Independent Investigative Journalism Since 1995 |
Age of Obama Bush End Game Bush - Second Term Bush - First Term Who Is Bob Gates? 2004 Campaign
Behind
Colin Powell's Legend
The
2000 Campaign
Media
Crisis
The Clinton Scandals Nazi Echo The Dark Side of Rev. Moon Contra Crack Lost History The October Surprise
"X-Files"
International |
Editor’s Note: An irony of the anti-government Tea Parties is that they are getting secret funding from tycoons whose portfolios benefited from the government bailouts of Wall Street – and who now are using the Tea Partiers to stop government help reaching average Americans. Though the Tea Partiers may think they’re the peasants rising up against the powerful, they are really the rear-guard for the super-rich who are heading off into the sunset in coaches laden with treasure, an injustice that Danny Schechter addresses in this guest essay: Ben Affleck’s next movie, “The Town,” is set in Charlestown, Massachusetts, known for the battle of Bunker Hill and dubbed in the past by tabloid TV as “hell’s half acre” for all the crimes that take place there.
The film, a cops-and-robbers tale, focuses on a gang that robs banks with extreme violence. The ads refer to Charlestown as the national capital of bank robberies. Oliver Stone’s “Wall Street 2: Money Never Sleeps” delves into Wall Street’s well-mined culture of greed with the director, perhaps chastened by the criticisms of his recent political travelogue in South America, assuring the New York Times that it’s not a “Michael Moore movie,” whatever that means. Presumably, Stone is saying that his movie is not explicitly political. (The Wall Street Journal called my film, “Plunder,” “the Anti-Wall Street Film That’s Not Just for Michael Moore fans,” whatever that means.) A new studio backed documentary by Charles Ferguson about the financial crisis is titled “Inside Jobs.” However, it’s more about the business collapse than the crimes that caused it. At the same time in a land faraway called Afghanistan – a country being introduced at gun point and drone attack to the wonders of Western Capitalism – a run on a big bank in Kabul has created a financial crisis. The owners of the Kabul bank, which was looted by its owners, say its collapse could lead to a “revolution.” “If this goes on, we won’t survive,” says one of the men at the top. Reports say that some $300 billion is missing. Like its American counterparts, the Kabul bank wants a Washington bailout. The Wall Street Journal reports, “Its executives seemed to have followed the western play book for ruining their bank.” The insiders gave themselves clandestine loans like many U.S. lenders did. We have seen this movie before too: Does anyone remember Pakistan’s BCCI (a.k.a.”The Bank of Crooks And Criminals International”)? Officially, Washington says it will offer no help, but many suspect that money will be forthcoming, less the illusion of Afghanistan’s democracy-to-be crumbles. In banking, justice has been redefined as “just-us.” As Federal Reserve Chairman Ben Bernanke told the Financial Crisis Inquiry Commission, Americans were justifiably angry that bankers “who drove their companies into a ditch walked off with lots of money.” He also admitted that he had failed to see the flaws of the system. Bernanke did allude to “innovations” that provided lenders with an “unfair advantage,” the closest he came to referencing the way borrowers were ripped off. He spoke about laws when it came to the Fed’s legal authority, but not to the way Wall Street bankers and the mortgage people who he acknowledged worked for them flouted the law. The Commission has its own “flaws,” failing to see or investigate this pervasive fraud at the heart of the crisis. Economist Michael Hudson notes, “I believe that the beneficiaries were fraudsters, and that the system cannot be saved. Trying to save it by keeping the debts in place – and letting Wall Street banks ‘work their way out of debt’ at the U.S. economy’s expense – threatens to lock the economy in a chronic debt deflation and depression.” In its hearings on the fall of Lehman, the Commission cited e-mails advising against helping the bank whose bankruptcy accelerated the financial collapse. Jim Wilkinson, then chief of staff to Treasury Secretary Hank Paulson, wrote them. What the Commission didn’t mention was Wilkinson’s personal history of deception and fraud. As a GOP political operative, Wilkinson defended the “riot” that stopped a vote recount in Miami Dade in 2000. He then moved on to become a national security spokesman, working for the White House Iraq Group that manufactured the WMD justifications for invading Iraq. Wilkinson headed the Coalition Media Center in Doha that critic Michael Wolf dubbed an “information deprivation tank” for all the lies about the coming Iraq War that were disseminated there. Author Ron Suskind called Wilkinson “the spinmeister for the Iraq War.” Talk about fraud! Here’s one operative who went from voter fraud to political fraud to financial fraud. So even as popular culture and an angry public see Wall Street as a den of thieves, the people who are supposed to prosecute financial and white-collar crime do not. They have been getting some of the perpetrators to fork over multi-million fines rather than tossing their asses behind bars. Last week, Moody’s, the rating agency partially owned by the “Oracle of Omaha,” billionaire Warren Buffet – the place that dished out triple-A ratings for “asset-backed securities” with no assets behind them – was told by the Securities and Exchange Commission that it will not be prosecuted. The SEC cited “jurisdictional” limits because some key events occurred in Europe, then beyond the scope of the SEC’s regulatory powers. So, the SEC claimed to be powerless to hold Moody’s accountable for misrepresenting the value of derivatives and “structured investment products.” Many banks bought this junk based on Moody’s reputation. In the end, they lost billions. They were also conned and lied to. The consequences for Moody’s: NONE. (One of the ratings agencies, Fitch, disclosed that 80 percent of the packages of mortgages they examined were fraudulent.) The ratings agencies are not alone in getting away with their crimes. None of the big brand-name banks are being prosecuted, nor the insurance giant AIG, which proudly and profitably wrote credit default swaps on this crap. Henry Blodget, who was excommunicated as a Wall Street trader for his own excesses and dishonesty during the dot-com hype, justified the decision not to prosecute AIG executives, including Joseph Cassano, chief executive of the unit that insured mortgage-related securities. “At first blush, this sounds outrageous – yet more failure to punish those responsible for the financial crisis – but in at least one important respect, it's very good news,” Blodget wrote. “Criminal charges against Cassano and other AIGers would have been greeted with near-unanimous applause, no matter how flimsy the case. Prosecutors who brought the charges would have been acclaimed for their toughness and heroism – and, even if the case eventually failed, would long since have moved on to the more lucrative side of the business (defense). “Politicians would have cheered the toughness of the new regulatory regime. The public would have felt that in some small measure, justice would have been done. And so on. “So why is it good news that charges weren't filed? “Because, despite crawling all over AIG for two years, Federal prosecutors apparently didn't find enough evidence to hang criminal charges on. … Being short-term greedy, betting the farm, and destroying your firm, it turns out, wasn't against the law.” Of course not, because the government regulations had been re-written with the help of lobbyists from the financial industry before this recent crime spree. Because of those changes, the securities laws had impossibly high standards for conviction. Yet the prosecutors didn’t consider bringing a RICO action to prosecute the interconnected crimes of the finance, real-estate and insurance companies. I asked Aaron Krowne, who edits the respected financial site ML-Implode, about Blodget’s rationalization. “My take is that RICO-style actions would be needed, as you say,” Krowne wrote me. “The crime was the pattern. In most cases, no specific black-letter statues were violated at the high level (though they may have been violated at lower levels, i.e. with mortgage transfers and such). “Also, criminal prosecution should look inward to the regulators. AIG may have been regulated by the flimsy OTS [Office of Thrift Supervision] in the US, but that doesn't mean the OTS has no responsibilities. Like a fish, the rot starts at the head. So the banks that robbed themselves, robbed each other, financed what the FBI calls a “mortgage fraud epidemic,” while gouging their customers with excess fees, phony charges and inadequate monitoring of fraud in individual accounts, are getting off scot-free. Well not exactly free, at least not for you and me. The perpetrators were first bailed out by the government and then were given access to loans at almost zero interest, so they could mark them up with higher fees and pass them on to others for a tidy profit. Despite all the largesse, hundreds of banks are still pleading poverty and others prefer to use their almost-free money for safe and easy returns, rather than investing it in the national economy. The banks remain a business that gives us the business with little accountability or transparency. Ain’t nothing free about this free market. News Dissector Danny Schechter made Plunder The Crime of Our Time, now available on DVD with a companion book. Comments to [email protected] To comment at Consortiumblog, click here. (To make a blog comment about this or other stories, you can use your normal e-mail address and password. Ignore the prompt for a Google account.) To comment to us by e-mail, click here. To donate so we can continue reporting and publishing stories like the one you just read, click here. |
|
RSS Feed
Home
Links
Contact Us
Books
Email
Printer friendly