Administrative Law Judge Confirm Corruption Inside CFTC Courts
There are those who may think I criticize the courts too much, or that the Administrative Legal System corruption may be a personal opinion. Now, even the Commodity Futures Trading Commission (CFTC) Administrative Law Judge, George Painter, recognized the corruption in his own court system. Painter sent a scolding letter announcing his retirement highlighting the corruption from an insider’s perspective. George Painter died last year at the age of 87. Yet his parting words still will echo on in the halls of justice.
In the letter, Judge Painter announced his retirement as he exposed the internal corruption inside the court system. He stated bluntly that his fellow admin judges had never awarded a case to a plaintiff in 20 years, and that he did so at the urging of former CFTC Chair, Wendy Gramm. I do not take something as seriously as corruption lightly. I am not the type to exaggerate or run off at the mouth. If I say something, I typically can back it up. If I express my OPINION, I clearly state it as such.
Wendy Gramm was the Chair of the CFTC 1988 to 1993. A former Enron board member and wife of energy deregulation architect, Phil Gramm, who dominated Congress for years. Previously, from 1985 to 1988, Wendy Gramm was head of the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA). Of course, politicians always appoint family members to further their power. After a lobbying campaign from Enron, the CFTC exempted it from regulation in trading of energy derivatives and Gramm was rewarded with a board member position, exactly as Alan Cohen received, who was the receiver in my case hired by Goldman Sachs. Gramm at least resigned from the CFTC and took a seat on the Enron Board of Directors, whereas Cohen remained the Court’s Receiver and worked as a board member at Goldman Sachs without resigning. This type of corruption is widespread.
After the Enron scandal, Gramm was never criminally charged but she and the other directors of the energy company were named in several investor lawsuits. Gramm and other Enron directors agreed to a $168 million dollar settlement in a suit led by the University of California. As part of that settlement, the directors agreed to collectively pay $13 million to settle claims of insider trading. The remainder of the settlement was to be paid by insurance.
Judge Painter wrote in his addressing the corruption in the courts he maintained that Judge Levine told him that he had promised former CFTC Chair Wendy Gramm, “That he would never rule in a complainant’s favor.” Painter’s notice went on to say, “A review of his rulings will confirm that he has fulfilled his vow.” Judge Painter explained his reasoning for exposing Levine. “If I simply announced my intention to retire, the seven reparation cases on my docket would be reassigned to the only other administrative law judge at the Commission, Judge Levine. This I could not do in good conscience.”
Then the WSJ ran an a article written by Sarah N. Lynch in support of the CFTC, accusing Judge Painter of mental unfitness and heavy drinking (Case Sheds Light on CFTC Judge – WSJ). They have never trashed a judge in such a manner. Why? Obviously they were trying to discredit Painter. The article omitted his attack on the Administrative Court System. It was a highly biased character assassination piece, written to support the CFTC. The LA Times, outside of the NYC cesspool, covered the story stating that the Judge Painter’s ruling should concern everyone. This illustrated the stark difference between NYC and the rest of the world.
Back in the 1980s, I was asked to testify against the CFTC with respect to merging it with the SEC. I called a lawyer who practiced before the CFTC who routinely said the same thing about the CFTC Administrative Law Court: you could not win, and often the decisions never made legal sense. I told him I could get him before Congress and he should tell them what he told me. “No way!” he said, for he would be prejudiced out of business and could never win a case thereafter. He advised me not to testify against the CFTC for they would target me as well in retaliation.
In March of 2015, two Supreme Court Justices, Kennedy and Breyer, testified before Congress stating bluntly that the U.S. criminal justice system does not work (Two Supreme Court Justices Say Criminal Justice System Isn’t Working – WSJ). The conviction rate back in 2000 in Federal Court was 87% with 71% of those sentenced to prison. By 2010 it rose to 93%. How? Judge Rakoff wroteWhy Innocent People Plead Guilty. Others have written on the same subject. Even Eric Holder admitted the justice system is broken, and he stood at the head of that system.
Attorney General John Ashcroft reorganized the Justice Department into what he called a “wartime reorganization” following 9/11. He sent thousands of Americans to prison. Prosecutors would not receive credit for a conviction UNLESS the defendant did jail time. A traffic violation on federal land mandates jail time, even for not having your documents in your possession.
So when I do say there is corruption, it is not simply a personal opinion. I will always qualify something as such. Otherwise, it is based upon observation and research, even though I do not always have the time to fully write about the sources I have encountered.
Judge Rules Administrative Court System Illegal After 81 Years
Well it has been a long time coming, but all along there have been discussions behind closed doors (never in public) that the Administrative Law Courts established with the New Deal were totally unfounded and unconstitutional. With the anniversary of Magna Carta and the right to a jury trial coming up on June 15 after 800 years, the era of Roosevelt’s big government is quietly unraveling.
A federal judge’s ruling against the Securities and Exchange Commission for using its own Administrative Law judges in an insider trading case is perhaps the beginning of the end of an alternative system of justice that took root in the New Deal. Constitutionally, the socialists tore everything about the idea of a Democracy apart. It was more than taxing one party to the cheers of another in denial of equal protection. It was about creating administrative agencies (1) delegating them to create rules with the force of law as if passed by Congress sanctioned by the people; (2) the creation of administrative courts that defeated the Tripartite government structure usurping all power into the hand of the executive branch, as if this were a dictatorship run by the great hoard of unelected officials.
Not discussed in the coverage of this story is that the Administrative Law Courts are a fiefdom, to put it mildly. They have long been corrupt and traditionally rule in favor of their agencies, making it very costly for anyone to even try to defend themselves. If someone were to attempt this feat, first they have to wear the costs of an Administration proceeding and appeal to an Article III court judge, then they must appeal to the Court of Appeals, and finally plea to the Supreme Court. The cost of such adventures is well into the millions, and good luck on actually getting justice.
Furthermore, Administrative Law Courts cannot sentence you to prison, but they can fine you into bankruptcy. So the lack of a criminal prosecution meant the judges did not have to be lawyers. They could be anyone’s brother-in-law looking for a job where he just rules in favor of the agency not to be bothered with law. Unless the victim has a pile of money, there is no real chance that he or she can afford to defend themselves. This is why the agencies cut deals with the big houses and prosecute the small upstarts who lack the funds to defend themselves.
In a 45-page ruling, U.S. District Judge Leigh Martin May in Atlanta issued an injunction halting Administrative Law proceedings against Charles Hill, a businessman who the SEC accused of reaping an illegal $744,000 profit trading in Radian Systems stock. This is typical. The legal fees involved will exceed the amount of money he is alleged to have made, the typical result is to just pay the fine and they go away, it is cheaper.
The judge ruled that the SEC agency violated the Appointments Clause of the Constitution by subjecting Hill to proceedings before an Administrative Law judge, who isn’t directly accountable to the president, officials in charge of the SEC, or the courts under Article III. The ruling is 81 years overdue. The entire structure of administrative agencies blackmailing people has been outrageous. Then you take the banks who just entered a plea of CRIMINALLY guilty to manipulating markets. They are now formally FELONS who engaged in violating SEC rules and thus under the SEC rules, they are no longer eligible for a banking license. The banks are “too big to jail” and the SEC has waived their own rules, of course, to exempt the banks. So they can engage in fraud and manipulation, get caught, pay billions in fines, and the SEC exempts them from losing their licenses. This is how corrupt the administrative agencies really are.
This new decision calling the Administrative Law Courts what they really are is reminiscent of the notorious extrajudicial proceedings of the Star Chamber operated by King James I. The court of Chancery set up outside of the King’s Bench, so there were no trials by jury. It had the same purpose, to circumvent the law. This is where our Fifth Amendment privilege came into being. That came about following the trial of John Lilburne (1615-1657) for handing out a pamphlet the government did not like.
The Miranda v Arizona 384 U.S. 436 (1966) decision of the Supreme Court came only after decades of abuse by American police against citizens, not unlike what we are watching today. The Miranda decision is hated by police, prosecutors, right-wing judges, politicians, and citizens. The decision is based upon the history of the right not to be coerced that began with the famous trial of John Lilburn before the English court of the Star Chamber in 1637 where he stood tall and objected to the King’s torture. Lilburn’s crime was handing out pamphlets against the king. John Lilburne (1615–1657) was a leader in the Leveller Movement of the 1640s and was a prolific pamphleteer who defended religious and individual liberty of the people. He was imprisoned many times for his views and was active in the army of the New Parliament rising to the rank of Lieutenant Colonel. In October 1649, he was arrested and tried for High Treason for printing and circulating books and pamphlets critical of the government but was acquitted of all charges by a jury of his peers.
Market Talk
Interesting day all around…
European bonds are weaker from the opening rumors of unwinding the yen carry trade as a result of the stronger JPY (on Abe’s comments) resulting in 10-year bund trading briefly above 1% and the U.S. 10-year note at 2.50%, but then retail appeared and the bounce continued throughout the day – periphery followed.
Greece, never out of the news, who despite managing to sell some short term bills we still see the 2-year notes trading above 25%. Late news that there may be more money for Greece, under the condition that Greece approves just one reform, was followed by an improvement in all European bond markets.
The Mansion House speech is tonight at 5:00 p.m. featuring London Chancellor and Mark Carney.
Sterling trading well today… so far!
— Ashley Warren, CEO, PEI
We Apologize For Delays – We Are Expanding Once Again
We are migrating the site once again. The content and traffic have grown beyond the capacity of the system to handle. We are working as hard as possible to improve the site in preparation for 2015.75.
Princeton World Economic Conference: Seating Reopened
We now have a headcount for the U.S. session of the World Economic Conference and those who have moved to the Berlin Session. This leaves less than about 50 seats available for the Princeton conference, which are being sold on a first come, first served basis.
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