Who is Karen Hudes?
Karen Hudes studied law
at Yale Law School and economics at the University of Amsterdam. She worked in
the US Export Import Bank of the US from 1980-1985 and in the Legal Department
of the World Bank from 1986-2007. She established the Non Governmental
Organization Committee of the International Law Section of the American Bar
Association and the Committee on Multilateralism and the Accountability of
International Organizations of the American Branch of the International Law
Association.
What did Karen Hudes blow the whistle on?
In 2007 Karen warned
the US Treasury Department and US Congress that the US would lose its right to
appoint the President of the World Bank if the current American President of
the World Bank did not play by the rules. The 66 year old Gentlemen’s Agreement
that Europe would appoint the Managing Director of the IMF and US would appoint
the World Bank President ended in 2010http://www.imf.org/external/np/cm/2010/042510.htm
In 1999 Karen reported
the corrupt take-over of the second largest bank in the Philippines. Lucio Tan,
a crony of Joseph Estrada, then President of the Philippines, acquired stock
owned by government employees in Philippines National Bank (“PNB”) valued more
than 10% of PNB’s outstanding capital without disclosure, as required by
Philippines securities laws. Tan owned Philippines Airlines, in default on its
loans from PNB. The government of the Philippines loaned $493 million to PNB after
PNB’s depositors made heavy withdrawals. $200 million of a loan from the World
Bank and a $200 million loan from Japan were cancelled. Estrada was ultimately
impeached, and in 2007 an anti-corruption court in the Philippines required
Estrada to refund graft he had plundered. The Bank’s Country Director in the
Philippines reassigned Karen when she asked him to sign a letter warning the
Philippines’ government that the Bank could not disburse its loan without a
waiver from the Board of Executive Directors since the loan conditionality was
not met. The World Bank’s Internal Audit Department refused to correct the
satisfactory evaluation of the Bank’s supervision performance or the flawed
report of the Institutional Integrity Department to the Audit Committee of the
Board of Executive Directors. When the Audit Committee requested an audit of
internal controls over financial reporting, KPMG, the external auditors,
circumscribed the scope of their audit in violation of Generally Accepted
Accounting Principles and Generally Accepted Auditing Standards.
Two days after
informing the Board’s Audit Committee of the cover-up in the Philippines, Karen
was reprimanded and placed on probation. The Dutch Ministry of Foreign Affairs
requested the World Bank’s Audit Committee to look into the cover- up. Instead,
the Chair of the World Bank’s Audit Committee requested an inquiry into the
World Bank’s Institutional Integrity Department. The Senate Committee on
Foreign Relations followed up with three letters to the World Bank. The World
Bank forged documents and fired Karen in contempt of Congress. The World Bank
also fired the Staff Association’s lawyer. The Staff Association stated that
what had happened to Karen had damaged staff morale and prevented others from
reporting misconduct. The World Bank’s Ethics’ Officer left in frustration
after her request for an investigation by the World Bank’s Institutional
Integrity Department was turned down.
Mr. Paul Volcker
headed the 2007 inquiry into the Institutional Integrity Department. The
Volcker Panel was discredited after sixteen staff employed in the Institutional
Integrity Department received significant damage awards in compensation for
abuses of authority to intimidate them during the Volker Panel investigation. A
staff-member of the EU’s anti-fraud agency, Office Lutte Anti-Fraude, on the
Volcker Panel wrote to Karen:
“My Director General and I met with a number of European Executive Directors of the World Bank a few weeks ago to discuss the Volcker Panel report. At the meeting there was also discussion about governance issues. My impression was that the European Executive Directors are well apprised of all relevant issues at the Bank and no further comment by OLAF is warranted even if it was within our legal competence.”
“My Director General and I met with a number of European Executive Directors of the World Bank a few weeks ago to discuss the Volcker Panel report. At the meeting there was also discussion about governance issues. My impression was that the European Executive Directors are well apprised of all relevant issues at the Bank and no further comment by OLAF is warranted even if it was within our legal competence.”
Karen informed Senator
Bayh, “[t]he ongoing cover-up is an indictment of the probity of US oversight
at the Bank and I would encourage the Senate to request GAO to look into it.”
Senators Richard Lugar, Evan Bayh and Patrick Leahy requested GAO to investigate
“internal resistance to increased transparency and accountability at the World
Bank.” http://citizenoversight.com/pdf/blwb.pdf
In 2008 Karen’s Congressman, Representative Chris Van Hollen, noted “that
[Karen's] claims and concerns have already been provided to the GAO…. and to
the relevant congressional committees.” In 2009 GAO stated that it could not
commence the inquiry “because of challenges we recently faced in gaining access
to World Bank officials.” Senator Lugar asked what was delaying the GAO review
during hearings on the World Bank’s capital increase.
Mr. Pieter Stek, then
Executive Director for the Netherlands, and Chair of the Board Committee on
Development Effectiveness, said:
“In a multilateral institution which should be governed by the rule of law and high standards of probity the charge of concealment from the Board of Executive Directors of information relevant to the exercise of its duty of supervising management and the persecution of the person who brings this to light is extremely serious. If correct, which I believe, this poisonous cocktail undermines good governance and ultimately the effectiveness of the Bank in fulfilling its mandate. I shall continue to assist Ms. Hudes in her efforts to have due process brought to bear, preferably by the Bank itself, on these issues of governance.”
“In a multilateral institution which should be governed by the rule of law and high standards of probity the charge of concealment from the Board of Executive Directors of information relevant to the exercise of its duty of supervising management and the persecution of the person who brings this to light is extremely serious. If correct, which I believe, this poisonous cocktail undermines good governance and ultimately the effectiveness of the Bank in fulfilling its mandate. I shall continue to assist Ms. Hudes in her efforts to have due process brought to bear, preferably by the Bank itself, on these issues of governance.”
David Brooks wrote:
“Then there are violations, when someone intentionally breaks the rules. Errors can be very hard for outsiders to detect. It was people inside the companies who were most likely to report fraud, because they have local knowledge. And yet 80 percent of these whistleblowers regret having reported the crimes because of the negative consequences they suffered. This is not the way to treat people who detect error.” http://brooks.blogs.nytimes.com/2011/06/13/living-with-mistakes/?comments#permid=34
“Then there are violations, when someone intentionally breaks the rules. Errors can be very hard for outsiders to detect. It was people inside the companies who were most likely to report fraud, because they have local knowledge. And yet 80 percent of these whistleblowers regret having reported the crimes because of the negative consequences they suffered. This is not the way to treat people who detect error.” http://brooks.blogs.nytimes.com/2011/06/13/living-with-mistakes/?comments#permid=34
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Holder's Seat Burning Hot Following Press
Revolt, Perjury Accusations
When Barack Obama first nominated Eric Holder for the position of Attorney General, Judicial Watch was outspoken in its criticism. In fact, take a look at a letter we sent to the Senate Judiciary Committee opposing the nomination at the time.
Mr. Holder's record demonstrates a willingness to
bend the law in order to protect his political patrons. On his watch at the
Clinton Justice Department, the pardon process was upended and corrupted by a
pay to play mentality. This undermined, in the least, the appearance of the
fair administration of justice by the Justice Department. Mr. Holder is the
wrong person to head the Department of Justice.
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Last week you will recall that
President Obama directed Eric Holder
to meet with the Washington, D.C., bureau chiefs of major news outlets to
discuss the administration's subpoena policies. The move was a clear attempt
by Obama to change a narrative that had done significant damage to the White
House.
But when the administration announced those discussions would be off the record, the wheels came off the wagon. Per CNN:
Attorney General Eric Holder's plans to sit down
with media representatives to discuss guidelines for handling investigations
into leaks to the news media have run into trouble.
The Associated Press issued a statement Wednesday objecting to plans for the meetings to be off the record. If it is not on the record, AP will not attend and instead will offer our views on how the regulations should be updated in an open letter, said Erin Madigan White, The AP's media relations manager. The New York Times is taking the same position. It isn't appropriate for us to attend an off-the-record meeting with the attorney general, executive editor Jill Abramson said in a statement. CNN announced in the article that it would also decline, along with The Huffington Post. As of this writing only Politico signaled its intent to participate. Making matters worse for Holder, news of the press revolt came at a time when House Republicans sent a letter to the attorney general expressing 'great concern' about the possibility that Holder lied under oath during his testimony earlier this month on the DOJ's seizing of journalists' records. According to CBS News:
On May 15, Holder told the committee he wasn't
involved in the potential prosecution of a member of the press under the
Espionage Act for disclosing classified information. This is not something
I've ever been involved in, heard of, or would think would be wise policy, he
said.
Shortly thereafter, reports began to surface that the Justice Department, in addition to seizing telephone and email records of Associated Press reporters, had seized the emails and phone records of Fox News correspondent James Rosen. While Holder had recused himself from the AP proceedings, the Washington Post reported that the attorney general had personally signed off on the search warrant for Rosen's records. In the search warrant, the FBI called Rosen a criminal co-conspirator and suggested there's probable cause that he violated federal law. Rosen was not charged with any crime. I don't see how one could reasonably parse Holder's statement as accurate or forthcoming. The Daily Caller reported this week that Attorney General Eric Holder felt a creeping sense of personal remorse, aides say, after it was revealed that the DOJ had seized Rosen's emails. I wonder if Barack Obama has experienced a creeping sense of personal remorse for installing Holder in office. As I say, this is not the first time Holder has been accused of lying, or best case scenario, artfully testifying before Congress. On March 1, 2011, Holder testified to the House Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies: The decisions made in the New Black Panther Party case were made by career attorneys in the department. And beyond that, you know, if we're going to look at the record, let's look at it in its totality. Not true. In a July 23 ruling, Judge Reggie B. Walton of the U.S. District Court for the District of Columbia ruled in response to Judicial Watch's effort to obtain attorneys' fees from the DOJ for stonewalling the release of documents pertaining to the NBPP scandal:
The documents reveal that political appointees
within DOJ were conferring about the status and resolution of the New Black
Panther Party case in the days preceding the DOJ's dismissal of claims in
that case, which would appear to contradict Assistant Attorney General
Perez's testimony that political leadership was not involved in that
decision. Surely the public has an interest in documents that cast doubt on
the accuracy of government officials' representations regarding the possible
politicization of agency decisionmaking.
Holder has a demonstrated record of dishonesty and contempt for the rule of law. He is the poster child for Obama corruption. Judicial Watch has been pushing an effort to Dump Holder for some time now. I suggest you support this effort and echo it with your elected representatives, your personal networks, and the media. We, in the meantime, will continue to battle Holder's DOJ lawyers in court to get information on the details of lawlessness in order to hold him accountable. These are troubled times for the country. With approximately one-third of congressional committees investigating scandals inside the Obama administration, Judicial Watch's work is more important now than ever. And that is why I am pleased to report a bit of good news as we seek to expose the truth about Washington corruption - which did not begin (and will not end) with the Obama administration. Read on... JW's Hard-Hitting Documentary District of Corruption to Broadcast Nationally on June 17, 2013 on AXS TV This morning I was on Fox and Friends to announce a wonderful development for Judicial Watch's public education mission. In just a few weeks, we are going to take another major leap forward in exposing the truth about Obama corruption - and DC corruption generally - to the American people. On June 17, 2013, our hard-hitting feature documentary film District of Corruption will receive its national television premiere at 8:00 p.m. ET, with an encore performance at 11:00 p.m., on the AXS TV network, reaching 41 million households. Additionally, HDNet Movies will air the documentary this fall. Our film, you may recall, is written and directed by award-winning filmmaker Stephen K. Bannon, the writer/director of Occupy Unmasked and the Sarah Palin film The Undefeated. It is produced in association with Constant Motion Entertainment and co-produced by Dan Fleuette. (District of Corruption is a companion piece to my New York Times best-selling book, The Corruption Chronicles, Obama's Big Secrecy, Big Corruption, and Big Government, which was released in July 2012 by Simon & Schuster's Threshold Editions.) As I say, the film's television premiere comes at a time of increased public attention to corruption scandals inside the Obama administration. Benghazi-gate, the Department of Justice and IRS scandals are grabbing the headlines. They represent the latest examples of the D.C. corruption crisis. But anyone who wants to truly understand the truth about this and more must look behind today's headlines. And that is why our film is so important. District of Corruption is the most sweeping attempt to date to examine political corruption - in both political parties. And make no mistake; this film is as factual and compelling a film on this out-of-control Obama administration as you will see. We are grateful to our partners at AXS TV for providing a platform to reach and educate millions of Americans. AXS TV Chairman Mark Cuban, for his part, believes the film will certainly be a conversation starter: "There is an enormous amount of public interest in the subject of political corruption, so I'm confident that District of Corruption will find an audience on our network. The film is dynamic and unsparing of politicians all across the board. District of Corruption is bound to get Americans talking." The film chronicles Judicial Watch's epic battles against corruption through three presidential administrations (Clinton, Bush, Obama), focusing most intensely on the current administration's scandals, including: Operation Fast and Furious; crony capitalism; Solyndra and other "green energy" projects; federal bailouts and earmarks; ACORN and voter fraud; illegal alien amnesty; and threats to the integrity of the 2012 elections; as well as new attacks on government transparency and accountability. The film traces the arc of government corruption and secrecy from the Clinton administration through the Bush years to the current corruption and transparency crises of the Obama years. "We decided from the outset that we could not and would not pull a single punch in making this film," said District of Corruption Director Stephen K. Bannon. "To play favorites or to avoid naming names would have completely undermined our objective. This film goes far beyond high-adrenaline, emotionally compelling entertainment. This is about saving our institutions of government from the corruption and cronyism that threatens their existence. We intend to initiate a seismic shift in the public policy and cultural landscape." I will be sure to keep you up to date on the broadcast days and times for District of Corruption as best I can in this space. But be sure to check the film website frequently for updates (www.DistrictOfCorruptionMovie.com). And to see the latest trailer, click here. Amnesty: Politics Before the Public's Safety It started as a dirty little secret several years ago. Frustrated by opposition to amnesty legislation, the Obama administration bypassed Congress and enacted a backdoor scheme to bypass Congress and enact illegal alien amnesty via executive fiat. That's when phrases such as, "selective deportation," entered the administration's lexicon. But that was before Barack Obama sailed back into the White House catching a mighty tailwind from minority voters, especially Hispanics. Now there is no need to bypass Congress. The so-called "Gang of Eight" in the U.S. Senate, including four Republicans, has given birth to the most sweeping amnesty bill in three decades - reform that will certainly worsen the illegal immigration crisis. Does the immigration "reform" bill provide amnesty for illegal aliens? For certain. It may be clothed in the now-common euphemistic phrase path to citizenship, but the bottom line here is that the 11 million+ illegal aliens in the country can first (and perhaps most importantly) become legalized and, then, after 13 years, citizens without ever leaving the country. "Essentially, [the immigration reform bill] is the most breathtaking, outrageous form of amnesty that's been seriously considered by the United States Congress, House or Senate in any time that I'm aware of throughout history," Iowa Republican Rep. Steve King toldNewsmax. Are there loopholes in the mammoth 844-page bill? Yes, and you can drive a truck through them. For example, as currently constructed, the bill would allow those who came to the U.S. illegally to collect cash assistance, food stamps and health care benefits long before they earn a green card and a pathway to citizenship, notes The Washington Examiner. Given the state of our sorry economy, such policies are terribly unwise. And what about border security? Legalization comes before border security. The timing of border security measures has been left to the subjective, amorphous discretion of the Secretary of Homeland Security, Janet Napolitano, according to Texas Senator Ted Cruz. So amnesty first, and border security perhaps never. Despite its deficiencies, the amnesty bill passed out of the Senate Judiciary Committee without significant changes. It is now set for debate on the Senate floor. And Senate Majority Leader Harry Reid (D-NV) says he has the votes. Per The Daily Caller:
Senate Democratic Leader Harry Reid believes he
has the 60 votes necessary to overcome a filibuster and pass the Senate
immigration reform bill.
In an interview Tuesday with the Nevada public affairs program To the Point, Reid explained that marshaling enough support to pass the legislation, which came out of committee last week, would be pretty easy. Reid then did the math. He has 52 Democrats and four Republicans in his camp, needing only four more votes for passage, which he predicts he will easily acquire. Now even if Reid is correct, there is still the matter of the House of Representatives. House Republicans have said the Senate bill would not stand a chance in their chamber. Instead, they say, the House will craft a bill of its own addressing many of the failings of the Senate version.
While we applaud the progress made by our Senate
colleagues, there are numerous ways in which the House will approach the
issue differently, the Republican leaders said in their statement. The House
remains committed to fixing our broken immigration system, but we will not
simply take up and accept the bill that is emerging in the Senate if it
passes. Rather, through regular order, the House will work its will and
produce its own legislation.
But I ask you this: How confident are you that the Republican Party will demonstrate the courage necessary to do the right thing? Haven't we seen Republicans cave before on key issues in the name of political expediency? To hear talk of voter demographics within Republican circles as a justification for granting amnesty to illegal aliens is extremely disturbing. This is the time to make your voice heard. The U.S. Senate will consider the bill in the next few weeks. The phone number for the Capitol Hill switchboard is 202-224-3121. And here's a link to a site where you can find the contact information for every U.S. Senator. Of course, Judicial Watch will persevere no matter what happens on Capitol Hill. We have a number of active lawsuits over sanctuary policies that aid and abet illegal immigration. Our investigations in this area are legion (see this link for an overview of our efforts on this crucial issue). Our nation's illegal immigration crisis won't be resolved by Washington politicians. It will be resolved by citizens, acting individually and through groups like Judicial Watch, that demand that laws be followed. Until next week...  Tom Fitton President |
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