- Post 20 June 2012
- By Joseph Farah
Let's take a quick look at the top law enforcement official in Washington — Attorney General Eric Holder:
First, for 18 months he has stonewalled congressional investigations into the "Fast and Furious" government gunrunning sting operation that resulted in the death of at least one Border Patrol agent, Brian Terry. Under this program, the Bureau of Alcohol, Tobacco, Firearms and Explosives actually allowed guns to be purchased by arms traffickers on behalf of the Mexican drug cartels. The stated purpose of this operation was to "track" the guns — presumably so the federal government could demonstrate how guns from the U.S. made their way to Mexico, building a statistical case for stricter gun control in America.
Next, he refused to appoint an independent counsel to investigate national security leaks from the Obama administration that disrupted an operation targeting al-Qaida in the Arabian Peninsula and may have jeopardized the lives of U.S. intelligence agents. Instead, he assigned politically connected U.S. attorneys to investigate.
Now, with Holder already under heat from members of Congress to resign, there is a new Holder scandal brewing, according to a report by WorldNetDaily's Jerome Corsi.
WND has obtained several hundred pages of documents alleging that Holder and Lanny Breuer, the assistant attorney general for the Department of Justice's criminal division, have intervened to block recommended federal prosecutions in an ongoing dispute involving the exclusive Yellowstone Club, a private golf and ski resort now owned by supermarket billionaire Ron Burkle and international bank Credit Suisse.
Holder is being accused of shielding from federal criminal prosecution Credit Suisse, a client of the Washington-based law firm Covington & Burling, as well as key Democratic Party operatives suspected of playing a role in allegedly fraudulent mortgage financing and bank lending practices. Now get this: Before joining the Department of Justice in the Obama administration, Holder and Breuer were partners at Covington & Burling.
"I know how Eric Holder and Lanny Breuer operate," said Mike Flynn, legal counsel for Tim Blixseth, the founder of the Yellowstone Club. Holder and Breuer are protecting Credit Suisse, he charged.
"In my 42 years of trying high-profile cases, I have never seen such corruption," Flynn said. "The American people need to know what is happening inside the Holder-controlled Justice Department. The fox is now truly guarding the hen house."
WND has obtained an affidavit signed by Blixseth Feb. 27, in which he alleges a federal task force investigated the case and recommended prosecution.
Here's what this scam is all about.
Credit Suisse Group AG, one of the world's biggest financial giants, marketed a variety of exotic loans during the boom real estate years of the mid-2000s. They included what were known as "equity recapitalizations" designed to allow the developers of high-priced real estate, including the Yellowstone Club luxury resort destination in Montana, to realize anticipated profits years before the profits were actually earned.
Instead of holding the equity in the luxury developments, Credit Suisse, after making the equity recapitalization loans, typically sold the equity to a syndication of institutional investors, including hedge funds and foreign investment entities.
One of the hedge funds purchasing the Yellowstone Club was Boston-based CrossHarbor Capital Partners, operated by Sam Byrne, now a partner of Ron Burkle in the ownership and operation of the Yellowstone Club.
The problem was that the "equity capitalization" loans first marketed by Credit Suisse First Boston, beginning Sept. 21, 2004, were valued, according to appraisals conducted by Cushman & Wakefield that arguably were not compliant with the Financial Institutions Reform, Recovery and Enforcement Act of 1989. Those valuations were based on a noncompliant standard of "total net value" that established the worth of the Yellowstone Club at $1.165 billion, when it was only worth approximately $455 million.
The scheme was simple: Credit Suisse made untold millions in fees making inflated loans on high-visibility luxury real estate based on fraudulent appraisals, with virtually no risk after the loans were sold to a "syndicate" of investors, including hedge funds and foreign investors.
Ultimately, when the pricey properties went into bankruptcy, the investors in the syndicate were left holding the bag, with their only recourse to go after the high net-worth homeowners to recover the losses.
With the industry-wide downturn in real estate in the United States, the Yellowstone Club has gone through a contentious bankruptcy proceeding before U.S. Bankruptcy Judge Ralph Kirscher, a Democrat appointed to the bankruptcy court by the U.S. Court of Appeals for the 9th Circuit Nov. 15, 1999, during President Clinton's second term in office.
In 2008, Kirscher issued a $40 million fraud judgment against Blixseth that Blixseth and his attorneys continue to contest. The judge then approved in May 2009 a reorganization plan giving the Yellowstone Club to Burkle and Byrne for less than $10 million.
In March, according to the Montana Standard, after Kirscher dismissed an attempt by Blixseth to vacate the $40 million fraud judgment against him, Blixseth charged Kirscher was politically influenced — in a 2009 meeting with Montana's Democratic Gov. Brian Schweitzer — to allow Blixseth's ex-wife and Byrne, a Boston real estate investor with ties to the Democratic Party, to buy the 13,600-acre property cheaply after the bankruptcy had been declared.
The political connections run even deeper in this scandal.
Ron Burkle, who now owns the resort with Credit Suisse, is the college-dropout supermarket-king who started out as a bag boy in his dad's neighborhood grocery and eventually bought and sold supermarkets through his private equity firm, Yucaipa Companies. He became a Democratic Party operative who reportedly raised more than $1 million for Hillary Clinton's 2008 presidential campaign.
Blixseth, who fully cooperated with federal investigators as "the victim" of this scam, has now turned into the scapegoat. As he explains it in his affidavit, "certain high-ranking individuals in the Department of Justice, who are widely known associates and friends of Ron Burkle, caused the investigation to be halted; thus, using their political positions to assist a friend financially and obstruct justice."
Once, again, we see how the Department of Injustice operates under the leadership of Eric Holder.
To find out more about Joseph Farah and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.
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