Tag Archives: crime

Goldman Sachs: Altruism for a profit

27 May

goldman-sachs,jpg

Investment powerhouse Goldman Sachs has made money with schemes that were ingenious, inventive, complex, arcane, morally vacant and, some might say, criminal. Now it hopes to make money by exploiting the dysfunctions of government.

 

Goldman has long mastered the art of generating cash without actually producing a product. Its techniques include:

 

  • Using influence to rig a trading system in its favor.
  • Finding a market where it can buy low and then finding a second market where it can sell high.
  • Identifying gross inefficiencies that are costing someone or something money and offering to fix them.

 

Goldman’s new plan is along the lines of the third. The firm is financing crime reduction measures in Massachusetts in exchange for a percent of what is saved by not having to incarcerate thugs.

 

Ingenious, inventive, complex.

 

New profit center for investors

New profit center for investors

This type of investment carries an extra dividend: It makes Goldman Sachs – a villain in the eyes of the Occupy movement – look like a Good Guy. Indeed, the investment vehicle designed to reduce crime is called a social impact bond, or in Wall Street parlance, an SIB.

 

Some view these investments as a marriage between capitalism and charity, but capitalism is the strong, dominant partner.

 

Bloomberg Businessweek reported on Goldman and the SIBs in early May. Writer Esme E. Deprez cites a prediction by the Rockefeller Foundation that the market for SIBs is growing and by 2015 will reach $500 million.

 

That’s a lot of social impact, enough to give government the idea that it no longer is responsible for maintaining order and structure in society. Or has it already decided that?

 

According to the Businessweek article, Goldman is investing $9 million and betting that crime will go down – or more accurately that young men will spend fewer days in jail.

 

The bonds help fund a program called the Massachusetts Juvenile Justice Pay for Success Initiative. In that program, a non-profit agency called Roca works with young adult males on probation. The agency provides outreach, therapy and training. After two years, participants are supposed to leave, take a steady job and lead a crime-free life.

 

If a graduate stays out of jail for a year, Massachusetts saves $12,400. If the state is able to reduce crime enough to close a 300-person prison, it saves $47,500 per inmate.

 

This is how the SIBs and Goldman get paid off.

 

In this particular case, Goldman has partnered with other investors who financed an additional $12 million in bonds, making the total $21 million.

 

The bonds earn 5 percent no matter what, but pay nothing else until the men in the program manage to spend 22 percent fewer days in jail. There’s a sliding scale for payment, with a maximum of $27 million being paid to bond holders if jail time is reduced by 70 percent.

 

It’s a risk, like a junk bond, but $27 million for a $21 million investment is pretty good money (28 percent profit) and worthy of the risk.

 

Roca had been working with 375 men. With the SIB money, it can handle 550.

 

A skeptic might look at all this and ask:

 

  • Why doesn’t Massachusetts put up the $21 million itself and forego the $6 million payout to investors?

 

  • Why doesn’t society as a whole recognize that employed people from stable families commit fewer crimes?

 

  • Why does the nation exclude million of people from an otherwise viable system of commerce, education and opportunity and allow the existence of acres and acres of urban decay that breed crime and insanity?

 

There are clear answers to these questions. I won’t go into them because our preference is to ignore them, deny them and maintain a monstrous blind spot in spite of religious teachings, well-intended laws and glorious, inclusive rhetoric.

 

But as a culture, we have reached an all-time low when we allow things to get so bad

that Goldman Sachs can make money off our failures. The promise of money, more so than altruism or mere brotherhood, does seem to get things done. Perhaps we can turn the VA hospitals over to Goldman. With all those returning vets, there’s got to be a profit in there somewhere.

 

By Lanny Morgnanesi

 

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Murder under my nose: How I made an innocent man look guilty

26 Feb

Justice

One afternoon last week a coworker sat down next to me and I focused on his shirt.

“Were you wearing that this morning?” I asked.

“I was,” he said.

This innocuous exchange revived in me a memory of murder. It brought back a decades-old crime and thoughts of an innocent man I wanted to put behind bars because someone said he changed his pants at lunch.

Circumstance, no matter how incriminating, should never be mistaken for truth. This I have learned.

The incident occurred at a newspaper where I was an editor. Our building was adjacent a large parking lot. At the far end of the lot, away from the building, was a patch of grass and some picnic tables.

No one but Janice used them.

Janice was a 26-year-old secretary who would sunbathe at lunch, lying on one of the tables.  Her meal would be a salad from the Burger King across the street. She’d drive over there, get the salad, then come back and park her car near the picnic tables.  The keys were left in the car and the sound system was turned up so she could hear it while taking in the sun.

A guy she was dating worked in the advertising department of the newspaper, but word was their relationship was coming undone. Janice planned to head north that weekend to visit a Canadian football player friend. But on Friday, before she left, she planned to talk with the old boyfriend and explain things.

She never did because she went missing. After a few days her body was found in the woods near a river. She had been stabbed about 40 times. Bloodstains were found on the parking lot near the picnic tables.

When word got out, everyone at work huddle together to cry, grieve, commiserate and ask why. I was the editor on the story and had to put aside personal feelings. I informed my coworkers that reporters would be interviewing them to find out if they had witnessed anything odd in the past few days and to learn what they knew about Janice.

The boyfriend was there. He looked terrible. He hadn’t slept or shaved for days. He seemed a wreck. Normally, his hair was perfectly coiffed in what could be called “disco” style. Now it was all mussed.

He took me aside and said, “I’m sorry, but I can’t talk to you about Janice. I just can’t.” He shook as he spoke.

I told him it was his decision to talk or not talk, but I asked him what he meant by “can’t talk.”

He was quiet for a moment then said, “Let’s go into an office.”

We did, and he shut the door.

“The thing is,” he said nervously. “The thing is . . . if I talk about Janice, if I tell you the story of Janice … the real story … she’ll come off looking like” – and he paused – “the devil.”

At that exact moment I decided I was alone in a locked room with a murderer.

Over the next few days, the reporters and editors worked feverishly to find Janice’s killer. The boyfriend is always a suspect and much of our findings were pushing us toward him.

The jealousy motive was clearly present. But there was more. A colleague told us that on the day of the murder the boyfriend had been wearing a pair of brown pants in the morning and in the afternoon had change to black.

Witnesses from outside the paper were coming forward. One was a hairdresser who said she had been driving past our building around the time of the murder and saw a man and a woman at the end of the parking lot. The man was raising and lowering his arm in the direction of the woman, she said. Being a hairdresser, she said she couldn’t help notice the man’s hair. She said it was neat and styled, like the hair of men who frequented discos.

When we spoke to the police, they suggested we could be onto something. It was odd, however, that they never wrote down anything we said.

Meanwhile, the boyfriend found it difficult to come to work. Janice had been well liked. This was not true of him. Now, popularity was a moot issue. He was being looked upon as the most horrid of creatures.

That did not change, although it should have.

Everyone at the paper, me more than anyone, was stunned when police arrested a 16-year-old high school dropout and charged him with the murder.

The boy, who hung out at the Burger King, recently got his driver’s license and wanted his parents to buy him a car. They refused. He liked Janice’s car, a hot black number that he’d see when she drove in to buy her salads. He decided he wanted it and followed her on foot to the newspaper parking lot across the street.

While she was on the table sunning, he got in the open car and was preparing to take it. She challenged him. He pulled the knife and stabbed her repeatedly. He put the body in the trunk and drove away with his prize.

All this happened in broad daylight, on a heavily traveled road, outside a building that employed hundreds of people, including journalists trained to observe and photograph news.

I don’t think any of us ever apologized to the boyfriend. In the face of rock solid evidence to the contrary, a few continued to believe he committed the crime.

Not long after the arrest, the largest fire in the area’s history broke out. A Kmart warehouse the size of several football fields was fully engulfed in flames and smoke. It was massive. The scene looked like World War II. The newspaper sent someone up in an airplane to shoot the fire, and the dramatic photo ran across six columns in the paper.

A copy of that day’s paper with the huge fire picture was on my desk when I arrived at work. There was a note attached. It was note I’ll never forget; a very short note that was very long on black humor; a note full of hurt.  Somewhere I must have it in my archives, but I’m not sure where. It was from the boyfriend, and this is what it said:

“Honest to God. I didn’t do this.”

The boyfriend eventually resigned from the newspaper. Years later, on Valentine’s Day, the murderer hanged himself in prison.

The whole episode is something I think about from time to time, especially when a colleague has innocently and maybe for no good reason changed an article of clothing in the middle of the day, or at least I or someone else thought he did.

 By Lanny Morgnanesi

Should hit men get medals?

26 Jan

Author Gay Talese

Mafioso Bill Bonanno

 

 

 

 

 

 

 

 

 

 

 

Like many Americans, and certainly many Italian-Americans, I have a mild fascination with the Mafia. So when I came across an old copy of Gay Talese’s “Honor Thy Father,” I started reading it. Talese was an early and very successful practitioner of something called The New Journalism. Now it’s just called writing, but it caused a big stir in the ‘70s.

The book was one of the first to take a human look at Mafioso, specifically Bill Bonanno, whose father was a New York don. Talese provides a somewhat sympathetic look at the Mafia. Talese says this about Bill:

When he went to ROTC camp, and later into military service with the Army Reserves, he was trained in the technique of legal killing. He learned how to use a bayonet, how to fire an M-1 rifle, how to adjust the range finder of a cannon in a Patton tank. He memorized the United States military code, which in principle was not dissimilar from the Mafia’s, emphasizing honor, obedience, and silence if captured. And if he had gone into combat and had killed several North Koreans or Chinese Communists he might have become a hero. But if he killed one of his father’s enemies in a Mafia war, where buried in the issues was the same mixture of greed and self-righteousness found in all the wars of great nations, he could be charged with murder.

In the post-Soprano age, I’m curious how people might react to such a statement. Please comment. Was Talese accurate in his analysis, or was he trying to sell a revisionist image of beastly men?

By the way, if you would like to sample a shorter-form piece by Gay Talese, I suggest: “Frank Sinatra has a cold,” said to be the best piece of non-fiction ever published in Esquire magazine.

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