Wednesday, August 27, 2008

Citicorp Stole from Its Credit Card Customers

Citibank, or Citigroup as the parent company is known, just plain stole money from its credit card customers in California using a computerized theft system that must be the envy of hacker gangs. They have agreed with the Attorney General of California to give as-yet undetermined millions of dollars back to the victims.

This criminal adventure is just the latest in a long series of crimes committed by Citibank during its history. In many cases transactions that would be crimes were legalized by bribing elected officials to write laws to Citibank's liking. See my Citibank page for an outline of this criminal history.

According to a Press Release from the California Office of the Attorney General Edmund G. Brown, Jr., Citibank used a sophisticated computer program for the thefts, called a "credit sweep process." For a variety of reasons a credit card account might show a temporary positive balance, for instance if a customer paid their monthly bill twice, or returned a purchased item for credit. The positive balances were detected by a computer program that automatically disappeared them from the victim's statements. The program was especially designed to target consumers who were deceased, had sought bankruptcy protection, or were involved in litigation.

The release indicated that "Citi" also stole from customers in the other 49 states in the United States of America, but it appears that the settlement only affects California, and that the the governments of the other states either can't be bothered or can be bribed.

A whistleblower who discovered the fraud was fired by Citibank. A Citibank executive said "Stealing from our customers is a business decision, not a legal decision."

The California investigation was launched in 2005. The Citibank actions violated the California False Claims Act.

The settlement [See State of California ex rel Mellon v. Citigroup Final Judgment] provided for a permanent injunction against credit sweeps in California, refunds for the victims including 10% interest, a penalty of $3.5 million to be paid to the State of California, and an independent audit of the process.

While I can applaud Jerry Brown for this action, in general the astonishingly corrupt Legislature of the State of California has done a terrible job regulating credit card companies. In fact, credit cards were deregulated (I think back in the 1980's). Back in the good old days the state set maximum interest rates and late penaltied. The industry argued that if it were deregulated interest rates and penalties would drop due to competition. An even stronger argument was a flood of money to the campaign funds of politicians, Republican and Democrat alike. Of course after deregulation late penalties and interest rates jumped and never came down.

Computer programmers from corporate fraudsters like Citibank talk of all kinds of tricks used to milk the public. The simplest is sending out bills after the first of each month. Many customers pay bills once a month, coinciding with when rent is due. The credit card bill arrives after that, is put in a pile, and is not paid until the end of the month, by which time a penalty is added to it. Billions of dollars have been stolen that way.

According to consumers, banks even simply allowed physical payments to ripen in a warehouse for a week or so before processing them. Most people pay their bills barely on time, so the extra week made the payment late and added a penalty. Complaining customers were told the fault must be with the U.S. Postal Service. Another scam is having payments post the day after they are received due to arbitrary deadlines that make no sense in this computerized world [ See Why Your Credit Card Payment Posts Late].

California - and the rest of the nation - needs real banking and credit card reform. Don't expect to get it as long as you keep voting for the Democratic and Republican Party machines' candidates.

Saturday, August 23, 2008

Barack Biden Boys Ball Club

Presumed Democratic Party nominee Barack Obama decided that women did not need to be represented on the party ticket, instead choosing notorious plagierizer, bank corporation errand boy, and militarist Joe Biden, currently Senator from Delaware, as his running mate.

There had been speculation that if Senator Obama did not choose Hilary Clinton for the ticket, he would at least choose a woman. But Barack Obama is all about getting elected, and he figures with no women on either of the two major party tickets, women will tend to vote Democratic as they have in the past. Pleasing the financial establishment is more important that pleasing women, so the man who brought us the new bankruptcy law (basically making getting out of consumer debt through bankruptcy proceedings impossible, though corporations can still easily shed their debt), Joe Biden, got the spot.

But what else would you expect of Barack Obama, a man who knows the Democratic Party was founded by a slave trader (President Andrew Jackson), who stewed his ambition in the corrupt Chicago school of Democratic Party politics, and whose campaign has been marked by vague promises targetting the nation's most naive Democratic primary voters?

Joe Biden's bid for the Vice-Presidency brings up deeper issues of Democracy in the United States. He is a Senator from Delaware. The population of Delaware is about 865,000, ranked 45th of the states. Yet Deleware gets 2 Senators, the same as California with a population of about 36.5 million. Buying a Senator in California is expensive (both Diane Feinstein and Barbara Boxer are already fabulously wealthy), but apparently buying Joe Biden was mere pocket change for MBNA, a bank known mainly for its credit card business, which was absorbed into Bank of America a few years back.

Of course Joe Biden is not an entirely bad man. Within the mainstream spectrum he has often been on the side of things I like, especially where social issues (abortion, women's rights, civil rights) don't interfere with economic issues (like MBNA's ability to charge what it liked for credit card interest and fees, then change the bankruptcy laws to trap its customers in perpetual debt slavery).

Expect leading Democratic Party women to stand behind their men; that is how they get their own bread buttered.

Want to show that you are not trapped in the two party system? The Green Party has an all woman ticket, former member of the House of Representatives from Georgia, Cynthia McKinney, and civil rights activist Rosa Clemente.

More data:

New York Times background article on Joe Biden

Saturday, August 16, 2008

Al-Qaeda in Hurlo-Thrumbo Says Chemical Attacks Ready

An internal memorandum of Al-Qaeda in Hurlo-Thrumbo claims that the ingredients are in place for a massive chemical attack on the United States of America.

Apparently kilograms of mercury, a toxic metal, have been manufactured into easily dispersible devices and spread throughout the nation. Mercury is poisonous when absorbed into the body, and it is absorbed from the air through the lungs when it is in the form of vapor. It can also be ingested with food and, when part of a soluble compound, absorbed through the skin. Safety standards for mercury vary according to the type of exposure. One comprehensible mercury standard from Australia is that drinking water should contain no more than one-thousandth of a milligram (one millionth of a gram) of mercury per liter (about a quart).

The Al-Qaeda in Hurlo-Thrumbo manufactured devices each contain 4 milligrams of mercury, enough to give an American citizen 4000 times the maximum safe daily dose. It is important to be able to recognize the symptoms of mercury poisoning. And not millions, but billions of the devices have already been smuggled into the United States of America.

The American military refers to the devices as CFLs. "As weapons CFL's have some drawbacks," said Deep Moat, our Pentagon source. "You have to break the CFLs open in order to release the cloud of mercury vapor. However, breaking them open does not even require an IED. The can be broken by dropping them, or by any of a number of mechanical means."

How were so many CFLs brought into the United States and placed in shopping malls, warehouses, even in homes and government office buildings?

"They sold them to the American public as replacements for the old-fashioned light bulb. When the American consumer failed to respond, they got a certain formerly high-ranking U.S. official to threaten Congress with a global disaster unless incandescent light bulbs were made illegal. Not understanding that this was an Al-Qaeda in Hurlo-Thrumbo plot, Congress went along. Of course there were the usual campaign contributions involved." We are quoting Deep Goat, whose agency does not want to be identified.

If you have an CFL and it breaks, it is recommended that you immediately evacuate the area and call in a toxic disposal crew.

"Sure, one CRL in a home or office just creates a hazard to a few people and can be cleaned up. What Al-Qaeda in Hurlo-Thrumbo seems to be indicating is that they have a plan to break millions of them simultaneously," Deep Goat continued. "Al-Qaeda is noted for this sort of spectacular tactic. They could target a number of big box stores, or a truck stuffed with CFLs moving through a city. There is no reasonable way to stop them, since the commerce clause prevents us from interfering with any commerce that Congress has ordained."

The best thing private citizens can do for their own safety is to refuse to buy the CFLs and stay away from stores that contain concentrations of CFLs. If you do have CFLs in your house or office, you should either contract in advance for toxic spill cleanup services or be prepared to follow the EPA guidelines for CFL breakage cleanup.

Also, here is a handy list of other common poisonous substances found in commerce: 64 Hazardous Substances - Mercury section

Sunday, August 3, 2008

U.S. Government of Somalia Collapsing

The U.S. government of Somalia installed against the will of the vast majority of the people of Somalia appears to be falling apart. Aside from an actual invasion by U.S. or allied troops (beyond the current occupation forces from Ethiopia and Uganda), there seems to be little the U.S. government can do to impose its will on Somalia. While no actual U.S. invasion is likely until after Barack Obama is elected President of the United States, it would not be surprising if the U.S. resumed bombing Somalia before the end of the Bush adminstration.

The tiny group of men styling themselves the government of Somalia (not long ago known as the Provisional Government of Somalia, and probably soon to be know as the former warlords financed by the CIA who briefly got the world press to call them a government) just split up. According to the Associated Press, a majority of the cabinet ministers resigned on Saturday, August 2nd, 2008. They were led by President Abdullahi Yusuf Ahmed, who had a dispute with Prime Minister Nur Hassan Hussein over who should be the warlord, I mean mayor, of Mogadishu.

This follows the collapse of peace talks with the democratic opposition. The opposition had restored a semblance of good government in Somalia in 2006, but called itself the Islamic Justice Courts. Fearful that the establishment of justice in the Horn of Africa would endanger U.S. military and economic interests, the U.S. CIA (directed, of course, by President George W. Bush) picked a favored warlord told him and his friends to call themselves the Provisional Government. Detested by the people of Somalia, this provisional Government was later propped up by an invasion of marauders from Ethiopia and Uganda, financed by the U.S.

Somalians are used to foreigners. As I wrote in Portuguese Catholics Destroyed East African Islamic Societies in 1500's, the role of "civilized Europe" in the Horn of Africa has always been one of piracy. Colonial rule only ended in 1960.

The only civilized approach to the Somalia mess (this is a mess that means millions of people are starving, without housing or medical care) is to withdraw all foreign troops and let the people decide the issue for themselves. That may mean anarchy. It may mean a patchwork of warlord-dominated regions. It might mean an Islamic state. It might even mean a peaceful democracy. Left to themselves, the people of Somalia will find a solution to their problems. Short-term solutions will evolve into long-term solutions. Short term, the issue will be settled partly with guns. But who the people point their guns at will depend on the popular consensus. Elections might make sense, but no outside government can be trusted to run fair elections. When the people themselves organize elections, they may be ready to rely upon the results of those elections.

For more insight into the history of what has been happening in Somalia since 2006 see my main Somalia page.

For New York Times (registration required) archives (mostly Associated Press articles) see NYT Somalia archives (but note these are highly biased in their descriptions of factions in Somalia).