It Figures,...More NY Politicians Arrested for Corruption

U.S. charges New York assemblyman, others with corruption, from Reuters

NEW YORK (Reuters) - New York State Assemblyman Eric Stevenson and four others were charged with corruption by U.S. prosecutors on Thursday, in the second federal graft case brought against New York politicians this week.

Federal prosecutors have accused Stevenson of taking more than $22,000 in bribes in exchange for official acts, which included drafting and sponsoring legislation to assist four businessmen in opening a network of adult daycare centers in the Bronx and avoid competition.

A Democrat from a prominent Bronx political family who was elected in 2010, Stevenson also sought to have one of the daycare centers named for his grandfather, according to prosecutors.

Stevenson's district office offered no comment.

"For the second time in three days, we unseal criminal charges against a sitting member of our state legislature," U.S. Attorney for the Southern District of New York Preet Bharara told a news conference.

"The allegations illustrate the corruption of an elected representative's core function - a legislator selling legislation," Bharara said. "And based on these allegations, it becomes more and more difficult to avoid the sad conclusion that political corruption in New York is indeed rampant and that a show-me-the-money culture in Albany is alive and well."

Since 1999, 20 state legislators in New York have been ousted because of criminal or ethical issues, according to the good government group Citizens Union. The New York Public Interest Research Group found that, since 2007, state senators have been more likely to be arrested than to lose their seats in a general election.

Allegations that elected officials were all too eager to hand the legislative process over to individuals offering a modest financial awards have shaken the New York political establishment, and led to urgent calls for reform.

In a separate case on Tuesday, Democratic New York State Senator Malcolm A. Smith was arrested and charged with trying to buy a place on the Republican ticket in the city's mayoral race, in what prosecutors said was his central role in a series of bribery schemes that reflected pervasive corruption in New York politics.

Five other politicians - three Republicans and two Democrats - were also arrested and charged with collectively accepting more than $100,000 of bribes in meetings that often took place in parked cars, hotel rooms and state offices, according to court papers.

In Thursday's case, two of the other defendants were charged in connection with paying a bribe to another assemblyman, who was cooperating with federal prosecutors at the time. Bharara said the assemblyman, whom he did not identify by name, has agreed to resign from office as part of a non-prosecution agreement.

Another Bankrupt California City

Retiring from the City at 50 years old and drawing 90% of your highest pay or being employeed for as little as six months and getting life time health benefits are a couple of the reasons Stockton, California is going bankrupt.

The people of Stockton will feel financial fallout for years after a federal judge ruled Monday to let the city become the most populous in the nation to enter bankruptcy. This coming from an Associated Press article yesterday.

But the case is also being watched closely because it could answer the significant question of who gets paid first by financially strapped cities — retirement funds or creditors.

"I don't know whether spiked pensions can be reeled back in," U.S. Bankruptcy Judge Christopher Klein said while making the ruling. "There are very complex and difficult questions of law that I can see out there on the horizon."

The potential constitutional question in the Stockton case is whether federal bankruptcy law trumps a California law that says money owed to the state pension fund must be paid. In making his ruling, Klein disagreed with creditors who argued that Stockton failed to pursue all avenues for straightening out its financial affairs.

"It's apparent to me the city would not be able to perform its obligations to its citizens on fundamental public safety as well as other basic government services without the ability to have the muscle of the contract-impairing power of federal bankruptcy law," Klein said.

A statement released by creditors said the group "respectfully disagrees with the court's ruling." The legal team for those creditors declined to say whether it would ask Klein for permission to appeal his decision — a requirement of bankruptcy code.

Stockton has tried to restructure some debt by slashing employment, renegotiating labor contracts, and cutting health benefits for workers. Library and recreation funding have been halved, and the scaled-down Police Department only responds to emergencies in progress. The city crime rate is among the highest in the nation.

Since cities can't liquidate assets, those that declare bankruptcy must come up with a plan for creditors to forgive some of the debt.

Holders of the biggest portion of Stockton's debt insured $165 million in bonds the city issued in 2007 to keep up with payments to the California Public Employees Retirement System as property taxes plummeted during the recession.

Stockton now owes CalPERS about $900 million to cover pension promises, far the city's largest financial obligation. Many struggling cities across California are in the same situation.

So far, Stockton has kept up with pension payments while reneging on other debts, maintaining it needs a strong pension plan to retain its pared-down workforce.

Attorneys for creditors argued that it was unfair for their clients to accept reduced payments while the pensions negotiated in flush times went untouched. They argued that employees who shared the wealth during good times should bow have to endure some of the pain with cuts to their pensions.

Legal observers expect the creditors to aggressively challenge the repayment plan presented by Stockton in the next phase of the process.

"That's where it will be precedent-setting," said Karol Denniston, a municipal restructuring expert who monitored the trial. "Does bankruptcy code apply to CalPERS or not? If bankruptcy code trumps state law, then that's huge and it has huge implications in terms of what happens next for other municipalities across California."

The state pension plan manages $255 billion in assets but was underfunded by $87 billion in 2011, the last time calculations were made. CalPERS is in the process of setting new rates to close the liability, said spokeswoman Amy Norris.

The changes could further strain at least two dozen other financially strapped cities, including San Bernardino, San Jose, Compton, Fairfield, Watsonville, Atwater.

"Just about everybody has an unfunded liability," Norris said.

Legal observers of the first-ever Chapter 9 bankruptcy case questioning state pension obligations expect an appeal to decide whether the 10th Amendment that gives rights to states is more powerful than federal bankruptcy code

Even Judge Klein, who was inclined at first to approve bankruptcy without a trial, said he was going forward with the hearing that ended Monday to create an appellate record.

Now the city of nearly 300,000 people begins a months-long process of negotiations over debt repayment. Already Stockton has spent $2 million on mediation and up to $5 million on the eligibility case, said Bob Deis, Stockton's city manager.

"There's nothing to celebrate about bankruptcy," he said. "But it is a vindication of what we've been saying for nine months."

Iron Lady Margret Thatcher Passes

The world is a little bit of a lesser place to live as Iron Lady Margret Thatcher passes away.

From a CNN report on Monday 8 April 2013. Former British Prime Minister Margaret Thatcher, a towering figure in postwar British and world politics and the only woman to become British prime minister, has died at the age of 87.

She suffered a stroke Monday, her spokeswoman said.

Thatcher's funeral will be at St. Paul's Cathedral, with full military honors, followed by a private cremation, the British prime minister's office announced.

Thatcher served from 1975 to 1990 as leader of the Conservative Party. She was called the "Iron Lady" for her personal and political toughness.

Former world leaders Margaret Thatcher and Ronald Reagan met many times as partners in diplomacy and policy-making and developed a public friendship. "We have lost a great president, a great American and a great man. And I have lost a dear friend," Thatcher said at Reagan's funeral in 2004.

Thatcher won the nation's top job only six years after declaring in a television interview, "I don't think there will be a woman prime minister in my lifetime."

During her time at the helm of the British government, she emphasized moral absolutism, nationalism, and the rights of the individual versus those of the state -- famously declaring "There is no such thing as society" in 1987.

Nicknamed the "Iron Lady" by the Soviet press after a 1976 speech declaring that "the Russians are bent on world dominance," Thatcher later enjoyed a close working relationship with U.S. President Reagan, with whom she shared similar conservative views.

But the British cold warrior played a key role in ending the conflict by giving her stamp of approval to Soviet Communist reformer Mikhail Gorbachev shortly before he came to power.

"I like Mr. Gorbachev. We can do business together," she declared in December 1984, three months before he became Soviet leader.

Having been right about Gorbachev, Thatcher came down on the wrong side of history after the Berlin Wall fell in 1989, arguing against the reunification of East and West Germany.

Allowing the countries created in the aftermath of World War II to merge would be destabilizing to the European status quo, and East Germany was not ready to become part of Western Europe, she insisted in January 1990.

"East Germany has been under Nazism or Communism since 1930. You are not going to go overnight to democratic structures and a freer market economy," Thatcher insisted in a key interview, arguing that peace, security and stability "can only be achieved through our existing alliances negotiating with others internationally."

West German leader Helmut Kohl was furious about the interview, seeing Thatcher as a "protector of Gobachev," according to notes made that day by his close aide Horst Teltschik.

The two Germanies reunited by the end of that year.

A grocer's daughter

Thatcher -- born in October 1925 in the small eastern England market town of Grantham -- came from a modest background, taking pride in being known as a grocer's daughter. She studied chemistry at Oxford, but was involved in politics from a young age, giving her first political speech at 20, according to her official biography.

She was elected leader of the Conservative Party in 1975, when the party was in opposition.

She made history four years later, becoming prime minister when the Conservatives won the elections of 1979, the first of three election victories to which she led her party.

As British leader, Thatcher took a firm stance with the European Community -- the forerunner of the European Union -- demanding a rebate of money London contributed to Brussels.

Her positions on other issues, both domestic and foreign, were just as firm, and in one of her most famous phrases, she declared at a Conservative Party conference that she had no intention of changing her mind.

The Iron Lady indeed.