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Everything Is Rigged…

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Everything Is Rigged: The Biggest Price-Fixing Scandal Ever
The Illuminati were amateurs. The second huge financial scandal of the year reveals the real international conspiracy: There’s no price the big banks can’t fix
by Matt Taibbi
APRIL 25, 2013

From Rolling Stone here

Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world’s largest banks may be fixing the prices of, well, just about everything.

You may have heard of the Libor scandal, in which at least three – and perhaps as many as 16 – of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that’s trillion, with a “t”) worth of financial instruments. When that sprawling con burst into public view last year, it was easily the biggest financial scandal in history – MIT professor Andrew Lo even said it “dwarfs by orders of magnitude any financial scam in the history of markets.”

That was bad enough, but now Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world’s largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world’s largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps.

Interest-rate swaps are a tool used by big cities, major corporations and sovereign governments to manage their debt, and the scale of their use is almost unimaginably massive. It’s about a $379 trillion market, meaning that any manipulation would affect a pile of assets about 100 times the size of the United States federal budget.

It should surprise no one that among the players implicated in this scheme to fix the prices of interest-rate swaps are the same megabanks – including Barclays, UBS, Bank of America, JPMorgan Chase and the Royal Bank of Scotland – that serve on the Libor panel that sets global interest rates. In fact, in recent years many of these banks have already paid multimillion-dollar settlements for anti-competitive manipulation of one form or another (in addition to Libor, some were caught up in an anti-competitive scheme, detailed in Rolling Stone last year, to rig municipal-debt service auctions). Though the jumble of financial acronyms sounds like gibberish to the layperson, the fact that there may now be price-fixing scandals involving both Libor and ISDAfix suggests a single, giant mushrooming conspiracy of collusion and price-fixing hovering under the ostensibly competitive veneer of Wall Street culture.

The Scam Wall Street Learned From the Mafia

Why? Because Libor already affects the prices of interest-rate swaps, making this a manipulation-on-manipulation situation. If the allegations prove to be right, that will mean that swap customers have been paying for two different layers of price-fixing corruption. If you can imagine paying 20 bucks for a crappy PB&J because some evil cabal of agribusiness companies colluded to fix the prices of both peanuts and peanut butter, you come close to grasping the lunacy of financial markets where both interest rates and interest-rate swaps are being manipulated at the same time, often by the same banks.

“It’s a double conspiracy,” says an amazed Michael Greenberger, a former director of the trading and markets division at the Commodity Futures Trading Commission and now a professor at the University of Maryland. “It’s the height of criminality.”

The bad news didn’t stop with swaps and interest rates. In March, it also came out that two regulators – the CFTC here in the U.S. and the Madrid-based International Organization of Securities Commissions – were spurred by the Libor revelations to investigate the possibility of collusive manipulation of gold and silver prices. “Given the clubby manipulation efforts we saw in Libor benchmarks, I assume other benchmarks – many other benchmarks – are legit areas of inquiry,” CFTC Commissioner Bart Chilton said.

But the biggest shock came out of a federal courtroom at the end of March – though if you follow these matters closely, it may not have been so shocking at all – when a landmark class-action civil lawsuit against the banks for Libor-related offenses was dismissed. In that case, a federal judge accepted the banker-defendants’ incredible argument: If cities and towns and other investors lost money because of Libor manipulation, that was their own fault for ever thinking the banks were competing in the first place.

“A farce,” was one antitrust lawyer’s response to the eyebrow-raising dismissal.

“Incredible,” says Sylvia Sokol, an attorney for Constantine Cannon, a firm that specializes in antitrust cases.

All of these stories collectively pointed to the same thing: These banks, which already possess enormous power just by virtue of their financial holdings – in the United States, the top six banks, many of them the same names you see on the Libor and ISDAfix panels, own assets equivalent to 60 percent of the nation’s GDP – are beginning to realize the awesome possibilities for increased profit and political might that would come with colluding instead of competing. Moreover, it’s increasingly clear that both the criminal justice system and the civil courts may be impotent to stop them, even when they do get caught working together to game the system.

If true, that would leave us living in an era of undisguised, real-world conspiracy, in which the prices of currencies, commodities like gold and silver, even interest rates and the value of money itself, can be and may already have been dictated from above. And those who are doing it can get away with it. Forget the Illuminati – this is the real thing, and it’s no secret. You can stare right at it, anytime you want.

The banks found a loophole, a basic flaw in the machine. Across the financial system, there are places where prices or official indices are set based upon unverified data sent in by private banks and financial companies. In other words, we gave the players with incentives to game the system institutional roles in the economic infrastructure.

Libor, which measures the prices banks charge one another to borrow money, is a perfect example, not only of this basic flaw in the price-setting system but of the weakness in the regulatory framework supposedly policing it. Couple a voluntary reporting scheme with too-big-to-fail status and a revolving-door legal system, and what you get is unstoppable corruption.

Every morning, 18 of the world’s biggest banks submit data to an office in London about how much they believe they would have to pay to borrow from other banks. The 18 banks together are called the “Libor panel,” and when all of these data from all 18 panelist banks are collected, the numbers are averaged out. What emerges, every morning at 11:30 London time, are the daily Libor figures.

Banks submit numbers about borrowing in 10 different currencies across 15 different time periods, e.g., loans as short as one day and as long as one year. This mountain of bank-submitted data is used every day to create benchmark rates that affect the prices of everything from credit cards to mortgages to currencies to commercial loans (both short- and long-term) to swaps.

Gangster Bankers Broke Every Law in the Book

Dating back perhaps as far as the early Nineties, traders and others inside these banks were sometimes calling up the company geeks responsible for submitting the daily Libor numbers (the “Libor submitters”) and asking them to fudge the numbers. Usually, the gimmick was the trader had made a bet on something – a swap, currencies, something – and he wanted the Libor submitter to make the numbers look lower (or, occasionally, higher) to help his bet pay off.

Famously, one Barclays trader monkeyed with Libor submissions in exchange for a bottle of Bollinger champagne, but in some cases, it was even lamer than that. This is from an exchange between a trader and a Libor submitter at the Royal Bank of Scotland:

SWISS FRANC TRADER: can u put 6m swiss libor in low pls?…
PRIMARY SUBMITTER: Whats it worth
SWSISS FRANC TRADER: ive got some sushi rolls from yesterday?…
PRIMARY SUBMITTER: ok low 6m, just for u
SWISS FRANC TRADER: wooooooohooooooo. . . thatd be awesome

Screwing around with world interest rates that affect billions of people in exchange for day-old sushi – it’s hard to imagine an image that better captures the moral insanity of the modern financial-services sector.

Hundreds of similar exchanges were uncovered when regulators like Britain’s Financial Services Authority and the U.S. Justice Department started burrowing into the befouled entrails of Libor. The documentary evidence of anti-competitive manipulation they found was so overwhelming that, to read it, one almost becomes embarrassed for the banks. “It’s just amazing how Libor fixing can make you that much money,” chirped one yen trader. “Pure manipulation going on,” wrote another.

Yet despite so many instances of at least attempted manipulation, the banks mostly skated. Barclays got off with a relatively minor fine in the $450 million range, UBS was stuck with $1.5 billion in penalties, and RBS was forced to give up $615 million. Apart from a few low-level flunkies overseas, no individual involved in this scam that impacted nearly everyone in the industrialized world was even threatened with criminal prosecution.

Two of America’s top law-enforcement officials, Attorney General Eric Holder and former Justice Department Criminal Division chief Lanny Breuer, confessed that it’s dangerous to prosecute offending banks because they are simply too big. Making arrests, they say, might lead to “collateral consequences” in the economy.

The relatively small sums of money extracted in these settlements did not go toward reparations for the cities, towns and other victims who lost money due to Libor manipulation. Instead, it flowed mindlessly into government coffers. So it was left to towns and cities like Baltimore (which lost money due to fluctuations in their municipal investments caused by Libor movements), pensions like the New Britain, Connecticut, Firefighters’ and Police Benefit Fund, and other foundations – and even individuals (billionaire real-estate developer Sheldon Solow, who filed his own suit in February, claims that his company lost $450 million because of Libor manipulation) – to sue the banks for damages.

One of the biggest Libor suits was proceeding on schedule when, early in March, an army of superstar lawyers working on behalf of the banks descended upon federal judge Naomi Buchwald in the Southern District of New York to argue an extraordinary motion to dismiss. The banks’ legal dream team drew from heavyweight Beltway-connected firms like Boies Schiller (you remember David Boies represented Al Gore), Davis Polk (home of top ex-regulators like former SEC enforcement chief Linda Thomsen) and Covington & Burling, the onetime private-practice home of both Holder and Breuer.

The presence of Covington & Burling in the suit – representing, of all companies, Citigroup, the former employer of current Treasury Secretary Jack Lew – was particularly galling. Right as the Libor case was being dismissed, the firm had hired none other than Lanny Breuer, the same Lanny Breuer who, just a few months before, was the assistant attorney general who had balked at criminally prosecuting UBS over Libor because, he said, “Our goal here is not to destroy a major financial institution.”

In any case, this all-star squad of white-shoe lawyers came before Buchwald and made the mother of all audacious arguments. Robert Wise of Davis Polk, representing Bank of America, told Buchwald that the banks could not possibly be guilty of anti- competitive collusion because nobody ever said that the creation of Libor was competitive. “It is essential to our argument that this is not a competitive process,” he said. “The banks do not compete with one another in the submission of Libor.”

If you squint incredibly hard and look at the issue through a mirror, maybe while standing on your head, you can sort of see what Wise is saying. In a very theoretical, technical sense, the actual process by which banks submit Libor data – 18 geeks sending numbers to the British Bankers’ Association offices in London once every morning – is not competitive per se.

But these numbers are supposed to reflect interbank-loan prices derived in a real, competitive market. Saying the Libor submission process is not competitive is sort of like pointing out that bank robbers obeyed the speed limit on the way to the heist. It’s the silliest kind of legal sophistry.

But Wise eventually outdid even that argument, essentially saying that while the banks may have lied to or cheated their customers, they weren’t guilty of the particular crime of antitrust collusion. This is like the old joke about the lawyer who gets up in court and claims his client had to be innocent, because his client was committing a crime in a different state at the time of the offense.

“The plaintiffs, I believe, are confusing a claim of being perhaps deceived,” he said, “with a claim for harm to competition.”

Judge Buchwald swallowed this lunatic argument whole and dismissed most of the case. Libor, she said, was a “cooperative endeavor” that was “never intended to be competitive.” Her decision “does not reflect the reality of this business, where all of these banks were acting as competitors throughout the process,” said the antitrust lawyer Sokol. Buchwald made this ruling despite the fact that both the U.S. and British governments had already settled with three banks for billions of dollars for improper manipulation, manipulation that these companies admitted to in their settlements.

Michael Hausfeld of Hausfeld LLP, one of the lead lawyers for the plaintiffs in this Libor suit, declined to comment specifically on the dismissal. But he did talk about the significance of the Libor case and other manipulation cases now in the pipeline.

“It’s now evident that there is a ubiquitous culture among the banks to collude and cheat their customers as many times as they can in as many forms as they can conceive,” he said. “And that’s not just surmising. This is just based upon what they’ve been caught at.”

Greenberger says the lack of serious consequences for the Libor scandal has only made other kinds of manipulation more inevitable. “There’s no therapy like sending those who are used to wearing Gucci shoes to jail,” he says. “But when the attorney general says, ‘I don’t want to indict people,’ it’s the Wild West. There’s no law.”

The problem is, a number of markets feature the same infrastructural weakness that failed in the Libor mess. In the case of interest-rate swaps and the ISDAfix benchmark, the system is very similar to Libor, although the investigation into these markets reportedly focuses on some different types of improprieties.

Though interest-rate swaps are not widely understood outside the finance world, the root concept actually isn’t that hard. If you can imagine taking out a variable-rate mortgage and then paying a bank to make your loan payments fixed, you’ve got the basic idea of an interest-rate swap.

In practice, it might be a country like Greece or a regional government like Jefferson County, Alabama, that borrows money at a variable rate of interest, then later goes to a bank to “swap” that loan to a more predictable fixed rate. In its simplest form, the customer in a swap deal is usually paying a premium for the safety and security of fixed interest rates, while the firm selling the swap is usually betting that it knows more about future movements in interest rates than its customers.

Prices for interest-rate swaps are often based on ISDAfix, which, like Libor, is yet another of these privately calculated benchmarks. ISDAfix’s U.S. dollar rates are published every day, at 11:30 a.m. and 3:30 p.m., after a gang of the same usual-suspect megabanks (Bank of America, RBS, Deutsche, JPMorgan Chase, Barclays, etc.) submits information about bids and offers for swaps.

And here’s what we know so far: The CFTC has sent subpoenas to ICAP and to as many as 15 of those member banks, and plans to interview about a dozen ICAP employees from the company’s office in Jersey City, New Jersey. Moreover, the International Swaps and Derivatives Association, or ISDA, which works together with ICAP (for U.S. dollar transactions) and Thomson Reuters to compute the ISDAfix benchmark, has hired the consulting firm Oliver Wyman to review the process by which ISDAfix is calculated. Oliver Wyman is the same company that the British Bankers’ Association hired to review the Libor submission process after that scandal broke last year. The upshot of all of this is that it looks very much like ISDAfix could be Libor all over again.

“It’s obviously reminiscent of the Libor manipulation issue,” Darrell Duffie, a finance professor at Stanford University, told reporters. “People may have been naive that simply reporting these rates was enough to avoid manipulation.”

And just like in Libor, the potential losers in an interest-rate-swap manipulation scandal would be the same sad-sack collection of cities, towns, companies and other nonbank entities that have no way of knowing if they’re paying the real price for swaps or a price being manipulated by bank insiders for profit. Moreover, ISDAfix is not only used to calculate prices for interest-rate swaps, it’s also used to set values for about $550 billion worth of bonds tied to commercial real estate, and also affects the payouts on some state-pension annuities.

So although it’s not quite as widespread as Libor, ISDAfix is sufficiently power-jammed into the world financial infrastructure that any manipulation of the rate would be catastrophic – and a huge class of victims that could include everyone from state pensioners to big cities to wealthy investors in structured notes would have no idea they were being robbed.

“How is some municipality in Cleveland or wherever going to know if it’s getting ripped off?” asks Michael Masters of Masters Capital Management, a fund manager who has long been an advocate of greater transparency in the derivatives world. “The answer is, they won’t know.”

Worse still, the CFTC investigation apparently isn’t limited to possible manipulation of swap prices by monkeying around with ISDAfix. According to reports, the commission is also looking at whether or not employees at ICAP may have intentionally delayed publication of swap prices, which in theory could give someone (bankers, cough, cough) a chance to trade ahead of the information.

Swap prices are published when ICAP employees manually enter the data on a computer screen called “19901.” Some 6,000 customers subscribe to a service that allows them to access the data appearing on the 19901 screen.

The key here is that unlike a more transparent, regulated market like the New York Stock Exchange, where the results of stock trades are computed more or less instantly and everyone in theory can immediately see the impact of trading on the prices of stocks, in the swap market the whole world is dependent upon a handful of brokers quickly and honestly entering data about trades by hand into a computer terminal.

Any delay in entering price data would provide the banks involved in the transactions with a rare opportunity to trade ahead of the information. One way to imagine it would be to picture a racetrack where a giant curtain is pulled over the track as the horses come down the stretch – and the gallery is only told two minutes later which horse actually won. Anyone on the right side of the curtain could make a lot of smart bets before the audience saw the results of the race.

At ICAP, the interest-rate swap desk, and the 19901 screen, were reportedly controlled by a small group of 20 or so brokers, some of whom were making millions of dollars. These brokers made so much money for themselves the unit was nicknamed “Treasure Island.”

Already, there are some reports that brokers of Treasure Island did create such intentional delays. Bloomberg interviewed a former broker who claims that he watched ICAP brokers delay the reporting of swap prices. “That allows dealers to tell the brokers to delay putting trades into the system instead of in real time,” Bloomberg wrote, noting the former broker had “witnessed such activity firsthand.” An ICAP spokesman has no comment on the story, though the company has released a statement saying that it is “cooperating” with the CFTC’s inquiry and that it “maintains policies that prohibit” the improper behavior alleged in news reports.

The idea that prices in a $379 trillion market could be dependent on a desk of about 20 guys in New Jersey should tell you a lot about the absurdity of our financial infrastructure. The whole thing, in fact, has a darkly comic element to it. “It’s almost hilarious in the irony,” says David Frenk, director of research for Better Markets, a financial-reform advocacy group, “that they called it ISDAfix.”

After scandals involving libor and, perhaps, ISDAfix, the question that should have everyone freaked out is this: What other markets out there carry the same potential for manipulation? The answer to that question is far from reassuring, because the potential is almost everywhere. From gold to gas to swaps to interest rates, prices all over the world are dependent upon little private cabals of cigar-chomping insiders we’re forced to trust.

“In all the over-the-counter markets, you don’t really have pricing except by a bunch of guys getting together,” Masters notes glumly.

That includes the markets for gold (where prices are set by five banks in a Libor-ish teleconferencing process that, ironically, was created in part by N M Rothschild & Sons) and silver (whose price is set by just three banks), as well as benchmark rates in numerous other commodities – jet fuel, diesel, electric power, coal, you name it. The problem in each of these markets is the same: We all have to rely upon the honesty of companies like Barclays (already caught and fined $453 million for rigging Libor) or JPMorgan Chase (paid a $228 million settlement for rigging municipal-bond auctions) or UBS (fined a collective $1.66 billion for both muni-bond rigging and Libor manipulation) to faithfully report the real prices of things like interest rates, swaps, currencies and commodities.

All of these benchmarks based on voluntary reporting are now being looked at by regulators around the world, and God knows what they’ll find. The European Federation of Financial Services Users wrote in an official EU survey last summer that all of these systems are ripe targets for manipulation. “In general,” it wrote, “those markets which are based on non-attested, voluntary submission of data from agents whose benefits depend on such benchmarks are especially vulnerable of market abuse and distortion.”

Translation: When prices are set by companies that can profit by manipulating them, we’re fucked.

“You name it,” says Frenk. “Any of these benchmarks is a possibility for corruption.”

The only reason this problem has not received the attention it deserves is because the scale of it is so enormous that ordinary people simply cannot see it. It’s not just stealing by reaching a hand into your pocket and taking out money, but stealing in which banks can hit a few keystrokes and magically make whatever’s in your pocket worth less. This is corruption at the molecular level of the economy, Space Age stealing – and it’s only just coming into view.

This story is from the May 9th, 2013 issue of Rolling Stone.

http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425

This is quite funny. It’s not a conspiracy. It’s emergence. A bunch of people who think the same way, all doing the same thing and providing an environment where there is no censure of this behaviour.

It’s trivial I know, but he misses the point about the trader’s comment about day old sushi rolls…it was a joke…. and then goes on to take everything else as evidence of a conspiracy.

What’s going on is a natural progression. Collapse of a civilisation as it starts devouring itself. The reason things were done in the first place is long forgotten and the system is gamed by the players, serving nothing but themselves to the detriment of all. Governments believe themselves responsible for everything but do not have the capability of managing everything. By taking away responsibility from the individual, they weaken society. For it to work, society requires some investment of themselves by the individuals who comprise it, and therefore there must be a good reason for individuals to invest something of themselves.

With the government disempowering and trampling on individual liberties, those reasons evaporate.

The result is what we see.

Written by anubis

May 1st, 2013 at 5:44 pm

Treason

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This is a letter written by a barrister regarding the refusal of the UK police to investigate crimes of Treason committed by various UK politicians in relation to cession of sovereignty to the EU.

The people of the UK own the right to govern themselves inalienably, indissolubly and in perpetuity and exercise that right through vesting in Parliament the right to bind us with its statutes and acts which are made in accordance with the law of the land. By purportedly entering into Treaties with the EU, the terms of which make EU law binding in the UK, the various politicians who have signed these treaties have committed Treason. Treason is so serious that not reporting Treason is itself a crime called Misprision of Treason.

Here is the letter.

Dear Sir,
We refer to the crime related incident numbers listed above. These concern allegations of treason in respect of:
(1) The Treaty of Maastricht (John Major, Douglas Hurd & Francis Maude); this treaty transferred sovereignty to a foreign power and the allegation is that it constitutes high treason;
(2) House of Lords reform (Tony Blair); this restricted the ability of the hereditary peers to play their proper part in Government and the allegation is that it constitutes the major crime of sedition, which at this level constitutes high treason;
(3) Closure of the Lords (David Cameron and Nick Clegg); this attempted to subvert the makeup of Parliament and the allegation is that it constitutes major crime of sedition, which at this level is high treason. We understand that you are refusing to investigate the allegations on the basis of comments by Lord Denning in R v Police Commissioner of the Metropolis ex parte Blackburn [1968] 1 AER 763. We have now had an opportunity to examine this case and our comments are as follows:

(A) The case concerns enforcement of the law in relation to gaming. The question was whether an order of mandamus would lie to the Commissioner of Police of the Metropolis to enforce that law. However, before the Court made a decision on the matter the Commissioner gave an undertaking to the Court that a confidential instruction not to investigate the matter would be revoked. Thus, the applicant achieved the substance of the relief that he sought. In ‘those circumstances, no order of mandamus was granted and so the comments of the Court are strictly obiter dicta rather than ratio. Thus, the case should be taken as general guidance to the Commissioner. Giving guidance is the procedure the Courts often use with the police — see R v Devon and Cornwall Chief Constable ex parte Central Generating Board [1981] 3 WLR 967. The task is therefore to discern the guidance that the Court would give to the Commissioner in these cases. In ascertaining that guidance, we emphasise that the Blackburn case must be read as a whole.

(B) As regards Lord Denning‘s comments, he makes a distinction between policy decisions where the law will not interfere and those where it will. He says that it is for the Commissioner of Police or the chief constable as the case may be, to decide in any particular case whether enquiries should be pursued, or whether an arrest should be made, or a prosecution brought lt must be for him to decide on the disposition of his force and the concentration of his resources on any particular crime or area. He then says that the Commissioner can make policy decisions and give effect to them, as, for instance was often done when prosecutions were not brought for attempted suicide. He goes on to say that there are some policy decisions where the courts can interfere. Suppose a Chief Constable were to issue a directive to his men that no person should be prosecuted for stealing any goods less than £100 in value. He says he should have thought that the court could countermand it. Thus, the distinction is between the individual case and a more general policy. Given the number of allegations of treason that have been made and the response we have received, it appears to us that the Commissioner has adopted a policy of not investigating allegations of treason. We submit that such a policy would be countermanded by the court. Thus, the Commissioner is failing in his duty to enforce the constitutional law of England.

(C) There were two other judgments of the court We submit that these form the majority of the Court Salmon LJ says (at 771):
“In my judgment the police owe the public a clear legal duty to enforce the law a duty which l have no doubt they recognise and which generally they perform most conscientiously and efficiently. In the extremely unlikely event, however, of the police failing or refusing to carry out their duty, the court would not be powerless to intervene. For example if, as is quite unthinkable, the chief officer in any district were to issue a instruction that as a matter of policy the police would take no steps to prosecute any house-breaker, l have little doubt but that any householder in that district would be able to obtain an order of mandamus for the instruction to be withdrawn. Of course, the police have a wide discretion whether or not they will prosecute in any particular case. In my judgment, however, the action which l have postulated would be a clear breach of duty. It would be so improper that it could not amount to an exercise of discretion. Counsel for the Commissioner has argued that the discretion is absolute and can in no circumstances be challenged in the courts. He instances the policy decision not to prosecute, save in exceptional circumstances, young teenage boys who have had sexual intercourse with girts just under the age of sixteen: but this, in my view, is an entirely different and perfectly proper exercise of discretion. The object of the Criminal Law Amendment Act, 1885, which made it a criminal offence to have sexual intercourse with girls under sixteen, was passed in order to protect young girls against seduction. Unfortunately, in many of the cases today in which teenage boys are concerned, it is they rather than the girls who are in need of protection. These are not the sort of cases which the legislature had in mind when the Criminal Law Ammendment Act, 1885, was passed. Moreover, experience has shown that if young boys are prosecuted in such circumstances, the courts usually take the humane and sensible course of imposing no penalty. The object of the statute which made housebreaking a crime was quite simply to prevent housebreaking in the interests of society. Similarly, the object of s 32 to s 40 of the Betting, Gaming and Lotteries Act 1963,
and the corresponding provisions of the Betting and Gaming Act, 1960, which the Act of 1963 replaced, was quite simply to protect society against the evils which would necessarily follow were it possible to build up large fortunes by the exploitation of gaming. The Acts of 1960 and 1963 were designed to prevent such exploitation and would have been entirety effective to do so had they been enforced. Regrettably they have not been property enforced. As a result, and entirely contrary to the intention or contemplation of Parliament, an immense gaming industry, particularly in London, has been allowed to grow up during the past seven years. “ The English constitution is a vital matter to every citizen. Our freedoms depend upon it. Its framers meant it to be properly enforced: that is why it is protected by the strict laws of treason and sedition etc. Otherwise, the most flagrant violations would go entirely unpunished and the constitution would quickly become a dead letter. The change to the composition of the Lords, the attempt to close the Lords down and the signing of the Treaty of Maastricht are all flagrant breaches of the constitution and need to be investigated forthwith. This is not a matter where the Commissioner can say that he is exercising his discretion reasonably e.g. in not prosecuting offenders who for some special reason were not to blameworthy in the way contemplated by the Act creating the offence (see H W R Wade on Administrative Law 5ed at page 360). Nor is the matter marginal to the statute. On the contrary, these are exactly the type of situation where the framers of the treason laws would have expected action to be taken. To reiterate, changes to the composition of the legislature, or its closure and domination by a foreign power are not matters which are marginal or un-blameworthy. Put another way, it may be fairly said that the discretion of the Commissioner over prosecution and enforcement of the statutory criminal law must be so exercised as to give effect to the true intention of Parliament appearing in and from the circumstances of the relevant statute, in this case the Treason Act 1351. We submit that this Act envisages that these sort of offences will be properly investigated and, if appropriate, timely prosecutions brought.

(D) The third Judge, Edmund Davies LJ said:
“In this context counsel for the Commissioner has addressed to the court an elaborate and learned argument in support of the bald and startling proposition that the law enforcement officers of this country owe no duty to the public to enforce the law. Carried to its logical limit, such a submission would mean that, however brazen the failure of the police to enforce the law, the pubic be wholly without a remedy and would simply have to await some practical expression of the court’s displeasure. In particular, it would follow that the Commissioner would be under no duty to prosecute anyone for breaches of the Gaming Acts, no matter now flagrantly and persistently they were defined. Can that be right? Is our much-vaunted legal system in truth so anaemic that, in the last resort, R would be powerless against those who, having been appointed to enforce it, merely cocked a snook at R? The very idea is as repugnant as it is startling, and l consider it regrettable that it was ever advanced. How ill it affords with the seventeenth century assertion of ‘Thomas Fuller
that, “Be you never so high, the law is above you” The applicant is right in his assertion that its effect would be to place the police above the law. l should indeed regret to have to assent to the proposition thus advanced on behalf of the Commissioner, and, for the reasons already given by my lords, l do not regard it as well founded. On the contrary, l agree with them in holding that the law enforcement officers of this country certainly owe a legal duty to the public to perform those functions which are the raison d‘etre of their existence.”

The view that the police have taken in respect of these allegations of treason seems to us to fall directly within what Edmund Davies LJ says. To adopt the policy that the police apparently have is to put them above the law. The police owe the public a legal duty to perform their functions. This is particularly the case where the issue relates to the constitutional law of England. The framers of the laws protecting that constitution cannot have imagined that those charged with its enforcement would simply adopt a policy of not enforcing those laws. That would be, in the words of Edmund Davies LJ, “as repugnant as
it is startling“. We also wish to point out to the Commissioner that treason is not an ordinary crime. There is a duty to report it to the police and failure to do so is itself an offence, called misprision of treason. What is the point of these special provisions if the police can simply say they are not going to investigate the allegations? Surely there is none. So treason is a special case, especially at this level. This is a crucial additional factor which the courts would have to take into account when considering the general guidance to be given to the Commissioner. lt weighs in favour of action being taken. in those circumstances, and in conclusion, we strongly submit that the general guidance the Court would give to the police would be as follows. The views of the majority of the Court in Blackburn show that the Commissioner cannot simply say that he will not enforce the law, particularly not a law as important as treason, which is protected by special provisions as outlined above. Very simply, there is a law against treason and it must be enforced. This is not a case where the Commissioner would have discretion because the matter was marginal or un-blameworthy. Rather the matter is central to our constitutional law and of vital importance to every subject of the Crown. Treason touches the dignity and titles of the Monarch. These are not matters of small moment. The framers of the statute of 1351
cannot have imagined that no action would be taken if the law were to be violated. We would respectfully remind you that the law is above even the highest in the land and it must be applied to them with the same rigour as it is to an ordinary citizen. The Courts have reiterated this point Even if Lord Denning’s views are different or to be preferred, we submit that the Commissioner has adopted a policy not to enforce the treason laws given the number of allegations that have been made. This is not in any way a tenable position for him to hold.

Accordingly, we look forward to hearing from you that all these allegations of treason will be investigated as a matter of urgency as befits matters of this importance.

Of course it’s also true that while it is obvious that these politicians have committed High Treason, the majority of the legal profession, House of Lords and Commons are all also in favour of this treason having been committed, with the result that there is no possibility that any process directed through the current legal system will deliver a remedy.

Written by anubis

January 12th, 2013 at 1:48 pm