Begin forwarded message:
> From: dasg...@aol.com > Date: July 29, 2010 9:54:32 PM PDT > To: ramille...@aol.com > Cc: ema...@aol.com, j...@aol.com, jim6...@cwnet.com, christian.r...@gmail.com > Subject: SEC Charges Billionaire Bush Donors with $550+ Million Financial > Fraud > > SEC charges billionaire Texas brothers who donate to GOP with fraud > > > The Swift-Boating 'Wyly Coyotes' donated the most cash to the Bush family, > 'Pioneer' backers of both George HW Bush & George W Bush > > > Charles Wyly > > > By Zachary A. Goldfarb and Philip Rucker > Washington Post, July 30, 2010 > http://www.washingtonpost.com/wp-dyn/content/article/2010/07/29/AR2010072906345.html > > Sam and Charles Wyly, billionaire Texas brothers who gained prominence > spending millions of dollars on conservative political causes, committed > fraud by using secret overseas accounts to generate more than $550 million in > profit through illegal stock trades, the Securities and Exchange Commission > charged Thursday. > > The Wylys, who have been generous contributors to the Republican Party and > GOP candidates, have spent the past several years facing questions, including > from a Senate investigative committee, about whether they hid millions of > dollars in tax shelters abroad. > Through their lawyer, the Wylys denied all charges. > > According to the SEC, the brothers, who live in Dallas, created an elaborate > and clandestine network of accounts and companies on the Isle of Man and in > the Cayman Islands. The brothers then used these accounts and companies to > trade more than $750 million of stock in four public companies on whose > boards they served, not filing the disclosures required for corporate > insiders, the SEC said. > > In one case, the SEC alleges that the Wylys traded based on insider > information they learned as board members, netting a profit of $32 million. > > "The cloak of secrecy has been lifted from the complex web of foreign > structures used by the Wylys to evade the securities laws," Lorin L. Reisner, > deputy director of SEC enforcement, said Thursday in a statement announcing > the civil charges. > > The agency is seeking unspecified financial penalties and a variety of other > sanctions, including barring the Wylys from serving as directors or top > executives of public companies. > > William Brewer III, a lawyer representing the Wylys, said they intend to > clear their name. > > "After six years of investigations, the SEC has chosen to make claims against > the Wyly brothers -- claims that, in our view, are without merit," Brewer > said in a statement. "It will come as little surprise to those who know them > that the Wylys intend to vigorously defend themselves -- and expect to be > fully vindicated." > > Charles Wyly, 76, and Sam Wyly, 75, have led a largely reclusive life, with > their public persona defined by their political activities. Charles Wyly and > his wife, Dee, have given more than $1.5 million to more than 200 Republican > candidates, party committees and conservative political action committees > over the past 20 years, according to an analysis by the Center for Responsive > Politics. Sam Wyly and his wife, Cheryl, gave more than $970,000 over the > same period, the analysis shows. > > The Wylys have given to dozens of Republican candidates, none more so than > the Bush family. The brothers were supporters of the campaigns of former > President George H. W. Bush and his son, former President George W. Bush. > > In 2000, the Wylys financed a third-party group, Republicans for Clean Air, > that launched a television advertising broadside against George W. Bush's > chief opponent, Sen. John McCain (R-Ariz.), on the eve of crucial GOP > presidential primaries. Later that year, the brothers each gave $100,000 to > fund Bush's inaugural festivities. > > In 2004, the Wylys helped fund Swift Boat Veterans for Truth, another > third-party organization that ran controversial television ads attacking the > military record of Sen. John F. Kerry (Mass.), Bush's Democratic opponent. > > "They are among the biggest of the big when it comes to campaign > bank-rollers, and their donors list is a who's who of the Republican Party > over the past decade," said Dave Levinthal, a spokesman at the nonpartisan > Center for Responsive Politics. "It's almost hard to find prominent > Republicans who haven't been a beneficiary of their financial largess. > They've definitely been very kind, financially speaking, to a number of > Republicans." > Their biggest beneficiaries include three Texas Republicans, Sen. Kay Bailey > Hutchison, National Republican Congressional Committee Chairman Pete Sessions > and former House Republican leader Richard K. Armey, according to the Center > for Responsive Politics analysis. The Wylys also have given to Senate > Minority Leader Mitch McConnell (Ky.), former New York mayor Rudolph W. > Giuliani and many other members of the GOP. > > Both brothers, according to Forbes magazine, are billionaires who amassed > their fortune by founding a computer company and investing in a wide range of > interests including oil, insurance and restaurants. In 1979, Sam Wyly faced > sanctions by the SEC for improper regulatory disclosures. > > They have been the subject of probes into potential financial wrongdoing > since then. In 2006, the Senate permanent subcommittee on investigations > completed a report on tax havens that focused on the Wylys. > > Over 13 years, the Wylys used an "armada" of lawyers, brokers and other > professionals to manage hundreds of millions of dollars in transactions that > amounted to "the most elaborate offshore operations reviewed by the > Subcommittee," according to the panel's report. > > In announcing its case, the SEC alleged that the Wylys' improper trades > benefited them in many ways. They used the proceeds to buy art, collectibles, > and jewelry worth tens of millions of dollars, according to the complaint. > They spent $100 million to buy real estate, including two ranches in Aspen, > Colo., two condominiums in Aspen, and a 100-acre horse farm outside Dallas. > They also used the proceeds to cover charitable contributions made by the > Wylys, including $8 million to Sam Wyly's business school alma mater and a > $2.5 million contribution to a church Charles Wyly attended. > > The agency alleges that the Wylys committed fraud and various other > violations of securities laws while sitting on the boards of four companies > over the course of a decade: Michaels Stores, Sterling Software, Sterling > Commerce and Scottish Annuity & Life Holdings. > > The SEC says that by using offshore accounts to trade shares of these public > companies, the Wylys were able to escape filing the regulatory disclosures > required of board members when they buy or sell shares. > > By keeping their trading activity secret, the Wylys deprived outside > investors of information they could use "to gauge the sentiment of public > companies' insiders and large shareholders about the financial condition and > prospects of those companies," the SEC said. > > In one instance, the Wylys used insider information to make an offshore > purchase of shares in Sterling Software, where they served as chairman and > vice chairman, according to the complaint. They did not disclose the purchase > even though they knew the company was soon going to be sold, according to the > SEC. Less than four months later, Sterling Software was sold, and the Wylys > netted nearly $32 million. > > "The Wylys have always received the advice and counsel of leading accounting > and legal professionals," said Brewer, the brothers' attorney in the SEC > matter. "They have never been given any reason to believe the financial > transactions in question were anything other than legal and fully > appropriate." > > The SEC also charged the Wylys' longtime personal attorney, Michael French, > and their stockbroker, Louis Schaufele III, for their roles in the alleged > scheme. French also served on the board of three of the companies. > > A lawyer for French did not return calls or e-mails seeking comment. A lawyer > for Schaufele declined to comment. > > ----------- > > Charles J. Wyly Jr. and Sam Wyly, often referred to as the "Wyly coyotes", > are two prominent Dallas, Texas, billionaire businessmen brothers well-known > for bankrolling Republican candidates, as well as for funding the smear group > Swift Boat Veterans for Truth. > > Joe Conason, "Sailing buddies. A flotilla of new reports shows that the Swift > Boat Veterans group is helmed by longtime cronies of the Bush family," Salon, > August 28, 2004. > > http://www.gregpalast.com/give-it-back-georgernrndid-wyly-coyotes-ill-gotten-loot-buy-white-house/ > > Give it Back, George > > Did Wyly Coyotes’ Ill-Gotten Loot > Buy the White House? > by Greg Palast > > Monday, April 11, 2005 > > When the feds swoop down and cuff racketeers, they also load the vans with > all the perp's ill-gotten gains: stacks of cash, BMWs, hideaway houses, > whatever. Their associates have to cough up the goodies too -- lady friends > must give up their diamond rocks. > > Under the racketeering law, RICO, even before a verdict, anything bought with > the proceeds of the crime goes into the public treasury. > > But there seems to be special treatment afforded those who loaded up on the > 'bennies' of crimes committed by George Bush's buddies. > > On Friday, the Manhattan District Attorney's office announced it had captured > a couple of Texas varmints, the Wyly Brothers, Charles and Sam. The two have > 'fessed to concealing half their holdings in one of the rich boys' companies, > Michaels Stores. The grand jury is still out on deciding to indict the two > for the crime of fraud upon the stock market. > > Who are these guys? The billionaire brothers are "Pioneers" - not the kind > that built little houses on the prairie, but the kind that agreed to raise > over a hundred grand for George W. Bush's first Presidential run. Sam anted > up more than a quarter million for the Republican National Committee in 2000. > > But that's just the tip of the cash-berg for Bush. In 2000, Sen. John McCain > was wiping the electoral floor with Bush Jr. in the Republican primaries -- > until that March when the Wylys secretly put up two and half million dollars > for a campaign to smear Bush's opponent just days before the crucial Southern > primaries. > > They repeated the trick in 2004, putting up cash for the Swift Boat Veterans > for Truth, the vicious little snipes who tore apart the Kerry campaign. > > So what makes these guys so thrilled with Mr. Bush? There are more than > ninety million reasons. While George W. was governor of Texas, investigative > reporter Joe Conason discovered, a Wyly family private investment fund, > Maverick Capital of Dallas, was awarded a state contract to invest $90 > million for the University of Texas endowment. > > That's not all. As Governor, Bush signed into law an electricity > "deregulation" bill that was little more than an ill-disguised raid on > consumers' wallets by Texas power companies. The bill was in part drafted by > an outfit called GreenMountain.com, a power company owned by -- Sam Wyly. > > On the day George W. signed the deregulation bill, Sam Wyly said, "Governor > Bush's hard work and leadership have paid off." And, it seems, in 2000 and > 2004, the Wylys paid back. > > Last week, the Wyly brothers, knowing law men will probably seize their gains > anyway, announced they would turn over their hidden loot to Michaels Stores' > treasury -- a kind gesture, like a bank-robber turning over stolen cash in > hopes of leniency. > > But what about the racketeering rule requiring all cronies of the wrongdoers > to give up the benefits of alleged crime? > > If the G-men don't know where the tainted booty is cached, try this address: > 1600 Pennsylvania Avenue. Ask for George or Dick. > > Now it might be unfair to say that George Bush's campaigns succeeded solely > because of the Wyly's loot. After all, the number one campaign contributors > were Pioneer Ken Lay and his associates at Enron. > > OK now, Mr. President, give it back -- the millions stuffed in the pockets of > the Republican campaign kitty filched from Enron retirees and the suckers in > the stock market who didn't have the inside track like the Wylys. > > When I worked as a racketeering investigator for government, nothing was > spared, including houses bought with purloined loot. Let there be no > exception here. It's time to tape up the White House gate and hang the sign: > "Crime Scene: Property to be Confiscated. Vacate Premises Immediately." >
