TSA Bans Coke Bottles That Resemble Fictional Star Wars Explosives

The Transportation Security Administration (TSA) has banned passengers from bringing special bottles of Coca-Cola sold at Disney theme parks onto planes because the containers resemble the fictional “thermal detonator” devices in the Star Wars universe.

The bottles are being sold at the newly opened Galaxy’s Edge, a Star Wars–themed attraction at Disneyland in California and at Disney’s Hollywood Studios in Florida. It’s a clever bit of marketing, but any parkgoers who want to take their Coke bottles home as soveigners will be out of luck if they plan to fly.

“It could create concern that it’s the real thing,” TSA spokesperson Jim Gregory told the Orange County Register, which first reported on the ban.

Really? Let’s think through this. Anyone familiar enough with Star Wars to recognize a Coke bottle made to resemble a thermal detonator is also going to be aware of the fact that thermal detonators are fictional. Anyone else is just going to think, “Wow, that’s an odd-looking Coke bottle.”

Even a lot of casual Star Wars fans might not know what the bottle is supposed to mimic, since the thermal detonator isn’t a well-known weapon. It’s mostly just a minor plot device. Introduced in 1983’s Return of the Jedi, the thermal detonator is a baseball-sized explosive that is implied to be very powerful. One is brandished menacingly by a disguised Princess Leia in the movie, but it never actually explodes on-screen. (Anton Chekov would be disappointed.)

But you know what does get used pretty often in Star Wars movies to kill and maim a lot of people and aliens? Lightsabers. And do you know what the TSA’s policy regarding lightsabers is? They’re perfectly fine—even in carry-on luggage!

That’s because plastic reproductions of laser swords carried by fictional space warriors are obviously not actual weapons. No one worries about confusing a lightsaber with “the real thing,” because that’s ridiculous. But plastic Coke bottles shaped like a fictional explosive device that never actually explodes? Those are so dangerous that they can’t even be packed in checked bags.

“The issue concerning Star Wars Galaxy’s Edge-themed soda bottles has recently been brought to our attention by the general public, as these items could reasonably be seen by some as replica hand grenades,” the TSA said in a statement Wednesday. “While we continue to review this issue, TSA officers will maintain the discretion to prohibit any item through the screening checkpoint if they believe it poses a security threat.”

Sadly, the TSA has a long and inglorious history of making arbitrary decisions about what counts as a “security threat.” The “thermal detonator” Coke bottles are forbidden under the same broad ban on replica weapons and explosives—except for lightsabers, I guess?—that has previously led TSA agents to seize items as innocuous as whiskey stones shaped like bullets.

This nonsensical prohibition is another good reminder that, nearly two decades after it was created, the TSA is not the last line of defense against terrorism. It’s a bloated, wasteful bureaucracy that treats innocent Americans like criminals and then shares those stories for laughs on social media. It kills bunnies, gropes grandmothers, detains kids, and still can’t find most of the actual weapons that get smuggled onto planes.

Are airline passengers safer travelling without Coke bottles shaped like fictional Star Wars bombs? No, they are exactly as safe as they would have been otherwise.

 

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Iranian Tanker Makes Drastic Course Reversal As It Entered Turkish Waters

While en route to southern Turkey on Thursday the Iranian tanker Adrian Darya made a sudden 180 degree course alteration, and is now headed away from the Turkish coast and again in the direction of EU-member Greece. 

Refinitiv ship tracking data as well as MarineTraffic.com showed the drastic change in course as the ship’s data signals a destination “For Order” designation, meaning the vessel isn’t disclosing any destination, after it previously listed Mersin, Turkey just days ago. It made the drastic maneuver just as it began entering Turkish territorial waters.

Current tracking data shows the ship between the coasts of Turkey and Cyprus, heading west, at a moment there’s still an active US seizure warrant for the vessel.

On Monday an Iranian government spokesman announced the 2.1 million barrels have been sold to an unnamed buyer while en route across the Mediterranean after it was released.

Image source: Reuters

In statements made to reporters in Tehran, spokesman Ali Rabiei, said of the oil’s as yet unmentioned unloading point, “The buyer of the oil decides where its destination is.” 

He added that the world is “witnessing the wrong policy by the U.S. in monitoring and intervention in others’ internal affairs.”

The Unites States says the tanker is controlled by the Iranian Revolutionary Guards and thus deems any state’s interaction with it support of a formally designated terrorist group.

It’s expected that it will at some point attempt a ship-to-ship transfer at sea before the oil is transferred and ultimately offloaded at a port of the undisclosed purchaser’s choice.

via ZeroHedge News https://ift.tt/2zwmNM8 Tyler Durden

Dalio Burned As Bridgewater Emerges As One Of The Biggest Treasury Shorts

After we published Ray Dalio’s latest LinkedIn commentary, in which the founder of the world’s largest hedge fund ominously warned that central banks are on the verge of losing control of the global economy as their ammunition is now virtually non-existent in a world where interest rates are the lowest on record, and explicitly compared the current period to the one just preceding World War II, stating that he would “recommend that you understand the workings of the 1935-45 period closely, which is the last time similar forces were at work to produce a similar dynamic“, many immediately suggested that Dalio was merely talking his book.

As it now turns out, a hypocritical take of Dalio’s recent media appearances and write ups appears appropriate, because as Bloomberg reports today, the losing ways at Bridgewater’s Pure Alpha fund – which we first noted last month had “suffered one of its worst first-half performances in two decades after being whipsawed and wrong-footed by rebounding markets” – continued, and this time it was due to the fund’s Treasury shorts.

As a result of its paradoxical Treasury short – “paradoxical”, because if Dalio really believed that central bankers were on the verge of losing control, i.e., the ability to stoke inflation, he would be buying not selling bonds – Pure Alpha was down 6% through Aug. 23, and a more levered version of the fund, Pure Alpha II, was down 9% YTD. The pain was not limited to just the fund’s biggest discretionary fund: Bridgewater’s Pure Alpha Major Markets fund, which invests in a subset of the markets traded by the broader strategy, was down 18% through Aug. 23. It manages about $16 billion and since its 1991 inception has gained an annualized 12.5%.

Not every Bridegwater fund is suffering. Offsetting much of the Pure Alpha embarrassment, Bridgewater’s passively managed All-Weather fund, which unlike Pure Alpha is immune from macro-economic shifts and is instead a risk-parity, “balanced” fund, returned 12.5% YTD, which was to be expected in a year where both stocks and bonds have soared, resulting in the best returns for risk parity funds in over two decades.

As Bloomberg notes, Pure Alpha’s performance contrast to many peers who unlike Dalio, instead of writing long essays about this or that, simply bought bonds and collected what may be record annual profits as the following chart of the 30Y TSY price shows.

While macro funds have gained 4.7% this year through July, the performance of many managers has been limited due to continue bets that bond yields would rise. Of course, this has been a terrible trade as Treasury yields across the world have never been lower.

Meanwhile, with the latest CFTC Commitment of Traders report showing the Ultra-Long Treasury futures net spec positions are just shy of all time shorts, one thing is certain: the next move in 30Y Treasury yields will not be higher.

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Feds Kick Incoming Harvard Freshman Out of the Country Because of His Friend’s Social Media Posts

Ismail Ajjawi flew to the U.S. from his native Lebanon last week. He had gained admission to Harvard University, and was excited to begin classes.

When he arrived at Logan Airport in Boston, a U.S. Customs and Border Protect agent detained him for eight hours.

“She called me into a room, and she started screaming at me,” Ajjawi later told The Harvard Crimson. “She said that she found people posting political points of view that oppose the US on my friend[s] list.”

Ajjawi protested that he was not responsible for his friends’ political opinions—and noted that he had not liked or shared them.

“I have no single post on my timeline discussing politics,” he said.

The officer was unmoved. She canceled Ajjawi’s visa and put him on a plane back to Lebanon.

Harvard’s administration is justifiably outraged, and it is working with Ajjawi and a team of lawyers to remedy the situation. They hope to have him back in the U.S. by September 3, the first day of fall classes.

It’s a terrible situation, and it at least partly reflects the Trump administration’s warped immigration priorities. In 2018, the State Department issued just 362,929 student visas, a 43 percent drop since 2015, according to Fox News.

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The Argentina Siren-Song (And Where Else It’s Being Sung)

Via Macro Man blog,

I’m back! After an extended leave of absence I’ve decided to start writing again.

Let’s start with a story familiar to those that read MM in my first term: Argentina. 

That cute little fella above is already back, only a few short years after Macri’s victory put an end to the sordid story of Argentina’s last debt default in 2001. 

I’m not going to get into the economics or the various mistakes made by the current government and the IMF.

Take a step back and think about how we got here, and the investor psychology required to move headlong back into Argentine debt: 

  • October 2015: Mauricio Macri defeats the ruling party-backed Daniel Scioli, putting a non-Peronist government back in power for the first time in a really long time. 

  • Macri appoints one of the most technocratic governments in the history of emerging markets. Argentine economists up and down the tri-state area that had sought refuge on Wall Street over the past 15 years came home to work for and support the new government. 

  • This new economic team quickly implements a series of orthodox policies and pitches a market friendly reform agenda with the goal of kick starting investment and growth. 

  • Macri quickly negotiates an agreement with holdouts from the previous debt default, and issues a ton of bonds to pay them off and fund massive twin deficits 

  • Investors rejoice and welcome Argentina back into the loving embrace of EM

None of these really look like mistakes, do they?

It started off well. The new bonds did well enough that the government was able to issue the famous Argentina century bond in June 2017. Later that year the government won important midterm elections that were seen as an important barometer for Macri’s success, political capital and chances of winning re-election.

Less than two years later, this is the chart on the Argentina 2021 bond…which traded at 110 in Q3-17:

That’s what they call a “sudden stop” in emerging markets. That influx of foreign capital has gone to money heaven. It doesn’t come back…the next one to bring capital to Argentina is that bird–which is why we’re already at this stage:

You can cite a few reasons for the descent from ten points over par to recovery value in less than 24 months. The government failed to deliver on growth, didn’t get pension reform done, there was a drought, low soybean prices, crappy growth in Brazil, USD strength, global manufacturing slowdown, you name it. Sure, maybe a confluence of all those things.

But let’s look back at the initial bullet points. Where did Macri go wrong?

I’d argue it was in the hiring of a ton of technocrats to run the economic program.

One can imagine how the conversations went. We’ll pay off Elliott. We’ll float the peso. We’ll institute inflation targeting at the central bank. Investors will love it. They’ll come to us in droves.

Yep, that’s how it went down. These guys played a siren song for EM investors, and they ate it up. They played every tune that is music to their ears….abolish capital controls, reform, inflation targeting, de-regulation, tax cuts…liquidity….oh yeah baby…

Before you know it, by mid-2018 there is $100bn in debt on the books and the fundamentals are deteriorating. Suddenly the IMF is back in town, an organization that has a favorability rating in Argentina on par with Trump on your average university campus. 

By 2019 the IMF has stabilized the situation well enough to buy Macri some time ahead of the October election. The economy wheezes along. Do investors take advantage of the opportunity to scale out of Argentine debt, given the poisonous political nature of the government’s economic record–and one that got into bed with the IMF?

No, instead foreign investors ate it up! This is a list of the top ten holders of the Argentina 2021:

Same chart for the Argentina 2028 (the only one that is reducing is blackrock, and only because they updated their data already):

Real money was not only holding these bonds, they were buying more. They were convinced Macri was going to win and make them a fortune. Take a look at the country weights of some of these mutual funds: you’ll find one after another is, or was anyway…overweight Argentina.

They bought into the swan song that the government told them. They succumbed to one of the classic behavioral biases: affinity bias. “These guys are just like us! They say they’ll win the election. We can trust them.”

There is also some confirmation bias there–where investors believed the orthodox path the government had taken was going to work. Why? Because that’s what they taught us in school! And the election?? Well, those Argentines….they know better than to bring the Kirchners back in, right?

And there is the last big mistake. Can you name one technocratic, dare I say, elitist, candidate that has won an election lately? One might say Macron…but look how that’s turned out. Sank without a trace.

Yet despite a terrible economic record, a leg shackled to a hated foreign organization and a global trend against orthodox, technocratic politics, foreign investors convinced themselves that Macri was going to win.

Right until he lost big.

And that brings us back to what Argentina can teach us about the rest of the world. Where else are investors buying into the swan song?

  • Brazil: sing it to me Captain…pension reform….deregulation….but growth still sucks and the government is still drowning in debt and red tape

  • Italy: wait, it is POSITIVE the most popular politician in the country just got heaved out of the government? That is going to make him LESS popular? 

  • UK: Maybe Boris can pull it off. Or maybe people still believe he can. 

  • United States: I can think of one good scenario going into the 2020 election, but it involves Joe Biden. With the S&P 4% off the highs, investors believe the most beautiful song is still sung by US multinationals. 

This was a big land mine for foreign investors. They stepped on it–not just because they got the story wrong–which happens to everyone. But because they had a few behavioral blind spots that we can all learn from.

via ZeroHedge News https://ift.tt/2zy7p1y Tyler Durden

Feds Kick Incoming Harvard Freshman Out of the Country Because of His Friend’s Social Media Posts

Ismail Ajjawi flew to the U.S. from his native Lebanon last week. He had gained admission to Harvard University, and was excited to begin classes.

When he arrived at Logan Airport in Boston, a U.S. Customs and Border Protect agent detained him for eight hours.

“She called me into a room, and she started screaming at me,” Ajjawi later told The Harvard Crimson. “She said that she found people posting political points of view that oppose the US on my friend[s] list.”

Ajjawi protested that he was not responsible for his friends’ political opinions—and noted that he had not liked or shared them.

“I have no single post on my timeline discussing politics,” he said.

The officer was unmoved. She canceled Ajjawi’s visa and put him on a plane back to Lebanon.

Harvard’s administration is justifiably outraged, and it is working with Ajjawi and a team of lawyers to remedy the situation. They hope to have him back in the U.S. by September 3, the first day of fall classes.

It’s a terrible situation, and it at least partly reflects the Trump administration’s warped immigration priorities. In 2018, the State Department issued just 362,929 student visas, a 43 percent drop since 2015, according to Fox News.

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A DEA Agent Got a Drug Dealer to Buy a Truck So the Agent Could Seize it Through Asset Forfeiture

A former Drug Enforcement Administration (DEA) agent was convicted Tuesday of lying and falsifying records to hide a long-running scheme to skim money and other property during drug busts. In one scheme, he convinced a confidential informant buy a truck so the agent could seize it through asset forfeiture.

A New Orleans jury found former DEA special agent Chad Scott guilty of seven counts of perjury, obstruction of justice, and falsifying government records. The U.S. government’s indictment alleged that from at least 2009 to 2016, Scott and two other members of a New Orleans drug task force conspired to steal money from suspects and from the DEA’s evidence locker, and to falsify records to cover their tracks. 

Part of Scott’s misconduct involved getting a Houston drug dealer to purchase a $43,000 Ford F-150 so that Scott could seize it through asset forfeiture laws and then use it as a work vehicle. Scott falsified seizure records to make it appear that he had taken the truck in Louisiana.

Federal prosecutors also accused Scott of convincing two drug traffickers to lie on the stand about about a third defendant’s involvement in a drug case, in exchange for more lenient sentences. The third defendant’s conviction was later overturned.

Under civil asset forfeiture laws, police can seize property suspected of being connected to criminal activity, even if the owner isn’t charged with a crime. Law enforcement organizations claim that civil forfeiture is a vital tool to disrupt drug trafficking and other organized crime by targeting illicit proceeds. Civil liberties groups say the practice creates a perverse profit incentive for police.

For example, in Illinois, former La Salle County state’s attorney Brian Towne faced criminal charges for misconduct and misappropriating public funds after he allegedly spent asset forfeiture funds on an SUV, WiFi for his home, and local youth sports programs. Town created his own highway interdiction unit and asset forfeiture fund for his office, an unusual move that the Illinois Supreme Court later ruled was illegal. A judge dismissed the charges against Towne after finding his right to a speedy trial was violated.

The New Orleans Advocate reported in 2016 that Scott, who styled himself as “the white devil,” was one of the most successful DEA agents in the region when it came to big drug busts and large cash hauls. The Advocate also reported that in 2004 a woman filed a complaint to the DEA and the Louisiana State Police claiming she saw Scott take drugs from a house following an arrest. Because of Scott’s status as a case-maker, numerous complaints against him and other red flags were ignored

That changed after Scott was indicted in 2017 as part of a wide-ranging FBI probe into the DEA’s troubled New Orleans field division. During Scott’s case, federal prosecutors attempted to enter other past misconduct issues going back to 1999 into evidence.

That year, two employees of Houston’s Rap-a-Lot Records, which was under DEA investigation, said they were pulled over by Scott and several other law enforcement officers. According to a motion filed by prosecutors, Scott’s group “proceeded to remove the occupants from the vehicle, place them in handcuffs, and stand them against a wall. Evidence indicates that [Scott] struck Mr. Simon and took a necklace from him,” which he then kept in his evidence locker for several months before returning.

A subsequent investigation by the DEA’s Office of Professional Responsibility (OPR) found that, while Scott admitted to knowingly violating the DEA’s evidence handling policies, there was insufficient evidence to support the allegations of civil rights abuses. Prosecutors wrote that “evidence indicates that in connection with this incident, [Scott] mishandled evidence” and “made false statements to investigators.”

In sworn testimony before the House Oversight Committee in 2000 regarding the Rap-a-Lot investigation, the then-head of the DEA’s Houston field office, Ernest Howard, said the OPR cleared Scott and his partner, Jack Schumacher of any misconduct. The hearing was spurred by a letter from Rep. Maxine Waters (D–Calif.) to Attorney General Janet Reno asking for an investigation into claims by Rap-A-Lot’s owner that he had been subjected to racial slurs, illegal searches, and frequent traffic stops by DEA agents.

The motion also revealed that in 2004 the DEA reprimanded Scott twice for mishandling confidential informants and violating agency policy.

And in 2005, Scott arrested a man named Julius Cerdes, who claimed that Scott asked him to fabricate a story about another criminal defendant. Specifically, Scott “wanted Mr. Cerdes to say that Mr. Cerdes sold cocaine to the criminal defendant, when in fact this had not occurred,” federal prosecutors wrote. “In exchange, Mr. Cerdes was to receive a more favorable disposition of his criminal case. In a subsequent proffer session, Mr. Cerdes lied as instructed, telling the false story.”

Yet Scott still had plenty of defenders.

“I knew Chad Scott, and still know him, to be a fine, upstanding public servant whose dedication has been an overwhelming asset to this community,” Matt Coman, a former federal prosecutor who worked closely with Scott, told the Advocate in 2016. “His work has gone a long way toward continuing to eradicate the scourge of illegal drugs in this community. He’s a fantastic person, a fantastic agent—a credit to that agency.”

In a Justice Department press release announcing Scott’s conviction, FBI Assistant Special Agent in Charge Anthony T. Riedlinger said the conviction “reinforces the message that no one is above the law. Scott’s actions were selfish and placed an unnecessary stain on an otherwise stellar agency.” 

Scott faces another federal trial in October on a different set of charges.

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“We Must Act”: Italian PM Conte Pledges Swift Action After Getting Green Light To Form New Government

Nine days after he resigned from Italy’s government, Giuseppe Conte has returned as prime minister to form a new government that will exclude Matteo Salvini, the former right-wing hardliner who was once widely believed to be next in line to occupy the Quirinale Palace, the seat of the Italian government.

On Thursday, Conte said he would accept the role with reservations, saying that he would immediately start working with all other Parliamentary Groups, and added that Italy must open itself up and become “a country which is open to everyone,” CNN reports. His first task, as he informed Italian President Sergio Mattarella, will be finding candidates to form a new cabinet. Conte officially informed Mattarella that he would accept his nomination as PM, putting an end to a three-week long political battle that threatened to blossom into a full-blown political crisis.

“This is a moment for courage and determination – a determination which will not be dogged by obstacles,” he said.

After holding together for more than a year, much longer than most political observers had anticipated, the coalition between M5S and the League Party fell apart last week after months of infighting over key policies.

Even more surprisingly, the Five Star Movement and the Democratic Party, decided to form a coalition after more than a week of tense negotiations. One of the main sticking points for both parties was that Conte, a technocrat, return to reprise his role as prime minister.

Conte

As the FT explained, the decision to re-anoint Conte as prime minister is a sign of just how much influence the moderate politician, who previously led a coalition of anti-establishment lawmakers, has gained. Conte has “marched decisively out of his deputies’ (that is, Salvini’s) shadow” and now boasts an approval rating of just below 60% – something most mainstream politicians would kill for.

He even won the endorsement of President Trump during last weekend’s G-7 meeting.

But after humiliating Mr Salvini in a blistering speech to the Senate, Mr Conte seems to have marched decisively out of his deputies’ shadow. He was embraced by Angela Merkel, German chancellor, at the G7 last weekend and even got the seal of approval from Donald Trump, the US president, who on Tuesday tweeted his esteem for the “highly respected” Mr Conte who “loves his country greatly & works well with the USA. A very talented man who will hopefully remain Prime Minister!”

Mindful of Mr Conte’s approval ratings, which have reached as high as 58 per cent – a level most leaders can only dream of – Five Star has insisted he remain prime minister in any new coalition. The Democratic party (PD) has however said it wants a clear break with the previous government.

As Reuters pointed out, Conte’s reputation as a pragmatic technocrat could improve Italy’s relationship with the European Union, which could come in handy during the upcoming budget negotiations this fall.

Conte’s top priority is formulating a budget that will allow his government to avoid implementing a VAT hike on Jan. 1 that could do more damage to Italy’s already-struggling economy. 

“We must immediately get to work and draw up a budget to avert the VAT hike, protects savers and offers solid prospects for economic growth and social development,” he said.

The VAT rate will rise unless Italy manages to find $26 billion of government funding from another source.

Hoping to seize on his rise in popularity, Salvini withdrew his support for the government and pushed for a no-confidence vote on Conte, hoping to collapse the government and force a new round of elections that could see his far-right League Party return as the leader of a new conservative coalition. But Salvini’s plan backfired, as his the new coalition will see the League relegated to the opposition.

Italy’s former government challenged Brussels over its budget deficit, its unwillingness to take in more migrants and its openness toward making amends with Russia.

But according to local media reports, Conte is preparing a policy platform that would ask Brussels for more “flexibility” in crafting a budget, adopting a much more conciliatory tone.

Italian stock markets and bond markets rallied after Conte’s decision, as analysts warmed to the new coalition.

“We think it will be less challenging to agree on an agenda between M5S (5-Star) and PD because the priorities both political forces have set out seem broadly consistent in many areas, ranging from fiscal policy to Italy’s relationship with the EU to a focus on a green economy,” said UBS Wealth Management’s Matteo Ramenghi.

Meanwhile, former Democratic Party PM Matteo Renzi said he would not be joining the new Italian government in a ministerial post, though he supported the coalitions efforts to make a deal because it would stop Salvini.

Still, Renzi celebrated the new coalition, as he told reporters.

“This result: politics 1, populism O. This is the result of the first half of the match,” he told CNBC’s Joumanna Bercetche, implying that he expected Salvini to return with some sort of challenge.

He has good reason to believe that to be the case. As we noted yesterday, frustrated members of the League urged their supporters to take to the streets to protest the new governing coalition, which they branded as undemocratic usurpers.

Here’s a chart illustrating the new government vs. the prior government.

Though while it appears Italy has avoided another election for now, Conte has several serious challenges facing him, not the least of which involves crafting Italy’s 2020 budget, and selling it to Brussels. That creates the possibility of market-rattling political turmoil ahead.

via ZeroHedge News https://ift.tt/2MIgs95 Tyler Durden

A DEA Agent Got a Drug Dealer to Buy a Truck So the Agent Could Seize it Through Asset Forfeiture

A former Drug Enforcement Administration (DEA) agent was convicted Tuesday of lying and falsifying records to hide a long-running scheme to skim money and other property during drug busts. In one scheme, he convinced a confidential informant buy a truck so the agent could seize it through asset forfeiture.

A New Orleans jury found former DEA special agent Chad Scott guilty of seven counts of perjury, obstruction of justice, and falsifying government records. The U.S. government’s indictment alleged that from at least 2009 to 2016, Scott and two other members of a New Orleans drug task force conspired to steal money from suspects and from the DEA’s evidence locker, and to falsify records to cover their tracks. 

Part of Scott’s misconduct involved getting a Houston drug dealer to purchase a $43,000 Ford F-150 so that Scott could seize it through asset forfeiture laws and then use it as a work vehicle. Scott falsified seizure records to make it appear that he had taken the truck in Louisiana.

Federal prosecutors also accused Scott of convincing two drug traffickers to lie on the stand about about a third defendant’s involvement in a drug case, in exchange for more lenient sentences. The third defendant’s conviction was later overturned.

Under civil asset forfeiture laws, police can seize property suspected of being connected to criminal activity, even if the owner isn’t charged with a crime. Law enforcement organizations claim that civil forfeiture is a vital tool to disrupt drug trafficking and other organized crime by targeting illicit proceeds. Civil liberties groups say the practice creates a perverse profit incentive for police.

For example, in Illinois, former La Salle County state’s attorney Brian Towne faced criminal charges for misconduct and misappropriating public funds after he allegedly spent asset forfeiture funds on an SUV, WiFi for his home, and local youth sports programs. Town created his own highway interdiction unit and asset forfeiture fund for his office, an unusual move that the Illinois Supreme Court later ruled was illegal. A judge dismissed the charges against Towne after finding his right to a speedy trial was violated.

The New Orleans Advocate reported in 2016 that Scott, who styled himself as “the white devil,” was one of the most successful DEA agents in the region when it came to big drug busts and large cash hauls. The Advocate also reported that in 2004 a woman filed a complaint to the DEA and the Louisiana State Police claiming she saw Scott take drugs from a house following an arrest. Because of Scott’s status as a case-maker, numerous complaints against him and other red flags were ignored

That changed after Scott was indicted in 2017 as part of a wide-ranging FBI probe into the DEA’s troubled New Orleans field division. During Scott’s case, federal prosecutors attempted to enter other past misconduct issues going back to 1999 into evidence.

That year, two employees of Houston’s Rap-a-Lot Records, which was under DEA investigation, said they were pulled over by Scott and several other law enforcement officers. According to a motion filed by prosecutors, Scott’s group “proceeded to remove the occupants from the vehicle, place them in handcuffs, and stand them against a wall. Evidence indicates that [Scott] struck Mr. Simon and took a necklace from him,” which he then kept in his evidence locker for several months before returning.

A subsequent investigation by the DEA’s Office of Professional Responsibility (OPR) found that, while Scott admitted to knowingly violating the DEA’s evidence handling policies, there was insufficient evidence to support the allegations of civil rights abuses. Prosecutors wrote that “evidence indicates that in connection with this incident, [Scott] mishandled evidence” and “made false statements to investigators.”

In sworn testimony before the House Oversight Committee in 2000 regarding the Rap-a-Lot investigation, the then-head of the DEA’s Houston field office, Ernest Howard, said the OPR cleared Scott and his partner, Jack Schumacher of any misconduct. The hearing was spurred by a letter from Rep. Maxine Waters (D–Calif.) to Attorney General Janet Reno asking for an investigation into claims by Rap-A-Lot’s owner that he had been subjected to racial slurs, illegal searches, and frequent traffic stops by DEA agents.

The motion also revealed that in 2004 the DEA reprimanded Scott twice for mishandling confidential informants and violating agency policy.

And in 2005, Scott arrested a man named Julius Cerdes, who claimed that Scott asked him to fabricate a story about another criminal defendant. Specifically, Scott “wanted Mr. Cerdes to say that Mr. Cerdes sold cocaine to the criminal defendant, when in fact this had not occurred,” federal prosecutors wrote. “In exchange, Mr. Cerdes was to receive a more favorable disposition of his criminal case. In a subsequent proffer session, Mr. Cerdes lied as instructed, telling the false story.”

Yet Scott still had plenty of defenders.

“I knew Chad Scott, and still know him, to be a fine, upstanding public servant whose dedication has been an overwhelming asset to this community,” Matt Coman, a former federal prosecutor who worked closely with Scott, told the Advocate in 2016. “His work has gone a long way toward continuing to eradicate the scourge of illegal drugs in this community. He’s a fantastic person, a fantastic agent—a credit to that agency.”

In a Justice Department press release announcing Scott’s conviction, FBI Assistant Special Agent in Charge Anthony T. Riedlinger said the conviction “reinforces the message that no one is above the law. Scott’s actions were selfish and placed an unnecessary stain on an otherwise stellar agency.” 

Scott faces another federal trial in October on a different set of charges.

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Euro Spikes, Stocks Dump As ECB’s Knot Says “No Need To Resume QE”

Following future ECB head Christine Lagarde’s dovish comments that the central bank hasn’t hit the lower bound on rates (yet):

In her first comprehensive comments on monetary policy since winning the job, she said Thursday the ECB has the tools to tackle a downturn and must be ready to use them if needed. The euro weakened slightly after the remarks were published.

European Central Bank policy maker Klaas Knot played bad-cop, saying hawkishly that the euro-area economy isn’t weak enough to warrant the resumption of bond purchases and such a step shouldn’t be taken unless the slowdown worsens.

While the Dutch central-bank governor said he’s open to an interest-rate cut, his remarks echo those by his German colleague Jens Weidmann:

“If deflation risks come back on the agenda then I think the asset-purchase program is the appropriate instrument to be activated, but there is no need for it in my reading of the inflation outlook right now,” Knot said in Amsterdam on Thursday.

“Not reactivating the asset-purchase program also means you keep some powder dry for when actually future contingencies happen.”

Euro spiked on the headline…

Source: Bloomberg

And bund yields spiked…

Source: Bloomberg

And stocks tumbled (from a key resistance level)…

Looks like Draghi has some work to do.

via ZeroHedge News https://ift.tt/2L5h4DG Tyler Durden