In recent years, Walmart has taken some steps to try to turn around its reputation as the company that everyone loves to hate through its sustainability initiatives, low-cost banking services and increased community donations.

But the mega-retailer still has a long way to go, judging by its repeat violations of workplace safety and health standards at some stores.

This week, it was fined $365,000 by the Occupational and Safety Health Administration for 24 alleged violations at a single store in Rochester, New York. The penalty stems from multiple inspections initiated after one complaint.

Among the alleged violations were those for obstructed exits, lack of eye and face protection for workers, lack of information and training on hazardous chemicals and an unguarded grinder. OSHA's area director, Arthur Dube, said in a statement that the size of the fines was due to the fact that the conditions are similar to those at nine other Walmart locations in New York and eight other states. The company was cited for similar violations between 2008 and 2010 at stores around the country, from Jonesboro, Arkansas, to Fargo, North Dakota, reports the Occupational Safety and Health Reporter.

"This situation is unacceptable," said Dube. "A corporate employer must take effective and proactive steps to assess, correct and prevent the recurrence of hazards at all of its locations."

Walmart released a statement on Tuesday, saying: "The safety of our customers and our associates is a top priority for us and we've put in place policies and training in our stores with that in mind. We're taking these claims seriously and looking into them to determine if any mistakes were made and, if so, what we can do to correct them."

The company is also taking some heat on another front this week. After the electrocution death of a Brazilian immigrant subcontractor doing demolition work at a store in Boston, Romulo de Oliveira Santos' family is trying to hold Walmart accountable for what they call unsafe practices at its construction sites. Walmart is contesting the claims.

Does Goldman's Subprime Trade Violate Volcker?

A test of the Volcker Rule's ability to stop banks from making trades with their own money may be the recent purchase of a $6.2 billion portfolio of subprime mortgage securities by Goldman Sachs (who else?). Back in 2010 the firm infamously paid $550 million to settle Securities and Exchange Commission charges that it bet against virtually worthless mortgage-backed securities that it was selling to investors.

In this latest deal, Goldman bought the packaged securities from the Federal Reserve Bank of New York, which is unloading assets it gained through the bailout of AIG. Goldman "held the bulk of the portfolio overnight before moving to sell the bonds en masse," according to Reuters. "While there was strong demand from Goldman clients, by doing so the Wall Street bank took the risk of events in Europe roiling markets and the value of those assets falling in a short period of time."

A tough interpretation of the Volcker Rule may ban such trades, Stanford University finance professor Darrell Duffie told Reuters. Goldman insists that the trade was always intended to benefit its clients. And financial writer Cate Long tweeted on Thursday night:

Quick Hits

* "Restaurant A" -- How Bill Marler's Food Safety News tied the salmonella outbreak to Taco Bell.

* A brass foundry in southern Wisconsin was slapped by OSHA with 10 alleged safety violations for failing to protect workers from exposure to metal dust, reports the Chicago Tribune.

* Next week marks the deadline to submit comments on 13 different proposed Dodd-Frank rules, from Commodity Futures Trading Commission regulations on retail commodity transactions to the SEC prohibition against conflicts of interest in some securitizations.

* Dallas Maverick owner Mark Cuban is due to be deposed today in the SEC's case against him for insider trading.

If you work on Wall Street and you observe some illegal shenanigans, make sure you call up the right Financial Fraud Enforcement Task Force.

Over two years ago, President Obama announced to great fanfare the Justice Department's formation of a Financial Fraud Enforcement Task Force, which was tasked with investigating and prosecuting significant financial crimes.

Now, some of their targets in the financial industry have their own task force, with the exact same title, to help them defend against accusations of wrongdoing. One of Washington D.C.'s most powerful law firms, K&L Gates -- with a client list that includes Goldman Sachs, Bank of America, UBS Financial Services and Man Investments -- just announced its own Financial Fraud Enforcement Task Force, reports FinancialFraudLaw.com. The firm says the task force was set up in response to the Justice Department's launch two weeks ago of a special federal-state initiative led by New York Attorney General Eric Schneiderman to crack down on residential mortgage-backed securities fraud:

Drawing on lawyers from the firm’s securities enforcement, white collar, litigation, financial services, internal investigation, and insurance coverage practice areas, as well as K&L Gates’ deep experience in the substantive mortgage financing issues on which the RMBS Working Group is focused, the Financial Fraud Enforcement Task Force formulates coordinated defense strategies to address allegations of RMBS fraud, mortgage fraud, securities fraud, and other types of financial fraud or discrimination alleged by the government.

The firm boasts that its task force of more than 50 lawyers from its offices around the world includes a former United State Attorney General (Dick Thornburgh), more than a dozen former staffers from the SEC, several former DOJ prosecutors and numerous former securities regulators.

To get a leg up on beating those pesky prosecutors in court, the law firm's all-star team might want to read a new report that gets to the bottom of why there have been so few criminal prosecutions of high-ranking corporate executives in the wake of the financial crisis. The authors of "Observations on the Dearth of Criminal Prosecutions After the Financial Meltdown," published in the Financial Fraud Law Report, cite several reasons: concern for the fragility of the financial system, the "unintended effects" of prosecutions, and the difficulty of proving complex frauds and explaining them to a jury.

Authors James M. Keneally and Serena B. David, who work at a New York law firm, use the case U.S. v. Ferguson as a cautionary tale for prosecutors. In that case, five Wall Street executives from AIG and General Re were charged and convicted of securities fraud, among other charges, over an allegedly fraudulent reinsurance transaction in an attempt to boost AIG's stock price. But their convictions were tossed by a federal appeals court last August due to two "less than glaring errors," write the authors.

Where Are All The Watchdogs?

The State Department has lacked an inspector general for 1,485 days and the Interior Department has been without an inspector general for 1,081 days, according to the Project on Government Oversight's essential new site, "Where Are All The Watchdogs?" The site will track how long such vacancies have existed at government agencies.

Gold Mines Emitting Toxic Mercury

There's more than just gold in them hills in Nevada, judging by the numbers on mercury emissions compiled by California Watch.

The Barrick Goldstrike Mines in Elko and Newmont Mining's Twin Creeks Mine in Golconda both emitted about 1.5 million pounds of mercury, a potent neurotoxin that is considered harmful to pregnant women and small children. Those two mines dominated the list of the country's top mercury-emitting facilities, according to Environmental Protection Agency data.

Quick Hits

• House Republicans and a few Democrats have come together in a rare show of unity to push legislation that "would make it more difficult for consumer advocates or other groups to obtain sensitive information that banks share with the new Consumer Financial Protection Bureau," Reuters reports.

• The Federal Trade Commission reached a settlement with robocallers who deceived more than 13,000 customers by claiming to reduce credit card interest rates.

• Revolving door chronicles: former Commodity Futures Trading Commission commissioner Michael Dunn is going to work as a senior policy adviser at lobbying powerhouse Patton Boggs, where he'll help clients "navigate complex regulatory processes and agencies."

A former Iraq-based General Electric executive claims he was fired after raising concerns that the company was violating federal anti-bribery laws.

Khaled Asadi says he objected to GE's hiring of a woman close to a senior Iraqi official in the summer of 2010 in order to "curry favor" with the Iraqi electricity ministry while bidding on $250 million contract. The move "could be damaging to GE's reputation and potentially violate the Foreign Corrupt Practice Act," according to a whistleblower lawsuit filed on Friday in federal court in Houston.

Soon after raising the issue with his supervisor and the GE ombudsperson, Asadi, who now lives in Houston and retains citizenship in both Iraq and the U.S., claims he was pressured to step down from a position he has held since 2006 and given an "extremely negative and troubling performance review," according to the lawsuit. He was eventually fired on June 24, 2011. Though Asadi signed an employment agreement requiring him to take any dispute to binding arbitration, he sued GE in court by citing the anti-whistleblower retaliation provision of the Dodd-Frank Act.

A spokesman for GE vigorously denied the accusation, stating that “Mr. Asadi's termination had absolutely nothing to do with any allegations he is making. Regarding our contracts in Iraq, GE followed all requirements and his allegations are false.”

The company was recently awarded contracts by the electricity ministry in Iraq for equipment needed to produce giant power plants, though it is unclear if they are related to the contract described by Asadi.

In 2010, GE paid $23.4 million to settle charges that it violated the Foreign Corrupt Practices Act by planning to pay kickbacks to Iraqi government agencies in order to win contracts to supply medical equipment and water purification equipment.

"Bribes and kickbacks are bad business, period," said Robert Khuzami, the Securities and Exchange Commission's enforcement chief at the time. "This case affirms that law enforcement is active across the globe -- offshore does not mean off-limits."

Watchdog To Slim Down?

The government's chief watchdog is in danger of losing its bite, warned the Government Accountability Office's Comptroller General Gene Dodaro in Congressional testimony on Tuesday.

Staff levels at GAO, which has uncovered corruption and billions of dollars in waste at government agencies, will dip below 3,000 for the first time in its 75-year history, said Dodaro. "We have carefully reviewed every aspect of our operations from a zero base to identify opportunities to reduce costs without sacrificing the quality of our work and preserving our ability to assist the Congress in addressing the most important priorities facing the nation," he said. "However, given that staff costs now represent about 81 percent of our budget and the deep reductions already taken in our infrastructure programs, reducing the size of our workforce could not be avoided."

Grain Company Contests $27,000 Fine Over Teens' Amputated Legs

How much is an amputated leg worth? Not that much, apparently, to an Oklahoma company accused of unsafe work conditions at its grain storage facility, where two 17-year-old workers each lost a leg after getting caught in a conveyor auger last August.

After the tragic incident led to amputations for both Bryce Gannon and Tyler Zander, the Occupational Safety and Health Administration slapped Zaloudek Grain with $21,500 in penalties, which the firm is contesting. That's the statutory maximum for serious violations, according to regional OSHA administrator John Hermanson. According to the Enid News & Eagle, the company did pay a $750 fine from the state Labor Department for failing to have worker's compensation insurance.

Quick Hits

• I dare you not to click on this headline: "Air Marshals Gone Wild! Tales Of Sexism, Suicide and Bigotry"

• In the wake of last spring's earthquakes and tsunami in Japan, the U.S. Nuclear Regulatory Commission was fraught with infighting and confusion over how to advise the Japanese, according to government emails uncovered by the Washington Post. In addition, engineering conglomerate Bechtel offered to provide equipment to pump sea water to cool the Fukushima reactors, but the $9.6 million price tag was a dozen times higher than its original estimate.

• Could President Obama's nomination of a Republican to the Federal Deposit Insurance Corporation help ease the way for other pending nominees at the FDIC and the Office of the Comptroller of the Currency?

• The Heritage Foundation takes aim at Obama's nominee for the Consumer Product Safety Commission, Marietta S. Robinson, because her appointment would "ensure a pro-regulatory majority through most of 2013, regardless of who is in the White House next year."

This story has been updated

A former bank president faces 15 years behind bars after being found criminally responsible for fraud that "contributed to the financial crisis." One of the world's most-admired banks is accused of forcing California state pension funds to cover its $95 million in losses on mortgage-backed securities. And a large bank's failed foray into complex investments went undetected for too long and doubled the Federal Deposit Insurance Corporation's holdings of such risky assets.

Though allegations of fraud on Wall Street inspire public outrage and grab the headlines due to big banks' outsize influence on the economy, the banks' mid-size competitors around the country played no small role in helping crash the economy. In just the last few days, three disturbing examples have surfaced.

On Friday, Jerry J. Williams pleaded guilty to conspiracy to commit bank fraud for his role in a scheme at Florida's Orion Bank to convince the Federal Reserve and FDIC that the bank was in better shape than it really was. Williams' goal was to make the bank's subprime loans look good by financing the sale of promissory notes secured by mortgages held by Orion. Two of his former vice presidents are already behind bars and were ordered by a federal judge to pay $33 million in restitution. "Williams is another senior bank executive being held criminally responsible for his actions in a fraud that contributed to the financial crisis," said Christy Romero, deputy special inspector general for the Troubled Asset Relief Program.

On February 1, Northern Trust Bank, which was ranked by Forbes in 2010 as the world's most admired company in the "Superregional Banks" category, was sued by the state of California. The Chicago-based firm is accused of making high-risk investments in mortgage-backed securities with money from the L.A. City Employees' Retirement System, losing $95 million on that bet and then demanding payment from the pension fund. According to the complaint, the firm's strategy was "heads we win, tails you lose," because Northern Trust took a share of the profits from its investments but stuck LACERS with the losses.

Northern Trust vigorously disputes the claims, saying in a statement that LACERS "did not lose money on its securities lending program."

And also on Monday, an audit by the Treasury Department's Inspector General revealed that Florida's Riverside National Bank engaged in questionable hiring practices, overly complex investments, and in the practice of writing off loans to board members who used company stock as collateral. "When Riverside began experiencing financial difficulty and the holding company's stock price fell, the bank charged off substantially all of the remaining loans to board members and their families, causing millions of dollars in losses to the bank," the report stated. The bank's assets should have been seized in 2007, when its portfolio of risky mortgage-backed securities was just starting to implode, rather than 2010, a delay that ended up costing taxpayers a lot more, said the inspector general. When the bank failed in 2010, its assets were sold to TD Bank.

Industry Forces Delay Of Study On Heath Effects Of Engine Fumes

Due to industry and congressional pressure, the publication of a 20-year-long government study that examines the link between diesel engine exhaust and the health of 12,000 miners has been delayed, reports iWatchNews.org.

Groups such as the Mining Awareness Resource Group, represented by D.C. lobbying powerhouse Patton Boggs, and the Truck & Engine Manufacturers Association have demanded that they get a chance to review what they call the "inaccurate and faulty" study before the Department of Health and Human Services makes it public. And a federal judge recently agreed, holding the agency in contempt for not producing all of the study materials to the groups. Public health experts say the pressure is unprecedented and is likely due to concern about the potential liability for lung cancer.

Train Safety Effort Derailed

Despite public pressure to improve rail safety in the wake of several tragic accidents, the railroad industry and some House Republicans have introduced a bill to delay the introduction of safety systems that override human error to prevent train crashes. The $13 billion cost of the implementation is often cited as a reason to postpone changes from 2015 to 2020, but major U.S. railroads can afford the changes, says Moody's Investor's Service. In a special report, the advisory firm said that rail companies "with $60 billion in annual revenue and several billion dollars in cash ... have the wherewithal" to pay for safety systems known as Positive Train Control, reports Fair Warning.

Quick Hits

* Mortgage company DocX faces forgery charges in Missouri foreclosures.

* Tennessee-based medical device company Smith & Nephew has agreed to pay more than $22 million to settle allegations that it violated anti-bribery statutes by making improper payments to Greek doctors and falsely recording the payments in its books and records

* In a speech to the British Bankes Association, the chief executive of the UK's main bank regulator, the Financial Services Authority, outlined Twin Peaks -- its dual supervision model for banks, building societies, insurers and major investment firms.

* The type of arcana that you find in the Federal Register -- the Coast Guard allowed the drawbridge over the Cheesequake Creek in New Jersey to stay closed for four days for scheduled repairs.

This article has been updated to include comment from Northern Trust.

The hubris of financial industry titans truly knows no bounds.

The chairman of the derivatives exchange that had oversight of bankrupt hedge fund MF Global raised some eyebrows on Thursday morning when he told analysts on a conference call that self-regulation worked "flawlessly" in that case.

When Matthew S. Heinz, an analyst with Stifel, Nicolaus & Co., asked CME Group chairman Terry Duffy and CEO Craig Steven Donohue a standard question about whether they had learned any lessons from the MF Global debacle, the executives got defensive.

Duffy claimed that CME's self-regulation "worked flawlessly," adding that "we did the right things and the answers for the Congress, where others we're seeing they don't know what happened to the money."

In the wake of MF Global's collapse, regulators have questioned whether CME Group could have done more to safeguard over $600 million in missing customer money. The Commodity Futures Trading Commission does not police futures commission merchants like MF Global and has to rely on self-regulatory organizations (SRO) like CME for oversight. CFTC chairman Gary Gensler is skeptical of the SRO system and has ordered a review of how futures brokerages are regulated, Reuters reported Wednesday.

Duffy has vigorously defended CME's role, saying that his examiners noticed problems with MF Global's segregated customer account days before the bankruptcy -- though it failed to report those concerns immediately to the CFTC.

The CME boss seems to have a fondness for certain adverbs -- in a video last year, Duffy said that the futures and options markets "function flawlessly" for their customers coping with the financial crisis.

Obviously not so flawlessly, since CME Group announced on Thursday that it would establish an insurance plan to cover up to $100 million in losses suffered by farmers and ranchers in the wake of another bankruptcy. But, as The New York Times' Ben Protess noted, the plan is "largely symbolic," since farmers and ranchers represent a tiny slice of the futures market and the fund will not cover losses related to MF Global's implosion.

Will the SEC Friend Facebook's IPO?

Regulators won't friend the Facebook IPO until they ensure that the social networking giant is making all of the proper disclosures of material information to potential investors. Securities and Exchange Commission staffers will be poring over the company's S-1 filing in the next few weeks and months to see how it makes its billions.

The three top areas of concern, Santa Clara University law professor Stephen Diamond tells Corporate Counsel, are "(1) whether or not the company's financial records are presented accurately; (2) the presentation of risk factors, such as the capital structure of the business; and (3) the description of the business."

Could Wall Street Criminals Face Longer Prison Sentences?

A little-noticed proposal based upon a requirement buried deep in the Dodd-Frank Act could lead to stiffer sentences for financial fraudsters, financialfraudlaw.com reports.

On Jan. 19, the U.S. Sentencing Commission proposed changes to current guidelines for financial fraud, insider trading and securities fraud that could lead to more time behind bars -- for "sophisticated insider trading," two points will be added to the "base offense level" (the starting point for establishing criminal sentences), and four points for top-level executives such as officers or directors who engage in such fraud.

Bill Kelleher, a lawyer at Robinson & Cole, told the site:

If adopted, these changes may dramatically increase sentences for the specific defendants to which they apply and continue the recent trend of stiff sentences in significant cases of securities fraud, insider trading and financial institution fraud. The changes will also likely give federal prosecutors more leverage to obtain guilty pleas and to foster cooperation from other defendants, which assistance is often key in making these types of charges stick due to the nature of the conduct.

Quick Hits

* Wall Street Wins Again: The Securities and Exchange Commission routinely lets the biggest firms on Wall Street avoid sanctions that apply in fraud cases, according to an analysis of agency documents by The New York Times.

* The former global head of Credit Suisse's CDO unit charged with fraud by federal prosecutors -- Kareem Serageldin -- has actually been cooperating with the feds and regulators in the UK for four years, his lawyer says.

* Former federal air marshal Robert MacLean was fired for blowing the whistle on the Transportation Security Administration's plan to cut costs by removing air marshals from flights. Even though many lawmakers praised him and the agency fixed the problem, the U.S. Merit Systems Protection Board sided with his retaliators. He has one last appeal -- to sign a petition urging members of Congress to defend MacLean, click here.

* Linguists hired by the Dallas field office of the Drug Enforcement Administration were not properly certified, according to the Justice Department's Inspector General.

It's been more than a year and a half since President Barack Obama signed the Dodd-Frank Act into law, promising that the new financial regulations "demand accountability and responsibility from everyone" and "provide certainty to everybody, from bankers to farmers to business owners to consumers."

So far, only one thing is certain -- not much has happened.

As of today, less than one-quarter of the 400 total rulemaking requirements have been implemented, only 40 percent have been proposed and regulators have missed almost three-quarters of their deadlines, according to a progress report by Davis Polk, a law firm that represents some clients impacted by the law.

The complexity of the rules and the intense lobbying of the financial industry have played a major role in the law's slow progress. In some crucial areas, such as the reform of banking regulations, derivatives and credit rating agencies, the majority of the deadlines for proposing and implementing new rules have been missed. And not a single rule related to executive compensation and corporate governance has been finalized so far.

The debate promises to heat up in the coming months -- both Republican front-runners Mitt Romney and Newt Gingrich have called for the repeal of Dodd-Frank -- which could further slow down implementation. The Securities and Exchange Commission recently published a timeline for proposed rules for the next six months, and they include some of the most contentious proposals governing asset-backed securities, municipal securities and investor protections.

The intensity of the industry pressure can be overwhelming -- petroleum marketing firms, airlines and lobbyists represented the majority of 13,000 comment letters sent to the Commodity Futures Trading Commission over a single proposed rule on position limits, the highest number of commodity futures and contracts that a trader can hold, the Sunlight Foundation reported last September.

For the second year in a row, the financial industry spent over $150 million on lobbying expenditures, with the focus shifting from Congress in 2010 to regulators in 2011.

In some cases, Wall Street is changing its own practices in anticipation of long-delayed regulations. Under the law, six agencies were mandated by early 2011 to adopt rules on incentive-based compensation, but the deadline has been repeatedly postponed. In recent weeks, financial leaders such as Morgan Stanley, Bank of America and Credit Suisse changed their policies to defer bonuses until next year.

Treasury Secretary Timothy Geithner vowed last week that the most important Dodd-Frank rules will be in place by the end of the year. "I know that people are concerned that they will be too tough," Geithner told the Charlotte Chamber of Commerce. "I don't think there is much risk of this. I think there is no evidence of that."

Despite Lawmakers' Rhetoric, Small Biz Supports Most Regulations

Despite the tsunami of conservative rhetoric denouncing "burdensome" government regulations, it turns out that most small business owners support them.

Almost 80 percent of small business owners see government rules as a crucial way to compete with big business, 86 percent view regulations as a necessary component of a modern economy, and more than three-fourths said that existing regulations should be enforced, according to a poll conducted by Lake Research. When it comes to specific regulations, 84 percent of small business owners support food safety standards (not sure who the 16 percent are that don't support such standards), and 67 percent support rules to cut back on financial speculating by Wall Street.

As The Hill notes, these poll results are consistent with previous surveys. Last September, McClatchy News Service interviewed small business owners, not one of whom complained about regulations and most of whom welcomed them.

Stringent Rules Can't Prevent Stupidity

Tough fines and other sanctions aren't enough to dissuade some brokers from being just plain stupid.

According to a Reuters review of disciplinary actions by the Financial Industry Regulatory Authority:
- An Ameriprise Financial broker was barred from the securities industry for borrowing $45,000 from an 102-year-old customer and subsequently ignoring FINRA's request to interview him about it.
- A broker failed to disclose a felony plea to a potential employer.
- A broker was busted for trying to cheat on a licensing exam by walking out of the room and peeking at a study guide he had hidden in his car.

Quick Hits

* One of the Pentagon's main health care contractors recently paid a $10 million fine to settle a Justice Department lawsuit over claims that TriWest Healthcare Alliance defrauded the government by failing to pass on savings to the military, reports USA Today.

* This huckster's last name should have tipped off unsuspecting payday loan seekers to his scheme. Michael Bruce Moneymaker, Daniel de la Cruz and their companies were ordered by the Federal Trade Commission on Wednesday to pay almost $10 million for secretly enrolling consumers in negative-option programs that cost initial $50 fees and recurring fees of up to $20.

* It wasn't quite a "dope on the table" moment, but U.S. Attorney General Eric Holder helped celebrate the 25th anniversary of the False Claims Act Tuesday. The law -- which recovers money from those who defraud government programs, Medicare and Medicaid, national security programs, disaster relief loans and agricultural subsidies -- has resulted in the recovery of more than $30 billion in judgments and settlements, reports the Project on Government Oversight.

* In its rush to meet deadlines to approve new drug applications, the Food and Drug Administration may end up overlooking safety problems, according to a study by researchers from Harvard, Stanford and Brown.

* In a new report that somehow neglects to mention orange-hued House Speaker John Boehner (R-Ohio) even once, House Democrats on the Energy and Commerce Committee accused the indoor tanning industry of misleading teenagers about the procedure's health effects. About 80 percent of the tanning salons reviewed by the committee's investigators claimed that indoor tanning actually would be beneficial to the health of a fair-skinned girl, with some even insisting that tanning would prevent cancer, treat depression and reduce weight.

* That Mexican-style food chain identified by the Centers for Disease Control as "Restaurant A" in its report on a 10-state outbreak of salmonella is Taco Bell, reports Food Safety News.

Federal prosecutors are expected to charge four former Credit Suisse brokers with criminal fraud for misleading investors by inflating the value of subprime mortgage derivatives to increase their own bonuses, reports the Wall Street Journal. In addition, the Securities and Exchange Commission is expected to file civil charges related to the case.

The charges are related to an incident in February 2008, when Credit Suisse suspended a group of traders for their role in a $2.85 billion overvaluation of asset-backed securities, which caused the bank to take a $1 billion hit in its first-quarter earnings that year. The banking giant itself reportedly won't be charged.

After years of criticism and public outrage over the lack of criminal prosecutions of Wall Street traders and executives whose risky trading helped cause the financial crisis, the Justice Department and the Securities and Exchange Commission seem to be finally taking action. Last week, it was reported that DOJ was probing possible fraud at WMC Mortgage Corp., the former subprime mortgage division of General Electric, and more such cases from DOJ and the Securities and Exchange Commission are reportedly due in the coming months.

The rogue traders suspended by Credit Suisse in 2008 were not named, but they reportedly included Kareem Serageldin, the global head of synthetic collateralised debt obligations (CDOs), and others working on his derivatives team at the bank's London office.

"Serageldin has been dismissed after an internal review, assisted by external lawyers, which examined thousands of emails and held face-to-face interrogations," reported The Guardian in March 2008.

Serageldin could not be located and it is not clear if he is involved in the pending case.

Private Equity Saviors Played Role In Housing Bubble

Private equity has become anathema to even many free-market-loving Republican primary voters, but can it help solve the housing crisis? The answer is crucial, considering that some of these would-be saviors helped crash the economy in the first place.

Saddled with 180,000 foreclosed homes, the Federal Housing Finance Agency last fall requested proposals to sell them and offered some of them as rental properties. Prominent private equity giants, including Cerberus Capital Management, Deutsche Bank AG, Fortress Investment Group, Carrington Holding, Starwood Capital Group, TCW Group and UBS AG, were quick to respond, reports Bloomberg News.

Other firms that are spending big to snap up single-family homes to manage as rentals are GTIS Partners, GI Partners and Oaktree Capital Management. Turning foreclosed properties into rental units makes sense, according to a study Federal Reserve chairman Ben Bernanke sent to Congress last month due to low demand for sales, high demand for rentals and banks' reluctance to offer mortgages.

But some of these potential saviors are led by executives whose firms helped cause the housing crash, lending an ironic twist to the heavily-touted plan. A subsidiary of Carrington Holding, which has partnered with Oaktree Capital Management to buy up to $450 million in vacant foreclosed homes and turn them into rental properties, settled in May a lawsuit filed by then-Ohio Attorney General Richard Cordray over its mortgage servicing practices. Carrington Mortgage Services, a major subprime servicer, was sued for "failing to provide homeowners with acceptable ways to avoid foreclosure," reported Reuters at the time.

"This lawsuit makes it clear that we have reached zero tolerance for this kind of behavior from loan servicers," Cordray said in a statement. "We've tried to work with them, but now we must take action." As part of its settlement last spring, Carrington committed to make good faith efforts to work with homeowners to modify loans instead of foreclosing on them.

And Fortress CEO Daniel Mudd recently took a leave of absence in the wake of a lawsuit filed by the Securities and Exchange Commission over accusations that he downplayed the amount of subprime loans when he ran Freddie Mac from 2005 to 2008. Mudd has stressed that the government and Freddie Mac investors were never misled about loans it held.

Quick Hits

* In case you missed the theatrics at Tuesday's Senate Banking Committee hearing into the oversight of the Consumer Financial Protection Bureau, starring new director Richard Cordray and Sens. Richard Shelby (R-Ala.) and Sherrod Brown (D-Ohio), here's the video.

* It's been a long time coming but the Occupational Safety and Health Administration is finally getting around to updating its permissible exposure limits - most of which date from 1971 - which set how long a person can be exposed to a substance without experiencing harmful effects.

* The Food and Drug Administration has forcefully rejected a lawyer's petition to overturn the agency's 2010 recall of 53-year-old pain medication Darvocet in the wake of a study finding potentially fatal heart risks in healthy people who took the drug. In its tough reply to Barbara L. Maw, a Utah-based attorney who has rallied pain sufferers to write the agency to protest the decision, the FDA dismissed her numerous claims and asserted that its decision was scientifically sound and responsible.

* Safety regulators in Wyoming issued 19 citations for an explosion and fire that killed three workers near an oil well last year, but they declined to release the names of the companies involved until the firms are able to review the charges. James Turner worked for Double D Welding and Fabrication, Llewellyn Dort and Gerardo Alatorre worked for Wild West Construction and the site was operated by Samson Resources.

* And in another case of veiling the (alleged) wrongdoers, the CDC is withholding the name of a Mexican-style restaurant chain linked to a salmonella Enteritidis outbreak that has sickened 68 people in 10 states since October. It's definitely not Chipotle.

The Securities and Exchange Commission investigates a Wall Street behemoth over claims that it assembled and sold a package of subprime mortgage-backed securities at the behest of hedge fund king John Paulson without telling other investors that Paulson planned to short it.

Sound familiar?

Almost two years ago, Goldman Sachs was in the SEC's cross hairs over such an allegedly fraudulent scenario and ended up settling charges for $550 million, but not without becoming the poster boy for Wall Street shenanigans that helped crash the economy. Now, it's Deutsche Bank that is being probed by the SEC, Der Spiegel reports, for allegedly letting Paulson help pick "junk" mortgage-backed securities that went into a collateralized debt obligation without telling other investors that the hedge funder was shorting the CDO, called START.

Deutsche Bank was the fourth-largest issuer of CDOs in the United States, but it has largely avoided the glare of a federal investigation while its competitors, including Goldman Sachs, Citigroup and JPMorgan, have all been probed by the SEC over how they marketed deals involving subprime mortgage-backed securities. The agency has come under criticism for that lapse, with particular focus on the fact that the SEC's enforcement chief, Robert Khuzami, previously worked as the general counsel at Deutsche Bank when it was packaging such CDOs.

The bank gained a certain infamy for its role in packaging START, as well as other CDOs, during hearings led by Sen. Carl Levin (D-Mich.) last year. It was revealed then that Deutsche banker Greg Lippman once advised a colleague to buy protection for the bank against START, emailing him: "Start is crap you should short because I bet we'll have to ... buyback cash ones next year."

Another email that came out during the hearing described Paulson's role in structuring the CDOs:

"The $1 billion START 2005-B trade was backed by a static pool of CDS [credit default swaps] on mezzanine RMBS [residential mortgage-backed securities] for Paulson Advisors ($4 bln risk arb hedge fund). Paulson retained the bottom 6% of the trade and we sold the rest of the capital structure. Paulson, who came to us with the strong desire to short the U.S. housing market, wrote CDS on underlying ABS (over 100 names) to DB [Deutsche Bank] and DB intermediated them into the deal."

Germany's biggest bank was also sued over the deal last October by Loreley Financing, which had purchased $440 million worth of CDOs from 2005 to 2007. Loreley claimed that Deutsche defrauded the plaintiffs by issuing CDOs that were "destined -- and indeed, designed -- to fail."

Duncan King, a spokesman for Deutsche Bank, declined to comment on the SEC probe. As to the Loreley lawsuit, King stated in an email:

"Along with other banks and financial institutions, Deutsche Bank is faced with lawsuits brought forward by retail and institutional clients who have lost money in the course of the financial crisis. We look into these claims carefully and, if they prove wrong, defend ourselves vigorously."

SEC spokesmen and Loreley Financing's lawyer declined to comment to The Huffington Post.

The Zombie Insider-Trading Case

In another sign that the SEC is sharpening its claws, the agency isn't letting death get in the way of a case. On Friday, a New York federal judge granted the SEC the right to pursue the estate of Charles Wyly Jr., the Dallas billionaire who was facing insider-trading charges when he died in a car crash in August, Thomson Reuters correspondent Alison Frankel reports. Frankel adds that U.S. District Judge Shira Scheindlin, in her ruling, found "that it doesn't make sense to permit Wyly's estate to hold onto his allegedly ill-gotten gains simply because he's no longer alive."

FDA Monitored Email Of Medical-Device Whistleblowers

The Washington Post revealed Monday morning that the Food and Drug Administration monitored the personal email of its own scientists and doctors "after they warned Congress that the agency was approving medical devices that they believed posed unacceptable risks to patients, government documents show." The staffers have filed suit against the FDA in federal court in Washington, arguing that they were harassed or dismissed based on information uncovered through the snooping.

CFPB Outlines Ambitious Agenda For Next 6 Months

In its first semiannual report to Congress, the Consumer Financial Protection Bureau outlined an ambitious agenda, according to American Banker. Over the next six months, the CFPB plans to issue final rules requiring a lender to verify a borrower's ability to repay a mortgage loan; propose a rule streamlining disclosures required by the Truth In Lending Act and the Real Estate Settlement Procedures Act; propose rules regarding the mortgage market, including new servicing standards, loan originator compensation rules and restrictions on high-cost loans; and propose initial rules defining the scope of its nonbank program. The bureau has hired more than 750 staffers and spent about $123.3 million in fiscal year 2011, according to its report.

Food Industry To White House: Don't Make Us Pay For Safety

A coalition of food industry groups -- including the National Frozen Pizza Institute, American Frozen Food Institute and American Meat Institute -- wrote a letter to the White House Monday, urging the administration to stop using industry fees to fund food safety initiatives and to use congressional funding instead. "As consumers continue to cope with a period of prolonged economic turbulence and food makers struggle with record high commodity prices, the creation of new food taxes or regulatory fees would mean higher costs for food makers and lead to higher food prices for consumers," says the letter. "As such, we believe imposing new fees on food makers is the wrong option for funding food safety programs." Regulators and food safety advocates tend to prefer fees because they "guarantee a dedicated revenue stream for their activities," rather than depending on the fickle whims of lawmakers, reports The Hill.

Today's Must-Reads

In a giant conflict of interest, taxpayer-owned mortgage giant Freddie Mac has giant investment portfolios that will pay off if "homeowners stay trapped in expensive mortgages with interest rates well above current rates," report ProPublica's Jesse Eisinger and National Public Radio's Chris Arnold.

California health officials are investigating skin-lightening products sold in the Bay Area for possible mercury contamination, says California Watch.

Two Japanese suppliers of automotive electrical components -- Yazaki Corp. and DENSO Corp. -- agreed to plead guilty and to pay a total of $548 million in criminal fines for their involvement in multiple price-fixing and bid-rigging conspiracies in the sale of parts to automobile manufacturers in the United States. It's the second-largest criminal fine ever for an antitrust violation, announces the Justice Department.

It's been three long years since the housing bubble cratered the economy and not a single top mortgage executive sits behind bars. But sometimes the wheels of justice just turn extra slowly.

The FBI and the Department of Justice are probing possible fraud at WMC Mortgage Corp., the former subprime mortgage division of General Electric, reports the Center for Public Integrity's Michael Hudson.

Federal authorities are "asking whether WMC used falsified paperwork, overstated borrowers' income and other tactics to push through questionable loans," reports Hudson. The unit was owned by GE from 2004 to 2007, when it was shut down as the housing bubble burst, leading to numerous civil lawsuits. Last fall, WMC and EquiFirst Corp. were sued in a Minneapolis federal court by a bank trustee over a $550 million pool of subprime mortgage-backed securities.

Though low-level mortgage fraudsters have been prosecuted, most top lenders and executives have evaded punishment. Last month, Bank of America agreed to a $335 million settlement with the Department of Justice over claims that its Countrywide Financial mortgage lending unit discriminated against Hispanic and African-American borrowers by pushing them into high-risk subprime loans.

But the bank has avoided prosecution and Countrywide founder Angelo Mozilo, the poster boy of the subprime debacle, settled securities fraud and insider trading charges with the Securities and Exchange Commission in 2010 for $67.5 million -- a fraction of his estimated $600 million fortune.

In the case of WMC, former CEO Amy Brandt who helped lead its push into subprime mortgages, left in late 2006 to start up an indie rock label and to head up a private equity fund that invests in undervalued mortgage assets. Her short-lived successor as CEO, Laurent Broussard, now runs the retail cards unit at JPMorgan Chase.

A GE spokesman wrote in an email to HuffPost, "WMC is aware of multi-year investigations into participants across the subprime industry. WMC has been cooperating fully with such investigations. We have no reason to believe that WMC is currently a target of these investigations."

Spokesmen for the Justice Department and FBI declined comment.

FDA Risks Ire of Lawmakers With Missed Deadline

It's been a tough year for regulatory agencies, with Republican lawmakers complaining about "overregulation" and the massive federal deficit forcing steep budget cuts across the board.

So, it was curious to see the Food and Drug Administration risk even more pain by recently missing a crucial deadline that is sure to anger some members of Congress. The regulators have been arguing with medical device makers over the cost to speed up reviews of products such as hip implants and heart stents, which is paid for by industry -- with the FDA seeking $805 million and companies such as Johnson & Johnson preferring to pay $447 million. The agency missed a Jan. 15 deadline to submit a new agreement and probably won't have one by Feb. 15, when the House holds a hearing on the matter. If they miss the mark again, the FDA "will have the wrath of a bunch of exercised politicians on them who are running for re-election and want their pictures on TV that night," Ira Loss, senior health policy analyst at Washington Analysis, told Bloomberg News.

IRS Punishing Reformed Tax Evaders?

It's the IRS version of "no good deed goes unpunished."

The Internal Revenue Service has been promoting its voluntary disclosure program to help reduce the $385 billion owed by tax evaders who often hide assets overseas. But the program ends up hurting participants, potentially costing them more than if they continue to evade the IRS, National Taxpayer Advocate Nina Olson said in her annual report to Congress, reported Bloomberg.

High-Risk Chemical Plants Go Uninspected

The Department of Homeland Security's plans to inspect the 100 most high-risk chemical facilities in the country by the end of 2010 have been delayed due to the time needed to build a roster of inspectors, among other factors, according to a Congressional Research Service report. Only nine such Tier 1 facilities -- those deemed most at risk of a successful attack -- have been inspected as of last September and fewer than 50 have had their site security plans approved.

Citi, Morgan, RBC Hit For Muni Violations

Citigroup Global Markets, Morgan Stanley and RBC Capital Markets were among five firms fined a total of $220,000 for violations of municipal securities rules by the industry's self-regulatory body, the Financial Industry Regulatory Authority. The violations involved a failure to disclose material information -- such as a downgrade of a security by a ratings agency -- to customers and to report trades on a timely basis.

Today's must-reads

• Less than four years after a head-on train collision that caused 25 deaths prompted safety legislation, those rules are in danger of being watered down in the face of industry pressure. (FairWarning)

• Nevada politicians, including Attorney General Catherine Cortez Masto, accepted thousands of dollars worth of gifts -- including tickets to NASCAR races, clothing and travel accommodations -- from various organizations in 2011. (Las Vegas Review-Journal)

• Does the Environmental Protection Agency have the political will to “use its existing authority to re-shape the United States' dependence upon high-carbon power,” asks Center for Progressive Reform Member Scholar Alice Kaswan.

• Three former top executives of failed bank Washington Mutual will pay nearly40 million -- through their insurers and out of their own pocket -- as part of a proposed settlement with the Federal Deposit Insurance Corp., according to documents filed in Delaware bankruptcy court Thursday. (Law360.com)

• Grossest regulatory news headline of the day: "Scab Check for Poultry to Be Scrapped Under Food-Safety Rule" (Bloomberg News, of course)

Government oversight of the $3.7 trillion market for municipal securities, wracked by several high-profile cases of fraud and bid-rigging, is inadequate, according to a report by the Government Accountability Office.

The securities, used by state and local governments to finance transportation projects and the construction of housing, hospitals, and schools, have been the subject of a five-year federal investigation into the reinvestment of proceeds of municipal bond sales. Most recently, General Electric Co.agreed to pay more than $70 million to settle a criminal probe for conspiring to overcharge 44 states on municipal-bond deals.

The Securities and Exchange Commission enforces the rules written by two self-regulatory organizations with oversight of the market -- the Municipal Securities Rulemaking Board and the Financial Industry Regulatory Authority. But because of huge staff cuts at the SEC inspection arm -- from 62 inspectors in 2005 to 38 in 2011 -- it has checked neither the MSRB nor FINRA's fixed-income surveillance programs since 2005.

The SEC's last inspection "predated the financial crisis -- and its ensuing volatility in the municipal market," the report says. Without such oversight, "the SEC may be unable to identify and act on regulatory problems in a timely manner."

The SEC recently began to look at FINRA's program, including municipal trade reporting and markup reviews. It has not begun a fresh review of MSRB.

In addition, the report found that the market favors institutional investors over individuals with better information and prices.

Some Regulators Make Wall Street's Case On Volcker Rule

One of the top arguments made by Wall Street executives and congressional Republicans against the Volcker Rule, which bans firms from trading with their own funds, is that the rule would reduce bank profit and liquidity -- essentially the cash available in the financial system to make trades and loans.

The rule, an essential part of the Dodd-Frank financial overhaul, is due to be in place by July 21.

On Wednesday, at a contentious hearing before the House Financial Services Committee, regulators defended the rule as necessary to prevent the type of risky trading that hobbled the financial system in 2008.

But some helped make Wall Street's case. Acting Comptroller of the Currency John Walsh said U.S. banks "will operate at a competitive disadvantage" with foreign banks. Federal Reserve Governor Daniel Tarullo acknowledged that the rule will be difficult to implement, since both banks and regulators will have a tough time distinguishing between permissible market-making and prohibited profit-making trading.

Rep. Barney Frank (D-Mass.) blamed the financial industry and its demands for the complexity of the 300-page rule, saying "a very simple rule could have been formulated, but it would not have accommodated the concerns you have of the financial institutions. So to some degree they are complaining about you having accommodated them."

Meanwhile, regulators are sure to earn the wrath of reform groups by proposing to extend an exemption that would allow U.S. banks to engage in proprietary trading of not just U.S. government bonds, but those of foreign countries too. "That benefit is not extended to the government securities of other countries," Martin Gruenberg, the Federal Deposit Insurance Corp. acting chairman, told lawmakers, according to MarketWatch. "We are going to get comments on this and this will be one of the issues we will be looking at."

Citigroup Fined Over Conflicts of Interest

Citigroup Global Markets was fined $725,000 today by the Financial Industry Regulatory Authority, a bank self-regulatory organization, for failing to disclose conflicts of interest in its research reports and research analysts' public appearances.

Those conflicts related to research reports on companies published from January 2007 to March 2010. Citigroup failed to disclose that the firm did business with those same companies -- either managing public securities offerings or engaging in investment banking for them. Citigroup anaylsts also failed to mention those relationships when discussing the companies in public appearances.

"Firms need to provide investors with full and accurate information so they will be able to take it into consideration before making an investment decision," said Brad Bennett, FINRA executive vice president and chief of enforcement.

Credit-Rating Agency's Conflicts of Interest Ignored

Though credit-rating agencies that rubber-stamped subprime mortgage securities played a major role in fueling the housing bubble, there has been little progress by regulators or lawmakers to increase incentives for the agencies to produce more reliable ratings, according to a new Government Accountability Office report. A main concern has been that Standard and Poor's, Moody's and Fitch are paid by the Wall Street firms that create the securities the agencies are being asked to rate.

Though there are at least seven alternative compensation models that would reduce that conflict of interest, they have received scant attention from either Congress or regulators, says the GAO. "For example, these authors noted that SEC had not reached out to them to further discuss these models as part of its ongoing study of alternative compensation models for credit rating agencies."

Blame Game Over Drug Shortage

Many parents have been up in arms over the past year because drugs, including Ritalin and Adderall, to treat childrens' attention deficit hyperactivity disorder have been in short supply. And two federal agencies are pointing fingers at each other for the problem, reports the Pharmalot blog.

The Drug Enforcement Administration sets overly strict quotas for the drugs, causing the shortage, say the regulators at the Food and Drug Administration. But the DEA says the supply is fine, suggesting drugmakers regulated by the FDA are to blame for pushing high-priced brand-name versions instead of the cheaper generics. Now, some members of Congress are demanding answers, sending letters to the DEA and big drugmakers including Novartis and Shire. One letter implies drugmakers favor profits over consumers' needs.

Pollution Regs Won't Cause Power Outages, Says Congressional Research Service

Despite the claims of Republican lawmakers and energy industry giants, new Environmental Protection Agency rules that limit toxic air pollution from power plants will not cause power outages, according to a new report by the Congressional Research Service (h/t The Hill).

There is plenty of capacity in the electrical system to make up for the impact of coal and oil-fired plants forced to close after installing costly technology to reduce pollution, says the report, adding that it is "unlikely that electric reliability will be harmed by the rule."

Today's Must-Reads

* SEC enforcement director Robert Khuzami forcefully defends the agency's track record for financial-crisis-related cases, telling HuffPost's Ben Hallman, "Our record in financial crisis cases is characterized by aggressive and broad-based enforcement activity" against companies and individuals who hid exposure to bad mortgage loans from investors.

* Three federal investigations are underway into major problems plaguing the $12.3 billion cleanup of America's most radioactive site. (USA Today)

* Who really caused the financial crisis in 2008? China, of course, argues Foreign Policy's Heleen Mees.

* The 10 most-common workplace safety violations, which declined overall to 3.1 million reported incidents in 2010 from 3.3 million in 2009.

* AirTran Airways ordered to hire back and pay over $1 million in back wages to awhistleblower pilot, who was fired after reporting mechanical concerns.

"The Watchdog" is back off the leash, with more bark and bite. After a six-month break to focus on some other duties here at HuffPost, I'm happy to be on the beat again, keeping a close eye on the regulators and how their actions affect the lives of everyday Americans.

Volcker Rule Limps To Finish Line

The final version of the Volcker rule, one of the most vehemently debated provisions of the Dodd-Frank financial regulatory overhaul, remains up in the air. On Wednesday, top regulators from the Securities and Exchange Commission, Commodity Futures Trading Commission, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency will appear before the House Financial Services Committee, where they are expected to face tough questions from Republicans, who consider the proposed rule unworkable, and from Democrats, who are concerned that regulators have watered down the provision. The rule, named for former Federal Reserve Chairman Paul Volcker, would ban banks from engaging in proprietary trading -- that is, making financial bets with their own money for their own profit.

Although it's been more than a year and a half since the passage of Dodd-Frank, the rule has been delayed due to its complexity and the opposition of the financial industry, which seeks broad exemptions from the rule. On Monday, Goldman Sachs President Gary Cohn told the Telegraph that if the rule is implemented as intended, banks will be devastated and "liquidity in all markets will dry up."

In addition, the CFTC took longer than other regulators to pass its proposal for implementing the rule, and the business lobby has demanded more time to analyze that proposal. As a result, the deadline for comments on the CFTC's version of the rule has been pushed back from Jan. 30 to March 11, reports The Hill.

Cruise Ship Regs Under Review After Accident

The tragic grounding of the cruise ship Costa Concordia off the coast of Italy last week, resulting in at least six deaths, may lead to revised safety regulations, said Koji Sekimizu, secretary-general of the International Maritime Organization. Noting that this is the centennial year of the Titantic disaster and cautioning that the causes of the Costa Concordia accident have yet to be determined, he told an IMO meeting on Monday:

We should seriously consider the lessons to be learnt and, if necessary, re-examine the regulations on the safety of large passenger ships in the light of the findings of the casualty investigation. In the centenary year of the Titanic, we have once again been reminded of the risks involved in maritime activities.

Stanford Sidekick Settles

Alleged Ponzi schemer Allen Stanford's $7 billion investment fraud trial doesn't begin until next Monday, but one of his former associates just settled an interesting conflict-of-interest case with the Justice Department. Dallas lawyer Spencer Barasch joined the Stanford Financial Group in April 2005 after leaving his job as head of enforcement for the SEC's Fort Worth, Texas, regional office, where prosecutors allege he repeatedly thwarted initial probes into Stanford's activities. After he left the SEC and was barred from representing Stanford before the agency, prosecutors say that Barasch nonetheless did so for several months in 2006 with the intention of influencing and obtaining information from the SEC. Barasch agreed to pay $50,000, the maximum civil fine for a such a violation, to settle the case. But the SEC has rejected a proposed settlement with Barasch and its investigation is continuing.

SEC Slammed For Soft Penalties

In other SEC news, it was a busy 2011 for the agency's enforcement division with a record 735 enforcement actions, including a 30 percent increase (over 2010) in actions brought against investment advisers and broker-dealers, and highlighted by several prominent insider-trading cases. But the agency has been faulted for not pursuing more cases related to the financial crisis. And those few cases -- which include charging Citigroup Global Markets with misrepresenting to investors the quality of fund assets and failing to disclose its own short position -- produced only negligence-based fraud charges, which result in softer penalties, instead of intentional fraud claims, which result in tough penalties but are harder to prove, according to a report prepared by the law firm Wilmer Hale.

Obama's Reg Review One-Sided, Say Scholars

A year ago, President Barack Obama initiated a much-debated regulatory review across the government. The results so far have been relatively one-sided, with changes focused on reducing costs but not enough emphasis on determining effective regulations that could be expanded, argue Richard Revesz, dean of New York University School of Law, and Michael Livermore, executive director of Policy Integrity, in a HuffPost blog:

Businesses will be pleased to hear that the October memo puts all its emphasis on using retrospective review of regulations to achieve cost-savings and eliminate "annual paperwork burdens." A template report attached to the memo asks agencies to describe, quantify, and monetize anticipated cost-savings from these actions.

But, a year after the original request, the administration needs to even out this process: looking at the rules where the public benefit could be increased at low cost would also be wise. The goal of regulations is to maximize net benefits. Rolling back expensive and ineffective rules is one way to get there, but so is expanding inexpensive and effective programs. Obama's Executive Order provides a blueprint not only for improving businesses' bottom lines but for adopting beneficial regulations that protect the well-being of the American public.

Big Step Forward for Food Safety Possible

If the Obama administration is granted the authority by Congress to reorganize government agencies, one of its steps would fulfill a long-sought goal of food safety advocates. Jeff Zients, management director at the Office of Management and Budget, told the Hagstrom Report that the White House is considering consolidating the U.S. Department of Agriculture's Food Safety and Inspection Service with a similar unit at the Food and Drug Administration. Food safety advocates have long pushed for the move, arguing that food safety should be independent of the USDA, whose role is largely to market and promote agricultural products. Such a transition has also been supported by the Government Accountability Office, which published a report this past spring that noted, "Fragmented food safety system has caused inconsistent oversight, ineffective coordination, and inefficient uses of resources."

Ax Swings At IG's Office

In a classic example of the Washington blame game, most of the staff is about to be let go at the inspector general's office of the Corporation for National and Community Service, but it's not clear who made the decision to cut in half the office's $4 million budget, reports the Federal Times' FedLine blog. Democrats have blamed House Republicans, but several GOP senators say they have urged Sen. Tom Harkin (D-Iowa) to restore the funding to no avail. The irony, according to the office's acting chief, Kenneth Bach, is that severance packages in some cases are close to the employee's annual salary.

Get Out Your Thesaurus!

The list of weather-related metaphors for regulations keeps growing longer. Last year, we heard plenty about the "tsunami," the "hurricane" and even the "tornado."

And last month, Business Roundtable President John Engler claimed that the "regulatory umbrella is blotting out the sun, it's so big," in an interview with the Washington Times. Citing the National Labor Relations Board, the Department of Labor, the Environmental Protection Agency and even the State Department, the former Michigan governor said that costly regulations are "epidemic across the government."

Last week, Franz Gayl was given his life back.

The Marine Corps veteran, who made waves in 2007 when he blamed top military officials for failing to speed the shipment of life-saving vehicles to Iraq, has spent the last few years seeing his vaunted career ripped to shreds. He's been publicly humiliated, reprimanded by his superiors. He had his security clearance yanked and placed on administrative leave for alleged improper use of a flash drive in a secure computer, effectively ending a 35-year career working for the Marines.

So Gayl was at home sitting at his computer last week looking for work as a volunteer firefighter when he got the call that his security clearance had been reinstated, giving him his job back as a science adviser at the Pentagon. "I was flabbergasted, but I am overjoyed that I can now return to my work of supporting the Marine Corps that has been, remains and will always be my life," he emailed The Huffington Post on Friday. He claims that his suspension was in retaliation for his demand that military brass be held accountable for the delay in delivery of mine-resistant, ambush-protected vehicles known as MRAPs.

Gayl's experience is an all too common one. In return for saving lives, highlighting government corruption and saving millions in taxpayer money, government whistleblowers are often punished for their good deeds.

Franz Gayl

It is likely that Gayl would never have been disciplined if the Whistleblower Protection Enhancement Act had been in place. The bill, which extends current safeguards to government contractors and bolsters prevailing protections for whistleblowers, enjoys bipartisan support spanning liberal Democrats and Tea Party conservatives. But it remains stalled in Congress, due to the opposition of government bureaucrats and some powerful lawmakers.

"These folks haven't had to worry about anyone looking over their shoulder for decades," explains the Government Accountability Project's legal director Tom Devine, adding that members of the intelligence and military bureaucracy have opposed meaningful changes to current whistleblower protections.

Earlier this month, a version of the bill sponsored by Rep. Darrell Issa (R-Calif.) passed unanimously through the House Government Reform and Oversight Committee. But its fate remains unclear in the full House where some lawmakers previously implied -- amid the furor over WikiLeaks -- that it entails disclosure of classified information.

At the end of 2010, the Senate version was killed in the final moments of the legislative session when a mystery senator placed a secret hold on the bill at the behest of the incoming House Republican leadership (the Government Accountability Project and NPR's "On the Media" got every senator but Jeff Sessions (R-Ala.) and Jon Kyl (R-Ariz.) to deny placing the hold).

Gayl's experience is a powerful reminder of the importance of whistleblowers.

When Gayl did a tour of duty in Iraq in 2006, he was shocked to see how many American soldiers were being killed and maimed by improvised roadside bombs. Many of them were driving Humvees, which are particularly vulnerable during such explosions due to their low mass, parts made of flammable aluminum and low ground clearance.

But Gayl was even more devastated to learn that the Corps was "well aware of this vulnerability as early as 1994 when experts reported that the Humvee is a 'death trap' against IEDs," he said over email. Moreover, it had neglected to look for a replacement for years and failed to act on multiple requests by generals and commanders in the field for mine-resistant, ambush-protected vehicles, which were commercially available and known to be nearly impervious to most IED attacks.

"Unfortunately, the civilian bureaucrats in the support establishment had buried the request for 1,169 MRAPs in 2005 leading to a 19 month delay in mass fielding, and a horrendous number of unnecessary deaths and injuries in the vulnerable Humvee, even when the threat and the tangible consequences were known to the responsible bureaucrats," Gayl emailed HuffPost.

The reason for the delay, Gayl said, is that some military bureaucrats wanted to "protect funding already programmed to Humvees and other planned projects."

A 35-year member of the Corps, Gayl grew so frustrated that he went public with his complaints in 2007 to pressure military brass to send MRAPs and to "[make] sure officials were held accountable for what I knew to be corrupted acquisition practices so that such a tragedy would not be permitted to happen in future conflicts."

It wasn't easy for him to do, he explained, citing the Marines' emphasis on loyalty and unit cohesion. "I never imagined becoming a whistleblower. To me and most of the Marines I know the mere word carries with it connotations of being a narc, a snitch, and even a traitor. ... However, my observations in Iraq and futile interaction with the stateside acquisition bureaucracy at all levels led me to do the very thing I would never have envisioned doing beforehand."

His outspokenness eventually helped prompt the Pentagon to expedite the shipment of thousands of MRAPs to Iraq's most dangerous provinces. Soon the death rate for Americans in such explosions plummeted -- Pentagon leaders even praised Gayl for his actions.

And how was Gayl rewarded for his good deed?

Two weeks after Pentagon chief Robert Gates launched a MRAP task force to speed the delivery of the vehicles to Iraq in 2008, Gayl received his first formal letter of reprimand in all his years of military service. And one day in October last year, when he arrived for work at the Pentagon, he was informed that his security clearance had been yanked. He was told to collect his belongings and placed on administrative leave -- basically ending his career. He was told that he was being investigated for using an unauthorized flash drive within a secure facility on several occasions.

Gayl said he supports the passage of the Whistleblower Protection Enhancement Act, saying that both Senate and House version are great improvements on status quo protections. He emphasizes that his success at getting his job back is an anomaly and should not be the exception "that proves a rule, but rather be the rule itself by means of enhanced whistleblower protection having teeth; legislation of the sort that will hopefully be signed into law by the President before the end of the year."

Here is the full transcript of my interview via email with Franz Gayl (my questions are in bold), preceded by a brief introduction written by Gayl.

To begin, I want to express my deepest thanks to all who have steadfastly supported me throughout this ordeal. In particular this pertains to fellow civilians, and the countless active duty, reserve, and retired Marines of all ranks from around the world who have remained in contact with and reached out to me, often risking their own careers in the process. This five year saga in my professional life has deepened my life-long commitment to the Marine Corps that has formed the foundation of my purpose and identity since I first enlisted in 1974. With the recent favorable adjudication by the Department of the Navy regarding my security accesses and the cancellation of my suspension I am energized to return to work hard in support of all Marines in the capacities for which I was hired. Again, the moral support provided to me by so many of my fellow Marines throughout has been a sustaining gift for both me and my family.

Also, as a general comment, DoD civilian whistleblowers today have no due process legal rights for a hearing other than those stated in the existing Whistleblower Protection Act (WPA). While the DoD IG can investigate and make recommendations, it has been a Trojan horse that teams up with the agency to finish off whistleblowers naively seeking its help. However, one major change in the climate is noteworthy. The Office of Special Counsel (OSC) has been transformed under the inspiring leadership of Carolyn Lerner. Since her arrival in the summer of 2011 OSC has truly come to fulfill its intended mission as a Federal guardian of whistleblower rights. For example, OSC's determination to request a stay of - an indefinite salary cutoff that would have starved me out of the Marines - and the Merit Service Protection Board's (MSPB) willingness to support it, was the turning point in my case during the darkest hours this fall, when I thought it would be necessary to sell my home and give up. I don't think it was a coincidence that the Department of the Navy then issued a favorable security adjudication that now permits me to get back to work. Several others like me have received similar support from OSC recently, examples that spell hope for current and future Federal civilian whistleblowers. With strong committed leadership at the helm of OSC, the MSPB, and related organizations an effective line of defense against agency reprisals can be drawn in anticipation of enhanced WPA protections that will, and must be signed by the President this year.

First of all, how did you feel when you found out about the reinstatement?

It was at first hard to believe the news when I got the call from my attorneys at GAP. I was flabbergasted, but I am overjoyed that I can now return to my work of supporting the Marine Corps that has been, remains, and will always be my life. The news of a favorable security determination was completely unexpected, especially after all of the derogatory comments that my supervisors at all levels had officially made on the record over the years regarding my trustworthiness, reliability, and judgment. But then I reflected on the fact that the Department of the Navy made the security determination, not the Marines. I have always had and have great faith in the professionalism and objectivity of the Department of the Navy Central Adjudication Facility (DONCAF). DONCAF has stood above and outside of the Marine Corps' political fray concerning me, looking at all the facts dispassionately and fairly, both favorable and unfavorable. That favorable determination by DONCAF was a simple reaffirmation of the professionalism of that organization. As for the same-day job reinstatement by my supervisors, I respect them greatly for acting immediately to put me back to meaningful work. I intend to redouble my efforts to serve them and the Marine Corps well again, as it was frustrating not to be able to do my job during the past year.

And secondly, where were you when you first heard the news?

I was on-line looking into the possibility of becoming a volunteer firefighter in my small community, in order to make more constructive use of my time in a way that served the community. GAP gave me a call at home.

How did you first realize Humvees provide Marines insufficient protection?

During the period of 2003 to 2004, I as a science and technology (S&T) advisor, had many interactions with the Office of the Secretary of Defense in accelerating capabilities to Joint forces in harm's way. Improvised Explosive Devices (IEDs) quickly rose to prominence as the number one priority of S&T resource commitment in DoD, as the ubiquitous Humvee, or High Mobility Multipurpose Wheeled Vehicle (HMMWV, a.k.a. Humvee) was hopelessly vulnerable to IEDs and there was nothing in in the acquisition pipeline to replace it. Adding armor was the only solution and that proved tragically ineffective as well. IEDs used against Humvees were the single biggest threat to mission success in Iraq at that time.

How vulnerable were the Humvees during IED explosions and other attacks?

Humvees suffer from fundamental design limitations that make them particularly vulnerable to IEDs. These limitations include comparatively low mass, critical parts made of flammable aluminum, a flat and effectively concave bottom that contains and even focuses blast energy into the crew compartment, and a low ground clearance that intersects the blast front when the peak pressure and heat are still near maximum. The Marine Corps was well aware of this vulnerability as early as 1994 when experts reported that the Humvee is a "death trap" against IEDs. For whatever business case reasoning, the Marine Corps decided not to develop a replacement. The shocking aspect of this negligence to act on a known vulnerability in the early 1990s, and the particularly gross negligence of failing to act on a warfighter request in 2005, is the fact that Mine Resistant Ambush Protected (MRAP) vehicles were commercially available. In fact MRAPs were known to be nearly impervious to conventional IED attacks. In fact, occupants are 10 times more likely to survive death or injury in attacks than similar IED attacks directed against Humvees, even up-armored Humvees. Modern versions of commercial models whose production lines opened in the 1970s, such as the "Casspir" were readily available in 2005, in fact the Marines in Iraq noted many commercial products by name. From a Marine logic standpoint the answer was a no-brainer: replace all armored Humvees with MRAPs since Marines continued to die, the mission was jeopardized, and ample funding was available to replace them with MRAPs immediately. However, the support establishment grossly negligent and did not process requests using Marine logic in 2005. More important was to protect funding already programmed to Humvees and other planned projects. I was well aware of the commercial availability of several MRAP variants and their unique survivability when I went to Iraq. "Cougars" and "Buffalos" had been purchased in small numbers for engineers, and I had advocated their use for two other forward-leaning capabilities earlier. All the requests from the field for MRAPs made perfect sense to me. Unfortunately, the civilian bureaucrats in the support establishment had buried the request for 1,169 MRAPs in 2005 leading to a 19 month delay in mass fielding, and a horrendous number of unnecessary deaths and injuries in the vulnerable Humvee, even when the threat and the tangible consequences were known to the responsible bureaucrats.

Were you surprised to learn about the previous 2005 request for MRAPs?

I was deeply angered, but chose to focus all my animation and energy into solving the problem in the interests of providing the Marines better protection. This was a two-pronged approach, first to replace all Marine Corps Humvees in the Iraqi theater with MRAPs, and second making sure officials were held accountable for what I knew to be corrupted acquisition practices so that such a tragedy would not be permitted to happen in future conflicts.

How did you feel when you first were informed about the charge that you divulged classified info?

I found it curious that I would be accused of doing so. I had always been diligent about maintaining the security of classified information, and I was quite confident that whatever investigation was being conducted as a result of the charge against me would eventually find that I had not divulged classified information. As I predicted, at the conclusion of their investigation into Marine allegations that I had published classified information (their second of three investigations - see below), the Naval Criminal Investigative Service (NCIS) determined that I had not divulged any classified information.

How else were your retaliated against at the workplace?

This is an incomplete list, in approximate order of occurrence. Many other instances of insults, public humiliations, workplace harassment, and minor derogatory correspondence not included:

2007:

1) first NCIS investigation was initiated (foreign contacts) - I was eventually cleared;
2) issued formal written counseling from supervisor and acting division director;
3) issuance of rewritten job description minimizing science and technology;
4) issued formal written reprimand from division director;
5) issued formal written proposal for 10 working day unpaid suspension;
6) bottom 30% perf eval rating for 2007, despite Senior Executive Service recommendation

2008:

7) second NCIS investigation was initiated (classified material) - I was eventually cleared;
8) third NCIS investigation initiated (my psychological stability) - I was eventually cleared;
9) bottom three (3) percent performance rating for 2008 - no bonus;

2009:

10) first denied request to obtain job related Naval Postgraduate School (NPS) education;
11) second denied request to obtain job related education at NPS;
12) denied request to serve as a USMC Congressional Fellow;
13) issuance of first performance improvement program (PIP);
14) issuance of second PIP on heels of my completion of the first;
15) bottom three (3) percent performance rating for 2009 - no bonus;

2010:

16) first denied request to obtain job related Singularity University (SU) education;
17) formal issuance of rewritten job description eliminating science and tech;
18) demotion to GS-14 from GS-15 accompanied new job description;
19) second denied request to obtain job related education at SU;
20) received verbal reprimand from Office of DoD IG for my public critique of dazzler audit;
21) formally suspended of all access to classified materials;
22) placement on administrative leave with no duties;
23) first DoD IG supports USMC, finding that NCIS classified investigation was not retaliation;
24) formal written proposal for indefinite unpaid suspension;

2011:

25) third denied request to obtain job related education at SU;
26) denial to attend job related education program at MIT offered to all employees;
27) denial to attend SU at my own cost using leave and plus advance leave;
28) second DoD IG supports USMC, finding suspension not retaliation;
29) formal written proposal for indefinite unpaid suspension;

That brings us basically to today.

Did you ever imagine that you'd become a whistleblower?

I never imagined becoming a whistleblower. To me and most of the Marines I know the mere word carries with it connotations of being a narc, a snitch, and even a traitor. Those concepts are anathema to Marines as they imply indiscipline, disloyalty, and a threat to unit cohesion. We Marines pride ourselves on the good order and discipline within our organizations as success in military conflict depends on it in. However, my observations in Iraq and futile interaction with the stateside acquisition bureaucracy at all levels led me to do the very thing I would never have envisioned doing beforehand.

What is the reputation of whistleblowers in the Corps?

To my knowledge the Marine Corps has no history of high profile whistleblowers. On any given day uniformed Marines assume that no problem is unsolvable within our own ranks; in other words inside the tight-knit, self-sufficient Marine Corps family. There is a mechanism for uniformed Marines to speak with superiors at much higher levels in confidence known as "requesting mast," but that is not available to civilians like me.

Do you support the Whistleblower Protection Act now making its way through Congress?

Yes!!!!!!!!!!!!!!!!!!!!!!! The House and Senate versions differ, but both are orders of magnitude better than status quo protections. Looking just at a few elements of the HR 3289 version, this small sample of improvements alone would have greatly helped my case over the years: 1) Closes judicially-created loopholes in the law's protection, while tightening language to preclude circumvention of the congressional free speech mandate; 2) Provides those covered by the WPA with district court access to challenge major disciplinary actions; 3) Outlaws security clearance harassment as a WPA violation, establishes minimum due process standards for agency clearance actions, and breaks out of the grievance model through appellate review of clearance actions by an inter-agency intelligence community forum required to have both merit system and national security expertise; 4) Modifies the burdens of proof to make it more realistic for the Office of Special Counsel to seek disciplinary accountability against those who retaliate; and 5) Creates a whistleblower ombudsman as a five-year experiment to advise employees of their rights in Offices of Inspectors General (OIG) for Title 5 employees. That is just a sample - there is much more.

Are whistleblowers still vulnerable to retaliation in the Marines and other military services?

Yes. My good fortune is a rare exception that proves the rule. It is noteworthy that very few past and even present whistleblowers in similar circumstances to my own have benefited from my support and good fortunes. The only reason that I have been able to remain employed over the past five years is due to my luck in receiving a timely combination of aggressive congressional support, free expert lawyers, a sustained media spotlight, and a broad-based solidarity support campaign. Yet even with all that exceptional support it took almost five years for me to arrive here, and my position is still far from secure. My professional survival was desperately hanging in the balance throughout that period. My returning to work remains an anomaly, and is not a sign of general improvement in whistleblower rights. Therefore, success stories should not be exceptions that prove a rule, but rather be the rule itself by means of enhanced whistleblower protection having teeth; legislation of the sort that will hopefully be signed into law by the President before the end of the year.

NEW YORK -- When President Obama signed the most sweeping financial regulatory overhaul since the Great Depression into law last July, he warned that for these new rules to be effective "regulators will have to be vigilant" and "we may need to make adjustments along the way as our financial system adapts to these new changes."

Though Democrats and consumer advocates have applauded the Dodd-Frank Act, Wall Street lobbyists condemned it and warned that it would hurt bank profits. Republican lawmakers have vowed to delay or destroy some of the bill's major provisions. "This is the first round of a heavyweight fight," one financial industry trade group executive told The Huffington Post the night after the signing ceremony. "When they get through writing all the rules to put this into action, it will end up looking a lot different."

A year later, much of the act remains unimplemented; the agencies who will enforce the new rules are facing budget cuts; and Republican lawmakers have introduced at least two dozen bills aiming to undo the act's major provisions. Despite Wall Street's warnings about the impact of the law, the financial services industry is thriving -- some banks just recorded billions of dollars in profits, with mega-bank Wells Fargo posting record second-quarter earnings of almost $4 billion. JPMorgan Chase's revenue and profit for the first half of the year was higher than in the six months before Dodd-Frank was signed into law.

"I think it has been an extremely tough year for Dodd-Frank implementation," former Sen. Ted Kaufman (D-Del.), who was a big supporter of the law, told The Huffington Post in an email. "It is very discouraging that after so many Americans have gone through so much pain and agony in lost jobs, homes, and self-respect, that we cannot institute the kinds of regulations to avoid another financial meltdown."

Check out this slideshow that charts the status of Dodd-Frank's major provisions:

Regulators have completed less than 20 percent of the 163 required rules that had statutory deadlines during the first year and only about 12 percent of all 400 rulemaking requirements in Dodd-Frank, according to projections by law firm Davis Polk & Wardwell. Regulators are likely to miss over a hundred rulemaking deadlines on July 16 and July 21, according to those projections. Regulators have been picking up the pace this week -- the Commodities Futures Trading Commission finalized four rules on Tuesday.

But industry pressure has helped delay some of the most significant reforms for up to a year. Earlier this month, the CFTC proposed delaying rules for the $601 trillion derivatives market that were set to go into effect on July 16 until as late as the end of the year. Last month the Securities and Exchange Commission decided to delay some measures designed to improve transparency and reduce risk in the over-the-counter swaps market.

Asked about the pace of implementation, Dean Baker, co-director of the Center for Economic and Policy Research, said it is certainly too slow.

"As this process drags on, we get further removed from the public sentiment behind reform," Baker said. "This means that the only people in the room will be the people from the financial industry. This will allow them to write the rules in a way that minimizes the impact of the regulation."

Others are cautiously optimistic, explaining that Dodd-Frank is one of the most complex legislative packages in recent history and that it's more important to get it done right than to get it done quickly. "I know to someone looking from the outside in, who isn't experienced with rulemaking, that it appears to be moving too slowly," said Michael Greenberger, professor at the University of Maryland School of Law and a former Director of Trading and Markets at the CFTC. "Contrast that with Wall Street, which is crying that it's moving too fast."

Greenberger pointed to the CFTC, where a small staff of 700 has to implement over 50 complicated new regulations. "They've done an effective job," he said. "It's a lot of work and they just started adopting final rules. On balance, they've worked very hard, very effectively and very competently."

Greenberger noted implementation of a rule on price manipulation, saying he was pleasantly surprised that the bipartisan commission passed it unanimously. He predicted that the rule will affect commodity prices and prompt enforcement actions against manipulators, while also helping prevent speculation in food, energy and metals trading.

"Of course, speed and time isn't of the essence, it's getting it correct," said former Rep. Paul Kanjorski (D-Pa.), a strong proponent of the Volcker Rule, an unimplemented rule that restricts banks from trading for their own benefit.

"Quite frankly, we did our job -- we passed legislation," said Kanjorski, who now does consulting work for financial industry firms. "But it was just a skeleton, and we authorized rulemakers to put the flesh on the skeleton and that implementation determines whether we create a Frankenstein or a human being. It will take years before the full impact of Dodd-Frank is implemented."

Industry lobbyists have swarmed the agencies in recent months. Among the almost 500 companies seeking to influence regulators on the implementation of the act this year, big Wall Street players have been the most active. Goldman Sachs representatives met with officials at the top financial regulatory agencies at least 83 times over the last year, including four separate meetings with CFTC officials in one day last month.

In addition to banks, multinationals like GE have also been busy lobbying to avoid tougher oversight as a "systematically important" institution. Even Standard & Poor's, the credit rating agency blamed for giving good ratings to high-risk mortgage securities during the housing bubble, is spending millions to avoid new rules that seek to limit conflicts of interest. Though the industry paid lobbyists $50 million so far this year, it's considered a good investment since firms claim they could lose billions of dollars in profits if Dodd-Frank is fully implemented.

As an example of the industry's influence on one small sliver of Dodd-Frank, lobbyists have worked intensely to slow down the SEC's implementation of a single fiduciary standard of care for securities brokers and dealers, as well as investment advisers. Regulators wanted the provision to force these firms to be held accountable for providing self-interested financial advice -- like recommending products that generated high-commissions. Pension and employee-benefit funds supported the universal standard as a way to prevent investor abuse.

After several December meetings with two powerful industry groups, the National Association of Insurance and Financial Advisors and the Securities Industry and Financial Markets Association, the SEC's two Republican members opposed the proposal last winter. They recommended that the SEC do an extensive cost-benefit analysis of the measure, and by March, GOP lawmakers were urging the agency to do just that before proceeding with the rule, which isn't expected to be ready until the end of the year, according to Investment News. A few months later, after a letter-writing campaign by industry groups urged lawmakers to demand more cost-benefit analysis of new rules, Senate Republicans asked inspectors general at five financial regulatory agencies to make sure that the agencies were properly assessing the costs of new regulations compared to their benefits, which is likely to further delay new rules.

Similarly, the SEC's proposal to register municipal bond advisers prompted a furious response, with more than 1,000 comment letters opposing the new requirement sent to the agency and lawmakers. The commission is reviewing the letters, may make some adjustments and is expected to enact a final rule this fall.

"It has been a very uneven fight with bank lobbyists fighting against regulations and spending $251 million last year and $51 million more in the first quarter, with very little being spent on the other side," says former Sen. Kaufman.

Industry lobbyists insist that they just want to improve a reform package that was long-overdue. Last week, SIFMA president Tim Ryan told the audience at a Dodd-Frank summit that he supports many of the changes proposed in the law. But he wants "increased coordination and comprehensive cost benefit analysis to ensure the new rules as proposed actually help make our financial system safer and more secure and provide the infrastructure to move our still fragile economy forward."

Noting that SIFMA has submitted over 100 comment letters on proposed rules, Ryan noted that some rules will tighten bank lending, which could hamper the recovery. He highlighted international capital and liquidity requirements and a possible capital surcharge for "systemically important" banks, warning that those proposals will hurt American competitiveness in a global market.

Despite the overheated rhetoric in Congress, where some lawmakers have expressed their desire to repeal the law, many in the business community say that Dodd-Frank is not going away. Last January, Steve Bartlett, the president of the Financial Services Roundtable, gave a speech in which he said: "It is not a proposal. It is not even a sound bite. It is the law of the land enforced by a sheriff with a posse, rope and gun. There are clear changes that the industry needs to implement. Ready or not, Dodd-Frank's 2,300 pages of 300 plus rules and studies are here to stay."

In addition to lobbying, some industry groups have gone to court to derail some of Dodd-Frank's provisions. After the Chamber of Commerce and the Business Roundtable sued the SEC over its proposed rule that enables shareholders to nominate directors to corporate boards, claiming that the agency didn't conduct a proper cost-benefit analysis, the agency suspended the rule, but the litigation continues. The Chamber and the Business Roundtable did not return calls for comment.

Even if the rules are eventually finalized, the agencies may not have the resources to effectively implement and enforce them. The SEC's budget was recently frozen at $1.2 billion and the CFTC's budget was cut 15 percent in two separate bills approved by two House committees, despite the fact that the agencies have more responsibilities under Dodd-Frank. CFTC chairman Gary Gensler warned in his testimony before the Senate Agriculture Committee last month that such a reduction "would hamper our ability to seek out fraud, manipulation and other abuses at a time when commodity prices are rising and volatile."

SEC chairman Mary Schapiro has said that without more funds, it will be more difficult for her agency to enforce many of the new rules. "We're going to have to make some very hard choices about how we utilize the resources that are available to us," she told Reuters earlier this week.

The Consumer Financial Protection Bureau, which the law created, could also be underfunded. Lawmakers introduced a bill that mandates that no more than $200 million can be transferred to the bureau, despite its request for $500 million in funding. The pace of such legislation has accelerated in recent weeks and has become a top priority of the Republican leadership, with Senate Minority Leader Mitch McConnell vowing, "The less we fund those agencies, the better America will be."

On Tuesday, Rep. Frank Lucas (R- Okla.) promised that more bills are forthcoming which are likely to delay certain Dodd-Frank provisions.

All of this Congressional sabre-rattling worries the act's proponents. While industry groups may acknowledge that Dodd-Frank is here to stay, some conservative lawmakers seem determined to destroy it.

"If you end up poisoning the regulators, you end up with a wimp," says former Rep. Kanjorski, who even goes so far as to claim that the numerous bills to defang the law could have a fatal effect. "If they persist in that, they will probably succeed in blocking the implementation of Dodd-Frank."

Rep. Barney Frank (D-Mass.), whose name is on the act, agrees. He has repeatedly said that the bill is "facing a death through a thousand cuts."

Check out the slideshow of Dodd-Frank's major players and observers offering their views:

If you're not a regular reader of Professional Door Dealer magazine, you may have been unaware of the lobbying battle over a proposal to toughen lead paint rules in schools, day care facilities and homes. The Environmental Protection Agency dropped on Friday an effort to add more testing requirements to existing lead paint rules in the face of fierce opposition from construction groups and other businesses. The original rule requires strict regulations for businesses that repair old buildings to ensure low levels of lead, a substance that has been found to cause brain damage in children.

The proposal was strongly opposed by the home-building lobbying groups, which claimed that it would cost an extra $100 to $500 per project and hurt business. Recently, the Window and Door Dealers Alliance made the battle a top priority and "organized industry leaders to attend a White House meeting with top Office of Information and Regulatory Affairs officials in order to present the industry case against the regulation," National Glass Association vice president David Walker told Glass magazine.

In addition, the industry pressured members of Congress, including Denny Rehberg (R-Mont.) who offered last week an amendment to an appropriations bill that would make it more difficult for the EPA to enforce its Lead: Repair, Renovation and Painting rule.

In Switch, FAA Allows Aircraft Companies To Certify Safety Of Its Products

Today's must-read: The Seattle Times has an excellent look at how a new Federal Aviation Administration program gives aircraft companies the power to certify the safety of their own planes.

Until now, the FAA appointed inspectors at the companies or outside contractors to report directly to the agency. Now, those those in-house staffers who assess the safety of products will report to the companies themselves. The self-certifying program applies to nine companies, including Northwest Airlines, Gulfstream, and Jamco, a supplier to Boeing and Airbus -- and by next year, aerospace giants like Boeing will join the program. The FAA emphasized that only companies with a track record of competence can qualify.

But aviation safety experts, such as Jim Hall, a former chairman of the National Transportation Safety Board, criticized the new approach.

"The federal government, because of shrinking resources, is turning over key parts of transportation-safety oversight" to private industry, Hall told the Seattle Times. "History tells us this could be a very dangerous path," he said, citing the 1998 crash of Swissair Flight 111 off the coast of Nova Scotia as a possible consequence of self-regulation.

Greyhound Supports Bus Safety Bill

Bus safety legislation got a major boost with the support of a bipartisan group of senators and Greyhound, the nation's largest bus company.

The Motorcoach Enhanced Safety Act, which was proposed in the wake of several high-profile fatal bus accidents earlier this year, requires safety improvements in the manufacture and operation of buses, and gives regulators more tools to crack down on unsafe drivers. Over the course of a few days in March, 17 people were killed in two separate bus accidents.

"I applaud Greyhound for their commitment to passenger safety and I hope others will follow their lead on this critical issue. Congress must move forward on passing this bipartisan legislation before more lives are wasted in tragedies that are entirely preventable," Sen. Hutchison (R-Texas) said.

U.S. Attorney: Nursing Home Billed Medicare For 'Worthless' Care That Led To Deaths

A nursing home chain that complained two weeks ago about lower Medicare reimbursement rates under health care reform was accused today of billing Medicare and Medicaid for "worthless" care that lead to deaths and injuries.

In the first such suit ever filed in Kentucky, the U.S. Attorney's office in the eastern district of the state filed a complaint alleging that a nursing home owned by Carespring Health Care Management defrauded Medicare and Medicaid by submitting bills for systemically poor care of residents -- numerous patients suffered serious injuries and five patients died from 2004 to 2008, according to the complaint, reported the Lexington Herald-Leader. Officials at Villaspring Health Care and Rehabilitation have been cited several times for inadequate care in previous years.

On June 11, Carespring filed a comment with the Centers for Medicare and Medicaid Services, complaining about a proposed recalibration of the formula used by the agency to reimburse health facilities. "If the expectation is for us to continue to provide excellent care to the Medicare beneficiaries, ample reimbursement is a necessity in providing this care and to offset the rising costs of operations and staffing."

CFPB Picks Up The Pace Of Staffing

The pace is picking up at the Consumer Financial Protection Bureau. In addition to naming Richard Cordray as the new director in a much-anticipated decision, the new bureau has lured 172 staffers from other regulatory agencies, about half the number who were approached and offered transfers, according to a Treasury department inspector general's report released on Friday. The bureau is also hiring to fill several positions and has received several thousand applications. Areas that need people include the Supervision, Fair Lending and Enforcement division and the Consumer Education and Engagement division.

In addition to its Washington headquarters, the bureau plans to set up three regional offices in San Francisco, Chicago and New York. And the bureau's Consumer Response Center will begin taking website inquiries, phone calls and complaints starting on Thursday.

On a related front, iWatchNews.com has an excellent series of stories called "Debt Deception", profiling a variety of Americans who are suffering from borrowing nightmares, which the CFPB is intending to address. On Friday, Amy Biegelsen reported on Mildred Morris, a single mother in West Virginia who lost her Pontiac Sunfire after using it to secure a $700 loan to pay for her son's college dorm fee.

Goldman Floods Regulators To Influence Dodd-Frank

In other Dodd-Frank news, the Sunlight Foundation has a new feature that tracks every disclosed meeting financial regulators have with lobbyists, executives from Wall Street and the financial industry.

Goldman Sachs dominates the 2,000-plus meeting list with 83 meetings -- including one day, June 14, when the firm's reps went to four separate meetings with CFTC officials to discuss swaps-trading rules.

After Goldman comes JP Morgan Chase, with 73 meetings, Morgan Stanley, with 58 meetings, and Bank of America, with 55 meetings.