How Crazy Is Wall Street

The New York Times published an article on May 14, 2012 concerning the question of whether the rich, from a moral standpoint, are good or bad. The story reported that“A recent study found that 10 percent of people who work on Wall Street are “clinical psychopaths” and that they exhibit an “unparalleled capacity for lying, fabrication, and manipulation.” The vivid term “clinical psychopath” brings to mind the berserk buzz-saw wielding investment banker played by Christian Bale in the film “American Psycho.” Since some 3.9 million people work in the financial services industry, a clinically-diagnosed horde of lunatics numbering almost 400,000 people would certainly be a matter of public concern, though it might only confirm some journalist’s view of American capitalism.


It is fair to ask what is the provenance of this incredible”study.” The New York Times cites its source as a March 12, 2011 story in THIS WEEK, which attributes the psychopath data to an estimate made by free-lance writer Sherree DeCovny in CFA Magazine, in an article entitled “The Financial Psychopath Next Door.” She wrote that “studies conducted by Canadian forensic psychologist Robert Hare indicate that about 1 percent of the general population can be categorized as psychopathic, but the prevalence rate in the financial services industry is 10 percent.” The problem here is that Hare never conducted a clinical study of the financial service industry, and never did a research that 10 percent of its members were psychopaths. John Grohol, the editor of World of Psychology, after the publication of DeCovny’s article, asked Hare about the putative study. Hare told him, “I don’t know who threw out the 10% but it certainly did not come from me or my colleagues.” The closest he came to such a claim was in a research paper he co-authored that analyzed the responses submitted by 203 corporate professionals from seven companies, none of which were on Wall Street. Nor were these 203 people randomly selected . He found that the answers of only eight people– approximately 4 percent of the sample– indicated psychopathic tendencies on a scale he had devised. Even though this was not a clinical study, the responses of these eight people, who might have not even worked in financial services, were transformed via the blogospshere into a supposedly scientific finding noted in one of our most respected newspapers that one-tenth of those working on Wall Street are clinical psychopaths. As Ryan Holiday, author of “Trust Me, I'm Lying: Confessions of a Media Manipulator,” explained to me, "Headline-grabbing trend

manufacturing such as this now dominates the pseudo-news cycle on the Web." Welcome to the Internet, which is not known for its source-checking. Unfortunately It is then only a short leap to the so-called newspaper of record, which is happy to serve up to the public this non-existing study, which like much else that demonizes financiers as a scientific finding. As a result, we now have mad men of Wall Street running amok in the public imagination.
[This is now included in my ebook "Myths of The Media" http://amzn.to/KifIfM

The DSK Affair: One Year Later

When Dominique Strauss-Kahn stepped out of the shower in his $3,000 a night suite at the Sofitel Hotel in New York one year ago May 14, he was fully on track to become the next President of France. As head of the International Monetary Fund he was now on his way meet German Chancellor Angela Merkel with a secret plan to avert the Greek default. He was nearly 20 points ahead of his rival President Nicolas Sarkozy in the public opinion polls. He had planned to announce his candidacy on June 15th, he told me when I interviewed him last month. He was confident, perhaps overconfident, he could not be stopped, expecting to be nominated by his Socialist Party, and then defeat Sarkozy.

These well-laid plans, as the whole world knows now, went astray moments after he stepped out of the bathroom naked and encountered a statuesque maid. The liaison that followed in the next seven minutes is currently the subject of a civil suite filed by that maid, Nafissatou Diallo, who claims he forced her to twice have oral sex; DSK claims that the sex was offered and consensual.

Four hours later he was arrested at JFK airport(after calling the Sofitel and reporting his location so it could return a missing cell phone.) In their rush to judgment, and after receiving information from an unidentified official in Paris, the prosecutors moved to deny DSK bail before they had gathered critical evidence, including key swipe and cell phone records. As a result, he was paraded before the cameras in a humiliating “perp walk,” imprisoned in the Rikers Island jail for four days, placed on suicide watch, and then put under house arrest for more than a month. By this time, his presidential ambitions had been effectively destroyed.

Only one month after this spectacle, in late June, after the prosecutors got the key swipe records , did it become clear to them that Diallo, the only witness against DSK, had given false testimony under oath to the Grand Jury about the case itself. So the Grand Jury had indicted him on testimony from a single witness that was untrue. The prosecutors found her “credibility cannot stand the most basic evaluation” and that “the nature and number of [Diallo’s] falsehoods leave us unable to credit her version of events beyond a reasonable doubt.” They further concluded that the medical evidence not only did not “prove or corroborate that their encounter was forcible or non-consensual,” but it fails to corroborate certain aspects of [Diallo’s] account.” In an almost unprecedented move in a high profile case, the district attorney dropped all the charges.

When, I met with DSK in Paris this April, he could not easily accept that the destruction of his political career was merely the result of false testimony. By now he had considerable reason to believe that he had been under surveillance by his political opponents. This suspicion is consistent with the conclusion of investigative journalists Didier Hassoux, Christophe Labbé, and Olivia Recasens, who interviewed member of the French intelligence services DCRI for their 2012 book, The President’s Spy. They reports that the DCRI not only had made DSK a target but also set up a “special group” that liased directly with Sarkozy’s Élysée Palace. If so, DSK was likely being watched on his US trip that May. It would then be possible for these operatives, and their superiors in Paris to use whatever happened at the Sofitel to ruin his presidential ambitions.

There certainly were curious happening in that hotel suite, including reported interceptions of his emails, a missing Blackberry phone, and at least one unidentified person using someone else’s key cart to enter his room just prior to his arrival. The suite had also been used for sexual liaisons before he checked in. The police lab analysis of the DNA evidence found precisely where Diallo said the attack occurred, revealing other stains there with DNA from at least seven other “unknown individuals. One stain visible in the carpeting contained a mixture of saliva and semen from three different people. Since no complaint was filed, these were presumable consensual liaisons.

Even if all the mysteries of the presidential suite have not been solved, it is now abundantly clear that if the district attorney’s office had gathered more evidence before they arrested and imprisoned DSK, the outcome of the French election might well have  had a different victor. But DSK’s enemy Sarkozy has not emerged triumph. The ending here is more like a Shakespearean revenge tragedy in which, as the plot unfolds, everyone involved is ruined.

What I (Still) Don't Know About DSK

I have spent the last 10 months investigating the incident  involving Dominique Strauss-Kahn at the Sofitel Hotel in New York-- an investigation which has resulted in my book Three Days In May: Sex, Surveillance, and DSK.   I have had considerable success obtaining CCTV surveillance tapes from around the hotel, the key swipe records for both the Presidential suite (2806) in which the incident took place and the room across the hall (2820), cell phone records, and police reports. But despite all my digging, I have been unable to answer 10 key questions about the downfall of DSK– nor was DSK able to shed light on them during my interview with him this April


1.  Who put DSK under surveillance during his US trip in May 2011, and why? I am convinced that DSK was under surveillance both on his trip to Washington DC and New York. But I do not know who ordered the surveillance.. He had reportedly become the target of the DCRI, France’s domestic intelligence service that March. That agency, according to my sources in US intelligence, certainly had the capability to track DSK in the US, but it also may have been handled by a free-lancer.

2. Why were not the hotel‘s key card records for room 2820 not provided to the New York prosecutors immediately? The records– which can be found here are the best evidence of what happened on the 28th floor, which is not covered by CCTV cameras. If they had been handed over immediately, the flaws in the maid, Nafissatou Diallo’s story would have become instantly apparent to the prosecutors. They would have seen then, as they later reported in their motion for dismissal, her “credibility could not withstand the most basic evaluation.” But who was responsible for this long delay?

3. Why did the maid enter DSK's suite twice without her cleaning equipment? The key card records indicate that the maid entered, left, and re-entered the president suite at 12:06 pm just before the sexual encounter took place. The maid told prosecutors her gear was inside room 2820, the room across the hall. DSK told me he was certain that she had no cleaning equipment.  The hotel managers I interviewed all agreed a maid cannot clean a room without her equipment. Her first entry might have been to see if room was available for cleaning, but, why would she then leave and -re-enter without the gear she needed to clean the suite?

4. Who was in room 2820, across the hall from DSK's presidential suite? The Sofitel has
consistently refused to identify the mystery guest in room 2820, even though he could be an
important witness to the events on 14 May 2011. Hotel records show the unidentified man in room 2820 checked out at 11:37 am that morning, but I have been unable to get the CCTV footage showing the man checking out at 11:37 am.

5. Why did two hotel employees carry out a “victory dance”? The pair, who included the head engineer and a hotel security guard, displayed joy when the police were finally called. As CCTV video in loading dock shows, both men spoke for a moment, then high-fived each other, clapping their hands and briefly dancing. Other hotel managers I interviewed said calling the police would be viewed as a disaster in terms of the hotel's image. So what were these men celebrating?

6. Was DSK's IMF BlackBerry bugged? This was the device that he used it to send and receive both personal and work texts and emails. According to DSK, he received an alarming text message on this device on the morning of the encounter with the maid. A friend from Paris warned him that at least one private email he had recently sent from the IMF BlackBerry to his wife Anne Sinclair had been read by his political foes. He decided then to have the BlackBerry examined by an expert to see if it was bugged.

7. Why did that same IMF BlackBerry go missing? Later that day, after the sexual encounter with
Diallo and after his subsequent lunch with his daughter, as he was in a taxi headed for JFK airport, DSK realized the IMF BlackBerry was missing. What DSK did not know was that his phone had remained at the Sofitel after he left the hotel. BlackBerry records show that the device's GPS signal was still emanating from the Sofitel 23 minutes after DSK left, at 12.51pm. But at that moment it abruptly stopped sending out a signal, indicating either that the battery had run out or that the GPS had been intentionally disabled. As the phone was not found in the police search that afternoon, someone took it. But who–and why?


8. What restrained the hotel from calling 911 immediately after the incident? There was a gap of
about one hour before Sofitel security guards contacted police. The videos of the security area show repeated re-enactments.  Had the maid been unwilling up until that time to go to the police, as a lawyer for the hotel group suggested. If so, who or what had persuaded Diallo to go to the authorities?


9. Who intervened from Paris with the New York district attorney's office on 15 May? The prosecutor Cyrus Vance was reportedly contacted by one or more French officials who provided information that appears to have been significant in persuading New York courts to refuse him bail and keep him in prison, further damaging his public reputation. Who were these officials, and why did they intervene in a way that hastened DSK's downfall.

10. Who else had sexual liaisons in that same suite?   No one doubts DSK had a sexual liaison with the maid. DNA testing showed his semen mixed with her saliva. But they were not the only ones having them. When the police lab examined the carpet in the section of corridor near the bathroom, precisely where she said she had spat, it found semen stains from other individuals, including one stain containing a mixture of one person’s saliva mixed with the semen from three other people. In all, the identified semen or saliva mixed with semen from seven unknown individuals, all the engagements taking place in this same small area. (Other areas in the suite were not examined) Since this evidence would not be washed away by multiple room cleanings, the conclusion of forensic experts was that they had occurred only a short time before the suite was rented to DSK. But the key card records I obtained for the suite, unlike those of 2820, do not extend before the day DSK arrived. I was therefore unable to ascertain how, when, or why these 7 unknown individuals got access to the suite.