Florida says NO to Private Prisons

Florida Lawmakers Defeat Prison Privatization amid National Push for For-Profit Jails

The Florida State Senate has defeated a measure to privatize at least 27 prisons, which would have created the largest corporate-run prison system in the country. Despite the vote, Republican Gov. Rick Scott could still privatize the prisons through executive authority. According to the U.S. Department of Justice, the number of prisoners being added to privately run jails is outpacing the overall prison population by 17 percent compared to 4 percent. The nation’s largest operator of for-profit prisons, Corrections Corporation of America, recently sent letters to 48 states offering to buy up their prisons in exchange for a 20-year management contract, plus an assurance that the prison would remain at least at 90 percent capacity. We discuss prison privatization with two guests: Florida Republican State Senator Mike Fasano, who led the charge against the bill to handover South Florida’s state prisons to private companies, and ACLU of Ohio spokesperson Mike Brickner, co-author of the report, “Prisons for Profit: A Look at Prison Privatization.” [includes rush transcript]

Guests:

State Senator Mike Fasano, Florida Republican who led the charge against the bill to hand over South Florida’s state prisons to private companies.

Mike Brickner, communications and public policy director at ACLU of Ohio. He co-authored the report “Prisons for Profit: A Look at Prison Privatization.”

 

Rush Transcript


 

JUAN GONZALEZ: The Florida State Senate has defeated a measure to privatize at least 27 prisons, which would have created the largest corporate-run prison system in the country. Despite the vote, Republican Governor Rick Scott could still privatize the prisons through executive authority. According to the U.S. Department of Justice, the number of prisoners being added to privately run jails is outpacing the overall prison population by 17 percent compared to 4 percent.

Meanwhile, the nation’s largest operator of for-profit prisons recently sent letters to 48 states offering to buy up their prisons. In exchange, Corrections Corporation of America is asking for 20-year management contracts, plus an assurance that the prisons would remain at least at 90 percent capacity. A CCA spokesperson touted prison privatization as a cost-saving initiative.

CCA SPOKESPERSON: This company, CCA, we are the leader and the largest in the world, as far as private prisons and jails. We’re highly rated in the stock market. It hones your ability to do it less expensively, because we have to earn a profit.

AMY GOODMAN: Corrections Corporation of America has been a swiftly growing business, with revenues expanding more than fivefold since the mid-’90s.

Well, for more, we’re joined now by two guests. On the phone, we’re joined by Florida Republican State Senator Mike Fasano. He led the charge against the bill to hand over South Florida’s state prisons to private companies. And in Cleveland, Ohio, we’re joined by the ACLU of Ohio’s spokesperson, Mike Brickner, co-authored a report called “Prisons for Profit: A Look at Prison Privatization.”

We welcome you both to Democracy Now! State Senator Mike Fasano, let’s begin with you. Why did you oppose this measure in Florida?

STATE SEN. MIKE FASANO: Well, first and foremost, I’m a true believer, as many of my colleagues are, that you don’t privatize public safety. You do not put, in my opinion, public safety in the hands of private corporations to make a profit.

Secondly, it is my belief that you do not put hardworking men and women, like our correctional officers and their families, out of work. We have a 10 percent-plus unemployment rate in the state of Florida, and the last thing we should be doing is moving prisons that were paid for by the taxpayers into the hands of corporations, that would probably put many of these families out of work, who have mortgages to pay, homeowner’s insurance to pay, food on the table. This would be devastating to—not only to their families, but also to the community they live in.

JUAN GONZALEZ: And Senator Fasano, you suffered repercussions from your own party as a result of your leading this fight, this successful fight. What happened?

STATE SEN. MIKE FASANO: Well, it wasn’t the party per se. It was the president of the Senate, Mike Haridopolos, that pushed this issue for the last year and a half since he’s been president of the Senate. I had made it clear last year, when he made me chairman, appointed me chairman of the committee that oversaw the Department of Corrections budget, that I could not support the expansion of privatization of our prison system in the state of Florida. He removed me from that position.

The good thing is that the vote that killed the bill that would expand the privatization in Florida was a bipartisan vote. We had 10 Republicans that joined 12 Democrats to defeat the bill 21 to 19 this past week.

AMY GOODMAN: I wanted to get your response, State Senator Fasano, to your governor, Rick Scott, who talked about his support of efforts to privatize the prisons of South Florida.

GOV. RICK SCOTT: What the bill says is that if we don’t save at least 7 percent, we don’t do prison privatization. But why wouldn’t we put ourselves in a position that, if we can save money, to put the money in the programs that we know we need to fund, whether that’s education or whether that’s Medicaid or any of our other programs—why wouldn’t we—why wouldn’t we take this opportunity to save the money? So, I’m hopeful that the House and Senate will approve it, because it’s the most logical way to save some money.

AMY GOODMAN: State Senator Fasano, could Republican Governor Rick Scott still privatize the prisons through executive authority? And your response to his saying this is how we could save money?

STATE SEN. MIKE FASANO: Well, it’s my understanding that he can, that he can and does have the ability, through statute, to privatize prisons. To the extent that this legislation would have allowed it, I’m not sure about that. But that’s why I asked for a study. The original amendment that I had on the bill, before we killed the bill, was to—would have required an in-depth study, economic study, to find out if there’s true savings there, but also to find out if—by privatizing, does it impact of our correctional officers, their community, and the economy of the state of Florida as a whole?

You know, they keep saying that—and the Governor refers to this 7 percent savings. I’ve not seen it. I used a perfect example on—during our debate, when we stopped the bill from moving forward. We talked about per diem. I used a public facility versus a private facility that was similar, comparable, and yet the public facility run by the state, the per diem per day was about $10 less than what the private company is charging the taxpayers. So I respectfully disagree with Governor Scott.

JUAN GONZALEZ: Well, Mike Brickner of the ACLU in Ohio, you’ve been studying the privatization of prisons. What about this issue that they’re cheaper, and what are some of the other problems that you’ve seen in your studies?

MIKE BRICKNER: Well, I think, first of all, it is the great myth that private prisons will provide any type of cost savings. Here in Ohio, we have—by statute, they’re required to save at least 5 percent. But there have been multiple studies that have shown that they did not save 5 percent. And in some years that we’ve had private prisons here in our state, they actually cost more than public prisons. And other states like Arizona have found that, as well. So, really, they don’t save much money at all.

We’re concerned on a number of different issues. Here in Ohio, we’ve had a very spotty past as far as safety with private prisons. Back in 1999, we had a private prison, a federal penitentiary in Youngstown, Ohio, and within 14 months of it being opened, there were 13 stabbings, two murders and six escapes. It got so bad that the city of Youngstown had to sue to close down the private prison and have them comply with their safety concerns. So, what we saw was, eventually, they had to comply with the safety concerns, and once they did that, it was no longer profitable for them to remain open.

The main way that they save money with the private prisons is that they cut staff benefits and pay. That means that they have less experience, less knowledgeable staff. That leads to higher turnover. And then they are not equipped to deal with the issues that occur when there is a riot or violence in a prison. And then we see an uptick in safety issues. Studies have shown, at similarly security-level prisons, private prisons have a 50 percent higher inmate-on-inmate and inmate-on-staff assault ratio than public prisons do.

AMY GOODMAN: State Senator Mike Fasano in Florida, who are the forces behind the push for privatization? How much money is involved here, and who’s getting it?

Ah, it looks like we just lost State Senator Mike Fasano. We’re going to go for a moment, if we can—we may have lost also Mike Brickner at the ACLU of Ohio, speaking to us from Cleveland.

The “Prisons for Profit: A Look at Prison Privatization,” your report—were you surprised by this letter that went out from the CCA? Talk about the significance of this and the push around the country in this election year.

Ah, I think he isn’t able to hear us, so we’re going to leave it there. We’re going to link to Mike Brickner’s report

with the ACLU of Ohio, called “Prisons for Profit.” And I want to thank Florida Republican State Senator Mike Fasano for being with us from Florida. Source

Some politicians get a lot of money from the private prison folks. They line their pockets and the people get shafted.

Also on this topic

The Prison Industry in the United States Costs Taxpayers Billions

 

Published in: on February 18, 2012 at 5:41 pm  Comments Off on Florida says NO to Private Prisons  
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Blowout: BP’s deadly oil rig disaster

May 3  2010 Updates at bottom.

Next step pollution containment chambers.

Seems the Chemicals didn’t work all that well.

Obama went to check out the damages.

The oil slick on April 30, approximately is 130 miles long and 70 miles wide and growing. Between 200,000 to 210,000 gallons per day are now spilling out of the oil well. BP  admits it cannot handle this disaster and is asking for help as well.

April 29 2010

The oil is leaking about 5,000 barrels a day apparently – five times greater than initial estimates.

Earlier reports said:

Oil continues to spill undersea at an estimated rate of 160, 000 litres a day. (  1,000 barrels or 42,000 gallons of oil a day) The oil rig may have had as much as 700 thousand gallons of diesel on it as well.

By Danny Fortson

April 25 2010

Fireboats rush to contain the flames on the rig

It was a calm, balmy evening in the Gulf of Mexico. Most of the crew of the Deepwater Horizon, a giant drilling rig moored 40 miles off the Louisiana coast, were unwinding after a 12-hour shift in the blazing sun.

It had been a good day. After weeks of drilling, the rig, a technical marvel designed to tap the world’s most remote fields, had struck oil. It was a long way down — some 18,000ft beneath their feet, further than the height of Mont Blanc.

BP, which had hired the rig, was preparing a press release to trumpet its latest success. The news would have gone down well in Washington. Weeks earlier President Barack Obama had opened up to explorers swathes of the Gulf and east coast, much of which had been off limits since the Exxon Valdez disaster in 1989.

Then at 10pm last Tuesday, Deepwater Horizon’s lights went out. An eerie thud followed. Then another. Jim Ingram, a seasoned offshore worker, was preparing for bed. “On the second [thud],” he said, “we knew something was wrong.”

Moments later a torrent of gas, oil and mud burst through the rig floor, and for reasons nobody yet knows, ignited. In an instant the Deepwater Horizon exploded into a fireball.

There was little time to react. Some of the 126 crew jumped overboard, breaking bones from the 80ft drop into the sea.

Most managed to clamber into covered lifeboats, which were quickly winched down to the water. They gathered up colleagues and sped away from the roiling blaze fed by a fountain of oil and gas.

It was 45 minutes before they were met by a nearby BP supply ship that had been alerted to the distress signal. US Coast Guard helicopters flew the critically injured to hospitals. The rest of the survivors endured a tortuously slow return trip on the supply ship.

They arrived at a hotel outside New Orleans just before 5am to tearful family members. The father of one of the workers said: “Thank God he wasn’t on the rig floor. He would have been burnt alive.”

Eleven people were missing. The coast guard covered 3,400 sq miles in spotter planes, cutters and helicopters before calling off the search on Friday. Rear Admiral Mary Landry said: “The time of reasonable expectation of survivability has passed.” All eleven are presumed dead.

The accident was the deadliest for America’s offshore industry in more than two decades. The question now is who gets the blame.

Tony Hayward, BP’s chief executive, has staked his reputation on cleaning up the company’s act. When he took over three years ago, the oil giant’s image was still tainted by the 2005 explosion at its Texas City refinery that killed 15 people and injured many more. The company paid millions in fines and pleaded guilty to criminal charges.

BP had just six men on the Deepwater Horizon. The rest were employees and contractors of Transocean, the firm that owned the rig and was responsible for the drilling. US authorities, Transocean and BP have all launched investigations to work out what went wrong.

The search for answers will be difficult: 36 hours after bursting into flames, the Deepwater Horizon capsized. The only trace it left was a one-mile by five-mile oil slick.

OBAMA enraged environmentalists last month when he repealed a moratorium on oil exploration on America’s east coast. His choice of venue for the announcement, Andrews air force base in Washington DC, in front of an F16 fighter jet modified to fly on biofuel, carried a less-than-subtle message. Finding domestic sources of fossil fuels is not just an economic issue, but a security one.

Five weeks before, Lord Hunt, Britain’s energy minister, delivered a similar message from a manufacturing yard in Fife. He announced the government’s largest-ever licensing of the seabed for oil exploration since the first parcels were offered in 1964, throwing open pristine swathes of coastal waters off Land’s End as well as large chunks of the English Channel that had previously been protected.

Domestic oil sources are dwindling at an alarming rate, pushing governments and the industry to increasingly desperate measures.

Kurt Arnold, a Houston lawyer with a pending case against Transocean, said: “The reality is that as we push and push into deeper exploration, deaths and injuries are more of a problem. You don’t hear about it because it’s offshore.

“They say it’s better than it used to be, but a lot goes unreported because of where it is.”

The Gulf of Mexico accounts for a third of America’s oil production. It attracts highly trained engineers as well as manual labourers, who can make far more than on land.

The work is dangerous. So far this year there have been three fires on rigs in the Gulf. Since 2001, 69 people have died in accidents. (The worst industry disaster remains the Piper Alpha catastrophe off Aberdeen, in 1988, when 167 workers died.) The Deepwater Horizon was designed to avoid such disasters. It was at the technological frontier, a “semi-submersible” rig intended for ultra-deep water, where rigid support structures are impossible.

Instead, it sat on pontoons equipped with thrusters that reacted to the tides to keep it in place. Six months ago it drilled to a record depth of 35,000ft. That well was also drilled for BP, not far from the site of last week’s disaster.

It is still unclear what caused the accident but it appears to have been a blowout — a sudden spike in pressure that sends oil or gas bursting up to the surface. If that happens, the blowout preventor, a guillotine-type valve on the seafloor, triggers automatically to cut the flow. It didn’t. BP sent remote-control submersibles to close it manually but they failed, which is why the rig continued to burn.

“I’m surprised by this,” said Manouchehr Takin of the Centre for Global Energy Studies, the research firm. “The deeper you go, you can find pockets of high pressure and low pressure, which can be a problem because the hydrostatic column must always be balanced. The fail-safes in place are incredibly good. This is just a tragic accident.”

BP’s relationship with Transocean will come under heavy scrutiny. Transocean is the largest offshore drilling contractor in the world with a fleet of 139 rigs.

The boom in offshore drilling, however, has led to intense competition not just for equipment but for the personnel to operate it. The most qualified crews are often shuffled between the most demanding jobs, like such as one the Deepwater Horizon was working on.

Contractually at least, the responsibility for the accident would appear to lie with Transocean. Like an architect, the oil giants design and oversee the job. It is the building firm, Transocean, that is paid to bring it to fruition, and shoulders the blame if anything goes wrong.

Speraking from Houston, Hayward said he was working closely with Transocean. “It is an incredibly good deepwater operator,” he said. “It’s their rig, their people, their systems, their processes.”

BP, as the owner of the oil, is taking the lead on the clean-up. So far this has been minimal. The fear was that oil would continue gushing when the rig sank. (Also, it had 700,000 gallons of diesel on board.) For some reason the flow reduced to a trickle.

BP has yet to determine why. A flotilla of 32 boats armed with skimming equipment and more than 1m feet of boom to contain any oil spillage remains at the ready.

Hayward said: “We want to make damn certain that this never happens again. That’s why I am here.

“We have an armada of ships ready to make sure that what is a tragic accident doesn’t become a major environmental issue.”

LESS than 36 hours passed before BP and Transocean were hit with the first lawsuit. Scott Bickford is representing the wife of Shane Roshto, 21, who had flown out a few days before to begin a three-week shift.

He is one of the 11 missing, now presumed dead.

“Both Transocean and BP are being sued. If there was any negligence, they’ll be liable,” Bickford said. “We wanted to make sure all evidence was preserved. I went down and saw one of the liferafts that was recovered. It was melted.”

This is just the beginning. It will be months before the cause of the disaster is determined and years before the last payouts are made.

For Transocean the stakes could not be higher. BP, too, will remain forever linked to another tragedy. How Hayward manages the crisis and its fallout could well be a defining moment of his reign at BP, much as Texas City was for his predecessor, Lord Browne.

The incident is certain to be exploited by all sides in the debate over where we get our energy and the risks we are willing to take.

“We strongly opposed Obama’s [offshore oil] proposal,” said Nick Berning at Friends of the Earth. “It endangers the marine environment, it’s obviously dangerous for workers and increasing our reliance on oil makes the climate crisis worse.

“His proposal is not a done deal. Legislation needs to be passed. This will influence that debate.”

Defining moment for the clean-up king

WHEN Tony Hayward took the top job at BP three years ago, the oil giant was in turmoil, writes Dominic O’Connell. Lord Browne, the “sun king” chief executive who had built up the group in a series of daring acquisitions, had left under a cloud after a boardroom bust-up.

The company was still suffering the legacy of an explosion and fire at its Texas City refinery that killed 15 workers and injured 170. The disaster had taken place two years earlier, in 2005, but a malaise still hung over BP’s American operations, fueled by the discovery of leaks in Alaskan pipelines and a string of other health and safety allegations.

Hayward, who has a first-class geology degree from Aston University in Birmingham, set out to reshape BP with a minimum of fuss and publicity. He asked Bain & Co, the business consultancy, to investigate the state of the group. The results were surprising. “I was gobsmacked,” he told The Sunday Times in an interview last November.

“They said, ‘You are the most complicated enterprise we have ever come across’. We were a very complex organisation with little clarity or accountability.”

His answer was to start hacking away at the organisation. He gutted middle management, sold assets and centralised operations. Only one in three of the top managers survived the cull. More than 6,500 jobs were eliminated and overheads fell by a third. The company’s results immediately perked up and investors were happy with Hayward’s increases in dividend payments and share buy-back programmes.

While the Gulf of Mexico explosion is not in the same league as the Texas City disaster, it is still worrying for Hayward, who is on the scene this weekend to monitor the clean-up.

President Barack Obama has only recently opened up new areas of America’s waters to exploration and BP, like the other oil giants, is desperate for virgin territories to explore.

If America pulls back, BP will be forced to look even farther afield. Source

Stormy weather delayed weekend efforts to mop up leaking oil from a damaged undersea well after the explosion and sinking of a massive rig off Louisiana’s Gulf Coast that left 11 workers missing and presumed dead. (April 25 2010)

Update April 26 2010

Fire crews attempting to extinguish fire.

Costs mount as BP battles oil disaster

By Rob Davies
April 26 2010

British oil giant BP is facing a multimillion-pound clean-up bill as it battles to contain a reputation-tarnishing oil spill off the coast of the US.

In the first major test for chief executive Tony Hayward, BP has deployed 32 ships and five aircraft to contain oil gushing from an underwater well in the Gulf of Mexico after an explosion on its Deepwater Horizon oil rig.

The explosion on the £388million rig managed by Swiss firm Transocean is thought to have killed 11 workers who have been missing since last Tuesday, while thousands of gallons of oil are being pumped into the sea.

A spokesman for BP said the clean-up operation had cost ‘ millions’ so far, but added: ‘Its money that needs to be spent and we will do what we need to.’

But the firm could be facing a multibillion-pound bill in the future, based on the fallout from the Texas City disaster in 2005, its last major US accident.

In that incident an explosion at BP’s refinery killed 15 workers and injured 180 others, prompting a report in which the firm was blamed for safety failures.

The company has paid out around £1.3billion in compensation and nearly £60million in fines for Texas City, and also reported lost earnings and repair costs of up to £650million relating to the accident. BP is already facing anger for this latest accident from US politicians, who have queued up to demand greater scrutiny of oil companies.

Florida Senator Bill Nelson said: ‘The tragedy off the coast of Louisiana shows we need to be asking a lot more tough questions of big oil.’

And his Louisiana counterpart, Senator Mary Landrieu called for a full investigation into the spill.

In a statement, the company said it ‘continues to forge ahead with a comprehensive oil well intervention and spill response plan’. One of the options being considered is to submerge a giant dome above the area of seabed from which the oil is gushing.

The dome, it is hoped, would catch the oil as it rises, which could then be pumped out.

The spokesman said the idea worked in shallow waters, but had never been tested in deep water.

The slick is around 40 miles off the coast and is not expected to reach land for three days.   Source

Big Oil Fought Off New Safety Rules Before Rig Disaster

Both companies British oil giant BP and Transocean have also aggressively opposed new safety regulations proposed last year by a federal agency that oversees offshore drilling — which were prompted by a study that found many accidents in the industry.

There were 41 deaths and 302 injuries out of 1,443 incidents from 2001 to 2007, according to the study conducted by the Minerals and Management Service of the Interior Department. In addition, the agency issued 150 reports over incidents of non-compliant production and drilling operations and determined there was “no discernible improvement by industry over the past 7 years.” For entire story go HERE

Update April 27 2010

Robot subs attempt to shut off oil leak

A vessel tries to contain oil spilled from a sunken rig in the Gulf of Mexico

Engineers from the British oil giant BP were yesterday racing to avert an environmental disaster in the Gulf of Mexico as crude continued to leak at the site of the submerged oil rig Deepwater Horizon, which exploded and collapsed a week ago.

Up to 42,000 gallons of oil a day is spewing from a crumpled pipeline and uncapped well nearly a mile below the ocean’s surface, about 40 miles off the Louisiana coast.

Efforts to stop it rest in part on robot submersibles but BP officials said the task was “highly complex” and might not succeed. Surface operations by aircraft and ships to break up a thin slick that has grown to about 600 square miles were postponed by bad weather.

It was feared that a change of wind direction might push the oil towards land. “We’re in a very serious situation,” said Rear-Admiral Mary Landry, of the US Coast Guard. “Forty-five to 90 days is the initial estimate … before this well could be secured.” A search for 11 missing workers from the rig was called off on Friday. Source

Related

Oil spill set deadly record for Sea Birds

The Exxon Valdez oil spill in 1989 killed more sea birds than any oil spill in history, according to a study by U.S. Fish and Wildlife Service biologists. For the entire Story go HERE

Legacy of the Exxon Valdez oil spill.

Excerpts from different articles at the site.

2 studies report long-term effects on Sea Otters.

Many fishermen were also hit by the 1989 Exxon Valdez oil spill

10 years later, front-line spill workers link physical ailments to cleanup work, cancer being one of them.

The 1989 Exxon Valdez oil spill was not the most egregious accident to damage ocean waters, but “only one of many, many changes, the mass majority of which are incremental, invisible, sometimes irreversible … and together quite insidious,” according to Jane Lubchenco, a professor of marine biology at Oregon State University                                                 For all the articles go HERE

Exxon Valdez payments List

List of Oil spills around the world

Another recent disaster in a mine. 25 died.

Deadly Record: Massey’s Mine In Montcoal Has Been Cited For Over 3,000 Violations, Over $2.2 Million In Fines

Safety Violations

Well who is keeping tabs on safety one has to wonder?

If a mine can have 3,000 violations, one has to wonder how many violations there are in the oil industry?

Safety should be paramount in all industries,  but in these two sectors mining an oil there seems to be little done to prevent disasters.  Why?

This is for the safety of the people who work there, those living in the areas, the impact on wildlife, the impact on water supplies and the destruction to the environment as a whole.

Seems none of the above are really taken into consideration.

Over the last week I noticed the price of Gas went down a bit because of the planes being grounded by the Volcanic eruption in Iceland.

Well that gave me a profound thought.

One has to wonder how much the price of Gas would go down if war was eliminated.

How much of the worlds resources are wasted on war?

How much does war, in total dollars and cents, cost the world?

You need the resources to make the weapons, planes, tanks, ships and jeeps etc. You need the fuel to transport and operate, the vehicles  vehicles once they are there.

The total cost from beginning to end must be staggering.

The destruction of lives and the environment are horrendous. In many cases the destruction is permanent.

The cost of Health care due to war is unimaginable.

The total cost of war is beyond your wildest dreams.

If a volcanic eruption can bring down the price of gas over a week, imagine how much the price of gas would fall without war.

War is not a necessity.  It is time we removed all the things that are not necessary that wastes the worlds resources.

If you want to save trillions of dollars a year. Eliminate war.

Spend the money on agriculture in third world countries so they can feed themselves.

To curb over population promote birth control. Millions of women around the world do not have access to it. Millions cannot even afford it.

Spend the money on renewable energies.

There are a million ways to spend money on more constructive things as opposed to war.

Save the environment we live in, instead.

Hey everyone is allowed to fantasize right.

But if you had a choice of the environment and war, which would it be?

War is a major polluter.

War is not sustainable on any level.

War “Pollution” Equals Millions of Deaths

Update April 28 2010

U.S. Coast Guard to burn oil leaking from sunken rig

By Kevin McGill
April 28 2010

NEW ORLEANS—Racing against a threat to environmentally sensitive marshlands, authorities planned to begin Wednesday burning some of the thickest oil from a rig explosion off the coast of Louisiana.

A U.S. Coast Guard spokesman said the burn was expected to begin in the morning.

Petty Officer 2nd Class Prentice Danner says fire-resistant containment booms will be used to corral some of the thickest oil on the water’s surface, which will then be ignited. It was unclear how large an area would be set on fire or how far from shore the first fire would be set.

The slick is the result of oil leaking from the site of last week’s huge explosion of the rig Deepwater Horizon that left 11 people missing and presumed dead.

Oil continues to spill undersea at an estimated rate of 160, 000 litres a day. ( 1,000 barrels or 42,000 gallons of oil a day)

Robot submarines have been unable to cap the well. Operator BP Plc. says work will begin as early as Thursday to drill a relief well to take pressure off the flow from the blowout site. That could take months.

Winds and currents in the Gulf have helped crews in recent days as they try to contain the leak, but it has moved steadily toward the mouth of the Mississippi River, an area home to hundreds of species of wildlife and near some of the Gulf’s richest oyster grounds.

Meanwhile, the cost of the disaster continues to rise.

The Deepwater Horizon exploded on April 20. The rig was owned by Transocean Ltd. and operated by BP.

Industry officials say replacing the Deepwater Horizon would cost up to $700 million (dollar figures U.S.). BP has said its costs associated with containing the spill are running at $6 million a day. The company said it will spend $100 million to drill the relief well, which it does not expect to be operating for up to three months. The coast guard has not yet reported its expenses.  Source

Imagine the air pollution from this one.

April 28, 2010

Update April 29 2010

Working on off shore rigs is dangerous in the Gulf of Mexico since 2001 there have been 59 fatalities, 1,349 injuries and 852 fires.

But that is only the off shore ones I went looking for all the accidents just to see how many there are around the world.

I didn’t find anything about  world wide statistics yet but I did find some Rather interesting pictures of Accidents

Blowouts and some of the injures oil workers have had ( warning some of them are horrendous). There are many pictures and videos on oil wells. Be sure to check them out. There is a wealth of information at the site,  just check the Site Map to find it all. You could spend the day there and not get through it all. Oilfield Accidents

Thought a few of you might be interested in having a look.

Excellent photos that show Deep water Horizon sinking. Transocean Deepwater Horizon photo slide show…

Click on image to enlarge.


Compliments of Roughneck City

More Photos of the Transocean Deepwater Horizon Fire

Blowouts are explained on the video Lodgepole link below. It took 63 days to finally cap the well. It was above ground not under water. Underwater is much more difficult..I would imagine..If you watch all five Videos on Lodgepole you will see why. It seemed anything that could go wrong did. Go to the Video page for the other 4 videos. Blowout at Lodgepole Part 1

Update April 29 2010

Oil spill in Gulf of Mexico ‘could be worse than Exxon Valdez disaster’

The US Coast Guard and the oil firm were leading the bid to limit the spread of slick, fed by oil leaking from broken well pipes one mile under the sea at an estimated rate of 5,000 barrels a day – five times greater than initial estimates.

With three leaks detected near the sea, the spill could eventually match the Exxon Valdez disaster in 1989, when 11 million gallons gushed from a crippled tanker into an Alaskan sound, devastating the local habitat.

For the entire story Go HERE

The oil slick could hit the shoreline , Thursday April 29 2010 from what many reports have said.  Apparently it is about about 12 miles out earlier today.

Two Mysteries Surround Gulf Oil Spill …

April 29 2010

Normally, hydraulic equipment controlled by engineers up on the oil rig can close the BOP. As a backup, most BOPs have automatic shutoff valves known as “Dead Man” switches that cause the BOPs to close automatically if there is loss of communication from the oil rig. As another backup measure, many BOPs have radio-controlled switches to allow crews to close the valve remotely—but the Deepwater Horizon lacked that device. So now, as the oil continues to pour out of the open well nearly 1.5 kilometers below the ocean surface, engineers are desperately trying to close the BOP manually using an arm on a robotic submersible. For the entire story go HERE

Army of volunteers needed for Gulf oil spill cleanup

Volunteer efforts are underway in Mississippi, Louisiana, Alabama and Florida to contain and clean up the massive oil spill in the Gulf of Mexico.
The Deep Water Horizon response team is actively working to contain the spill and has laid down 217,000 feet of barrier. They’re asking coastal residents to report areas where oil can be seen on the shore or to leave contact information if they wish to volunteer by calling 1-866-448-5816. Oiled animals should be reported at 1-866-557-1401, but not captured.
The National Audubon Society is carefully coordinating their response with government officials to ensure that the response goes as smoothly as possible. Prospective volunteers who sign up at AudubonAction.org will be connected with state and federal agencies, Audubon leaders and other volunteer organizations who are in need of assistance.
For the entire story and organizations looking for help and donations go HERE to get phone numbers or web sites.

As the oil begins to wash ashore, reports David Usborne reports from Venice, Louisiana, on a community powerless to save itself.

May 1  2010

Despair and resignation reigned among fishermen and other seafaring residents of the southern Louisiana shoreline yesterday as the vast Gulf of Mexico oil slick began to slide silently into fragile marshlands and ecologically precious inlets fed by a deep-water leak that no one seems able to plug.

“They can’t turn it off, they don’t know how to,” lamented Captain Sean Lanier, who makes his livelihood taking tourists fishing for redfish and speckled trout through the grassy waterways and inlets at the mouth of Mississippi here. “What we need now is a James Bond to go down there and close that thing down.”

More than a week after the sinking of the BP-operated Deepwater Horizon rig, about 40 miles out to sea from here, the leading edge of a slick as large as Jamaica was beginning to lick the reeds and mud flats of the estuary, threatening oyster beds, fisheries and tourism in communities that have barely recovered from Hurricane Katrina. Strong winds and 7ft waves were pushing the slick inshore even faster.

For the entire story go HERE

White House Suspends New Drilling / Oil Spill Hits Gulf Coast Shoreline

Update for May 2 2010

Now they are thinking about using a Chemical to help clean up the mess which may be as bad for the environment as the oil as there is has not been any long term study done however.

Oil-spill disaster: Chemicals used in cleanup add to toxic mix

May 2, 2010

For now, heavy applications of the soaplike liquid may be all that stand between the fast-spreading crude and Florida’s coastline, which could be in jeopardy by midweek, , according to projections by response authorities in Roberts, La.

Environmental advocates and scientists consider dispersant the lesser of two evils when faced with what could turn out to be the nation’s worst drilling-related offshore oil spill. And the U.S. Environmental Protection Agency warns that “dispersants used today are less toxic than those used in the past, but long-term, cumulative effects of dispersant use are still unknown.” For entire story go HERE

To bad they didn’t have a few dozen Slick Lickers. Other wise known as Oilevator. And old invention.

They probably don’t even make them any more. But had they had a few of those it would be better then using Chemicals and you still get to save  the oil.  Now one would think this type of invention could have been improved upon considering the drilling at sea, as they do now.  A few of these on  a larger scale would be  very helpful at a time like this. But whatever. Just a thought from a stupid person? LOL Beats Chemicals all to hell of course. And remember, if we run out of oil we can always go back to the old horse and buggy days. Horses were smart enough not to have head on collisions.

Environment: The Slick-Licker

Ferried out to the spill on small landing craft, four lickers extended their long, conveyor belt “tongues” to the oil. A whir of machinery, and the absorbent material on the belt spun into the oil and sopped it up. Heavy rollers at the end of the conveyors then squeezed out the oil into 45-gallon drums. In ten weeks about 200,000 gallons of oil had been lapped up. The licker is doubly effective because its conveyor belt is coated with oil prior to deployment. The result is that the tongue repels surrounding water and gobbles up only oil.

Oilevator is dirt cheap (about $7,500 per machine), and it has worked so well that a government task force has recommended that at least one slick-licker be placed in each Canadian port. For entire story go HERE

Halliburton in spotlight in gulf spill probe

Updates May 3 2010


In this April 26, 20010 photo released by the U.S. Coast Guard, the base of a pollution containment chamber is moved to a construction area at Wild Well Control, Inc. in Port Fourchon, La., April 26, 2010. The chamber will be one of the largest ever built and will be used in an attempt to contain an oil leak related to the mobile offshore drilling unit Deepwater Horizon explosion. (AP Photo/U.S. Coast Guard, Petty Officer Third Class Patrick Kelley)

Crews have had little success stemming the flow from the ruptured well on the sea floor off Louisiana or removing oil from the surface by skimming it, burning it or dispersing it with chemicals. For entire story go HERE

The containment chambers will be 40 feet tall, 24 feet wide and 14 feet deep.

We have a second type of containment Dome. Not sure which one will be used.

How to stop the BP oil spill: What else can be tried now? May 3, 2010

Welders at work on the Pollution Control Dome being built in Port Fourchon Monday, as BP rushes to cap the source of the oil spill from the Deepwater Horizon platform disaster. BP might be ready to deploy the structure, which would funnel the oil into ships, by this weekend. Newscom For entire story go HERE

Obama toured the Coast.

The bulk of the slick is now nine miles offshore.

Mr Obama flew to New Orleans and drove for two hours to the tip of the Mississippi delta to show his concern for communities at risk of economic extinction from the growing oil slick to the south – and to show Americans that he has learnt from his predecessor’s mistakes. The visit was part of an urgent push by the White House to present its response to Louisiana’s latest disaster as more nimble than that of President Bush after Hurricane Katrina in 2005. For entire story go HERE

Iran offers to help contain US oil spill

May 3 2010

The National Iranian Drilling Company (NIDC) has offered to assist the US in efforts to prevent an ecological disaster caused by the spreading oil spill in the Gulf of Mexico.

Following an explosion on a BP-operated oil rig in the Gulf of Mexico last month, at least 210,000 gallons (5,000 barrels) of crude oil are thought to be spilling into the water every day.

NIDC managing director Heidar Bahmani announced the firm’s readiness to use its decades-long expertise to fight the oil slick, the company’s public relations office told Press TV.

“Our oil industry experts in the field of drilling can contain the rig leakage in the Gulf of Mexico and prevent an ecological disaster in that part of the world,” Bahmani said.

Overlooking the new US drive for slapping more UN sanctions on Iran over its civilian nuclear program, the company said that there is an urgent need for action to protect the nearby coasts from the advancing oil spill.

The governors of Alabama, Louisiana and Florida have reportedly called a state of emergency for fear of the oil slick’s environmental and economic damages.

The disaster has also prompted the White House to ban oil drillings in new areas of the US coast until the British company explains the cause of the explosion that killed 11 employees and resulted in the oil spill.

Maybe the US and BP should consider the help seems they are not doing so well on their own. Maybe Iran has the answers they need. It’s  time to put ego’s aside.

They do after all  help the US in the Health care field.

This is rather interesting It talks about  some of the Chemicals/pollution that  are emitted while drilling for oil among other things…Check table 2 on page 10

I have one question that I haven’t found an answer for yet. Who built the “Blowout Preventor” that failed to work?

BP is hoping to have the oil stopped withing a week. Somehow I have a hard time believing that.

Seems everything that has been tried has not worked.

This is a very nasty oil disaster and there are three leaks at this point in time.


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New US gov’t study shows mercury in fish widespread

By DINA CAPPIELLO
August 19 2009
WASHINGTON (AP) – No fish can escape mercury pollution.

That’s the take-home message from a federal study of mercury contamination released Wednesday that tested fish from nearly 300 streams across the country. The toxic substance was found in every fish sampled, a finding that underscores how widespread mercury pollution has become.

But while all fish had traces of contamination, only about a quarter had mercury levels exceeding what the Environmental Protection Agency says is safe for people eating average amounts of fish.

The study by the U.S. Geological Survey is the most comprehensive look to date at mercury in the nation’s streams. From 1998 to 2005, scientists collected and tested more than a thousand fish, including bass, trout and catfish, from 291 streams nationwide.

“This science sends a clear message that our country must continue to confront pollution, restore our nation’s waterways, and protect the public from potential health dangers,” Interior Secretary Ken Salazar said in a statement.

Mercury consumed by eating fish can damage the nervous system and cause learning disabilities in developing fetuses and young children. The main source of mercury to most of the streams tested, according to the researchers, is emissions from coal-fired power plants. The mercury released from smokestacks here and abroad rains down into waterways, where natural processes convert it into methylmercury – a form that allows the toxin to wind its way up the food chain into fish.

Some of the highest levels in fish were detected in the remote blackwater streams along the coasts of the Carolinas, Georgia, Florida and Louisiana, where bacteria in surrounding forests and wetlands help in the conversion. The second-highest concentration of mercury was detected in largemouth bass from the North Fork of the Edisto River near Fairview Crossroads, S.C.

“Unfortunately, it’s the case that almost any fish you test will have mercury now,” said Andrew Rypel, a post-doctoral researcher at the University of Mississippi who has studied mercury contamination in fish throughout the Southeast. He said other research has shown mercury in fish from isolated areas of Alaska and Canada, and species that live in the deep ocean.

Mercury was also found in high concentrations in western streams that drain areas mined for mercury and gold. The most contaminated sample came from smallmouth bass collected from the Carson River at Dayton, Nev., an area tainted with mercury from gold mining. At 58 other streams, mostly in the West, the acidic conditions created by mining could also be contributing to the mercury levels, the researchers said.

“Some ecosystems are more sensitive than others,” said Barbara Scudder, the lead USGS scientist on the study.

All but two states – Alaska and Wyoming – have issued fish-consumption advisories because of mercury contamination. Some of the streams studied already had warnings.

“This is showing that the problem is much more widespread,” said Sonya Lunder, a senior analyst for the Environmental Working Group, which has pushed for stronger advisories on consumption of mercury-laden fish and controls on the sources of mercury pollution. “If you are living in an area that doesn’t have a mercury advisory, you should use caution.”

Earlier this year, the Obama administration said it would begin crafting a new regulations to control mercury emissions from power plants after a federal appeals court threw out plans drafted by the Bush administration and favored by industry. The Bush rule would have allowed power plants to buy and sell pollution credits, instead of requiring each plant to install equipment to reduce mercury pollution.

The EPA also has also proposed a new regulation to clamp down on emissions of mercury from cement plants.

___

On the Net:

U.S. Geological Survey: http://water.usgs.gov/nawqa/mercury/

Source

Pro-Obama Haitian-Americans want help

Pro-Obama Haitian-Americans want help
December 30 2008

LAUDERHILL, Fla.,

Haitian-American leaders who turned out the vote for U.S. President-elect Barack Obama in Florida say they expect him to help ease crises in their homeland.

Members of a Broward County, Fla., branch of Haitians for Obama, which worked hard to canvass ethnic communities for the president-elect, say that while immigration and the economy are big issues for them, they also expect Obama’s administration to work more closely with Haitian leaders to help their impoverished native country, the South Florida Sun-Sentinel reported Tuesday.

“Our country is in a permanent crisis,” group member Aude Sicard told the newspaper. “We’re not simply asking for humanitarian aid, but we want this country to send technicians and engineers and see a true path for development in Haiti.”

Saying they’ll continue to build on the activism established to elect Obama, the Haitian-Americans have vowed to continue to lobby for temporary protected status, which would grant undocumented Haitian immigrants in the right to work in the United States legally until their homeland becomes more stable, the Sun-Sentinel said.

Source

U.S. Haiti policy senseless, deadly
By Myriam Marquez
December 31, 2008

Two years ago, Louiness and Sheryl Petit-Frere were newlyweds celebrating their good fortune. Both from Haiti, they had found love and each other in Miami.

Today, Louiness, a 31-year-old baker, waits at the Glades detention facility in Central Florida to be sent to a country he hasn’t seen in a decade, where no one waits for him.

His 27-year-old bride in Miami tries to make sense of a senseless immigration law that would deport an otherwise law-abiding, working man because he had an old asylum petition denied.

Never mind that he is married to a U.S. citizen, that he had, in good faith, filed for legal status and had shown up for the interview at the Citizenship and Immigration Services office when he was hauled away like a common criminal.

Petit-Frere’s mother and five siblings are all permanent U.S. residents, including his brother, Sgt. Nikenson Peirreloui, a U.S. Marine with a war injury to show for his two tours in Iraq. But none of that matters.

The U.S. government deems it imperative to deport Petit-Frere, who has no criminal record, to a place decimated by four back-to-back storms this summer, with thousands of starving, dehydrating children left homeless and adults facing no prospects for jobs.

“It seems terrible,” his mother, Francina Pierre, told me Saturday while she waited for her daughter-in-law to get off work as a grocery store clerk.

“He has nobody left in Haiti,” she said. “My mom died, my dad died, my sister died. And my two brothers live here. One is a U.S. citizen and the other is a permanent resident. We have no more family living in Haiti, no more.”

The Bush administration had sensibly put deportations to Haiti on hold after a succession of hurricanes and tropical storms destroyed parts of the island, leaving thousands without work or home. But the president stopped short of granting temporary protected status, or TPS, to Haitians living in the United States without proper documentation.

Natural disasters generally qualify for TPS consideration — as Central Americans with TPS can attest. But Haitians can never seem to catch a break.

U.S. immigration officials decided recently that it would be just dandy to deport Haitians while recovery efforts on their part of Hispaniola proceed in spurts and stops, as children die of malnutrition and mudslides continue to impede reconstruction.

“How can this nation in good conscience send children and families to face the terrible conditions that exist in Haiti?” Cheryl Little, the Florida Immigrant Advocacy Center’s executive director, said in a statement. “People could die because of this decision.”

She’s not crying wolf.

The conditions in Haiti cry out for solutions — not asinine deportations that only exacerbate an already untenable situation.

As President Bush looks through his list of pardons to wipe the slate clean for criminals, he should move to do more for the common man, people like Louiness Petit-Frere. Why not grant TPS for Haitians who have no criminal record, so they can stay and work here until conditions improve in their country?

Those who do have family in Haiti can send money and goods back to help the reconstruction and rev up the economy.

TPS was designated for catastrophic situations like Haiti’s. There’s no reason to deny Haitians TPS. Only racist excuses.

Source

Thrice-built house embodies Haiti aid shortfalls
By JONATHAN M. KATZ
December 30 2008

GONAIVES, Haiti

The farmer camps in a crude tent of broken sandbags as he guards the foundation of his destroyed home and his last possessions: a pickax, a hoe and some charcoal.

This is the third time Olisten Elerius is preparing to build his tiny cinderblock house. Four years ago, Tropical Storm Jeanne flooded it and drowned his father, sister and nephew. Then, late this summer, Tropical Storm Hanna swallowed it along with his daughter and another sister. It could happen again.

After Jeanne struck in 2004, more than $70 million in aid went to immediate relief such as food, medical aid and jobs, but little went to flood control, according to an Associated Press review of relief spending. Despite pledges to prevent such devastation in the future, few projects to build drains, fix roads and stop erosion were even attempted.

In other parts of Haiti, U.S. officials launched an ambitious flood control project. But it took 3 1/2 years to plan and was not placed in Gonaives because of a lack of funding.

So when four major storms hit within a month this year, nothing stopped the La Quinte River from roaring over its banks again. It inundated farmers like Elerius on its way to the center of Gonaives, where men, women and children swam for miles through swirling waters to escape. The storms killed 793 people and caused $1 billion in damage.

“The authorities were always coming here to take pictures and measure things,” Elerius said. “The words in their mouths said they would help, but they never did anything.”

Top officials agree that efforts fell short.

“I think we were very successful in getting Gonaives back on its feet,” Alexandre Deprez, an official for the U.S. Agency for International Development, said of the work after Jeanne. “But it is true that we didn’t put the time and the resources to do what needs to be done in the longer term.”

___

Haiti’s floods are not natural disasters, but a direct result of widespread deforestation, erosion and poverty. Farmers cut trees for charcoal and plant shallow-rooted crops. Rains that would be forgotten elsewhere can kill thousands.

In 2004, Elerius was working in the neighboring Dominican Republic when Tropical Storm Jeanne came twisting like a wounded animal out of the northern sky, sending a wall of water through his cinderblock home and sweeping away his father, sister and nephew. Gonaives residents fled to their rooftops as rivers broke their banks, overflowing morgues with bloated corpses.

A horrified world pledged to help. Elerius returned home just as the money and the white SUVs of non-governmental organizations began flowing into Gonaives, in the north of Haiti.

The U.N. appealed for $37 million in flood relief. Washington would donate more than $45 million, first for emergency food and supplies and then through USAID for the two-year, $34 million Tropical Storm Jeanne Recovery Program.

Disaster officials, newspapers and aid workers called for well-planned, well-financed, long-term aid. Haitian officials told the agencies to spend the money on projects that would save lives: secure rivers, fix roads, design better canals, build homes with better drainage to the sea.

But the U.N. member states, distracted by the Indian Ocean tsunami four months later, raised less than half their funding target.

Work was hampered by violence and insecurity. The Inter-American Development Bank provided about $10 million in loans, mostly for construction of a small drainage system. That project was abandoned by Haitian contractors after bandits stole the cement and steel, IDB representative Philippe Dewez said.

Washington sent money mostly for short-term projects: cleanup, restoration and repair of basic services such as schools, health clinics, roads, bridges and homes. In 2005, the U.S. Government Accountability Office reported that U.S. organizations cleared more than 2 million cubic feet of mud and restored the livelihoods of 48,000 people. But the GAO said they failed to meet an already reduced target for houses and completed no roads or bridges.

Elerius rebuilt his family’s flimsy home at Mapou, a flat plain on the outskirts of the city, just 50 feet from the La Quinte River after it descends from barren mountains toward the sea.

On the denuded hillside, USAID said projects to grow plant cover and build terraces have restored 3,700 acres of the La Quinte watershed — 2 percent of the basin. But few trees are visible, and local officials said most saplings were eaten by goats.

Corruption watchdogs with Transparency International said public funds — nobody seems to know exactly how much — were distributed with little oversight by the U.S.-backed interim government.

Soon after Jeanne, USAID commissioned a study of Haiti’s watersheds, which led to an ambitious $18 million effort to reduce flooding. Work did not begin until February 2008.

The report recommended action in high-risk flood areas, including Gonaives. But the U.S. Congress only gave enough money for the agency to start in two smaller, less populated watersheds — Limbe in the north and Mountrouis in the west, both more than 40 miles away from Gonaives. Some money went to a project on a Port-au-Prince river this year.

“With the funding that we were given we said to ourselves, ‘Why go into a place where you’re not going to make a difference?’ ” Deprez told The Associated Press. “Go into a place where you can focus and make a difference and test the approach that was recommended.”

It will take five years to know the effects of the pilot flood-control programs. Officials then hope to replicate them elsewhere.

But the storms didn’t wait.

___

Starting in mid-August, Tropical Storm Fay hit Haiti, followed by Gustav, Hanna and Ike. They destroyed thousands of homes, devastated crops and set the country back decades. Starving families, whose plight had fueled April riots, got even hungrier.

On the dark afternoon of Sept. 2 in Gonaives, there was no warning as mountain run-off began to gather in ravines. Officials were not given orders to evacuate, and in any case no plan was in place. There was nobody to clear fallen trees that had jammed a bridge on the La Quinte River and caused it to divert the day before.

Elerius was in town getting supplies when he heard radio reports about a new storm. Even as rain fell in Gonaives, radio broadcasts in Port-Au-Prince, the capital, repeated predictions that it would veer to the north, away from Haiti.

It was only word of mouth that sent Elerius running home. There he found the river had again become an ocean, his family submerged and his house disintegrating.

He dived into the water and pulled his mother and 4-year-old son Jonslay to safety. Then he yelled for his 6-year-old daughter, Joniska, and his 21-year-old little sister, Jimele.

Neither called back.

This time, without a network of roads that could withstand the flooding, Gonaives was trapped. A Haitian-funded causeway needed to connect it to the capital, 80 miles away across the cactus plain of Savanne Desolee, was left half-finished, denying scores of families a way out. Refugees climbed its scaffolding to escape the rising waters.

Others were stranded on their rooftops. It took four days for the U.N. to bring in ample food aid by ship.

Some development workers say the reduced death toll this year — in the hundreds instead of thousands — validates their efforts. But survivors and local officials say more survived this time because the memory of Jeanne sent them running for higher ground.

Today in Gonaives, homeless families crowd tent neighborhoods. Men scrounge for fish in stagnant floodwaters. Schoolgirls wear sunglasses and surgical masks to block the clouds of dirt that cover the city. The road to Port-au-Prince is still blocked by an enormous lake.

As former Gonaives disaster management coordinator Faustin Joseph said, “Everybody failed.”

The craggy roads of Gonaives are filled again with white SUVs. The U.N. issued a $107 million appeal, of which it has raised about half, and is now requesting $20 million more. The World Food Program has delivered more than 11,000 tons of food. The Haitian government has set aside $198 million for rebuilding roads, fortifying river beds and restoring agriculture.

The U.S. government pledged more than $30 million in immediate relief. Another $96 million from Congress is on its way.

President Rene Preval told the U.N. General Assembly in September he feared that “once this first wave of humanitarian compassion is exhausted, we will be left as always, truly alone, to face new catastrophes and see restarted, as if in a ritual, the same exercises of mobilization.”

Some in Gonaives have become restless.

“If things go like they did after Jeanne again, and it looks like people are doing nothing, we might get up and start burning things down,” said Odrigue Toussaint, 40, who has not worked since he lost his motorcycle to Hanna. “We will let the authorities know it can’t happen again.”

Elerius sent his son, mother and siblings to live with neighbors. He never found the bodies of his sister and daughter.

He sleeps on the dirty ground under the plastic tent. Inside it’s stiflingly hot during the day but cooler at night.

The La Quinte River gouged a shallow canyon through what was once his farmland, where he planted onions, plantains and potatoes. The topsoil washed to the streets of Gonaives, encasing the city in mud.

Haitian construction crews put the river back into its bed a week after Hanna, just as they did after Jeanne, and built temporary levies with gravel and sandbags that Elerius pilfered to make his tent. The bags were falling apart anyway, he said.

The farmer who keeps losing everything is resigned.

“Whatever they do now we’ll accept it,” Elerius said. “I just wish they would have already done more.”

Source

The Rebirth of Konbit in Haiti

Haiti’s road to ruin

Starvation slams Haiti: Kids dying after 4 storms ravage crops, livestock

Haitian children died from severe malnutrition

Madoff house arrest ordered as European banks reel

December 17 2008

By Grant McCool and John Poirier

NEW YORK/WASHINGTON (Reuters) – Disgraced financier Bernard Madoff, accused of orchestrating a $50 billion (33 billion pound) fraud, was placed under house arrest on Wednesday as BNP Paribas  became the latest European bank to be sideswiped by the scandal.

A federal judge ordered the 70-year-old former pillar of Wall Street confined to his $7 million Manhattan apartment and told Madoff’s wife to surrender her U.S. passport by noon on Thursday.

Madoff will be fitted with an electronic ankle bracelet and will only be allowed to leave his home for appointments prearranged with authorities.

The changes in bail conditions for the one-time Nasdaq Stock Exchange chairman were ordered a day after U.S. Securities and Exchange Commission Chairman Christopher Cox offered an embarrassing mea culpa for the agency’s lack of oversight of Madoff’s investment advisory firm.

A rewrite of U.S. regulations to prevent a relapse of the Madoff fiasco will be high on the agenda of the new U.S. Congress, U.S. Rep. Paul Kanjorski said. He said he will convene a congressional inquiry in early January to focus on the case.

Kanjorski, who chairs the House Capital Markets Subcommittee, called the matter “deeply disturbing,” and said the scandal only weakens “already-battered investor confidence in our securities markets.”

BNP’s stock was the main loser among Europe’s top banks after it announced an unexpected 11-month loss at its CIB investment bank unit, blamed partly on exposure to Madoff.

“Generally there is a sense of nervousness going on with Madoff’s alleged fraud and BNP’s losses,” said Fox-Pitt Kelton analyst David Williams.

In Asia, Great Eastern Holdings Ltd , the insurance arm of Singapore’s Oversea-Chinese Banking Corp , said it had an indirect exposure of about S$64 million (US$43.93 million) to Madoff.

In Europe, the Dutch pension fund of Royal Dutch Shell Plc  said it had a $45 million exposure.

YEARS TO SORT OUT LOSSES

An investor protection group in the United States said it could take several years to sort through investor losses.

The Securities Investor Protection Corp is overseeing the liquidation of Bernard L. Madoff Investment Securities LLC.

Madoff, who counted celebrities and many friends among his investors, was unable to obtain four co-signers to guarantee his $10 million bond.

Only two people, his wife, Ruth, and brother, Peter, had signed it as of Wednesday morning. Peter Madoff also worked at Madoff’s firm.

In lieu of two additional signatures, Madoff and the government agreed that his wife surrender her passport and put up properties in her name in Montauk, New York, and Palm Beach, Florida.

Madoff will not be required to appear in court for a bail hearing unless he fails to file the documents on the additional conditions by Monday, the deadline set by the judge.

A preliminary hearing and appearance by Madoff was scheduled for January 12.

Cox’s admission that the SEC had missed obvious red flags in the Madoff case was seen as the latest in a series of black eyes to the U.S. securities watchdog, already under fire for weak oversight as U.S. banks loaded up on risky assets that have ripped huge holes in their balance sheets.

Cox said the agency’s failure to catch Madoff’s alleged massive Ponzi scheme was “deeply troubling.” Under a Ponzi scheme, later investors’ funds were used to pay returns to initial investors.

Cox asked the agency’s inspector general to probe the SEC’s conduct in the Madoff case. Madoff’s niece, Shana Madoff, a compliance lawyer at his firm, is married to a former SEC lawyer, Eric Swanson, who was the agency’s assistant director in the office of compliance inspections and examinations.

A spokesman for Swanson said his romantic relationship with his wife began years after the compliance team he helped supervise inquired into Bernard Madoff’s securities operations.

In another sign of Madoff’s close ties to the powerful, U.S. Attorney General Michael Mukasey has removed himself from involvement in the investigation, a department spokesman said.

He declined to discuss the reason. Mukasey is leaving office in January.

Marc Mukasey, a son of the attorney general, told Reuters on Wednesday that he represents Frank DiPascali, a senior official at Madoff’s firm. The younger Mukasey leads white-collar defense and special investigations at New York law firm Bracewell & Giuliani.

Madoff, accused of defrauding hundreds of wealthy investors including Ezra Merkin, the former chairman of auto finance company GMAC, and real estate and newspaper mogul Mortimer Zuckerman, faces up to 20 years in prison and a maximum fine of $5 million if convicted.

At least two putative class-action lawsuits have been filed in U.S. district court in Manhattan over investments handled by Madoff.

On Wednesday, an investor sued Gabriel Capital LP, its manager Merkin and auditor BDO Seidman for “gross negligence” in handing over at least 27 percent of Gabriel investment capital to Madoff. A similar lawsuit was filed by New York Law School on Tuesday against Ascot Partners LP, Merkin and BDO Seidman.

(Additional reporting by Rachelle Younglai in Washington and Martha Graybow in New York; writing by Christian Plumb; editing by Jeffrey Benkoe)

Source

Madoff victims threaten legal action and there certainly are many

Madoff victims threaten legal action

Banks and investment firms blamed for introducing clients to ‘$50bn fraudster’

By Stephen Foley in New York
December 17 2008

The victims of the world’s biggest fraud are raising harsh questions about how Bernard Madoff was able to run his $50bn (£33bn) scam for so long without his staff, the authorities or his trading partners noticing.

A firestorm of legal action is gathering as individuals who lost their life savings and charities threatened to pursue the banks and investment firms that made their ill-fated introduction to Mr Madoff.

“If this were a traditional bank robbery, the eyewitness reports would say Mr Madoff walked out with billions of dollars as someone held the door open for him,” said Jeffrey Zwerling, a lawyer representing some of the victims. “There is just no way that this happens without help of some kind.”

The fall-out from Mr Madoff’s arrest on Thursday is being felt around the world as banks, hedge funds, charitable organisations and thousands of well-to-do individuals tot up their losses. With each passing hour, new victims come to light, often in the tight-knit world of Jewish philanthropy, where Mr Madoff managed cash for numerous charities and for many of their biggest donors.

Christopher Cox, chairman of the Securities and Exchange Commission, the US financial regulator, said last night that he was “gravely concerned by the apparent multiple failures over at least a decade” and that he had ordered “full and immediate review of the past allegations regarding Mr Madoff and his firm and the reasons they were not found credible”.

More European finance houses confessed to losses, including Crédit Mutuel, France’s second-largest bank. Regulators in Spain said 224 investment funds in the country had been exposed and faced losses of €107m (£97m). Among the celebrity victims revealed yesterday is Uma Thurman. Her husband, Arpad Busson, had £145m invested with Mr Madoff through his hedge fund. A charity connected to Steven Spielberg, the Hollywood director, was already among the list of victims. UK banks HSBC, Royal Bank of Scotland and Santander – owner of Abbey and Alliance & Leicester – have previously admitted exposure of more than $5bn between them.

The breathtaking fraud, committed over many years by one of Wall Street’s best-respected investment managers, was uncovered only when Mr Madoff confessed to his two sons a week ago that he was “finished”. In a criminal lawsuit filed the next day, public claims that Madoff Investment Securities was managing $17bn of client money and had made double-digit returns every year for almost a decade were “all just one big lie”, he had told them.

Mr Madoff was running a giant pyramid scheme, paying out to existing investors with money coming in from new ones. But as the credit crunch began to bite, investment dwindled and there was a surge in requests to cash out. It proved to be his undoing.

Lawyers said the investment managers who recommended that their clients invest with Mr Madoff should have investigated his methods, which he had shrouded in mystery. They pointed to red flags going back as far as 1999, when Harry Markopolos, a securities industry executive, urged the SEC to investigate Madoff Investment Securities. Last year, investigators hired by potential investors urged them not to invest because they were suspicious.

The New York Law School – which fears losing $3m of its endowment fund – launched a lawsuit against one of its financial managers, Ascot Partners, Ascot’s boss, Ezra Merkin, and the auditor, BDO Seidman. The defendants “recklessly or with gross negligence caused and permitted $1.8bn, virtually the entire investment capital of Ascot” to be handed over to Mr Madoff, according to the suit. Separately, Yeshiva University said it was considering its options after it lost about $110m.

Mr Madoff is due in court today for a bail hearing. He was released on a $10bn bond last week but has failed to find the required three co-guarantors. Meanwhile, details are emerging of the two separate sets of books he kept: ones showing the real losses, the other detailing the fictitious trading and profits, which he would mail to investors.

Mr Madoff has told the FBI he acted alone. His sons, Andrew and Mark, work in a different part of the business and the Massachusetts Secretary of State, William Galvin, did not suggest his brother Peter was involved.

The victim: A charity devoted to the poor

As well as the super-rich circling Mr Madoff in his playgrounds of Palm Beach, Florida, and Long Island, New York, there are scores of philanthropic victims of his record-breaking fraud, the JEHT Foundation among them. Since it was formed in 2000, it has given away $62m to fund research, to lobby for progressive reforms, and to prop up projects in some of the most deprived areas of the US. It harnessed the fortune of the late real estate mogul Norman Levy, but the family’s money was invested with Mr Madoff, and is probably now gone.

Source

Bank billions at risk from Wall Street Fraud

Obama free to chart new course with Cuba

Fidel Castro -- 'El Commandante'

December 13 2008
By Tom Bevan, RealClearPolitics.com

New polling in Florida shows that for the first time a majority of Cuban-Americans favour lifting the trade embargo against Cuba that the United States has had in place since 1962. Fifty-five percent of those surveyed favored discontinuing the embargo, and 65 per cent said they were in favor of reestablishing diplomatic relations with the neighboring Communist regime.

During the Democratic primary, then candidate Barack Obama spelled out his willingness to ease the embargo with Cuba in an op-ed in the Miami Herald in August 2007, writing that he would “use aggressive and principled diplomacy to send an important message: If a post-Fidel government begins opening Cuba to democratic change, the United States (the president working with Congress) is prepared to take steps to normalize relations and ease the embargo that has governed relations between our countries for the last five decades.”

The following May, Obama gave a speech in Little Havana saying that his policy toward Cuba would be “guided by one word: libertad.” In the speech Obama again advocated easing restrictions on remittances and travel to Cuba.

Obama lost the meaningless Florida primary to Clinton in January by 17 points, which included a 33-point thumping among the state’s Hispanics.

But Obama won the Sunshine State 51-49 over McCain in November, including a majority of the Hispanic vote. Obama lost the Cuban vote to McCain by thirty points, 65-35, though there was a stark discrepancy among age group. The oldest demographic of Cuban-Americans (aged 65+) voted overwhelmingly for McCain, 84-16, but those Cuban-Americans under 30 backed Obama by a 55-45 margin.

As a result, the Associated Press declares that Obama will be the first president in 50 years to have “a relatively free hand” in forging a shift in America’s policy toward Cuba:

Cuban-Americans have had a mixed reaction to Obama’s campaign promises — most voted against him, but Obama carried Florida and didn’t even need the state’s votes to win the presidency, confounding the notion that the support of anti-Castro Cuban exiles is essential in presidential elections.

“Obama already has a much freer hand than Bush did,” said Daniel Erickson of the Inter-American Dialogue, a Washington, D.C. think tank. “He does not owe any of his political success to Cuban-Americans in South Florida.”

Obama is therefore free to chart a new course. He can reverse some policies of President George W. Bush with a pen stroke, and while undoing the embargo would take a majority in Congress, that’s easier than ever with Democrats holding sizable majorities.

No doubt leading the charge in Congress will be one of President-elect Obama’s former rivals, Senator Chris Dodd, who’s been pushing for taking a softer line against Cuba for years.

Source

Maybe Barack could learn about Cuba’s Health Care system, apparently it is pretty good.

Fidel Castro has offered to speak with Barack Obama

Published in: on December 14, 2008 at 1:35 pm  Comments Off on Obama free to chart new course with Cuba  
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Billions here, billions there: A look at where it’s going

Billions here, billions there: A look at where it’s going

November 24 2008

Wars. Bailouts. Unemployment aid. Automakers. Washington has opened the tap on big spending and money is gushing down the pipeline.

The national debt now stands at $10.6 trillion, compared with about $5.7 trillion in 2000 before George W. Bush took office. Buckle up, because that figure is going to climb.

Here’s where some of the big bucks are going:

Iraq war Various estimates put the total cost of the military operation since 2003 at about $600 billion.

Bailout — The Troubled Assets Relief Program (TARP), signed on Oct. 3, provides $700 billion in financial relief. Of that amount, the Treasury Department has committed about $270 billion in cash injections for banks and another $40 billion for the insurer American International Group.

Economic stimulusEarlier this year, Bush signed into law a $168 billion stimulus package that included rebates for households and tax breaks for businesses. President-elect Barack Obama is preparing another stimulus plan, and Democratic lawmakers say they expect the package could total between $500 billion and $700 billion.

Detroit General Motors, Ford, Chrysler and their suppliers have been authorized $25 billion by Congress to retool their assembly lines for making more fuel-efficient cars. Now, the Big Three want an additional $25 billion to ensure they will have the funds to operate through spring. Congress could act on it in December.

Housing In July, Bush signed a housing bill that included $300 billion in new loan authority for the government to guarantee cheaper mortgages for troubled homeowners. In September, the Treasury took over mortgage giants Fannie Mae and Freddie Mac, pledging up to $200 billion to back their assets.

Jobless aid Congress last week approved an extension of up to three months for expiring unemployment benefits. The cost is nearly $6 billion.

Federal Reserve In the past year the Fed has increased its lending and purchases of debt by $900 billion, to almost $2.2 trillion.

The federal deficitIt’s the difference between what the government received from taxes and other revenue and what it spent. In fiscal 2008, which ended Sept. 30, the budget deficit was $455 billion, quite a difference from 2007’s $161.5 billion. Just one month into fiscal 2009, the budget deficit had already reached $232 billion, including $115 billion going directly on the deficit ledger for bank stock purchases as part of the financial bailout. The deficit for fiscal 2009 could reach $1 trillion.

Source

Millionaires reap farm payments; Nobody checking incomes

Investigators say the problem will get worse

By LARRY MARGASAK
THE ASSOCIATED PRESS

WASHINGTON — A sports team owner, a financial firm executive and residents of Hong Kong and Saudi Arabia were among 2,702 millionaire recipients of farm payments from 2003 to 2006 — and it’s not even clear they were legitimate farmers, congressional investigators reported Monday.

They probably were ineligible, but the Agriculture Department can’t confirm that, since officials never checked their incomes, the Government Accountability Office said.

The Agriculture Department cried foul: It said the investigators had access to Internal Revenue Service information on individuals that the department is not permitted to see.

John Johnson, deputy administrator in the department’s Farm Service Agency, said officials there are in touch with the IRS to devise a system for including tax information in its sampling program to determine eligibility.

He added that 2,702 recipients cited by the GAO was a small percentage of the 1.8 million recipients of farm payments from 2003 through 2006.

The investigators said the problem will only get worse, because the payments they cited covered only the 2002 farm bill subsidies.

The 2008 farm legislation has provisions that could allow even more people to receive improper payments without effective checks, they said.

There are three main types of payments: direct subsidies based on a farmer’s production history; countercyclical payments that kick in when prices are low and disappear when they recover; and a loan program that allows repayment in money or crops.

The 2002 farm bill required an income test for the first time.

An individual or farm entity was ineligible if average adjusted gross income exceeded $2.5 million over three years — unless 75 percent or more of that income came from farming, ranching and forestry.

According to the report, the 2,702 recipients exceeded the $2.5 million and got less than 75 percent of their income from these activities.

The payments to them totaled more than $49 million.

“USDA has relied principally on individuals’ one-time self-certifications that they do not exceed income eligibility caps, and their commitment that they will notify USDA of any changes that cause them to exceed these caps,” the GAO said.

The report said Agriculture field offices have been able to request that recipients submit tax returns for review.

But the administrator in charge of the payment programs, Teresa Lasseter, told the GAO, “Requiring three years of tax returns initially from over 2 million program participants was not a viable option or cost-effective alternative.”

The GAO said 78 percent of the recipients resided in or near a metropolitan area, while the remaining 22 percent resided in large towns, small towns and rural areas.

Further, the investigators said the Agriculture Department should have known that 87 of the 2,702 recipients were ineligible because it had noted in its own databases that they exceeded the income caps.

The GAO said it was prevented by law from identifying individuals cited in its report, but the investigators offered these examples of likely improper payments:

A founder and former executive of an insurance company received more than $300,000 in farm program payments in 2003, 2004, 2005 and 2006 that should have been subject to the income limits.

An individual with ownership interest in a professional sports franchise received more than $200,000 for those same years that should have been barred by the income limits.

A person residing outside the United States received more than $80,000 for 2003, 2005 and 2006 on the basis of the individual’s ownership interest in two farming entities.

A top executive of a major financial services firm received more than $60,000 in farm program payments in 2003.

A former executive of a technology company received about $20,000 in years 2003, 2004, 2005 and 2006 that were covered by the income limits.

This individual also received more than $900,000 in farm program payments that were not subject to those limitations.

The investigators also found nine recipients resided outside the United States — in Hong Kong, Saudi Arabia and the United Kingdom, for example.

The remainder resided in 49 of the 50 states, the District of Columbia and the Virgin Islands.

Five states — Arizona, California, Florida, Illinois and Texas — accounted for 36 percent of the recipients and 43 percent of the $49.4 million in farm program payments.

Source

We must also remember that $2.3 Trillion they admitted to losing on September 10, the day before 9/11 still hasn’t been found either.

One has to wonder how much money, has been lost in other areas as well?

“Accountability” is not something the Bush Administration took to seriously.

Bush accountability is gone: just a reminder

June 7, 2007

Somebody owes me a Diet Coke.

That’s what was at stake in a wager a gentleman and I made over dinner at a restaurant in Baton Rouge. He had asked if I didn’t agree that Attorney General Alberto Gonzales, then, as now, under fire in the scandal over the alleged politically motivated firing of nine U.S. attorneys, would soon be forced to step down. I said no. He said Gonzales would not last six weeks. We made a bet on it.

This was 11 weeks ago. Gonzales, of course, is still in office. In fact, President Bush last month reiterated his support for his embattled friend, who faces a possible Senate no-confidence vote later this month.

I wish I could say that in wagering on Gonzales’ political survival, I relied upon some insider knowledge, some astute reading of the tea leaves based on long years of watching the political scene. Truth is, what I relied on is a belief in the utter shamelessness of George W. Bush’s administration.

No, Team Bush does not own the patent on shamelessness. Some of us thought it bespoke an alarming imperviousness to embarrassment when Bill Clinton, caught lying about being serviced by a young intern in the Oval Office, chose to brazen his way through the resulting furor rather than resign.

But if the Bush people did not invent shamelessness, they have refined it to a level that once seemed impossible. So much so that this shamelessness, this indifference to perception, this abysmal lack of what Thomas Jefferson called “a decent respect to the opinions of mankind” may prove to be the administration’s defining characteristic, its calling card in matters both grand and small. Granted, shamelessness will have to battle hubris and incompetence to earn that distinction, but still …

No administration in living memory has shown Team Bush’s ability to reverse itself so blithely, to deny the obvious so serenely, to ignore precedent, propriety and responsibility with such placid unconcern for consequences or public perception.

Weapons of mass destruction not found where you once guaranteed they would be? Pretend you invaded Iraq for other reasons.

“Stay the course” proving an ever more threadbare strategy? Deny it was ever your strategy at all.

FEMA director presides over a botched disaster relief effort that costs hundreds of American lives? Praise him for doing “a heckuva job.”

CIA director presides over intelligence gathering failures that cost thousands of American lives? Give him a Medal of Freedom.

And so on.

If you’re looking for accountability, you’re looking in the wrong White House. Or as Bush once put it, “We had an accountability moment, and that’s called the 2004 elections.” In other words, if you win the election you can do whatever you want and it doesn’t matter what anyone else thinks.

So I am not surprised that, despite growing evidence he allowed the Justice Department to become a wholly owned subsidiary of the Republican Party, Alberto Gonzales still has a job with the federal government. To be honest, I am more surprised that Donald Rumsfeld, Paul Wolfowitz and former FEMA chief Michael Brown do not.

And ain’t that a kick in the head? We have reached a pass where one is almost shocked to see people held to answer for scandal and ineptitude. Where one is taken aback at the notion that failure carries a price. And where tough talk and a “What, me worry?” smugness now routinely pass for iron resolve and moral clarity.

If you had told me in 2001 that this would be the state of things six years later, I’d have laughed in your face.

I’d have lost a lot of Diet Cokes on that.

Source

GAO: Labor Dept. Misled Congress

By Carol D. Leonnig

November 25, 2008

The Labor Department gave Congress inaccurate and unreliable numbers that understated the expense of contracting out its employees’ work to private firms, according to a Government Accountability Office report released yesterday.

The department’s decisions in allowing contractors to compete for bureaucrats’ work — known as “competitive sourcing” — also demoralized workers, according to most of the 60 agency employees interviewed by the GAO.

“DOL’s savings reports are not reliable: a sample of three reports contained inaccuracies, and others used projections when actual numbers were available, which sometimes resulted in overstated savings,” the GAO report said. “Because of these and other weaknesses, DOL is hindered in its ability to determine if services are being provided more efficiently as a result of competitive sourcing.”

Labor Secretary Elaine L. Chao began having some agency workers compete for their jobs in 2004, but since then few employees have actually lost their jobs and had their pay cut as a result of the privatizing effort, GAO found. Of the 314 federal workers who had a job change as a result of competitions with private firms, 263, or 84 percent, were either reassigned to positions with the same title and pay or were promoted. Of the 16 workers who were demoted, 14 kept their same professional grade or pay.

Twenty-two employees were demoted or laid off, and all were African American. An additional 29 employees left voluntarily.

Sen. Tom Harkin (D-Iowa) and Rep. David Obey (D-Wis.), chairmen of their chambers’ appropriations subcommittees with jurisdiction over the Labor Department, asked for the report and urged Congress not to fund the competition program until the GAO provided the answers. They issued a statement yesterday saying the review documented “the negative impact the Bush Administration’s failed policies have had” on the agency.

“Under the direction of this White House, the Department of Labor has increasingly attempted to move work performed by Federal employees to private contractors” and, in so doing, hurt workers’ morale and “grossly overstated savings,” they wrote. “We look forward to working with the Obama Administration to strengthen the Department of Labor as it undertakes the critical missions of making sure our workplaces are safe; protecting employee pensions, health benefits and rights; and providing workers with the skills they need to compete successfully in the 21st century economy.”

Patrick Pizzella, an assistant secretary who oversees competitive sourcing, told the GAO in a letter last month that the department agrees tracking costs and performance more systematically would give the agency a more accurate picture of the usefulness of competitive sourcing. “As the GAO report indicates, DOL has made progress developing a system to assess the performance of winning service providers in our competitive sourcing program, and DOL’s competitions rarely resulted in lost jobs or salary reductions for DOL employees,” he said yesterday.

Pizzella said the Office of Management and Budget does not require that fuller counting; the GAO urged the OMB to require agencies to do so.
Source

Will the lies ever end?

Ranieri Becomes Victim of Crisis as Franklin Bank Corp. Seized

By Ari Levy

November 8 2008

Update 1

Lewis Ranieri, who helped create the mortgage-securities market in the 1980s while at Salomon Brothers Inc., became a victim of its collapse after his Houston-based bank was seized.

Franklin Bank Corp., formed by Ranieri in 2002, was taken over by the Federal Deposit Insurance Corp., and its deposits handed over to Prosperity Bank, the FDIC said in an e-mailed statement yesterday. The failed bank’s 46 offices will open as branches of Prosperity, the FDIC said.

Ranieri, 61, a former Salomon Brothers vice chairman, formed Franklin in 2002 and over the next four years expanded the bank’s lending operations. While Franklin avoided the subprime mortgage market, his firm was burned by loans to builders in California, Arizona, Florida and Michigan, where foreclosures are among the highest in the U.S. In November 2006 and again a year later, he predicted the market would get worse.

“The subprime crisis has spread to other sectors of the housing market,” Ranieri said in a conference call a year ago. It’s “having a significant effect on housing and builders.”

Franklin and Security Pacific Bank of Los Angeles became the 18th and 19th U.S. banks seized this year amid the worst housing crisis since the Great Depression. Franklin’s $3.7 billion in deposits were assumed by Prosperity, and Security Pacific’s $450.1 million in deposits are now controlled by San Diego-based PacWest Bancorp. All deposits from both banks are still insured, the FDIC said.

Banks Closing

Regulators this year have closed the most banks since 1993, and the collapses of Washington Mutual Inc. and IndyMac Bancorp Inc. were among the biggest in history. The housing slump and tight credit led to a $700 billion bank-rescue plan, and the U.S. Treasury is using the fund to buy $250 billion in preferred shares in banks to boost capital.

In May, Ranieri replaced Anthony Nocella as chief executive officer after accounting errors related to real-estate loans. Alan Master was promoted to CEO in August, freeing Ranieri to try to raise money. That month, the company said it expected a $102.5 million second-quarter loss following $87 million in total losses the previous two periods.

In building Franklin, Ranieri enlisted Nocella among five former executives of Bank United Corp., later sold to WaMu, to run the bank. Ranieri took the bank public in 2003 at $14.50 a share, and the stock peaked at $21.88 in October 2006. Franklin shares tumbled 33 percent to 26 cents yesterday.

Franklin’s Decline

Franklin lost more than three-fourths of its market value during 2007 as bad home and commercial loans doubled. Ranieri said in December 2006 at an industry conference that investors in mortgage-backed bonds had no idea of the risks they were taking. Worldwide credit losses and writedowns linked to the mortgage meltdown have swelled to $688 billion, according to data compiled by Bloomberg. Ranieri’s assistant said he wasn’t available for comment yesterday.

“The residential side was not their problem, it was clearly the commercial side,” said David Lykken, co-founder of Mortgage Banking Solutions, an Austin, Texas-based consulting firm. “The reason it took a little longer is because that trailed residential,” he said yesterday in an interview.

Prosperity, of El Campo, Texas, will assume Franklin’s deposits, including brokered deposits, at a 1.7 percent premium. Prosperity will purchase $850 million of assets and the FDIC will retain the rest for later disposition, according to the statement. The FDIC estimates the transaction’s costs to its insurance fund will be $1.4 billion to $1.6 billion.

Pacific Western agreed to assume Security Pacific’s deposits at a 2 percent premium and buy $51.8 million of assets, with the FDIC keeping the rest. Security Pacific is the third California bank to close this year, after IndyMac and First Heritage Bank.

Cost of Failures

The FDIC oversees 8,451 institutions with $13.3 trillion in assets, and insures deposits of up to $250,000 per depositor per bank and the same amount for some retirement accounts. The agency has proposed doubling premiums charged to banks for coverage, to replenish its reserves amid agency forecasts that bank failures through 2013 will cost almost $40 billion.

The FDIC in August said 117 banks were classified as “problem” in the second quarter, a 30 percent jump from the first quarter. The agency, which doesn’t name “problem” lenders, will update its assessment this month.

“Banks overall are very well capitalized,” FDIC Chairman Sheila Bair told the Senate Banking Committee on Oct. 23. “We have some banks with some challenges, but the vast majority are well capitalized.”

The U.S. closed 27 banks from October 2000 through the end of last year, according to a list at fdic.gov.

Source