Financial Sector Accountability for the 2007/8 crisis?
Of all the topics on which I’ve focused, I’ve likely written most about America’s two-tiered justice system — the way in which political and financial elites now enjoy virtually full-scale legal immunity for even the most egregious lawbreaking, while ordinary Americans, especially the poor and racial and ethnic minorities, are subjected to exactly the opposite treatment: the world’s largest prison state and most merciless justice system. That full-scale destruction of the rule of law is also the topic of my forthcoming book . But The New York Times this morning has a long article so perfectly illustrating what I mean by “two-tiered justice system” — and the way in which it obliterates the core covenant of the American Founding: equality before the law — that it’s impossible for me not to highlight it. The article’s headline tells most of the story: “ In Financial Crisis, No Prosecutions of Top Figures .”
In case you needed more proof of the utter incompetence of the SEC, two new items emerged late last week. First was more detail on the mindset of the jurors who found Citigroup CDO salesman Brian Stoker innocent in the SEC’s case against him on misrepresenting the bank’s role and interests in selling a CDO squared it had set up to fail and making $160 million by betting against it. Per the juror’s foreman, as recounted by the New York Times :
Obama’s 2009 White House summit with finance titans, in which the president warned that only he was standing "between you and the pitchforks" Why, despite widespread outrage, financial-fraud prosecutions by the Department of Justice are at 20-year lows Attorney General Eric Holder’s lucrative ties to a top-tier law firm whose marquee clients include some of finance’s worst offenders How Obama’s trumpeted “task force” for investigating risky mortgage lenders—announced in this year’s State of the Union speech—is badly understaffed and has yet to produce any discernible progress With the Occupy protesters resuming battle stations , and Mitt Romney in place as the presumptive Republican nominee , President Obama has begun to fashion his campaign as a crusade for the 99 percent--a fight against, as one Obama ad puts it, "a guy who had a Swiss bank account." Casting Romney as a plutocrat will be easy enough.
“It’s perplexing at best,” says Phil Angelides, the Democratic former California treasurer who chaired the bipartisan Financial Crisis Inquiry Commission. “It’s deeply troubling at worst.” The Newsweek reporters note that “financial-fraud prosecutions by the Department of Justice are at 20-year lows”; in fact, such prosecutions under Obama “are just one third of what they were during the Clinton administration” — even though the 2008 financial crisis was drowning in financial fraud. Contrast that with the reaction of George H.W.
Bernard L Madoff ran the biggest Ponzi scheme in history, operating it for 30 years and causing cash losses of $19.5bn. Shortly after the scheme collapsed and Madoff confessed in 2008, evidence began to surface that for years, major banks had suspected he was a fraud. None of them reported their suspicions to the authorities, and several banks decided to make money from him without, of course, risking any of their own funds. Theories about his fraud varied. Some thought he might have access to insider information. But quite a few thought he was running a Ponzi scheme.
We Speak on PBS Newshour About Why No Bank Executives Have Gone to Jail The cynic in me has to note that PBS Newshour decided to cover the issue of why no banksters have gone to jail on what has to be one of their lowest traffic days of the year. And I have a sneaking suspicion I got the call to go on the show because it was not exactly easy to find people willing to be taped late in the afternoon on the day before Thanksgiving (they did have to go to the trouble not only of arranging for a studio in Alabama, but also finding a makeup person, since I’m not in the habit of taking my TV warpaint with me when I travel). I hope you like this segment. PBS prefers a format which keeps the guests from interacting directly.
February 3, 2012 | Like this article? Join our email list: Stay up to date with the latest headlines via email. American Public Media's "Marketplace" had a recent segment focused on why it has taken so long to bring criminal prosecutions related to the financial crisis.
“Crooks on the Loose? Did Felons Get a Free Pass in the Financial Crisis? “ I have to confess I have yet to do more than sample this video, but I intend to watch it in full as soon as I have a breather. This is a video of a panel discussion at NYU Law School earlier this month at which former prosecutors Neil Barofsky and Eliot Spitzer took on party-line-defending Lanny Breuer of the Department of Justice, and to a lesser degree, Mary Jo White, former US attorney who now works on the defense side. Various reports on the discussion indicate that sparks flew at several junctures, so I am confident the NC audience will find it engaging as well as informative.