March 28, 2024

Drugs Injected at the Racetrack Put Europe Off U.S. Horse Meat

Lately, however, European food safety officials have notified Mexican and Canadian slaughterhouses of a growing concern: The meat of American racehorses may be too toxic to eat safely because the horses have been injected repeatedly with drugs.

Despite the fact that racehorses make up only a fraction of the trade in horse meat, the European officials have indicated that they may nonetheless require lifetime medication records for slaughter-bound horses from Canada and Mexico, and perhaps require them to be held on feedlots or some other holding area for six months before they are slaughtered.

In October, Stephan Giguere, the general manager of a major slaughterhouse in Quebec, said he turned away truckloads of horses coming from the United States because his clients were worried about potential drug issues. Mr. Giguere said he told his buyers to stay away from horses coming from American racetracks.

“We don’t want them,” he said. “It’s too risky.”

The action is just the latest indication of the troubled state of American racing and its problems with the doping of horses. Some prominent trainers have been disciplined for using legal and illegal drugs, and horses loaded with painkillers have been breaking down in arresting numbers. Congress has called for reform, and state regulators have begun imposing stricter rules.

But for pure emotional effect, the alarm raised in the international horse-meat marketplace packs a distinctive punch.

Some 138,000 horses were sent to Canada or Mexico in 2010 alone to be turned into meat for Europe and other parts of the world, according to a Government Accountability Office report. Organizations concerned about the welfare of retired racehorses have estimated that anywhere from 10 to 15 percent of the population sent for slaughter may have performed on racetracks in the United States.

“Racehorses are walking pharmacies,” said Dr. Nicholas Dodman, a veterinarian on the faculty of Tufts University and a co-author of a 2010 article that sought to raise concerns about the health risks posed by American racehorses. He said it was reckless to want any of the drugs routinely administered to horses “in your food chain.”

Horses being shipped to Mexico and Canada are by law required to have been free of certain drugs for six months before being slaughtered, and those involved in their shipping must have affidavits proving that. But European Commission officials say the affidavits are easily falsified. As a result, American racehorses often show up in Canada within weeks — sometimes days — of their leaving the racetrack and their steady diets of drugs.

In October, the European Commission’s Directorate General for Health and Consumers found serious problems while auditing the operations of equine slaughter facilities in Mexico, where 80 percent of the horses arrive from the United States. The commission’s report said Mexican officials were not allowed to question the “authenticity or reliability of the sworn statements” about the ostensibly drug-free horses, and thus had no way of verifying whether the horses were tainted by drugs.

“The systems in place for identification, the food-chain information and in particular the affidavits concerning the nontreatment for six months with certain medical substances, both for the horses imported from the U.S. as well as for the Mexican horses, are insufficient to guarantee that standards equivalent to those provided for by E.U. legislation are applied,” the report said.

The authorities in the United States and Canada acknowledge that oversight of the slaughter business is lax. On July 9, the United States Food and Drug Administration sent a warning letter to an Ohio feedlot operator who sells horses for slaughter. The operator, Ronald Andio, was reprimanded for selling a drug-tainted thoroughbred horse to a Canadian slaughterhouse.

The Canadian Food Inspection Agency had tested the carcass of the horse the previous August and found the anti-inflammatory drug phenylbutazone in the muscle and kidney tissues. It also discovered clenbuterol, a widely abused medication for breathing problems that can build muscle by mimicking anabolic steroids.

Article source: http://www.nytimes.com/2012/12/09/sports/drugs-injected-at-the-racetrack-put-europe-off-us-horse-meat.html?partner=rss&emc=rss

New York Court Permits Banks to Sue MBIA

The state Court of Appeals in Albany, New York’s highest court, announced its decision Tuesday, overturning a lower court ruling.

A state appellate court in January dismissed the suit by the banks, which claimed the bond insurer’s overhaul had been intended to defraud policyholders. The banks claim the revamping was a “fraudulent conveyance” that left MBIA undercapitalized and possibly unable to pay future claims.

The Court of Appeals decision, in a 5-to-2 vote, turned on whether approval of the split by the state insurance superintendent had precluded the bank policyholders’ claims.

“We hold that the superintendent’s approval of such restructuring pursuant to its authority under the Insurance Law does not bar the policyholders from bringing these claims,” Judge Carmen Beauchamp Ciparick wrote for the majority.

The decision restored the banks’ claims of fraudulent conveyance, breach of contract and abuse of the corporate form. The court agreed with the lower court that a claim for unjust enrichment should be dismissed.

The banks said in court filings that the split had transferred $5 billion in cash and securities out of MBIA’s primary operating unit, the MBIA Insurance Corporation, to another entity, now known as the National Public Finance Guarantee Corporation.

The insurer argued that the restructuring had been done to help unfreeze the public finance markets during the financial crisis and had been approved by state regulators after an extensive review that found MBIA Insurance would remain solvent and have sufficient resources to meet claims, according to a brief filed in April with the Albany court.

Article source: http://feeds.nytimes.com/click.phdo?i=33c40e7c8a866c33a12347c0503e3e1a

New York Investigates Banks’ Role in Fiscal Crisis

Officials in Eric T. Schneiderman’s, office have also requested meetings with representatives from Bank of America, Goldman Sachs and Morgan Stanley, according to people briefed on the matter who were not authorized to speak publicly. The inquiry appears to be quite broad, with the attorney general’s requests for information covering many aspects of the banks’ loan pooling operations. They bundled thousands of home loans into securities that were then sold to investors such as pension funds, mutual funds and insurance companies.

It is unclear which parts of the byzantine securitization process Mr. Schneiderman is focusing on. His spokesman said the attorney general would not comment on the investigation, which is in its early stages.

Several civil suits have been filed by federal and state regulators since the financial crisis erupted in 2008, some of which have generated settlements and fines, most prominently a $550 million deal between Goldman Sachs and the Securities and Exchange Commission.

But even more questions have been raised in private lawsuits filed against the banks by investors and others who say they were victimized by questionable securitization practices. Some litigants have contended, for example, that the banks dumped loans they knew to be troubled into securities and then misled investors about the quality of those underlying mortgages when selling the investments.

The possibility has also been raised that the banks did not disclose to mortgage insurers the risks in the instruments they were agreeing to insure against default. Another potential area of inquiry — the billions of dollars in credit extended by Wall Street to aggressive mortgage lenders that allowed them to continue making questionable loans far longer than they otherwise could have done.

“Part of what prosecutors have the advantage of doing right now, here as elsewhere, is watching the civil suits play out as different parties fight over who bears the loss,” said Daniel C. Richman, a professor of law at Columbia. “That’s a very productive source of information.”

Officials at Bank of America and Goldman Sachs declined to comment about the investigation; Morgan Stanley did not respond to a request for comment.

During the mortgage boom, Wall Street firms bundled hundreds of billions of dollars in home loans into securities that they sold profitably to investors. After the real estate bubble burst, the perception took hold that the securitization process as performed by the major investment banks contributed to the losses generated in the crisis.

Critics contend that Wall Street’s securitization machine masked the existence of risky home loans and encouraged reckless lending because pooling the loans and selling them off allowed many participants to avoid responsibility for the losses that followed.

The requests for information by Mr. Schneiderman’s office also seem to confirm that the New York attorney general is operating independently of peers from other states who are negotiating a broad settlement with large banks over foreclosure practices.

By opening a new inquiry into bank practices, Mr. Schneiderman has indicated his unwillingness to accept one of the settlement’s terms proposed by financial institutions — that is, a broad agreement by regulators not to conduct additional investigations into the banks’ activities during the mortgage crisis. Mr. Schneiderman has said in recent weeks that signing such a release was unacceptable.

It is unclear whether Mr. Schneiderman’s investigation will be pursued as a criminal or civil matter. In the last few months, the office’s staff has been expanding. In March, Marc B. Minor, former head of the securities division for the New Jersey attorney general, was named bureau chief of the investor protection unit in the New York attorney general’s office.

Early in the financial crisis, Andrew M. Cuomo, the governor of New York who preceded Mr. Schneiderman as attorney general, began investigating Wall Street’s role in the debacle. But those inquiries did not result in any cases filed against the major banks. Nevertheless, some material turned over to Mr. Cuomo’s investigators may turn out to be helpful to Mr. Schneiderman’s inquiry.

Article source: http://feeds.nytimes.com/click.phdo?i=99e58ca07168bd1e714066626b7f21c8