Monthly Archives: April 2009

Happy Birthday, Bernie Madoff

Bernie Madoff celebrated observed his birthday at a federal prison in lower Manhattan, the Metropolitan Correctional Center (MCC), while he awaits a sentencing hearing, tentatively scheduled for June 16.

“We do not celebrate inmates’ birthdays in any way,” said Scott Sussman, Public Information Officer for the MCC.

I know it’s silly but that seems really mean. Particularly for white-collar defendants.

Madoff’s wife, Ruth, visited him on Monday. The federal prison system says “handshaking, embracing, and kissing are ordinarily permitted within the bounds of good taste,” according to Bureau of Prison regulations.

No conjugal visits are allowed.

Ruth Madoff declined to comment as she left the prison.
….
Ruth has told members of her family that she still loves her husband of more than 45 years, but that she feels shunned and lonely because of her husband’s $65 billion fraud that cheated thousands of people, including some of her closest friends.

Yeah, that will make a girl lonely.

The case of Bernie Madoff just seems weird to me. The fact that he didn’t attempt defend himself seems queer to me. Maybe he really is guilty and feels deep remorse. I don’t know. It just seems weird to me that someone with a wife and children who love him wouldn’t at least go to trial where there is at least the sheer hope of a technicality to keep him away from a life sentence.

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Today In Enron History

Today in 2003, Lea Fastow was originally indicted for Conspiracy to Commit Wire Fraud and Defraud the United States, two counts of Money Laundering, two counts of Aiding and Abetting and one count of filing a false tax return.

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Former Enron Board Member Starts Blog

Herbert Winokur has founded a blog to “make sure the media didn’t miss a future conspiracy like Enron.”

It seems a little too piquant to me that Mr. Winokur can claim, by virtue of this blog, that he knew nothing of the goings-on at the company (i.e, “a conspiracy”), yet Jeff SKilling’s claim that he didn’t know everything, such as Fastow’s theft, is met with sneering derision. Mr. Winokur was supposed to be one of the cops in the company – providing leadership and oversight. If Mr. Winokur saw nothing, then perhaps Mr. Skilling also saw nothing amiss.

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Liveblogging Life Without People

I’m writing and half-watching a program on the History program, Life After People. This episode is about what happens to the dead bodies.

I sort of hate myself for watching this. It is such a misanthropic idea – earth without people, or as they say on the program: Earth, Population Zero.

In the opening credits, it shows various destructive scenarios. New York gone, the Statue of Liberty’s arm and torch broken off, and the skyline of Houston, Texas being assaulted by what appears to be rockets or meteors.

Horrible scenes.

Yet they’re so realistic, and it’s such a darkly fascinating cue for the darkness inside me that I can’t turn it off. Thus resigned to watching this, I have learned that in the International Space Station is what is called the Immortality Drive, which contains the DNA codes for Steven Hawkings, Steven Colbert, and a Playboy model. “The Immortality Drive may be man’s best shot at preserving the species in a life after people,” says the voiceover, “but we will see if it can really last forever.”

Now it’s attacking art. “In the time of humans…” is a phrase that the narrator keeps using. “In the time of humans” … as if there was any other time that was relevant. The narrator says that the Sistine Chapel is better off without humans. “Without the annual press of two million tourists,” he says, “there are no ascending currents of human body heat. The frescoes on the ceiling, including God and Adam, are safe … at least for now.”

The idea that the Sistine Chapel has any meaning at all without human beings is laughable. What Michaelangelo created was transcendent – but that also means that the knowledge of it is enough. We don’t have to have the actual thing to value it (I’ve never seen it, except in pictures, but I know I value it deeply because it is evidence of the greatness that man can achieve.)

Six months after people. Huts in Antarctica thrive because the average temperature is negative three degrees below zero. Mold and insects do not exist. Cans of meat from 1919 are still on the shelves, and the narrator says they’ll survive for centuries more. And next is footage of meats – actual, recognizable meats, hanging from hooks, from 1919 which the narrator says is also edible and will continue to be for two hundred more years at least.

But what does “edible” mean in this context? Edible for whom? If there are no humans, what value is the meat, whether or not it was slaughtered today or in the Middle Ages? A man tells the story that a mastodon came up through the ices, and scientists in 1928 cooked it and served it for dinner at a meeting in Paris.

“How did it taste?”
“It tasted like rotten meat. It’s been buried in the ice for ten thousand years. But it is edible.”

I suppose by that definition, balloons, lint, shoes and mice are edible.

They’re attacking Houston and Boston specifically.

The USS Constitution, “Old Ironsides”

Um… Cara? Why are you liveblogging this? I do not know. It feels important.

Anyway, it says that nine months after people, the search to see what survives become more intense. Back to Boston. The USS Constitution’s hull can not withstand the constant infiltration of water. The water starts leaking, shrinking and expanding and rotting. Automatic bilge pumps would drain the water, but without it, the Constitution would remain afloat for a year, maybe less, then sink.

Three years after people, the International Space Station still orbits, but without constant recalibrations from terrestrial stations, it drifts off course, losing two miles of altitude each month. It will fall to earth, and destroy itself in the process. Oh, and here’s the scene I described earlier, with what I thought were missiles descending upon Houston.

“The Immortality Drive proves to be quite mortal, after all.”

It is now showing Hashima Island in which all the buildings are dead, empty, destroyed, concrete walls fallen, metal netting strewn across the ground, “thirty-five years of wind and rain.”

“Mankind’s bids for immortality have long odds.”

Fifty years after people. This is just unbearably horrible. The images catch in my cerebellum, marking themselves in memory.

Domestic parrots escaped into the wild, and retain the words taught to them by their vanished masters, says the narrator. Strange, how poignant that our language would live on in the treetops. American English spoken by tropical birds.

A man says that parrots live about sixty years. So it’s plausible that fifty years after the last human being is gone, and our language has not been uttered for all that time, we could hear “human noises” in the wild. Well, we couldn’t hear them. But they would exist. And I wonder if the domesticated parrots would pass their words on to other parrots, learning from each other like little babies.

Seventy-five years after humans. The Bunker Hill bridge is decaying (strange, they didn’t choose to profile the Golden Gate Bridge for this.) A construction expert says bird poop and rainwater would wear away the protective plastic coating on the Bunker Hill bridge, and says that the lethal combination partially caused the bridge failure in Minnesota in 2007.

One hundred years after people, the combination would corrode the steel of the cables that are suspended between the two extremities. The bridge can maintain its structure until fifty percent of the cables failed. Spectacular failure of the bridge.

Lady Liberty’s torch is now about to die. Without humans, it is inevitable that she would crumble.

Now back to Houston. The domed stadiums (Enron Field!) have spent one hundred years as subtropical paradises. In the time of humans, it cost $500,000 per year to maintain the Astrodome. After a century, in great chunks, the steel and lucite domes come raining down. The visuals are astonishing, of course. But it hurts to see this. Hurts very much indeed.

One hundred and fifty people years without people makes Boston look like an overgrown garden. The John Hancock building, eaten by vegetation, falls in a spectacular collapse, reminiscent of September 11. “The urban jungle is now just jungle,” says the narrator.

The scene of two gorgeous red parrots saying, “Hello, hello” over the empty, garden-like, destroyed city is almost too much to bear. “Though these parrots have never interacted with humans, their ancestors did, and some remnants of speech remain.”

The drop-off of the language would be about 200 years. There is no benefit for the parrots to keep using human words, there is no evolutionary compulsion to, and they are not rewarded. So the language slowly dies.

Two hundred years after humans.

“The tallest building in Houston has had its windows blown out by hurricanes.” That’s you, Shell Tower. The insides are corroded by rain.

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And then the building is stripped to its bones. Oh heavens. This picture is just overwhelming.

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As someone who loves architecture almost as much as I love Enron, it is actually painful to see buildings in this state. Then the steel frame corrodes and collapses.

There would be no panic in the streets. It would be loud, I imagine, that collapse, but then after it falls, deathly silent, as if it had absorbed all the potential for sound.

In New York Harbor, the torch falls off the Statue of Liberty, then her head, then other parts. But on the ocean floor, the impression of the torch would remain for perhaps forever – much like dinosaur prints.

That doesn’t qualify for immortality in my estimation.

Five hundred years after people, the Sistine Chapel would finally collapse.

Ten thousand years after people, most traces of human culture or existence has vanished. The planet has gotten warmer (even without people!) The meats in the Antarctica are gone. The huts are gone.

One hundred million years after people, every mark of man is gone. What survives is not what people made, but the simple mineral compounds they were made of.

Our teeth, the dentine, will survive. But little else.

Years ago, I watched a show about dinosaurs that made me wistful and astonished at the power of the earth. Now, I feel the maturity of those emotions. I feel like I want to grasp every human achievement, hold it in my hand and see to which mathematical sigils to which it will acquiesce.

I will miss us. Even when I’m not here, I will miss us.

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Gay, Transgender Monks Get New Behavior Guidelines

Prepare your eyeballs, you’re about to read the strangest post ever:

A Buddhist preacher in Thailand has announced plans for new guidelines aimed at curbing the flamboyant behaviour of gay and transgender monks.

I need to list my thoughts to give the illusion of order.

1. Flamboyant behavior of monks. Man, that’s just awesome.
2. Gay and transgender monks. Man, that’s just … wow.

The “good manners” curriculum – the country’s first – is being introduced in the northern province of Chiang Rai.

The senior monk told the BBC he was particularly concerned by effeminate activities among novices such as the wearing of make-up and tight robes.

TIGHT ROBES.

I like the thought of seeing effeminate, skinny men in half-shirts dancing to Madonna and then claiming to be monks. Their lack of self-awareness is just boggling.

More than 90% of the Thai population are followers of Buddhism.

Great.

The BBC’s Jonathan Head in Bangkok says tales of monks behaving badly are nothing new in Thailand.

Hahahaha!

In America we have a problem with nuns. Those Sacred Heart bitches are out of control.

In recent years, they have been accused of abuses of their exalted position in society that range from amassing dozens of luxury cars, to running fake amulet scams, to violating their vows of celibacy, our correspondent says.

Of all austerity vows, celibacy is the most unnatural. Anyone who vows not to have sex is clearly mentally ill. Actually I think monks – and recluses – are just people who just haven’t met the right bunny yet.

Senior monk Phra Maha Wudhijaya Vajiramedhi told the BBC he would address issues like smoking, drinking alcohol, walking and going to the toilet properly, which are all detailed in the traditional 75 Dharma principles of Buddhism, and the 227 precepts for monks.

Do I want to know the rules of going to the toilet? No, I do not believe I do. I prefer ignorance.

He was especially concerned, he said, by the flamboyant behaviour of gay and transgender monks, who can often be seen wearing revealingly tight robes, carrying pink purses and having effeminately-shaped eyebrows.

Hahahah! I have tears in my eyes. I am shaking with laughter.

Thailand has a very large and visible population of transgender men, and Phra Vajiramedhi acknowledged that it was difficult to exclude them from the monkhood but he hoped his course could at least persuade them to curb their more extrovert habits.

If successful, the “good manners” course, at the Novice Demonstration School, would be replicated at other Buddhist monasteries and seminaries, he said.

If a monk engages in these behaviors, he’s not really a monk. He is fake and a fraud, a man whose tight robe is nothing more than a Halloween costume.

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Gekko Lives: Wall Street Sequel A Go

Rumours of a Wall Street follow up have been floating for years, but now, it appears it might actually happen. (I am trying to remain calm. This is huge news for me! HUGE!)

Wall Street’s all the rage again — literally. And Oliver Stone and Michael Douglas have decided they have more to say about it.

Stone has just closed a deal with Fox to direct the follow-up to “Wall Street,” now tentatively called “Wall Street 2,” with Douglas starring. This would provide an unusual amount of continuity since Stone directed and co-wrote, with Stanley Weiser, the original 1987 exploration of the inner workings of the finance sector and its complicated relationship with greed.

The plot line for the new “Wall Street” iteration has not been divulged, but it will pick up with corporate raider Gordon Gekko, the character for which Douglas won a best actor Oscar more than 20 years ago. Gekko’s larger-than-life presence will once again loom over a younger upstart looking to navigate the shark-tank world of today’s Wall Street.

Shia LaBeouf is in talks with the studio to take on the younger role. Stone and Co. hope to begin production over the summer.

Ohmigod! Ohmigod! I am so excited I can barely sit still!

Here is my first post about the movie, which I will repost here:

The whispers are just starting to piss me off now. Is there a sequel to Wall Street, or not? And is it called Money Never Sleeps, or not? QUIT TEASING ME ALREADY. JUST GIVE ME THE GODDAMN SEQUEL, BITCH.

Banking sites are running wild with speculation about this movie, and I have my own ideas:

Financial vehicle/mode of global domination:
Hedge fund

Mode of communication:
Blackberry, obviously.

Bullshit shorthand move to let us know how much time has passed:
Sweeping view of lower Manhattan with no World Trade Center.

Gratuitous mentions:
Emperors Club
Moody’s
CDS-related insider trading
Enron
Tyco
WorldCom

Home after prison:
Immense loft. Some things never change.

Bad Guys:
They’ll go global on this one. Chinese might be too on the nose, so I say Russians.

Odds that a character will be based on either Jeff Skilling or Andy Fastow:
2-1

Odds that Gordon Gekko will abandon the “greed is good” mantra
12-1

Odds that they’ll show real news footage of Jeff Skilling being arrested:
2-1

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Marc Dreier To Plead Guilty

Disgraced lawyer Marc Dreier will plead guilty May 11 to money laundering and other charges in an alleged scheme to sell $700 million in fictitious promissory notes, his lawyer said Monday.

Via WSJ:

Gerald L. Shargel, Dreier’s lawyer, said his client will enter a guilty plea to all the charges in a superseding indictment unsealed in March – conspiracy, securities fraud, money laundering and five counts of wire fraud. Dreier will plead guilty without a deal in place with the government, Shargel said. His lawyer had previously indicated they expected a quick resolution of the case.

Prosecutors have alleged Dreier sold about $700 million in fake promissory notes and misappropriated client funds from his law firm. The out-of-pocket loss to investors and clients when the fraud was discovered in December was more than $400 million, the government has said. The overall scheme allegedly ran from 2004 to 2008.

Dreier also is facing civil charges by the U.S. Securities and Exchange Commission, filed in December, and his assets have been frozen. His law firm, Dreier LLP, filed for bankruptcy protection on Dec. 16.

I don’t have anything to add specifically about Dreier, but I am wondering if these types of crimes are more frequent these days or if tales of financial crimes are just getting more coverage. It seems we live in an age where every week somebody is accused of a multibillion dollar fraud; I wonder if this constant reporting is contributing to our feeling of financial doom.

When little girls start vanishing or shark attacks start happening, they become full-time news fodder and create panic. It seems to me the same thing is happening here but with more severe circumstances. Every time a story of fraud is reported, citizens become that much more worried about money, and I think it might have a small effect on the overall economy.

There is no way to measure this, of course, but it’s my present working theory.

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Arthur Andersen Settles Enron Suit For $16 Million

It sounds like news from 2001, but alas, it’s fresh off today’s Chron:

Arthur Andersen LLP agreed to pay $16 million to Enron Corp. creditors to settle claims that the accounting firm was negligent in auditing and advising the energy trader, which collapsed in bankruptcy in 2001.

A hearing on whether a bankruptcy judge should approve the settlement is scheduled for May 14. The accord resolves a lawsuit filed in Houston accusing Arthur Andersen, now largely defunct, of approving transactions that manipulated Enron’s financial condition for the benefit of its executives.

“It was a long process and we’re glad we were able to reach a settlement,” Harlan Loeb, a spokesman for the creditors, said today in a phone interview. The two sides asked a judge to approve the accord in a document filed April 21 in U.S. Bankruptcy Court in New York.

Enron, based in Houston, was the world’s largest energy- trading company, with a market value of as much as $68 billion, before it imploded amid allegations of accounting fraud. Arthur Andersen, its outside auditor, was convicted by a federal jury in 2002 of obstructing an investigation into Enron’s collapse. The U.S. Supreme Court overturned that verdict in 2005.

Four former Arthur Andersen partners are winding down the company, including overseeing remaining litigation.

A call to Arthur Andersen seeking comment wasn’t immediately returned. The company continues to deny the creditors’ allegations, according to the request to approve the settlement.

‘High-Risk Transactions’

The creditors said Chicago-based Arthur Andersen “failed to fully and candidly apprise the board with respect to certain high-risk transactions orchestrated by the Enron insiders and failed to fulfill its obligations to Enron,” according to the April 21 filing.

The Enron creditors have recovered more than $22 billion, or more than 50 cents on the dollar, Loeb said. In January, Goldman Sachs Group Inc. agreed to pay $6.95 million to settle claims over some debt payments made before the energy trader’s collapse. About $128 million was distributed to creditors this month, Loeb said.

“This settlement is a clear indication that the post- bankruptcy era of Enron is drawing to a close quickly,” he said.

A federal court jury in Houston found former Enron Chief Executive Officer Jeffrey Skilling and former Chairman Kenneth Lay guilty in 2006 of deceiving investors, analysts and employees about the company’s deteriorating financial condition. Skilling is in prison. Lay died before sentencing and Lay’s record was wiped clean because he died before he was sentenced or had a chance to appeal.

Fun fact: Did you know that Arthur Andersen still exists?

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EllisonBlogger: Psychiatrist Quoted In Chron Article Is ETF Prosecutor’s Husband

In what should be a shocking lapse in judgement but unfortunately is pretty routine for the Houston Chronicle, reporter Loren Steffy published an article about the statement that Cara Ellison put out this afternoon. Mr. Steffy then got a very negative quote from a psychiatrist by the name of Dr. Henry Walker, in which he says that Ellison is “paranoid”. It took all of two phone calls to learn that Dr. Henry Walker is the husband of Lydia Walker, a prosecutor on the Ellison Task Force.

I am starting to think the Houston Chronicle just doesn’t care anymore at all. They’re not even trying to be ethical.

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Ellison Denies Conspiracy, Calls Government “Glorified Notary Publics”

In a rambling statement released by Cara Ellison Corp. today the Chief Executive has finally broken her silence over her indictment, as well as the firings and investigation into several of her closest confidants. “I was never involved in any conspiracy or fraud at Cara Ellison Corp. I did not do any one of the 753 things they are accusing me of doing,” says Miss Ellison, and then goes on to accuse the government of targeting not only herself but her company.

“This is the letter of a very disorganized mind,” says Dr. Henry Walker, chief psychiatrist at the George Washington Medical Center in Washington, D.C. “I would say that she’s almost paranoid, thinking that the government is out to get her. Very troubling indeed for stakeholders, as well as employees.”

The Ellison Task Force spokesman says they have not yet had time to read the statement but might have a reaction later in the day.

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Statement From Cara Ellison, CEO of Cara Ellison Corp.

Dear shareholders,

Today we are faced with unprecedented business challenges. I am not speaking primarily of the weakened economy, which has had an effect on our business. The economy is a function of the attitudes of citizens all over our country, whereas the problems I am speaking of are the result of a small group of government officials. Our company is under attack by the United States Government.

In 2003, Chief Financial Officer Owen Kind formed an SPE called JML, which, as the news has reported, stands for Just My Luck. The purpose of JML was to provide liquidity to Cara Ellison Corp. on short notice. The due diligence costs and fees would be much less than those charged by banks. JML was a partnership. The other parties involved include banks, hedge funds, and other businesses. It was learned yesterday afternoon that Owen Kind improperly took for himself over $120 million dollars of JLM’s funds. I dismissed him immediately. I am deeply disappointed and shocked at his uncharacteristic behavior and I will cooperate in any investigation into the loss of those funds.

Today’s firings are the result of an internal investigation by our auditors. The individuals dismissed were mostly from JML, but I am personally sad to say that three of them were from headquarters of Cara Ellison Corp. This matter has been turned over to the FBI and I will not say more about that at this time.

These actions are a case of bad timing. Though they coincide with the indictment handed down on me, this is not any sort of conspiracy. I was never involved in any conspiracy or fraud at Cara Ellison Corp. I did not do any one of the 753 things they are accusing me of doing. They are using this witch hunt as a pretext to destroy our company. The United States Government would like nothing more that to appropriate the wealth of all businesses, but I promise you, shareholders and friends, as long as there is breath in my body, they will not touch Cara Ellison Corporation.

The government and the media are also investigating the bonus structure of our company. I assure you there is nothing illegal or immoral about the bonuses that certain of our executives have earned.

Yes, it is true that we are facing challenges. We are facing not only a worldwide weakened economy, we are also facing the persecution of the chief executive of a $200 billion company with 100,000 employees around the globe, and many thousands of vendors, clients, and customers that rely on us. We are facing the betrayal of people we all trusted, and liked personally.

I will not step down. I will not take a plea deal for my own alleged misdeeds. And I will not allow a small group of small-minded anti-business glorified notary publics in the Department of Justice to force me into giving up the thing I love most in the world. Yes, we are facing challenges. We are facing anti-business attitudes the likes of which I have never seen. We are facing the Ellison Task Force, which is comprised of young attorneys desperate to cut their teeth on a big case to make their careers. I personally am fighting an indictment I know to be completely false.

It is a challenge. But that’s why we are here. We are Cara Ellison Corp. and we are changing the world.

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Cara Ellison Executives Fired En Masse

This morning it was learned that eight top executives at Cara Ellison Corp. have been fired, including the Chief Accounting Officer, the Chief Technical Officer, and the Treasurer. The other executives are managing directors of a partnership corporation called JML, which sources tell us stands for Just My Luck. The firings come one day after CFO Owen Kind was abruptly dismissed.

Yesterday, Ellison Task Force prosecutor Jonathan E. Summers stated that the entire upper echelons of Cara Ellison Corp. may have been involved in a conspiracy. Summers said the nature of the conspiracy is outlined in Ms. Ellison’s 1,400 page indictment but did not say to what extent Mr. Kind might have been involved. Today he stated that all eight individuals are under investigation.

Calls to Ms. Ellison’s office and her attorney were not returned. However, the company spokesman said Ms. Ellison herself would give a statement at 1pm Central Standard Time.

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The Next Terror Attack

After the White House’s mock terror attack on New York City today, I’ve been thinking about the next terror attack and what it might look like. The 9/11 Commission concluded that we had a “failure of imagination”; since then, I’ve tried to correct that by imaging the very worst things that could happen.

I am pretty good at imagining disaster scenarios. It’s actually more productive, I think, to know what the next terror attack will not look like.

Despite White House warnings that anyone who votes for the guy with an R next to his name is a right wing extremist, I do not believe the next terror attack will be committed by Americans.

I do not believe it will be committed with airplanes.

I do not believe it will target specific buildings.

I believe it will be committed by Islamofascists who will either attack us with a nuclear weapon, or if they get impatient, they’ll just do a suicide bomb at a Starbucks.

Remember sleeper cells?
Remember the color-coded terror alert?
Remember when we had an administration that actually took these things into consideration in between their dinner parties and golf games? In this respect, I long for 2001.

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Ellison Arrested In DC

Another Ellison has been arrested today – Rep. Keith Ellison [al-Ellison? -- ed.] and four other members of congress were arrested while protesting Darfur. If you think it’s unbecoming for a United States Representative to be involved in these kinds of things, you’re not alone.

From Fox News:

Activists were arrested – including [Muslim --ed.] Minnesota Rep. Keith Ellison – for protesting the expulsion of aid groups in Darfur in front of the Sudanese Embassy in Washington.

Led by Ellison and Maryland Rep. Donna Edwards, five protesters were led away in handcuffs for crossing a police line.

The protesters urged world leaders to take a stand against Sudanese President Omar al-Bashir’s decision to expel 16 aid agencies from the war-torn region.

Depriving aid to “the most vulnerable people on our planet” is wrong, said Ellison.

The United Nations claims nearly 300,000 people have died in Darfur, where ethnic African rebel groups have been fighting the Arab-dominated national government for six years.

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Cara Ellison CFO Fired, “Evidence of Conspiracy Comes To Light” Says ETF

Cara Ellison Corp. CFO Owen Kind has been fired, according to a statement released by Cara Ellison Corp. this afternoon. The statement did not give any reasons behind the surprising dismissal, but Ellison Task Force prosecutor Jonathan E. Summers offered that “evidence of a wide-ranging conspiracy through-out the Ellison Corporation is coming to light.”

When asked if Mr. Kind is under investigation, Mr. Summers replied that the entire Cara Ellison Corp. organization is under investigation. “The upper echelons of the company seem to have been involved in the conspiracy that was instigated by Ms. Ellison.”

Cara Ellison Corp stock (CEC) fell 1% today after heavy trading.

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