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Blog Posts2013 Springsummer V7 Table of Contents Feb 11, Gregg Fields. Burning Down the House: Dependency Corruption Issues in Credit Rating Practices ................. 4 Feb 18, Ted Gup. The Power of Disclosure: (What Power?) ............................................................................................ 8 Feb 20, Paul Thacker. The Slow Pace of Success in a "Do Something Congress" ....................................................... 11 Feb 21, Ken Silverstein and Brooke Williams. Membership Has Its Privileges: Donor Perks and the Atlantic Council .. 15 Feb 22, Donald W. Light. Synergies Between Moral Philosophy and Institutional Corruption ........................................ 18 Mar 07, Kirsten Austad and Aaron Kesselheim. Physicians and the Pharmaceutical Industry: Where does this Story Begin? ............................................................................................................................................................................. 20 Mar 8, Donald W. Light. Institutional Corruption and Countervailing Powers ................................................................. 24 Mar 09, Gregg Fields. John Reed: On the Value of Values ............................................................................................ 27 Mar 26, Sheila Kaplan. Lobbyist's Progress: An Interview With Jeff Connaughton ........................................................ 30 Mar 27, Daniel Weeks. The Fiscal Fallout: A View From Below ..................................................................................... 34 Mar 29, Gregg Fields. Whale-Sized Institutional Corruption: Regulatory Capture and the JP Morgan Derivatives Scandal ........................................................................................................................................................................... 37 Apr 03, Sebastían Pérez Saaibi and Juan Pablo Marín Díaz. Understanding Conflict of Interest Networks .................. 40 Apr 05, Gregg Fields. How the Fed Came to See the Light: The Growing Role of Transparency in Monetary Policy ... 45 Apr 12, Gregg Fields. Wheel of Fortune: As Regulators Spin Off Duties, Ex-Regulators Cash in as Consultants ......... 48 Apr 20, Gregg Fields. Capital Opportunities: A Watchdog Journalist’s Take on Washington’s Legalized Corruption .... 52 April 22, 2013, Brooke Williams. Just Asking: An Appeal for Vountary Disclosure ......................................................... 55 Apr 22, Sheila Kaplan. Exploding Influence: How Lax Oversight Won by Industry Lobbyists Lessens Safety ............... 57 Apr 25, Garry C. Gray. Insider Accounts of Institutional Corruption .............................................................................. 60 Apr 25, Gregg Fields. Institutional Corruption and the Big Bang Theory ........................................................................ 62 Apr 29, Susann Fiedler. Bad Apples and Dirty Barrels: Outliers and Systematic Institutional Failures .......................... 65 May 2, Paul D. Thacker. Performing the Job of a Congressional Staffer: Informing the Public Without Endangering Your Boss ....................................................................................................................................................................... 67 May 10, Gregg Fields. The Shadow Knows: Ben Bernanke Battles Non-Bank Banks ................................................... 73 May 10, Gregg Fields. Banking on Tomorrow: Why Today is Never Good for Financial Reform ................................... 70 May 13, D. James Greiner. Diagnosing Institutional Corruption ..................................................................................... 76 May 14, Brooke Williams. Good, Clean Data .................................................................................................................. 80 May 15, Donald W. Light. Institutional Corruption: Linking and Learning from Regulatory Capture ............................... 82 May 16, Heather White. Bangladesh: Savar Solutions and Fast Fashion may not be Compatible ................................ 85 May 23, Jonathan H. Marks. The Perils of Public-Private Partnerships ......................................................................... 88 2 Jun 05, Brooke Williams. Further Disclosure .................................................................................................................. 90 Jun 12, Adriane Gelpi. Dispatch from Chile: The Ethics of Health Priority Setting, or Searching for True North Without a Compass ......................................................................................................................................................................... 92 Jun 13, Justin O’Brien. Tackling Institutional Corruption in Financial Markets ............................................................... 98 Jun 18, Carla Miller. The Emperor's New Clothes: A View into the Current State of Municipal Ethics ......................... 101 Jul 2, Gregg Fields. The Tower of Institutional Corruption: The Bank for International Settlements In The Nightmare Years ............................................................................................................................................................................. 105 Jul 9, Ken Silverstein. The Bipartisan Lobbying Center: How a Washington Think Tank Advocates for Political Unity - and its Top Donors ........................................................................................................................................................ 108 Jul 16, Donald W. Light. Corrupting Practices Harm Patients ...................................................................................... 111 Jul 17, Donald W. Light. Risky Drugs: Why The FDA Cannot Be Trusted .................................................................... 112 Jul 24, Genevieve Pham-Kanter. A Few Predictions on the Sunshine Act ................................................................... 115 Jul 26, Gregg Fields. Simply Fab: Institutional Corruption and the Trial of Fabrice Tourre .......................................... 118 Jul 31, Donald W. Light. Systematic Evidence of Less-Than-Truthful Commercial Free Speech That Harms Citizens .... 121 Aug 1, Gregg Fields. On The Edge: The SAC Capital Indictment Draws a New Line on Institutional Corruption ........ 123 Aug 7, Dieter Zinnbauer. If You Could Ask 100,000 People Around the World One Thing to Better Understand or Tackle Institutional Corruption, What Would it Be? ....................................................................................................... 127 Aug 14, 2013. Malcolm S. Salter. The AIG Bailout Revisited: Calculated Corruption or Miscalculated Risk Management? ............................................................................................................................................................... 132 Aug 20, 2013, Carla Miller. The Tail Wagging the Dog: Institutional Corruption and the Federal Sentencing Guidelines for Organizations (FSGO) ............................................................................................................................................ 137 Aug 22, 2013, Malcolm S. Salter. Is Financial Reform Being Gamed? What Implementation of the Volcker Rule will Reveal about the Gaming of Financial Reform ............................................................................................................ 142 Aug 22, 2013, Gregg Fields. One Holy Mess: Pope Francis Fights Institutional Corruption at the Vatican Bank ........ 151 3 Burning Down the House: Dependency Corruption Issues in Credit Rating Practices Gregg Fields A new federal lawsuit against Standard & Poor’s raises a vexing question: Where is the line between an opinion that is paid for, and one that is bought? Who knew that tweaking the lyrics to a Talking Heads song could so accurately reflect what happened during the mortgage meltdown? In March 2007, an analyst at Standard & Poor’s noticed something about the subprime mortgage-backed securities that had received relentlessly rosy ratings from S&P: They were crashing. So the analyst sent an email to his colleagues, providing his own version of the Talking Heads’ classic “Burning Down The House.” “Subprime is boiling over/ Bringing down the house,” one of his three stanzas read in part. It was a fitting tribute to a band also known for their concert movie, “Stop Making Sense.” The analyst even videotaped himself singing his ditty, while his S&P coworkers laughed. Heart of the matter That picture—of S&P fiddling while its customers got burned—is one of several disturbing take-aways from a civil lawsuit filed last week against S&P and its corporate parent, McGraw-Hill Cos. The case was filed in U.S. District Court for the Central District in California by the Department of Justice. The DOJ claimed S&P’s actions on how it rated mortgage-backed securities—and a related type of investment known as collateralized debt obligations—cost federally insured financial institutions more than $5 billion. And it didn’t have to happen, U.S. Attorney General Eric Holder said at a press conference. “Put simply, this alleged conduct is egregious—and it goes to the very heart of the recent financial crisis,” Holder said. In examining the voluminous case—it runs 119 pages long—a picture emerges of a system that appears to be built on a foundation of a perfectly legal form of dependency corruption. (This isn’t a criminal case—the lawsuit is seeking damages
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