Re: FBI and AIG and the like. (Bravo!! :))) )



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http://www.courant.com/hc-pentagon0505.artmay05,0,6008486.story?page=2
Pentagon Analyst Is Arrested
Accused Of Passing Secret Information
By MARK SHERMAN
Associated Press

May 5 2005

WASHINGTON -- It's a familiar scene at Washington-area restaurants: A
government official and lobbyists talk shop over lunch. But during a
June 2003 meal in Arlington, Va., top-secret information was discussed,
federal authorities contend.

Pentagon analyst Larry Franklin, 58, an Air Force Reserve colonel who
once worked for the Defense Department's No. 3 official, provided
information about potential attacks against U.S. forces in Iraq to two
executives of the American Israel Public Affairs Committee, authorities
say.

Franklin was arrested Wednesday and charged with disclosing classified
information to people not authorized to hear it. He is the first person
charged in a long-running investigation into whether Israel improperly
obtained U.S. secrets.

Twice last year FBI agents searched the offices of AIPAC, a lobbying
organization influential on U.S.-Israeli relations. It was once thought
AIPAC might be a target of the probe, but that's not the case,
according to two knowledgeable people. They spoke only on condition of
anonymity because the probe is underway.

One of the people is familiar with the group's role in the probe; the
other is a federal law enforcement official. They said the FBI is
focusing on whether classified information reached Israel.

An FBI agent's affidavit that accompanied the criminal complaint
against Franklin does not suggest that the disclosure endangered U.S.
troops, but said intelligence sources could have been compromised.

Franklin faces a count of disclosing classified defense information,
which is punishable by up to 10 years in prison. He was not charged
with espionage.

In Jerusalem, Israeli Foreign Minister Silvan Shalom said his country
was not involved.

"Israel does not carry on any activity in the United States which could
harm, God forbid, its closest ally," Shalom told Israel's Channel One
TV.

Israel has said it imposed a ban on espionage in the United States
after the scandal over Jonathan Pollard, a civilian intelligence
analyst for the Navy caught spying for Israel in 1985 and sentenced to
life in prison. That case damaged U.S.-Israeli relations and remains a
sore point between the countries.

AIPAC declined to comment on the Franklin case Wednesday, but it has
previously said it had done nothing wrong and was cooperating with the
investigation.

Franklin, of Kearneysville, W.Va., turned himself in Wednesday morning.
He made a brief appearance in U.S. District Court in Alexandria, Va.,
and was released on $100,000 bond under the condition he surrender his
firearms and passport.

A preliminary hearing was set for May 27. Franklin's lawyer, John
Richards, said he expected his client would plead innocent.

Franklin, who specialized in Iran and Middle Eastern affairs and had
clearance to review top-secret documents, gave classified information
to the two AIPAC employees during the lunch at an Arlington restaurant,
FBI Agent Catherine Hanna said in the affidavit.

Hanna said Franklin admitted 10 months ago that he disclosed the
information.

The people at the lunch have been identified as AIPAC employees Steve
Rosen, the director of research, and Keith Weissman, deputy director of
foreign policy issues. Neither still works for the group. Both have
been interviewed by the FBI but neither has been charged.

Rosen's lawyer, Abbe Lowell, said his client "never solicited, received
or passed on any classified documents from Larry Franklin."

The affidavit does not allege documents were passed. It says Franklin
described the information, said it was highly classified and asked the
men not to use it. The information concerned possible attacks against
U.S. troops by Iranian-backed groups in Iraq, according to the federal
law enforcement official.

Franklin also passed other classified information to a foreign official
and members of the media, the affidavit says. It does not describe the
information or further identify the recipients.

A Defense Department official said Franklin continued to work at the
Pentagon until his arrest, but he could not immediately say what kind
of work Franklin performed. The official spoke on condition of
anonymity because the matter still is under FBI investigation.

Franklin's top-secret security clearance was suspended in June 2004,
the Justice Department said. He formerly worked in the office of policy
undersecretary Douglas Feith.

The suspension followed a search of Franklin's West Virginia home that
turned up 83 classified documents, Hanna said.

Franklin has taught history courses at Shepherd University in
Shepherdstown, W.Va., for the past five years.
Copyright 2005 Associated Press


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kathleen wrote:
>
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>
http://www.courant.com/business/hc-fbi.artmay05,0,2474262.story?page=2&coll=hc-headlines-business
>
> FBI Probing Insurance Industry
> Taking `A Hard Look' At Cases Similar To AIG
> Bloomberg News And Staff Reports
>
> May 5 2005
>
> The Federal Bureau of Investigation is probing the U.S. insurance
> industry to determine whether insurance fraud is "the next big one"
> after the savings-and-loan crisis of the 1980s and the corporate
fraud
> scandals that began in 2001, officials said Wednesday.
>
> Though not inspired by any specific company or crime, the inquiry
> covers the types of allegations that led to federal and New York
state
> probes of American International Group Inc., the world's largest
> insurer, said Chris Swecker, who heads the FBI's criminal division.
>
> "We're taking a hard look at cases like AIG to see if there's an
> indication of something more pervasive," Swecker said at a briefing
for
> reporters in Washington on the status of financial crimes
> investigations. "I'm not going to say that [the insurance industry]
is
> the next crisis, but I will say that we're looking at it."
>
> The FBI said it is working with state insurance commissioners on its
> industry review, although Connecticut's insurance commissioner, Susan
> Cogswell, said Wednesday that she had not been informed of the probe.
>
> "This is the first I've heard of it," she said in response to a
> reporter's question.
>
> "If they do contact us, of course, we will be as cooperative as we
> possibly can be," she said.
>
> Although many of the FBI's 56 field offices are involved in the
> inquiry, Swecker said, the bureau decided to run it from the
Washington
> headquarters to look broadly for "trends and patterns." The FBI's New
> Haven field office expects to be involved in the review, a
spokesperson
> said.
>
> Jeremy Wilkinson, a spokesman for the National Association of
Insurance
> Commissioners, which represents state regulators, said the group has
> "an ongoing relationship with the FBI."
>
> The FBI also recently joined the International Association of
Insurance
> Fraud Agencies.
>
> An FBI report released at the briefing said the bureau's review of
the
> industry is focused on insurance-related corporate fraud, the
diversion
> of policyholder premiums for the personal benefit of agents and
> brokers, and workers' compensation frauds that target pools of small
> businesses.
>
> Reinsurance is also a topic of the review, said Brian Lamkin, chief
of
> the FBI's financial crimes section.
>
> AIG spokesman Chris Winans declined to comment. The company said May
1
> that it would correct five years of earnings results for reinsurance
> and other transactions that inflated the company's net worth by $2.7
> billion. Chairman and Chief Executive Officer Maurice Greenberg
> resigned in March.
>
> In February, New York Attorney General Eliot Spitzer and the
Securities
> and Exchange Commission began examining whether AIG had improperly
used
> reinsurance. Since then, an internal review has uncovered misleading
or
> improper booking of asset writedowns, hedge-fund proceeds and
> underwriting results, AIG said.
>
> Swecker and Lamkin declined to identify or describe any specific
> investigation. Lamkin said history shows that "a lot of the
accounting
> schemes in these large corporations also can be done in some other
> industries, like the insurance industry. We're just taking a hard
look
> at it."
>
> The FBI report said there is "a recent trend involving insurance
> companies caught in the web" of corporate accounting schemes.
>
> Robert Mintz, a former federal prosecutor, said it's unusual for the
> FBI to use such a "broad-based, industrywide approach," a technique
> more typical of Spitzer's office.
>
> "We may be seeing the FBI, to some extent, following the lead" of the
> New York attorney general, "which is really unusual," Mintz said.
>
> Lamkin said investigators are looking for "a pattern within the
> industry and a practice of doing the same type of schemes."
>
> "This is exactly what we did during the `80s during the
> savings-and-loan crisis," Lamkin said. "We had individual S&L
> investigations going on. What we identified were these side deals of
> exchanging bad loans back and forth between the institutions to hide
> them from regulators."
>
> Told to look out for such deals, FBI field offices began noticing
them
> in other investigations, "and that's what generated the whole
national
> push," Lamkin said.
>
> Wednesday's FBI report also predicts that cases of corporate fraud,
the
> top priority of the bureau's financial crimes section, "will continue
> to flourish."
>
> FBI field offices are now pursuing about 405 open cases around the
> country, double the number in September 2003.
>
> The open cases include those that have already led to some trials or
> convictions, such as Enron and WorldCom, Swecker said.
> Copyright 2005, Hartford Courant
>
>
>
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