Bloomberg’s Christine Harper Richard and Bob Ivry circle back to the Fenway deal Lehman Brothers made with Hudson Castle that allowed it to cook its books by lending $3 billion to itself.

Lehman turned souring real estate investments into top- rated securities that the bank’s insiders dubbed “goat poo,” according to court records. The securities, called Fenway commercial paper, helped keep Lehman afloat over the summer of 2008, until a trading partner determined they were “worth practically nothing.” That precipitated Lehman’s demise on Sept. 15, 2008, bankruptcy documents and a May 2010 Lehman lawsuit show.

Further:

“Repo conduits” like Fenway allow banks to finance longer-term assets such as real estate loans by borrowing short- term from investors such as money-market funds. For Lehman itself to buy the Fenway commercial paper was a sign of trouble, Rutledge said.

“The fact that Lehman bought the Fenway notes after creating them not only raises red flags, it shows that Lehman was trying to sustain the illusion of financial health,” she said.

And this is a great juxtaposition with CEO Dick Fuld’s statements:

Lehman’s “liquidity positions have never been stronger,” Fuld said on June 16, 2008. Patricia Hynes, an attorney for Fuld, did not respond to calls and an e-mail seeking comment.

In addition to posting the Fenway notes to JPMorgan as collateral, Lehman improperly included them and other pledged securities in its liquidity pool, the fund meant to be accessible in case of emergency, the Valukas report said. Lehman reported that the pool held $45 billion at the end of May 2008.

While there are no required minimums for such pools, “if you tell the public something you can’t lie about it,” said Bob Byman, a partner with Jenner & Block LLP in Chicago and an editor of the examiner’s report. “The truth was that Fenway wasn’t liquid — you couldn’t turn it into cash by calling a broker and saying, ‘Sell it.’ But it was also pledged.”

In other news, the authorities can’t find anybody at Lehman to prosecute.

— Reuters’s Matt Isaacs, in collaboration with the Investigative Reporting Program at UC Berkeley, has a very interesting investigation on Las Vegas Sands, which is under criminal investigation into whether it bribed foreign officials.

This one’s worth a read. We’ve got a Wild West land of crime and casinos, the triad mafia, Macau, alleged blackmail, politicians on the payroll, destroyed documents, and multibillionaire Sheldon Adelson.

The allegations come from a fired executive, one who had helped turn the company around, who says:

Adelson, Jacobs charged, instructed him to secretly investigate senior Macau government officials. “Any negative information could be used to exert ‘leverage’ in order to thwart government regulations/initiatives,” the lawsuit claims.

Jacobs in his suit also notes that he was repeatedly threatened with termination if he “objected to and/or refused to carry out Adelson’s illegal demands.”

In particular, Adelson insisted Jacobs hire a local lawmaker named Leonel Alves, he says in his lawsuit. For more than a year, Alves, a public official in a position to help the corporation, was also listed as its counsel — a potential conflict of interest central to the U.S. federal bribery investigation.

The Wall Street Journal is good to flag yet another aggressive Amazon move to avoid collecting sales taxes.

This time it’s in Illinois. Amazon will quit paying affiliates in the state referral fees after the state said that constituted a physical nexus and tried to force Amazon to collect sales taxes.

Amazon’s stance against collecting sales tax has drawn the ire of brick-and-mortar retailers, who complain the company has an unfair business advantage over rivals that collect sales taxes. Meanwhile, lawmakers have become more determined to make the online giant collect taxes to help address budget shortfalls that have become big problems for many states.

Over the past two years, officials in several states have tried different tactics to try to compel Amazon and other retailers to collect sales taxes. New York, Hawaii, Rhode Island, North Carolina and now Illinois have passed laws that require online retailers with marketing affiliates in their state to collect sales taxes.

The company is collecting sales tax in New York, while continuing to fight the legislation in court, as well as in Kansas, Kentucky, North Dakota and Washington.

Amazon has had a nice cuddly image in the press. But it’s a rogue on taxes, demanding that it be given a leg up over stores that actually keep the money in their state’s economy.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.