-Dame, the nickname Antique Alley, new design boutiques, delis and restaurants are popping up. Try McKiernan, the latest offering from Montreal chef and restaurant impresario Fred Morin. This teeny, playfully rustic wine bar and luncheonette is a great place to come for cosy evening drinks bolstered by small but hearty bites.


A flash new dining spot called DNA has opened in Old Montreal headed by Derek Dammann, the original head chef at Jamie Oliver's Fifteen restaurant in London. This innovative west-coast Canadian serves up his own handmade charcuterie, cheeses and refined rustic Italian cuisine; experimental but very tasty and lots of fun.

Can't get a table? Kill time in the buzzy lounge bar. The decor may be a tad too retro 1980s but, like the food, the creative cocktails are most definitely "du jour".

Angus Shops

Montreal's Angus Shops were opened by the Canadian Pacific Railway in 1902 to service its locomotives and by the Second World War some 12 000 people worked in the yards, with residential neighbourhoods growing up around the site.

It closed in the 1970s and was something of a wasteland until recent redevelopment brought new housing, shops, smart offices and, now, an architecturally stunning gym, Studio Locomotion, slotted into the original shell of this vast building.

Come here for yoga, pilates or a state-of-the-art workout and don't miss the little exhibitions by local artists and photographs of the rail yard buildings through the ages.

Jenx & Cie

Run by an expat Scot, this shop in the hipster enclave of Mile End sells stylish T-shirts printed with icons and expressions unique to Montreal, such as the neon Five Roses Flour sign that tops the Ogilvie flour mill in the Old Port, or an abstract of the Cubist-looking housing complex designed by architect Moshe Safdie, for the 1967 Expo.

My favourite is a shirt that reads "tabarnac", an incomparable Montreal expletive derived from the religious word "tabernacle".

Quartier des Spectacles

This downtown district, where most of Montreal's festivals take place, is being regenerated to the tune of $120 million (R1.74 billion). Some may bemoan the loss of certain red-light destinations but by 2012 lights of all colours will shine under a project to illuminate the façades of some 30 arts venues.

A new Westin hotel is due to open in May in an old newspaper press building.

Insider's secret:

François Perre is a television news director for the Canadian Broadcasting Corporation.

"Atwater might be the Montreal market icon but, for me, the Jean-Talon Market is the best place in town for food shopping. And it's so much more than that.

Deer burger, fresh calamari, foie gras or maple syrup cakes – the endless food stalls are the perfect place for a quick bite.

This place is also my favourite Sunday destination; a hot spot for Montrealers seeking an easy lunch and a chance to bump into friends."

Further information from Montreal tourism.

Get your skates on: In winter the Old Port of Montreal becomes a skating rink. Photo by:
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Saturday, February 21, 2009

The Lavish Lifestyle Of Sir Allan Stanford

Court papers lift lid on Stanford’s lifestyle
By Michael Peel and Megan Murphy in London and Stacy-Marie Ishmael in New York
Published: February 20 2009 19:19 | Last updated: February 20 2009 21:56
The lavish lifestyle enjoyed by Sir Allen Stanford, the Texas billionaire charged by US financial regulators with “massive” investment fraud, has been laid bare by court documents from two years ago that emerged on Friday.

A $10m Florida mansion, bills of up to $75,000 for Christmas presents and childrens’ holidays, and a $100m fleet of private jets topped a list of Sir Allen’s outgoings and assets in the documents obtained by the Financial Times from a 2007 court case.

Details of his lifestyle emerged as the Federal Bureau of Investigation continued its probe into the billionaire’s affairs and allegations that his Antigua-based Stanford International Bank was at the centre of an $8bn fraud that may have drawn in tens of thousands of investors.

The criminal inquiry by the FBI and justice department is expected to resemble that of Enron seven years ago, when a special taskforce was formed to investigate allegations of criminal behaviour at the Houston-based energy company.

Sir Allen and two co-defendants had surrendered their passports to the US authorities, the Securities and Exchange Commission said on Friday.

A law firm representing 100 Stanford clients filed a civil lawsuit in Texas accusing the billionaire of fraud, conspiracy and breach of contract. It is thought to be the first such action. James A. Dunlap Jr and Associates LLC, a Georgia firm, filed its suit on behalf of a Colorado charity.

In London, the England and Wales Cricket Board said it was ending all contracts with the Stanford Financial Group, including a planned four-country tournament in England due in May.

The 2007 court case against Sir Allen was brought by a woman who claims to be the mother of two children by him. The documents detailed personal expenditure ranging from a $100,000 a week yacht to $25,000 a month rent for a Florida home.

In the paternity suit, Louise Sage Stanford said the family once lived together in a $10m mansion known as the Wackenhut Castle after its builder, the former FBI agent and private security tycoon George Wackenhut. Her claims – admitted by Sir Allen – included his chartering of the yacht, the purchase of gifts and vacations costing from $30,000 to $75,000, and his ownership of a fleet of private jets.

Elsewhere, the reverberations from the SEC allegations continued apace.

In Houston, the court-appointed receiver for the Stanford Financial Group warned that customers of the firm’s brokerage and advisory businesses would not be able to access their cash or close their accounts while the company’s assets were being examined.

“For the foreseeable future, customers cannot use their accounts to make payments because transfers out of these accounts are frozen until the receiver is able to verify there are no legal or equitable claims against those accounts,” the receiver said in a statement.

In Antigua, the island’s financial regulators appointed separate receivers to unravel the affairs of Stanford International Bank, Sir Allen’s offshore business, and the Stanford Trust Company.

Separately, the Eastern Caribbean Central Bank - the monetary authority for eight island nations - was forced to seize control of a commercial bank owned by Sir Allen to prevent its collapse. The ECCB said it would take over the Bank of Antigua after “an unusual and substantial withdrawal of funds” during the week.

The Bank of Antigua is a separate entity from Stanford International Bank and is not mentioned in the SEC’s complaint. But the association with Sir Allen was enough to prompt hundreds of locals to demand their money back. The subsequent run on the bank had threatened to destabilise the country’s economy, banking officials said.

Officials in Venezuela have also banned the directors of Sir Allen’s banking operations there from leaving the country. The Venezuelan government took control of Stanford Bank Venezuela on Thursday.

Additional reporting by Joanna Chung, Greg Farrell and Tracy Alloway

Copyright The Financial Times Limited 2009

Stanford Bank Clients Can't Get Cash,Close Accounts, Receiver Says

Stanford Clients Can’t Get Cash, Close Accounts, Receiver Says
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By Erik Larson

Feb. 21 (Bloomberg) -- Customers of Stanford Financial Group Co.’s brokerage and advisory units were told by a court- appointed receiver overseeing as much as $50 billion in assets that they can’t take out cash or close accounts.

The customers are limited to selling securities through Stanford’s Houston headquarters until the company’s assets are accounted for, according to a statement issued yesterday on a new Web site set up by the receiver, Ralph Janvey.

“For the foreseeable future, customers cannot use their accounts to make payments because transfers out of these accounts are frozen until the receiver is able to verify there are no legal or equitable claims against those accounts,” Janvey said in the statement.

Janvey, a Dallas securities lawyer, was appointed receiver by a judge on Feb. 17, the same day U.S. regulators sued Houston billionaire R. Allen Stanford and three of his companies for allegedly running an $8 billion fraud through Antigua-based Stanford International Bank.

Janvey sent most of Stanford’s employees home and directed recipients of political contributions to return the donations, according to the statement. He also barred Stanford companies from selling certificates of deposit and directed its cash and securities be held by independent, third-party brokers.

In the statement, Janvey said he has hired outside lawyers, broker-dealer experts and experts in forensic accounting and electronic records to help him systematically gain control of Stanford’s assets.

$50 Billion

Janvey is overseeing assets under Stanford management that could be as high as $50 billion, according to the SEC complaint. The alleged fraud is limited to $8 billion of CDs issued by the Antigua-based bank.

Janvey, who is physically securing Stanford’s headquarters and other control centers, said he will eventually file with the court a list of Stanford’s assets, a list of all claims against those assets and a proposal for how to distribute the assets to creditors.

The receiver said he seeks to limit interruptions to day- to-day operations during the process and that “some operations will continue as the receiver identifies and values assets and claims against those assets.”

The Antigua-based bank, with 30,000 clients in 131 countries, was named in the lawsuit with Houston-based broker- dealer Stanford Group Co. and investment adviser Stanford Capital Management. The civil lawsuit also names chief financial officer James M. Davis and chief investment officer Laura Pendergest-Holt.

FBI agents found Stanford Feb. 19 in the Fredericksburg, Virginia, area and served him with an SEC subpoena. No criminal charges have been filed against the 58-year-old billionaire. His whereabouts were unknown after the lawsuit was filed, prompting rumors he may have fled the country.

Janvey didn’t return calls or e-mails seeking comment.

The case is Securities and Exchange Commission v. Stanford International Bank Ltd., 09-cv-00298, U.S. District Court, Northern District of Texas (Dallas).

To contact the reporter on this story: Erik Larson in New York at

Last Updated: February 21, 2009 00:01 EST

World Health Organization Says Zimbabwe Now Has 80,000 Cholera Cases

Cholera cases in Zimbabwe pass 80,000, says WHO

Press Trust Of India
New York, February 21, 2009
First Published: 15:12 IST(21/2/2009)
Last Updated: 15:13 IST(21/2/2009

The raging cholera epidemic in Zimbabwe shows no signs of abating with the UN health agency reporting that the death toll has mounted to 3,800 with more than 80,000 infected.

Some 3,760 people have now died from cholera since the outbreak first hit the besieged southern African country in August last year, with all 10 of Zimbabwe's provinces having been affected by the water-borne disease, which has spilled over to neighbouring countries, World Health Organisation (WHO) says.

The WHO reported that South Africa has been able to limit the number of fatalities to below one per cent of people infected by the deadly disease, compared to four per cent in Zimbabwe last December and between one and two per cent in recent weeks.

A high number of cholera cases have also been reported in Malawi, Mozambique and Zambia, all countries where the disease is endemic. There are 365 cholera treatment centres operating in Zimbabwe and WHO has set up a Cholera Command and Control Centre in the capital, Harare.

WHO warned that containing the rate of infection remains a significant challenge given the country's dilapidated water and sanitation infrastructure and a weak health system and its priorities now include decentralising the emergency response and strengthening social mobilisation to improve access to health services and earlier treatment.

Friday, February 20, 2009

What Finding Alien Life Could Mean For Earth

What Finding Alien Life Could Mean for Earth

By Seth Shostak
Senior Astronomer, SETI Institute
posted: 19 February 2009
8:12 am ET

Imagine that tomorrow morning scientists tell the world they've found evidence for a colony of aliens living only 35 million miles from Earth.

Do you think your neighbors would wig out - stocking up on Ramen noodles, and secluding themselves and the family schnauzer in the basement? Or do you believe most folks would simply mutter "whatever," and go back to checking out new Facebook friends?

The question's not altogether fatuous, because this kind of discovery could happen soon, thanks to the efforts of astrobiologists - researchers who study the origin, nature and distribution of life.

Although we still haven't found any biological activity elsewhere, it's hardly inconceivable that before your car gets its next oil change, robot spacecraft could discover a horde of microbes hidden beneath the Martian sands. Or maybe a few years down the road, some astrobiology experiment will stumble across alien pond scum floating in Titan's rime-frosted lakes, or pick up a radio signal beamed earthward from the star system Gliese 581.

The impact of such news would be significant and, at this point, largely unknown. So to get a better grip on how astrobiological discoveries would play out, the SETI Institute and the NASA Astrobiology Institute recently held a three-day workshop to bring together scientists, ethicists, historians, lawyers, anthropologists, and the media to consider the societal consequences of this type of research.

It's obvious that three days of conversation is thoroughly inadequate for gauging the cultural repercussions of astrobiology's wide range of research. So Margaret Race, the organizer of the event and a scientist at the SETI Institute, suggested that the forty-and-more participants simply devise a "roadmap" - a reconnaissance of the issues, if you will. What should we be studying in this field? As the traveling salesmen in The Music Man insisted, "you've got to know the territory."

Well, let me tell you: the territory is immense, and encompasses such dramatic and controversial conundrums as protecting ourselves from errant asteroids (is it OK to deflect an incoming rock just enough to keep it from pulverizing your own country but let it wallop, say, western China?) and dealing with the possibility of synthetic life, cooked up in a lab (should there be controls on such research?)

I won't even try to survey the field. But I will offer an example that will keep your brain warm if you ponder it during your ride to work. It's the scenario that began this short essay, and it will give you some flavor of the type of problems foreseen by the workshop participants.

It goes like this. As zealous followers of space research know, there's now good evidence for methane floating above the Martian landscape in several regions of the planet. Now there are only two straightforward explanations for this gas: (1) the methane is the consequence of geological activity, such as volcanism, or (2) it's produced by bacteria-like microbes under the surface. Suppose we were to discover that biology, not geology, is making the methane. This would be big news, because after centuries of imaginative speculation, we would have found real Martians.

Now consider the long-term problems this would pose. Mars, rather than being a natural place for humankind to explore and exploit, would take on a different mien. Suddenly we'd know it has natives.

So what do we do about that? Some would say, "Hey, these Martians are mindless and miniscule. We don't worry about earthworms at a building site. We won't worry about these guys." Of course, samples of this life would be made available for scientific scrutiny, but that's a different, and short-term, matter. Once the inhabitants had been cataloged and crated, Mars would be open for business. After all, isn't it human destiny to spread out? Surely we wouldn't let a messy mass of microbes interfere with our efforts to colonize the Red Planet.

Or would we? Others might say, "Look, the planet has its own ecosystem. Leave it alone. We'll turn Mars into a nature preserve." If, like NASA's Chris McKay, you think that life is special and should be encouraged, you might wish to intervene to give the indigenous Martian life a helping hand; to let it flourish in a way that's clearly beyond what it's doing now. In other words, not merely preserve the Martians' habitat, but improve it.

Those who cotton to third-way approaches might consider fencing off Mars' inhabited real estate (assuming that it doesn't lace the entire planet), and limiting human intrusion. It's unclear, of course, how well this would work, and in any case, any long-term terraforming project would change the climate in the "Martian territories" as well as the rest of this world.

So what would you do? What should humanity do, and how will it decide? And even if there was some sort of international agreement, who would be tasked with enforcing it?

These are not easy questions to answer, and the organizers of the workshop thought it worth getting a head start before the headlines arrive. Consider the reluctance of Nicolaus Copernicus to publish his work a half-millennium ago. Fearful of the reaction of religious zealots, he initially did no more than circulate a small book, without his name on it, outlining his ideas. His magnum opus, De Revolutionibus Orbeum Coelestium, hit the shelves (and, according to popular account, his deathbed) much later. Similarly, Charles Darwin delayed publication of his evolutionary theories, worrying that they would discomfit readers because humankind would no longer be so exceptional. Societal reaction can matter.

The fact is that much of what scientists do won't change your life very much. A lot of it is like numismatics or canning fruit: specialized activities with only modest cultural impact. But if we find life of any kind beyond Earth, everyone's going to notice, and our descendants will be affected in profound ways. Exactly how they'll be affected deserves our consideration now.

Video - Figure the Odds of E.T.
Video - Reflections on Fermi's Paradox
UFOs - Flying Emotions

Comments (57)
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Rascal_sage wrote:
"Is it OK to deflect an incoming rock just enough to keep it from pulverizing your own country but let it wallop, say, western China?"

Since China is financing most of my country's deficit spending, that is a real dilema.
.3 Recommend | Report Abuseposted 2/19/2009 8:34:18 AM.RachaelWhitney wrote:
the alien in the picture above is SEXYYYYYYYYYYYYY
.3 Recommend | Report Abuseposted 2/19/2009 8:44:26 AM.mduncan36 wrote:
I think most societies on Earth would deal with the news of life elsewhere without falling apart. If nothing else we have been conditioned by popular culture to believe it already exists. Being intimately familiar with fundamentalist Christianity, it has long been pointed out that God doesn't say in the Bible that there isn't life anywhere else. What does concern me will be the usual whack-jobs of whatever belief system that will claim this is part of an attempt to devalue their faith. For example, what will happen if the Taliban says this is merely an attempt to lure people from God? This will be very powerful and upsetting stuff to certain people.
.3 Recommend | Report Abuseposted 2/19/2009 8:46:39 AM.Danzi wrote:
What would we do if Mars did actually have 'Martians' . . . well i think we should colonise a part of the planet, and leave the rest to carry on with its natural life, and let the planet evolve naturally, so if man wants to venture onto the planet and away from the colony, then they have a limited period, and no 'Earth Germs' to be allowed on the planet at all.
But before we went if there were Bacteria, we would have to make sure that we would die from them as soon as we touched down. It would be somthing out bodys have never encountered, and could cause are bodys serious damage.
Then there is also the dilema of Animals. Do we take them with us, or are they strictly Earth bound, i mean, it wouldnt do any bacteria any good if there was dog mess all over the place, or they could thrive on it . . . who knows.

Well as for the asteroid, surley if its big enough that you need to deflect it, then you will still feel the impact where ever you are on Earth, and still face serious conciquenced from the impact. If possible, deflecting it back into space is more feesable as then the whole planet is safe. If they have to sacrifice a part of this planet to be hit, surly its a no brainer to have it hit a large desert in Africa where there is little or no people.

.1 Recommend | Report Abuseposted 2/19/2009 8:50:04 AM.HelloBozos wrote:
only way we'd exsept them is if they coming to save us from something,other wize,it's religon,race,an terrestrial place wars
.0 Recommend | Report Abuseposted 2/19/2009 8:50:40 AM.TD wrote:
No one freaked out when Slipher announced simple plant life on Mars over 50 years ago, or when Sinton discovered spectroscopic signatures of organic compounds on Mars at about the same time....most people just don't care. The only folks that seem to get excited are scientsts that want to "protect" whatever life is there. And if there are indications of life on Mars, and if it is being kept secret, or even just delayed, from society by some small group of scientists, (whoever they are), there are going to be a lot of angry people running around. And society's trust in science will fall even lower at a time when issues like global warming need some level of trust.
.10 Recommend | Report Abuseposted 2/19/2009 8:51:11 AM.Gerrit_smit_br wrote:
The best way to protect alien life is to not go there, not stick fingers in the alien soil, and not bring samples back.
.0 Recommend | Report Abuseposted 2/19/2009 9:01:52 AM.jollie849 wrote:
Seth, the pond scum has been discovered!! It's a colony of lawyers!! It continues to infect us every moment and we've yet to find an antidote!!!!!!!!!!!! Help us all.
.5 Recommend | Report Abuseposted 2/19/2009 9:10:04 AM.Stockeraties wrote:
Face it, if we could thrive on another planet then something else will already be there, pretty much fact. So if we do want to expand the race then I am afraid that the other life comes second!
.3 Recommend | Report Abuseposted 2/19/2009 9:10:12 AM.MartianSam wrote:
It was a broadly-held idea in theological circles for many decades that God would show his creativity by creating life everywhere. Some theologians in France and Germany speculated on this since Copernicus.

The better question is that Mars is not black and white - there is a third zone which is life from Earth to Mars carried over by meteors millions of years ago. Fortunately, some flightworthy instruments are able to initially determine by the handedness of amino acids if there is life, roughly how decade or active, and should the handedness be different, if it is alien, or should I say native, in origin. And what if we find native life there, that opens up a possiblity that native mars life has been transported HERE and we either accept it as native to Earth or it exists in a parallel ecosystem we have so far not discovered. What then?
And what if it all exists at least 4 meters underground - how does that impact settlement when we, too, need to be at least 4 meters under to protect from cosmic rays (my suggestion, grab the top meter and push it over the habs).
I do not agree with those who say we should collect our landers and go home. They should be sterilized in place and left as monuments to our explorations there, and future landers should be fully sterilized prior to departure.
.0 Recommend | Report Abuseposted 2/19/2009 9:23:16 AM.Page: 1 | 2 | 3 | 4 | 5 | 6Leave a Comment

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Jumbo Loan Defaults Rise

Jumbo Loan Defaults Rise at Fast Pace as Rich Suffer (Update2)
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By Bob Ivry

Feb. 20 (Bloomberg) -- Luxury homeowners are falling behind on mortgage payments at the fastest pace in more than 15 years, a sign the U.S. financial crisis that began with the poorest Americans has reached the wealthiest.

About 2.57 percent of prime borrowers who took out jumbo loans last year were at least 60 days delinquent, a percentage reached within 10 months and the fastest since at least 1992, according to LPS Applied Analytics, a mortgage data service in Jacksonville, Florida. That’s almost twice as quickly as 2007 borrowers fell behind and a level 2006 owners haven’t attained after almost three years.

The jump in late payments on jumbo loans, while still lower than the 20 percent delinquencies in subprime mortgages, signals that the borrowers with the most money and the best credit are hurting as the U.S. recession deepens in its second year. It also means these loans will be even more difficult to obtain and more expensive to pay off.

“The biggest influence in rising delinquencies is related squarely to the economy rather than poor underwriting,” said Keith Gumbinger, vice president of HSH Associates, a Pompton Plains, New Jersey-based mortgage research firm. “We are apparently all suffering to some degree. It’s certainly more severe for some but still, it’s pretty much widespread.”

Raymond Young bought his lakeside home in Miami four years ago for $2 million cash and in 2006 took out a $1.4 million jumbo mortgage to pay for a real estate venture in Texas. Now, with home prices in his area down 40 percent from their 2006 peak, according to the S&P/Case-Shiller Home Price Index, Young needs to refinance because the Texas investment isn’t paying off and his income has dried up. He can’t find a bank to help.

No Refinancing

“They’re telling me the house is only worth $1.3 million,” said Young, 46. “I’m upside down. I’m stuck. I’m in bailout mode but they’re bailing out banks and they’re not bailing out homeowners.”

President Barack Obama’s Homeowner Affordability and Stability Plan, announced this week, has no provision to help jumbo mortgage borrowers.

U.S. joblessness reached a 25-year high in January while the unemployment rate in the financial industry rose to 6 percent from 3 percent a year ago. It jumped to 10.4 percent from 6.4 percent in the category of professional and business services, according to the U.S. Bureau of Labor Statistics in Washington.

About 1.92 percent of homeowners with 2008 mortgages backed by Fannie Mae and Freddie Mac fell at least 60 days behind, LPS Applied Analytics said. Jumbo loans are bigger than what the two government-controlled agencies buy or guarantee, and Obama’s plan focuses on shoring up mortgages eligible to be bought by Fannie and Freddie.

No Government Help

Currently the Fannie-Freddie cap is set at $417,000 in most places and up to $729,750 in areas with higher home prices. The average credit score for 2008 jumbo loans was 762, LPS Applied Analytics said. Such scores are used to assess risk.

Jumbo lending slowed in the fourth quarter to $11 billion, or 4 percent of the mortgage market, the lowest quarterly amount since Inside Mortgage Finance started tracking that data in 1990. In 2007, jumbo loans made up 14 percent of total U.S. mortgage originations, according to the Bethesda, Maryland-based publication.

Financing Jumbo Loans

The top five U.S. jumbo lenders -- Chase Home Finance LLC, Bank of America Corp., Washington Mutual Inc., Wells Fargo & Co. and Citigroup Inc. -- originated a combined $55.3 billion in jumbos in 2008. They lent just $4.3 billion of that during the last three months of the year, according to Inside Mortgage Finance.

Banks don’t want to make jumbo loans because holding them on their books means they have to keep sufficient money in reserve in case borrowers quit paying, Inside Mortgage Finance Publications Chief Executive Officer Guy Cecala said.

The national average for a 30-year fixed-rate jumbo mortgage was 6.57 percent this week compared with 5.34 percent for a conforming loan, according to White Plains, New York-based financial data provider BanxQuote.

The difference in interest rates between jumbo loans and prime conforming mortgages, or mortgages eligible for sale to Fannie Mae and Freddie Mac and available to borrowers with top credit scores, had been about 20 basis points “for several decades,” according to BanxQuote CEO Norbert Mehl.

181 Basis Points

In August 2007, that difference jumped to as much as 200 basis points and has stayed between 100 and 200 basis points, Mehl said. A basis point is equal to 0.01 percentage point.

The difference between the jumbo interest rate and the prime conforming rate was 181 basis points on Feb. 18, according to Bloomberg data.

“The only jumbo mortgages being written right now have strict qualification criteria both in the credit rating of the borrower and the down payment requirements and they are nearly impossible to qualify for,” Mehl said. “Some lenders quote a jumbo rate but they don’t make the loans.”

Steve Habetz, president of Threshold Mortgage Co. in Westport, Connecticut, said he relied on Hudson City Bancorp Inc. in Paramus, New Jersey, and closely held, Manhasset, New York- based Apple Bank for Savings for jumbo loans.

Capacity is down because lenders everywhere are understaffed and “drowning in loan applications,” Habetz said.

Habetz said he had a customer with a 740 credit score who had a down payment of $500,000 on a $1 million home in Easton, Connecticut. The borrower had to wait two weeks for approval when in December he would have gotten the mortgage overnight.

“Mortgage lending right now is like wading miles and miles in waist-deep mud,” Habetz said. “It’s so difficult. Jumbo borrowers will be tortured and it’s nothing they should take personally because everybody is getting tortured.”

To contact the reporter on this story: Bob Ivry in New York at

Last Updated: February 20, 2009 10:24 EST
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Bloomberg Bullish On Zimbabwe Stock Exchange

Zimbabwe Stocks May Soar as Bourse Reopens in Dollars (Update1)
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By Janice Kew

Feb. 20 (Bloomberg) -- Zimbabwe shares, battered by the world’s highest inflation rate and a decade-long recession, may rebound after the stock exchange reopened yesterday from a three- month suspension with listings re-denominated in U.S. dollars.

While prices are bound for an initial fall as investors who were prevented from selling seek an exit, shares will probably more than double by year-end, according to the Harare-based unit of Renaissance Capital, the investment bank with brokerages in ex-Soviet and African countries. Companies are priced at a third of their breakup value on average after an 86 percent drop in the two months before the Nov. 21 shutdown, said BoE Private Clients, South Africa’s second-biggest private-client asset manager.

“There is an opportunity purely based on the discount to valuation of corporate assets,” said Thomas Chataika, a Zimbabwe-born fund manager who helps manage more than $6 billion at BoE in Johannesburg.

Zimbabwe’s central bank suspended shares as inflation estimated at 89.7 sextillion percent by the Cato Institute, a plunge in the Zimbabwe dollar to 12.6 trillion per U.S. dollar and international sanctions against President Robert Mugabe’s regime caused the economy to collapse. Reopening the exchange was one of the first steps by the coalition government formed last week as part of a power-sharing agreement between Mugabe, 84, and opposition leader Morgan Tsvangirai.

Phones, Beer

Only $30 of shares traded in the hour the exchange opened yesterday. Apex Corporation of Zimbabwe, an engineering and steel manufacturing company, was the only stock that traded, with 3,026 shares bought and sold at 1 cent each, according to price lists e-mailed by Kingdom Stockbrokers Ltd. in Harare.

“It wasn’t really communicated that the exchange was going to reopen and I don’t think the general public were aware,” said Chataika. “It will take about a week for the market to trade properly as the stocks still need to be re-valued in dollars.”

Today’s trading began at 10 a.m. and lasted for 1 1/2 hours, Kudzai Gambinga, a trader at Kingdom, said in a telephone interview. The exchange will move to two trading sessions once there is enough demand, he said.

Chataika, who has about $3 million in Zimbabwe stocks, said he plans to buy Econet Wireless Holdings Ltd., the country’s biggest mobile-phone operator, Delta Corp., Zimbabwe’s largest beer and beverages maker, and Kingdom Meikles Africa Ltd., the Harare-based owner of TM supermarkets, the biggest retail chain.

Economy, Sanctions

“Everyone there is despondent, and drinking,” said Chataika, 31, who lived in Zimbabwe until 2005. “Even if it takes time for the economy to show real growth, people still communicate, eat and drink.”

Econet and Delta, both based in Harare, are also top picks for Dzika Danha, a strategist at Renaissance Capital.

“When it comes to phones, penetration is very low at about 13 percent, and so there is a lot of room for growth,” Danha said in a telephone interview from Harare yesterday.

Zimbabwe is in the grip of an economic crisis that’s left more than half of the African nation’s 11 million people in need of emergency food rations, according to the United Nations World Food Program. A quarter of the population has fled the country. The U.S. and European Union imposed sanctions including freezing government assets and travel bans to show disapproval of Mugabe’s rule.

Cost Incentives

Reserve Bank of Zimbabwe Governor Gideon Gono ordered the shutdown of the stock exchange citing allegations that some traders used fraudulent checks totaling “60 hexillion” Zimbabwe dollars to buy shares. Eleven companies and nine individuals had their accounts frozen in November.

Tsvangirai, 56, was appointed prime minister on Feb. 11, ending an impasse with Mugabe’s Zimbabwe African National Union- Patriotic Front that began last March after disputed elections deprived Zanu-PF of its parliamentary majority for the first time since it took power in 1980. Tendai Biti of Tsvangirai’s Movement for Democratic Change became finance minister.

To spur trading, stamp duty on purchases and sales of stocks has been cut to 0.5 percent from 2 percent, according to Netsai Muyaka, a trader at Harare-based Kingdom Stockbrokers Ltd. A withholding tax of 5 percent on sales was also removed, according to Renaissance.


“Trading costs have been reduced and this is a good signal,” said Chataika at BoE. “It says that the new finance minister is trying to realign trading with international norms.”

Tsvangirai will seek $1 billion of aid from South Africa in talks with President Kgalema Motlanthe today, the Johannesburg- based Business Day newspaper reported, without saying where it got the information. Motlanthe’s office declined to comment.

Renaissance sees a 60 percent probability of the Zimbabwe Stock Exchange All-Share Index soaring 150 percent this year, a 30 percent likelihood of a 50 percent advance, and 10 percent odds of a 250 percent surge, according to a report published yesterday. Shares gained 56,436 percent on the Zimbabwe Industrial Index, part of the All-Share Index, in September in Zimbabwe dollars, according to Bloomberg data. The currency was re-dominated at the start of February at one trillion per U.S. dollar.

“Trading on the exchange is going to be a process of discovery in the first few days as investors try and figure out the dollar value of their shares,” said Danha at Renaissance. “Those who want to trade will also have to open foreign- currency accounts so that they can trade in dollars. There will initially be sellers who need cash.”

To contact the reporters on this story: Janice Kew in Johannesburg at

Last Updated: February 20, 2009 06:28 EST
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Thursday, February 19, 2009

President Obama Should Take Lessons From Nelson Mandela

One of America's most prominent and well-respected pollsters has a piece of advice for Barack Obama: study Nelson Mandela.

Stan Greenberg, who helped guide Bill Clinton to the White House in 1992 and was credited by Mandela for his presidential victory in '94, drew political parallels between the current White House occupant and the famed anti-Apartheid leader. Both transcended deep and bitter racial divisions, he said. Both promised a fundamental restructuring of the political and economic institutions in their countries.

But Mandela's political history also contains a cautionary note, one from which Obama would be wise to learn: even in the most fortunate of circumstances, politicians stumble.

"I would advise [Obama] to read the Mandela chapter very closely," said Greenberg, discussing his newly released book, "Dispatches From The War Room," which documents his work with five prominent world leaders. "Obviously you had a big crisis and big transformation then. There were new electoral alignments and [Mandela] had high popular support and some big achievements. And yet, even there, when people are desperate, you can lose their support."

"I'm really impressed with Obama and his leadership and his White House and his team," he added. "I'm impressed with the big forces that have emerged from winning the 2006 and 2008 elections, which have created a powerful moment for Obama to do well. But, it is also true that in every place that I've worked, even in South Africa with Mandela, [presidents and prime ministers] have all struggled to keep people with them. There is disillusionment in every one of these cases. There is a sense of high hopes and then despair when they fail to deliver. Look at the South Africa chapter on this. You have Mandela who [brought] an end of segregation, people of color now sitting in the parliament after it was all white, water and electricity going to the African areas, and within a year it is like nothing. 'Where is the housing? Where are the jobs?' It quickly turned into disillusionment."

It is a hard reality for elected officials to confront, but one that Obama should brace for. In "Dispatches From The War Room," Greenberg details how, just years after triumphantly ascending to power, Mandela was confronted with bleak news: his party was being blamed for failures in governance and was sitting at the "red line" of 50 percent popularity.

"Mandela was disturbed and did not dispute the reality or mask his distress," Greenberg writes of a breakfast the two shared one morning in Johannesburg. "Then, rather than drawing a wise conclusion as he usually does, he simply said, 'We have much to do.'"

Dislodged from its complacency, the ANC went on to retain power in the next election (though Mandela was not on the ballot). But the lesson of that event -- one that Greenberg learned all too well from the U.S. congressional elections in 1994 -- was that, in politics, nothing

R. Allan Stanford Under Federal Drug Investigation

Accused Financier Under Federal Drug Investigation
Authorities: Stanford May Have Laundered Drug Money for Mexican Cartel
February 18, 2009

The SEC's fraud charges may be the least of accused financial scammer R. Allen Stanford's worries. Federal authorities tell ABC News that the FBI and others have been investigating whether Stanford was involved in laundering drug money for Mexico's notorious Gulf Cartel.

Allen Stanford disappears after accused of a massive $8 billion scam.
Watch the full story tonight on World News with Charles Gibson at 6:30 p.m. ET.

Authorities tell ABC News that as part of the investigation, which has been ongoing since last year, Mexican authorities detained one of Stanford's private planes. According to officials, checks found inside the plane were believed to be connected to the Gulf cartel, reputed to be Mexico's most violent gang. Authorities say Stanford could potentially face criminal charges of money laundering and bribery of foreign officials.

Authorities say the SEC action against Stanford Tuesday may have complicated the federal drug investigation.

The federal investigation, however, did not stop Stanford from using corporate money to become a big man at last year's Democratic convention in Denver.

A video posted on the firm's web-site shows Stanford, now sought by U.S. Marshals, being hugged by Speaker of the House Nancy Pelosi and praised by former President Bill Clinton for helping to finance a convention-related forum and party put on by the National Democratic Institute.

Manhunt: Accused Financier Scammer Stanford MissingWATCH: Financial Titan Accused of FraudMore from Brian Ross and the Investigative Team

"I would like to thank the Stanford Financial Group for helping to underwrite this," Clinton said to the crowd at the event.

Stanford Financial was listed as the "lead benefactor" for the gathering, and Stanford was permitted to address the audience of several hundred.

Stanford contributed $150,000 to underwrite the event, said NDI president Kenneth Wollack. More recently, Stanford gave $5,000 to help pay for a luncheon hosted by the group. At the time NDI had no idea of Stanford's trouble, and it is has not had any contact with him since the December event, said Wollack.

"We had no reason to believe that a very public company that was also engaged in philanthropic work might be suspect," said a spokesperson for the National Democratic Institute, Amy Dudley.

The SEC charged yesterday that Stanford was running a fraudulent investment scheme that may have bilked customers out of as much as $8 billion.

Stanford's whereabouts are unknown and U.S. Marshals say they are searching for him.

Over the last decade, Stanford has spent more than $7 million on lobbyists and campaign contributions to Washington politics in both parties, although the vast majority of the money has gone to Democrats.

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The Man Who Brought Down Stanford Bank

Alex Dalmady was just trying to do a favor for a friend when he uncovered one of the biggest potential frauds in banking history.

The amateur investor, a 48-year-old Venezuelan financial analyst who lives in southern Florida, went online and within hours discovered major discrepancies in the business model of fugitive financier Allen Stanford's $50 billion Stanford International Bank. Stanford was charged with "massive fraud" by the SEC on Monday and since then stories about his tax problems, suspected money laundering for drug cartels and lobbying activities have snowballed.

"There were a number of things that struck me, from the lack of detail to the simplicity of the business model to the lack of sophistication in the language they used," Dalmady tells Huffington Post.

Dalmady says that he told his friend to take his money out "as soon as possible," convinced that it was almost impossible for the bank to produce the returns it was claiming.

Intrigued by the breadth of the potential fraud, Dalmady wrote an article to explain his suspicions despite the fears of his wife.

"My wife was really scared. She said, 'You're calling these guys out by name - it could get you in trouble' and I said, 'I know'. I had to."

His article, "Duck Tales," was published in a Venezuelan economic publication, Veneconomia, where he noted one of his suspicions - the bank's one board member was an "85-year-old cattle rancher and used car dealership owner". The article was soon was picked up by a financial Website and ricocheted around the world until Business Week covered his suspicions last week.

Dalmady is already being compared to Harry Markopolos, the whistleblower who repeatedly warned the SEC in vain about Bernard Madoff's massive Ponzi scheme.

Story continues below

Dalmady says that he was definitely inspired by the revelations about the Madoff scheme.

"We were all blind and the Madoff thing blew the cover off... I just wanted to save some people some money but I didn't and I'm sorry."

In fact, Dalmady says that his warnings didn't prevent some investors from being duped by Stanford.

"I heard about someone who put $50,000 in to Stanford after reading the article. But you can't stop stupid."

Dalmady, who says that he has not yet been contacted by the SEC or other federal officials, says that he never thought about approaching the SEC about his concerns partly due to Stanford's extreme wealth.

"You consider going up against someone who's on the Forbes [wealthiest Americans] list and I don't know."

Dalmady, who adds that he has never received any threats, believes that Stanford knew the SEC was preparing to charge him.

"Allen's got to be gone for a couple a months. I don't think he just disappeared. He had his retreat plans."

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Tuesday, February 17, 2009

Financier Charged With $9.2 Bbillion Fraud

Financier charged with $9.2 billion fraud
SEC alleges Robert Allen Stanford orchestrated a scheme centered on an $8 billion CD program.
By Julianne Pepitone, contributing writer
Last Updated: February 17, 2009: 2:37 PM ET

Robert Allen Stanford
Made like Madoff

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NEW YORK ( -- The Securities and Exchange Commission said Tuesday that it has charged financier R. Allen Stanford and three of his companies with orchestrating an $8 billion investment fraud.

The SEC's complaint alleges that the fraud centered on a CD program in which Stanford International Bank promised "improbable and unsubstantiated high interest rates."

SIB, based in Antigua, allegedly acted through a network of Stanford Group Company financial advisers to sell approximately $8 billion of "certificates of deposit" to investors.

The bank boasted a unique investment strategy that it said allowed it to receive double-digit returns on its investments for the past 15 years, the SEC said.

"We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world," Rose Romero, director of the SEC's Fort Worth regional office, said in the statement.

The SEC also charged SIB chief financial officer James Davis and Laura Pendergest-Holt, chief investment officer of Stanford Financial Group. The third company named in the complaint is investment adviser Stanford Capital Management.

According to the release, U.S. District Judge Reed O'Connor issued a temporary restraining order, and froze the defendants' assets.

Early Tuesday, CNBC reported federal marshals were seen entering the offices of Stanford Financial Group in Houston. Reuters reported an eyewitness saw a sign taped to the window stating the company is now "under the management of a receiver."

SEC alleges false financial claims
According to the SEC's complaint, filed in federal court in Dallas, the defendants told CD purchasers that their deposits were safe, falsely claiming that the bank re-invests client funds primarily in the portfolio; monitors the portfolio through a team of more than 20 analysts; and is subject to yearly audits by Antiguan regulators.

Amid the news of Bernard Madoff's massive Ponzi scheme, SIB falsely claimed the bank has no "direct or indirect" exposure to the Madoff scheme, the statement said.

Stanford's inner circle
According to the SEC's complaint, a close circle of Stanford's family and friends operates SIB.

Its investment committee, responsible for managing the bank's multi-billion dollar portfolio of assets, includes Stanford; Stanford's father, who lives in Mexia, Tex.; another Mexia resident with business experience in cattle ranching and car sales; Pendergest-Holt, who had no financial or securities experience prior to joining SFG; and Davis, Stanford's college roommate.

SIB's Web site claims its network has $51 billion in deposits and assets under management or advisement, with more than 70,000 clients in 140 countries.

$20 million cricket match
In September, Forbes named Stanford No. 205 in its 400 Richest Americans article. He's used some of his billions to spark interest in cricket.

In 2006, he founded the Stanford 20/20 Tournament, a single-elimination knockout cricket competition held in Antigua featuring 20 teams from several Caribbean territories competing for $1 million.

Stanford topped that in 2008 with the "Stanford Super Series," in which four teams competed for $20 million - the largest team prize for a single sporting match, according to the series Web site.

An additional scheme
The SEC's complaint alleged an additional scheme relating to $1.2 billion in sales. SGC advisers are accused of using materially false historical performance data to create a mutual fund program called Stanford Allocation Strategy, the release said.

According to the complaint, the false data helped grow the program from less than $10 million in 2004 to more than $1 billion, generating SGC - and ultimately, Stanford - about $25 million in 2007 and 2008.

That fraudulent performance helped recruit registered investment advisers, who were then given heavy incentives to move their clients' assets to SIB's CD program, the release said.

Stanford Financial Group could not immediately be reached for comment.

First Published: February 17, 2009: 1:49 PM ET

Madoff case delayed another 30 days

FBI strained by fraud probes

Sir R. Allen Stanford Charged By SEC

Sir R. Allen Stanford Being Charged By SEC For Fraud
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The SEC is charging Sir Allen Stanford's bank with "massive fraud." Read more from AP below.

From AP:

Federal regulators are charging R. Allen Stanford and three of his companies with a "massive" fraud that centered around high-interest-rate CDs.

The Securities and Exchange Commission's complaint, filed in federal court in Dallas, alleges that Stanford International Bank sold about $8 billion of so-called certificates of deposit to investors by promising "improbable and unsubstantiated high interest rates."

The rates allegedly allowed the bank to achieve double-digit returns on its investments for the past 15 years. U.S. District Judge Reed O'Connor entered a temporary restraining order and froze Stanford's assets.

The SEC's outgoing enforcement chief Linda Chatman Thomsen says Stanford and his family and friends "perpetrated a massive fraud based on false promises and fabricated historical return data to prey on investors."

CNBC is reporting that US federal agents have entered the Houston office of the Stanford Financial Group. Read the full report here.

The Huffington Post intends to dig deeper into this story, and we need your help. If you have invested with Stanford or know about the bank's business practices, we want to hear from you. Email us at submissions

If you have invested with Stanford, let us know about your returns on investment. Have you tried to get your money back and been rebuffed? What have you been told about the bank's portfolio? How long have you been invested with him?

If you know Stanford personally, tell us about him.

Email your insights to submissions

Allen Stanford Accused Of Massive Ongoing Fraud

Allen Stanford Accused of ‘Massive, Ongoing’ Fraud (Update1)
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By Alison Fitzgerald and David Scheer

Feb. 17 (Bloomberg) -- U.S. regulators accused R. Allen Stanford of running a “massive, ongoing fraud” while selling about $8 billion in certificates of deposit through Antigua- based Stanford International Bank Ltd.

The bank made “improbable and unsubstantiated” claims about its ability to generate “safe” returns of more than 10 percent, and it misled investors about exposure to Bernard Madoff’s alleged Ponzi scheme, the Securities and Exchange Commission said today in a complaint against Stanford, firms he controls and two colleagues. The agency asked the Dallas federal court to freeze assets and appoint a receiver to return money to investors.

The SEC has been investigating Stanford’s Houston-based investment firm, Stanford Group, since at least last summer over sales of certificates by the Antigua-based affiliate. The inquiry intensified after the December arrest of New York money manager Madoff, who allegedly confessed to masterminding a $50 billion fraud in which early investors were promised steady returns and paid with money from later participants.

“We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world,” Rose Romero, director of the SEC’s Fort Worth office, said today in a statement. Stanford spokesman Brian Bertsch did not immediately return a call seeking comment.

The SEC has asked former employees about the bank’s stated returns on investment, between 10.3 and 15.1 percent every year from 1995 until last year, according to documents and annual reports on the bank’s Web site. SIB says it has $7.2 billion in assets and 30,000 clients, according to the SEC.

‘Routine Examinations’

Investigators from the Financial Industry Regulatory Authority visited six Stanford Group offices in January, downloaded information from computer hard drives and looked through files, people familiar with the events said. The people declined to be identified because they didn’t want to put their current jobs at risk.

“Regulatory officers have conveyed to us these visits are part of their routine examinations,” Allen Stanford said in a Feb. 11 letter to clients and an e-mail message to the company’s employees obtained by Bloomberg.

Stanford said in a Feb. 12 e-mail to his employees that he’d “fight with every breath to continue to uphold our good name” in the face of the investigations.

To contact the reporter on this story: Alison Fitzgerald in Washington at; David Scheer in New York at

Last Updated: February 17, 2009 12:05 EST
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South African Airways Crew Arrested For Drug Smuggling The Second Time In 4 Weeks

South African Airways crew arrested for drug smuggling - the SECOND in four weeks
Last updated at 10:22 AM on 17th February 2009

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An aircrew arrested after £250,000 of cocaine was discovered in baggage on a plane have been released on bail.

The 15 South African Airways employees were arrested after UK Border Agency officers found 5kg of the class A drug when their flight from Johannesburg arrived at Heathrow yesterday.

The nine men and six women were interviewed by customs officers and bailed to return to Heathrow Police Station in April.

Two times: A South African Airways crew has been arrested for drug smuggling twice in the space of a month

Bob Gaiger, HM Revenue & Customs Heathrow spokesman, said: 'Crew members are subject to the same customs checks as any other person when entering the UK.

'HMRC together with UKBA play a vital role in the fight to prevent illegal drugs from entering the UK and in protecting our communities from the violence and corruption that always accompany this hideous trade.'

The latest arrests follow a similar incident on January 21, when a 15-member crew from the same airline was arrested after cocaine and cannabis worth £310,000 was found on their flight.

50kg of cannabis, with a street value of £150,000, and 4kg of cocaine, worth £160,000, was found in bags when the flight landed at Heathrow.

The crew was released on unconditional bail, and was due to report back to HMRC investigators at Heathrow Police Station on March 23.

South African Airways (SAA) spokeswoman Robyn Chalmers said: 'Following yesterday's incident, the airline is again co-operating fully with the British authorities in an investigation that is currently under way.

'An investigation in Johannesburg, involving SAA Aviation Security and the South African Police Service Crime Intelligence Unit, is also under way to establish how security procedures were breached.

'SAA remains committed to a zero-tolerance approach towards the use of the airline's services for any criminal activity and will continue to closely monitor the situation.'

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Israel Launches Covert War On Iran

Israel launches covert war against Iran
Israel has launched a covert war against Iran as an alternative to direct military strikes against Tehran's nuclear programme, US intelligence sources have revealed.

By Philip Sherwell in New York
Last Updated: 10:38PM GMT 16 Feb 2009

Israel foreign minister Tzipi Livni Photo: EPA
It is using hitmen, sabotage, front companies and double agents to disrupt the regime's illicit weapons project, the experts say.
The most dramatic element of the "decapitation" programme is the planned assassination of top figures involved in Iran's atomic operations.
Despite fears in Israel and the US that Iran is approaching the point of no return in its ability to build atom bomb, Israeli officials are aware of the change in mood in Washington since President Barack Obama took office.
They privately acknowledge the new US administration is unlikely to sanction an air attack on Iran's nuclear installations and Mr Obama's offer to extend a hand of peace to Tehran puts any direct military action beyond reach for now.
The aim is to slow down or interrupt Iran's research programme, without the gamble of a direct confrontation that could lead to a wider war.
A former CIA officer on Iran told The Daily Telegraph: "Disruption is designed to slow progress on the programme, done in such a way that they don't realise what's happening. You are never going to stop it.
"The goal is delay, delay, delay until you can come up with some other solution or approach. We certainly don't want the current Iranian government to have those weapons. It's a good policy, short of taking them out militarily, which probably carries unacceptable risks."
Reva Bhalla, a senior analyst with Stratfor, the US private intelligence company with strong government security connections, said the strategy was to take out key people.
"With co-operation from the United States, Israeli covert operations have focused both on eliminating key human assets involved in the nuclear programme and in sabotaging the Iranian nuclear supply chain," she said.
"As US-Israeli relations are bound to come under strain over the Obama administration's outreach to Iran, and as the political atmosphere grows in complexity, an intensification of Israeli covert activity against Iran is likely to result."
Mossad was rumoured to be behind the death of Ardeshire Hassanpour, a top nuclear scientist at Iran's Isfahan uranium plant, who died in mysterious circumstances from reported "gas poisoning" in 2007.
Other recent deaths of important figures in the procurement and enrichment process in Iran and Europe have been the result of Israeli "hits", intended to deprive Tehran of key technical skills at the head of the programme, according to Western intelligence analysts.
"Israel has shown no hesitation in assassinating weapons scientists for hostile regimes in the past," said a European intelligence official, speaking on condition of anonymity. They did it with Iraq and they will do it with Iran when they can."
Mossad's covert operations cover a range of activities. The former CIA operative revealed how Israeli and US intelligence co-operated with European companies working in Iran to obtain photographs and other confidential material about Iranian nuclear and missile sites.
"It was a real company that operated from time to time in Iran and in the nature of their legitimate business came across information on various suspect Iranian facilities," he said.
Israel has also used front companies to infiltrate the Iranian purchasing network that the clerical regime uses to circumvent United Nations sanctions and obtain so-called "dual use" items – metals, valves, electronics, machinery – for its nuclear programme.
The businesses initially supply Iran with legitimate material, winning Tehran's trust, and then start to deliver faulty or defective items that "poison" the country's atomic activities.
"Without military strikes, there is still considerable scope for disrupting and damaging the Iranian programme and this has been done with some success," said Yossi Melman, a prominent Israeli journalist who covers security and intelligence issues for the Haaretz newspaper.
Mossad and Western intelligence operations have also infiltrated the Iranian nuclear programme and "bought" information from prominent atomic scientists. Israel has later selectively leaked some details to its allies, the media and United Nations atomic agency inspectors.
On one occasion, Iran itself is understood to have destroyed a nuclear facility near Tehran, bulldozing over the remains and replacing it with a football pitch, after its existence was revealed to UN inspectors. The regime feared that the discovery by inspectors of an undeclared nuclear facility would result in overwhelming pressure at the UN for tougher action against Iran.
The Iranian government has become so concerned about penetration of its programme that it has announced arrests of alleged spies in an attempt to discourage double agents. "Israel is part of a detailed and elaborate international effort to slow down the Iranian programme," said Mr Melman.
But Vince Canastraro, the former CIA counter-terrorism chief, expressed doubts about the efficacy of secret Israeli operations against Iran. "You cannot carry out foreign policy objectives via covert operations," he said. "You can't get rid of a couple of people and hope to affect Iran's nuclear capability."
Iran has consistently asserted that it is pursuing a nuclear capability for civilian energy generation purposes. But Israeli and Western intelligence agencies believe the 20-year-old programme, which was a secret until 2002, is designed to give the ruling mullahs an atom bomb.

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Galaxy Has Billions Of Earths

Galaxy has 'billions of Earths'

The number of stars points to there being many rocky planets
There could be one hundred billion Earth-like planets in our galaxy, a US conference has heard.
Dr Alan Boss of the Carnegie Institution of Science said many of these worlds could be inhabited by simple lifeforms.
He was speaking at the annual meeting of the American Association for the Advancement of Science in Chicago.
So far, telescopes have been able to detect just over 300 planets outside our Solar System.
Very few of these would be capable of supporting life, however. Most are gas giants like our Jupiter, and many orbit so close to their parent stars that any microbes would have to survive roasting temperatures.
But, based on the limited numbers of planets found so far, Dr Boss has estimated that each Sun-like star has on average one "Earth-like" planet.
This simple calculation means there would be huge numbers capable of supporting life.
"Not only are they probably habitable but they probably are also going to be inhabited," Dr Boss told BBC News. "But I think that most likely the nearby 'Earths' are going to be inhabited with things which are perhaps more common to what Earth was like three or four billion years ago." That means bacterial lifeforms.
Dr Boss estimates that Nasa's Kepler mission, due for launch in March, should begin finding some of these Earth-like planets within the next few years.
Recent work at Edinburgh University tried to quantify how many intelligent civilisations might be out there. The research suggested there could be thousands of them.

Monday, February 16, 2009

R. Alan Stanford Is Looking More Like Bernie Madoff

ShareThisHuffington Post | Julie Satow | February 16, 2009 08:28 AM

I Like It I Don’t Like It Read More: Allen Stanford, Allen Stanford SEC, Bernard Madoff, Bernie Madoff, Fbi, Federal Bureau Of Investigation, Next Bernie Madoff, R. Allen Stanford, Securities And Exchange Commission, Stanford Investigation, Business News

Share Print CommentsFifty-eight-year-old Texas billionaire R. Allen Stanford is looking a lot more like the next Bernie Madoff.

The Securities and Exchange Commission, the Financial Industry Regulatory Authority and the Federal Bureau of Investigations are looking into the eccentric money man for alleged fraud involving his Stanford International Bank, which claims to have $8.5 billion in assets and some 30,000 investors.

Sir Stanford--he was the first American to receive knighthood from the government of Antigua and is infamous for his efforts to revive West Indian cricket--has managed to report shockingly consistent returns for years. Even in 2008, when Wall Street was hit across the board, he managed to make a 6% profit on his portfolio.

The return is even more impressive, notes Felix Salmon, given that Stanford International Bank is a bank that doesn't make loans:

"SIB, it turns out, is a very peculiar fish indeed: it offers extremely high interest rates on its deposits -- on the order of 7.5% for a one-year CD. It then takes that money and, rather than lending it out at a higher rate still, invests it in stocks and hedge funds and commodities and the like."

Russ Dallen, who used to head the Venezuela business of Oppenheimer & Co. in Caracas, remembers clients moving money from his company to Stanford, wooed by promises for "14 percent on savings, guaranteed."

"We were just gobsmacked because guaranteeing those kinds of returns is just not possible," said Dallen.

Sound familiar?

And get this:

Stanford owns more than 10 percent stakes in three firms trading below $2 per share on the Bulletin Board or Pink Sheets: eLandia International Inc, a Coral Gables, Florida technology company; Forefront Holdings Inc, a Brentwood, Tennessee provider of golf supplies; and Health Systems Solutions Inc, a New York technology and services company. Story continues below

"These were not exactly blue chip companies," said Bob Parrish, an accountant in Longboat Key, Florida, whose clients pulled roughly $500,000 out of Stanford last year.

The SEC was alerted to Stanford last year when two former company employees, Charles Rawl and Mark Tidwell, told regulators that they suspected Stanford was engaged in illegal practices related to selling the CDs and other securities.

In an internal memo obtained by Bloomberg, Stanford blamed the investigations on former disgruntled employees: "We are all aware that former disgruntled employees have gone to the regulators questioning our work and our processes," he said in the email. "This could have compounded an otherwise routine examination."

The investigations come in the wake of the SEC's failed bid to heed warnings that Madoff's investments were too good to be true. Since the $50 billion ponzi scheme was revealed, the SEC has announced lawsuits against at least seven other money managers.

It's not the first time Stanford has been in trouble with the law. In the 1980s, the US Tax Court found that Stanford, who claims he is a distant relative of the founder of Stanford University--the school denies this--along with his wife, Susan, under reported their 1990 federal taxes by $423,531.36.

Bernard Madoff
Fifty-eight-year-old Texas billionaire R. Allen Stanford is looking a lot more like the next Bernie Madoff. The Securities and Exchange Commission, the Financial Industry Regulatory Authority and th...
Fifty-eight-year-old Texas billionaire R. Allen Stanford is looking a lot more like the next Bernie Madoff. The Securities and Exchange Commission, the Financial Industry Regulatory Authority and th...
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Stanford Bank Cuts Financing As FBI Moves In

Stanford’s Bank Cuts Financing as U.S. Probes Related Broker
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By Alison Fitzgerald

Feb. 16 (Bloomberg) -- R. Allen Stanford’s offshore lender, Stanford International Bank Ltd., hasn’t been able to complete the financing of two transactions involving U.S. companies in which it owns shares, according to regulatory filings.

The Antigua-based bank, whose affiliated brokerage firm in Houston is under investigation by U.S. securities regulators, according to people familiar with the matter, was released from its obligation to lend Elandia International Inc. $28 million, a filing dated Feb. 6 said.

SIB agreed to cancel 16.14 million common shares that it owned in the telecommunications company. They were worth $18.6 million on Feb. 4, the last day they were traded on the Nasdaq Stock Market before the announcement.

“Since entering into the Credit Agreement, we have performed our obligations and we have not been in default,” Elandia said in a form 8-K filed with the Securities and Exchange Commission. Calls to Elandia’s Coral Gables, Florida headquarters and to the contact listed on its press release went unanswered yesterday.

Brian Bertsch, a spokesman for Stanford, declined to comment yesterday.

Stanford agreed to accept 1.78 million convertible preferred shares in exchange for canceling a $12 million loan it had already made to the company, the filing said.

Last week, SIB failed to provide funding for Health System Solutions Inc. to buy Emageon Inc., a medical-technology company.

The bank is the principal shareholder of Tampa, Florida- based Health Systems Solutions, which sells medical software. Birmingham, Alabama-based Emageon on Feb. 13 received $9 million that the lender put in escrow in case the agreement fell through, according to a press release.

SEC Investigation

Stanford Group Co., an affiliate of the bank, is under investigation by the SEC and Financial Industry Regulatory Authority, according to people familiar with the matter who declined to be identified because they didn’t want to put their jobs at risk.

Stanford’s operations are also being probed by the FBI, the Wall Street Journal reported, without citing anyone.

Securities regulators are examining Stanford Group’s sales of certificates of deposit issued by SIB and the consistent, above-average returns those investments paid, the people said.

‘Disgruntled Employees’

“We are all aware that former disgruntled employees have gone to the regulators questioning our work and our processes,” Stanford, 58, said last week in an e-mail to staff members that was obtained by Bloomberg News. “This could have compounded an otherwise routine examination.”

Investigators from Finra visited six Stanford Group offices last month, downloaded information from computer hard drives and looked through files, the people said.

“Regulatory officers have conveyed to us these visits are part of their routine examinations,” Stanford said in his e-mail message. He repeated that assertion in a letter to clients dated Feb. 11 and obtained by Bloomberg. least two former Stanford employees.

The U.S. investigation of Stanford’s securities firm intensified after the arrest in December arrest in New York of Bernard L. Madoff, who allegedly confessed to running a $50 billion Ponzi scheme in which early investors were paid with money from later participants.

The SEC has stepped up probes after being accused of failing to heed criticiscm that Madoff’s investment returns were too good to be true. The agency has since announced unrelated lawsuits against at least seven money managers for allegedly inflating profits or siphoning off client money.

4.5 Percent

Stanford International Bank describes its CDs, which paid 4.5 percent interest on a $100,000, one-year investment as traditional bank deposits, according to a disclosure statement. The bank doesn’t lend the proceeds and instead invests in a mix of equities, metals, currencies and derivatives, according to its Web site and disclosure documents for the certificates provided to Bloomberg by a former Stanford Group adviser.

A one-year, $100,000 CD issued by the bank paid a 4.5 percent annual yield as of Nov. 28, according a posting on the lender’s Web site yesterday. A one-year, $10,000 CD purchased at JPMorgan Chase & Co. would earn 1.75 percent, according to its consumer banking Web site.

In 2006, SIB reported that 57.4 percent of its portfolio was in equities, 21.9 percent in Treasuries and corporate bonds, 13 percent in metals and 7 percent in alternatives, according to a disclosure statement related to the CD offering. The rest was in cash, mostly U.S. dollars.

Gold Trader

The bank owns stakes in publicly traded U.S. companies including Dallas-based DGSE Inc., a gold and silver-trading firm in Dallas, and Springfield, Tennessee-based golf-equipment marketer Forefront Holdings Inc., according to regulatory filings.

DSGE is also a jewelry wholesaler whose businesses include the Dallas Gold and Silver Exchange and an online precious-metals business. Stanford International Bank held 6.7 million, or 30 percent of the shares, as of June 27. The shares fell 74 percent in the last year.

SIB held 750,000 shares, or 31 percent of Forefront Holdings when the company filed with the SEC on August 12 to deregister its common stock. The company, which lost $3.3 million in the first quarter of 2008, announced in August the opening of a distribution center in Baldwyn, Mississippi, the hometown of James Davis, Stanford Group’s chief financial officer, and Chief Investment Officer Laura Pendergest.

On Dec. 15, Forefront said it was opening an 11,500 square- foot corporate headquarters in Brentwood, Tennessee.

For Related News and Information:

To contact the reporter on this story: Alison Fitzgerald in Washington at

Last Updated: February 16, 2009 00:01 EST

Sunday, February 15, 2009

President Robert Mugabe's $8 Million US Home In Hong Kong

From The Sunday TimesFebruary 15, 2009

Found: Robert Mugabe’s secret bolthole in the Far EastJon Swain, Bangkok and Michael Sheridan, Hong Kong
ZIMBABWE’S President Robert Mugabe and his wife Grace have secretly bought a £4m bolt-hole in the Far East while his country struggles with hyper-inflation, mass unemployment and a cholera epidemic.

The Mugabes’ house, in an exclusive residential complex in Hong Kong, was purchased on their behalf by a middleman through a shadowy company whose registered office is in a run-down tenement block. When a reporter and a photographer called at the house last week, they were attacked by the Zimbabwean occupants. The assailants were questioned by the police.

The property came to light during a Sunday Times investigation into the Mugabes’ financial interests in Asia, where a web of associates has helped them to spend lavishly on luxuries and stash away millions in bank accounts. In Zimbabwe, meanwhile, inflation has reached 231m%, unemployment stands at 94% and 3,467 people have died in recent months from cholera.

According to sources in Zimbabwe and Asia, Grace Mugabe has splashed out £55,500 on marble statues in Vietnam and £8,700 on a handbag in Singapore. She and her husband have enjoyed some of the region’s finest hotels.

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In Hong Kong, where she has discussed a venture to have Zimbabwean diamonds cut and polished in China, her aides paid one hotel bill with a bag of cash containing £10,500.

The Hong Kong house is the first in the Far East to be identified as the Mugabes’. Last Friday two men and a woman objected violently to the arrival of this newspaper’s journalists.

The throat of Colin Galloway, a 46-year-old reporter, was gripped and bruised by a man in his thirties who lifted him off his feet. Galloway was later examined under police supervision at hospital.

Tim O’Rourke, 45, was grabbed by the neck in his second bruising encounter involving the Mugabes in Hong Kong. Last month Grace Mugabe flew at him with her fists after repeatedly punching another Sunday Times photographer in the face in an incident that attracted worldwide publicity.

Hong Kong police said last night that inquiries into a case of alleged common assault on Friday were continuing.

The disclosures about the Mugabes’ Far Eastern interests are certain to anger Zimbabweans already outraged by extravagant celebrations laid on for the dictator’s 85th birthday this week.

Have your say

And you thought it was terrible under Ian Smith's rule!

Tony Matthews, Sundbyberg, Sweden

Whats the bristish media and ruling elites obession with zimbabwe and mugabe. Fact of the the matter is, zimbabwe is a failed state with its leaders looting it for all they can, but then so is somalia, sudan, burma, north korea and a host of others.why the obsession with "Rhodesia"...history i gues

Tony Burkson, london, UK

The Mugabes are bleeding Zimbabwe dry. Not content with starving the nation, and fuelling Cholera by their inaction, they are stealing what is left of the country's forex reserves to feather their own nest ready for exile. The Hong Kong authorities must not allow this to happen.

Massimba Okono, Cape Town, South Africa

Mugabe has relied on his tribal ancestry. Post colonial Africa is just the same. Breakdown of government, greed, tribal loyalty.

jane, whittlesey, UK

It appears that our UK politicians and leaders are just as dishonest, morally inept and also without any conscience or integrity.

Not a very good stance from which to preach to the world or ensure any humanity or justice for the proletariot.

Jimmy, Bournemouth, United Kingdom

The reason, Timothy, is that the British Government overthrew a stable government to install this man.

David, Bromley,

Under NO circumstances should British tax[ayer's money go to Zimbabwe.

Dr.Stuart M. Brown, Rickmansworth, UK

Timothy, London.

Grace Mugabe is not just a wife who bought a bag. She is notorious and greed driven. Enjoying herself at the expense of her starving and diseased country. She is a criminal person who must be detained along with her genocide husband.

Colin, Carmarthen, United Kingdom

Mr. Mugabe has been spending the wealth of Zimbabwe in Hong Kong since 1980- spending 100's of thousands of HK$. He was a frequent visitor to HK. Of course they will welcome him with open arms, he's been a very loyal customer. Why the surprise? BTW;Dick Cheney's heading for Dubai! Whatever next?

NDG, Tokyo, Japan

They'll need to steal a few more farms to pay for this lot.

We should have guessed the future of this so-called Marxist when he held onto Lord Carrington's pen.

Mick Green, Birmingham, UK

Is this Hong Kong bolt hole simply a holiday/shopping villa or is it a final refuge for a vilified dictator? Either way the amorality of China is most apparent. Mr Wen, the Chinese Premier made no mention of such awkward facts during his lecture at Cambridge University!!

David , Swansea, Wales

Thank God for the investigative journalists. A good piece of work.

Why do not police and decent politicians ( are there any?) back up the newspapers, there is just so much sleaze and corruption.

If Mugabe can be caught in HK then take him straight to the Hague.

Ben Haworth, NORWICH,

When will someone stop this animal?????!!!!!!!!!!!! Better to go after Bankers I suppose...

Mark, London,

If the UK is planning a 1 billion GBP per year aid package for Zimbabwe, the UK taypayer has an interest in where this money is likely to go! We hope it will go to help the people of Zim and not where Mugabe can get his hands on it.

Ted, Notttingham , UK

Good investigative journalsm!
Keep it up.

Bob Johnson, near Kuopio, Finland

Timothy, the obsession is because this man was supported by many people of the west and east before he became the dictator of a wealthy country.
We knew that this would be the outcome but nobody believed us. Many people died to prevent this. Blacks and whites. Never forget that.

Alice, Holland,

Billy: If I recall correctly, when voting to reinforce sanctions, China and Russia... vetoed? (perhaps I'm wrong on that). In any case, I'm fairly sure the Chinese have little or no problem with Mugabe.

Tom Farmer, Swansea, UK

I thought there were sanctions on this man and family. Why did Hong kong allow him them into the country.

Billy, Bangkok, Thailand

Our obsession as a nation with one man is rather revealing. Especially when we have famine in Somalia, civil war in Darfur, civil strife in the DRC and coups in Guinea. Now are you able to name the presidents of any of these countries? Yet we know the wife of one man is alleged to have bought a bag

Timothy Wilson, London, UK

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