From Volume 37, Issue 18 of EIR Online, Published May 7, 2010

United States News Digest

Dirty Dem Laundry To Be Aired?

May 1 (EIRNS)—The New Yorker magazine is reportedly about to publish the life story of Haim Saban, Los Angeles "media mogul" cum hedge fund billionaire, and deep-pocket Democratic Party moneybags. According to Hollywood leak-sheet The Wrap, Saban, an Egyptian-born Jew, is reportedly nervous, and has already warned author Connie Bruck—even speaking directly to editor David Remnick about the 11,000-word opus, almost a year in the making—that there will be consequences if the article contains any "disparaging" information.

The Saban story touches many chords close to the seamy side of the Democratic Party cash machine, that, if told, could spell additional trouble for President Obama and friends. It is his money, for example, which is behind the Saban Center for Middle East Policy at the Brookings Institution. The Center, founded in 2002, houses a host of Democratic heavies, including former ambassador Martin Indyk.

Saban is closely connected to the $12 billion hedge fund Quellos, started by Seattle Starbucks founder Howard Schultz in 1994. Quellos quickly developed a relationship with San Francisco/Silicon Valley venture capitalist firm KPMG (Kleiner Perkins), recycling dot-com nuevo-billionaires cash into offshore tax dodges. After the Y2K bust, Quellos shifted into hedge funds, becoming a leader in the new "fund of funds" industry, as hard-put institutional investors turned to them for "profitable" places to put their cash. Quellos's relationship with KPMG was the subject of a hearing by the Senate Permanent Subcommittee on Investigations, after the dot-com bust, in 2003. In 2007, after the exposure of the fraudulent tax shelters led to lawsuits, Quellos got $1.7 billion from Peter Peterson's former fund BlackRock, which took control of Quellos's investment unit.

Saban has an additional weight around his neck, with a lawsuit involving his former accountant Matthew Krane, who turned state's evidence (and is reportedly also the major source in the New Yorker piece) against Saban last year. According to LA Noir Nov. 12, 2009, Saban had instructed Krane to find him a tax dodge for the $1.5 billion profit he reaped when he "sold" Fox Family Channel to Disney Productions for $5.3 billion, in 2001. Krane's solution (in addition to apparently giving a big chunk of funds to Brookings that year) involved laundering cash through some connections in Austria, with the help of UBS bank Switzerland; and the legal case that has been playing out in Austria is about to be brought to the U.S.

Saban has since been hit with a $250 million tax bill by the IRS, and Krane was convicted for identity theft and passport fraud in 2008. His cooperation with the Feds, however, came only after Saban accused him (in Seattle court) of stealing $36 million and laundering the profits of the tax dodge.

Wall Street Demands No Extension of Unemployment Benefits

April 29 (EIRNS)—Wall Street's Bloomberg news service is putting out the word that unemployment benefits are not to be extended again; people who have been unemployed for over 99 weeks be damned. Bloomberg reports that that means more than 1 million more Americans will be thrown onto general relief, or have no income at all in the immediate months ahead, but says "the deficit" requires it. Sen. Max Baucus (D-Mont.), chair of the Senate Finance Committee, agrees with Wall Street, telling Bloomberg, "You can't go on forever.... 99 weeks is sufficient."

Blogs run by desperate unemployed and families of unemployed, organizing Congress for an extension, feature stories of growing numbers of suicides of those abandoned, as the social fabric of the United States disintegrates under the unchecked breakdown of the monetarist system.

Unemployment figures are as much lies as everything else the Obama team and Wall Street says, and even they estimate that only 70% of the nation's jobless received benefits in March. State officials told Bloomberg that 130,000 people in Florida, 57,000 in New York, and 30,000 in Ohio have now received their last check; state officials in California told the Los Angeles Times that nearly 100,000 people still looking for work, have run out their benefits. The notorious under-estimating Bureau of Labor Statistics says 44% of the unemployed have been out of work for at least six months; a study by Pew Fiscal Analysis calculated that 3.4 million Americans have been out of work for more than a year.

Cap-and-Trade Scam Faces More Trouble in Congress

April 25 (EIRNS)—The Obama Administration's effort to ram through cap-and-trade legislation, the same way it did the health-care bill, has taken a hit. Sen. Lindsey Graham (R-S.C.) has been the patsy Republican working on a "bipartisan bill," but part of the deal appears to have been that the Democrats would hold off on the immigration bill. Now Senate Majority Leader Harry Reid (D-Nev.), who appears to be losing his reelection bid, is desperate to win the Hispanic vote, and is moving to put immigration reform up front.

Graham responded with a public letter yesterday, saying that, "The political environment that we needed to have a chance [to pass the bill] has been completely destroyed by the push for immigration reform. What was hard has become impossible.... Moving forward on immigration in this hurried, panicked manner is nothing more than a cynical political ploy. What's happened here is, mid-terms are on us and Harry Reid's in a state with a heavy Hispanic vote."

Without at least one GOP vote, the bill will die in the Senate.

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