Bring Wall Street Crooks to Justice
Debate over how to resolve the nation’s financial emergency is taking a salutary direction for the moment, as politicians of both parties refuse to be herded by the Bush White House into a ridiculous $700 billion swindle. Before Congress approves such a stunning expenditure to save the undeserving hides of the super-rich, they may at least create provisions for independent oversight, new regulation, public equity and homeowner relief.
There is one more thing that should not be neglected, however. Before this is over, we will need a special prosecutor with an ample budget to find, prosecute, imprison and ultimately deter the criminals responsible for this disaster.
From the bottom-of-the-barrel bucket-shop mortgage salespeople, who sought inspiration and technique from the movie Boiler Room, to the geniuses who packaged those bad and often fraudulent loans into bad paper for sale to major banks, investment houses and insurance companies, literally thousands of crooks are out there. Unless we find a way to bring them to justice—starting at the top, by the way—then the “moral hazard” inherent in any bailout will become even more acute.
Anyone who doubts that massive fraud is at the center of this crisis hasn’t been reading between the lines. While much coverage in the business press has focused on tick-tock accounts of the final days of the big investment houses or the vagaries of the roiling market, there is no shortage of stories showing how we got into this morass.
The simple version of this decentralized criminal conspiracy can be summarized as follows: Mortgage lenders handed out loans to unqualified borrowers and sometimes tricked them into signing agreements they could not fulfill. Those same companies and others then marketed those loans with false assurances of their soundness to convince investors to buy them. Some of those investors then resold the packages of crap mortgages to other investors both here and abroad. Among the miscreants implicated in these activities were many with actual criminal records, whose entry into the mortgage industry was in no way hindered by the state regulatory agencies. They proceeded to amass fortunes large and small, using the same techniques familiar from previous financial scandals—pressurized sales techniques; targeting of the weak, elderly and insecure; outright fraud, forgery and deception.
Which of the participants knew what was going on here? Which of them merely failed to perform any due diligence before passing along undue risk to the individual investors, pension funds and others to whom they owed fiscal prudence? Which companies and executives actively encouraged thievery, and which simply looked away while they booked big profits?
Those are the questions that must be sorted out by competent judicial authorities if we are ever to establish the rule of law in our markets. The F.B.I. is currently investigating more than 20 lenders, including the defunct Indymac, but there is much more to be done—and at the moment, the prosecutors seem to have set their sights too low. Someone with prosecutorial authority and resources should scrutinize the major players at UBS, Bear Stearns, Lehman Brothers and all the rest. The passage of the Sarbanes-Oxley law was meant to discourage this kind of financial chicanery by major firms. Now is the time to apply its criminal sanctions to those who flouted the law.
State authorities, whose years of incompetence and negligence led directly to the debacle, cannot be trusted to enforce the law now. In Florida, for example, which has suffered the worst of the national epidemic of mortgage fraud, the state regulators were recently found to have permitted thousands of brokers with criminal records—including actual bank robbers!—to enter the marketplace. The best estimate is that up to 25 percent of the mortgages recorded in the Sunshine State over the past few years were tainted.
Now, as the federal government prepares to take many or most of those bad loans off the books of the geniuses who bought them, what will prevent additional massive fraud? Only the threat of enormous fines and years of imprisonment can prevent these crimes from being repeated, at our expense. During the final decade of the last century, the nation spent well over $100 million on special prosecutors to investigate trivial and nonexistent offenses by public officials. We should be prepared to spend many times that amount in the years to come to get to the root of this gigantic scam, both to punish and to deter.
jconason@observer.com
In criminal law, there is a term called, "depraved indifference". It refers to those who stood by when a crime was being committed, yet did nothing.
I think all the politicians who allowed this financial meltdown to transpire should be charged with such a crime.
Now, let's see. In 2005 John McCain proposed specific, sweeping legislation to correct most - if not all - of the maladies now plaguing the system.
He was, of course, ignored by Barack Obama and the rest of the Democrats.
So, Joe, I suppose, to make a good example, you would start with the arrest of Barack Obama? That is where your logic leads you.
Just announced on CNN - Lou Dobbs, FBI is investigating The Wall Street Crooks. Was a short update blurb. Sounds great if they actually do their job & it's not just another Bush crafted cover up.
Bill08:
Have you noticed that there is no mention of Homeland Security. One of their Jobs is to watch out for ANY ATTACKs on our money systems. I hope that the RICO ACT can be used and TAKE ALL of their assets. It would be neat if they would get a citizen group of ( 12 ) APPOINT their Lawyer...
RoFlMaO....
There will be a special ring in Hell reserved for the avaricious bastards in the financial community who perpetrated this fraud - and their willing accomplices in Washington.
I would love to ascribe blame to one party or another on this, but this was an equal opportunity screwup. About the only thing one could say party-wise was that Senator McCain's sweeping reform bill in 2005 never made it out of committee, having been voted down, I believe, on a partyline vote.
RICO statutes were used in both civil and criminal courts in the 1980's to recapture the assets of the real estate crooks. Time to rev up that old engine again.
2005? Which political party controlled Congress with an iron fist? The Executive Branch?
You may be correct in utilizing the concept of "depraved indifference" but why were you attempting to misdirect its application?
Joe, Joe, Joe! Don't you see and can't you smell the malodorous carcass of Affirmative Action disguised as Altruism that's been under your retrousse proboscis ever since you were still an honest joe, Joe?
This $1trillion is just a down payment on the reparations that Jesse and Jeremiah claim as amerikkka's debt to the offspring of its original sin!
Only 776 more $1trillion crises to go!
DavidDPL,
Please see post #4. Both parties, and the individuals in them, are responsbile for this mess. Politically, the Democrats seem to be benefitting more from the fiasco, if the polls are correct. Senator Obama is now up nine points in the latest ABC poll, and it seems to be tied directly to the economy.
I think the American populace is angry - and rightly so - at the administration's bailout plan. Of course, the clueless President Bush doesn't know what's in it. He should be selling the plan to the American public, not his lackey cabinet secretaries. It's a bad plan, Americans know it instinctively, and are punishing all Republicans for it.
Let's start with Phil Gramm who wrote the bill and President Clinton who signed it that let loose all this crap. Then you are talking!! Then we need to look at the Bush WH who turned their collective heads and looked the other way for all these years and let it happen. Yet you also need to go further back to Bush 41 and Phil Gramm's wife to wrote another bill that he signed that let the speculators loose on us. So it's all tied together. You cannot talk about one without the other.
Mr. Conason,
Your Literature has been superb! What is more, Linguistics shall be a further escapade into Truth! As for Clinton, that she is the president and that she is simply superb, the jerks have more than proven: a little Aristotelean Rhetoric there!
Continue Onward! Good!
ME
To Bolgia no. 7 of the 8th circle of hell they go...
how wa the figure of 700 billion arrived at? where exactly will it go ? are the cooked wall st executives going to be the watchdogs ? after lehman brothers bankruptcy what is the urgency now does sec'y paulson whant to secure his goldman investment? what about some paybacks fist, from the greedy fatcats.
If the White House and the DOJ stay in the hands of the GOP..only the very small fish at the bottom of the sea will ever be prosecuted..if at all. Watching the highly politicized Department of Justice headed by the GOP yes men such as Alberto Gonzales or A.G. Michael Mukasy gives me absolutely no confidence that any of the extremely wealthy Bush cronies will ever suffer for even one nano-second. These wealthy crooks are right at this moment laughing and making fun of both Chairman Dodd in the Senate and Barney Frank in the House (Banking committee chairmen) for even suggesting any one should be held accountable, not given their golden parachutes, not allowed to carry on with business as usual or even the mere hint of any sort of "regulation" that might hinder further fraud and theft....and why not?..the Democrats have categorically denied fulfilling their oath of office by "taking impeachment off the table" and have punished no one...in response to ignored subpoenas, stonewalling and obstruction have only managed an occasional "strongly worded letter" and yet I have more faith in the devil I don't know (a Democratic Administration) than the devil I have become so familiar with over the last eight years..the GOP administration...I am ready for a real change...
The way I see it the crooks behind this mess (all friends of Bush I imagine) decided that the only way to make sure a new administration can't see the books is to get their friend in the White House to bail them out.
Just look at Section 8 of the original bailout bill. In one sentence it attempts to sweep everything under the rug. It states "Decisions by the Secretary pursuant to the authority of this act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." (The secretary being Treasury Secratary Paulson)
What more do you need to know about what they are attempting to pull off. I say do not pass the bill, let the economy end up where it should be without being propped up, and send the crooks to jail. Otherwise this will just happen again and again.
Dear Mr. Conason,
Please don't forget to rein in Mr. Alan Greenspan too. As I recall he once prasied the subprime mortgage in the Congress hearing with the words like "It is for the first time in history that Americans was so easy to own a home."?
R.I.C.O.
I did a little research on this - the bill passed the house with overwhelming (bipartisan) support, but died in the Senate. According to an article in the Financial Times,
"Mr Oxley reached out to Barney Frank, then the ranking Democrat on the committee and now its chairman, to secure support on the other side of the aisle. But after winning bipartisan support in the House, where the bill passed by 331 to 90 votes, the legislation lacked a champion in the Senate and faced hostility from the Bush administration.
Adamant that the only solution to the problems posed by Fannie and Freddie was their privatisation, the White House attacked the bill. Mr Greenspan also weighed in, saying that the House legislation was worse than no bill at all." http://www.ft.com/cms/s/0/8780c35e-7e91-11dd-b1af-000077b07658.html?ncli...
The bill never made it to a vote in the Senate. Why was there no push? Perhaps was considered DOA due to fact that it was not likely to be signed into law by the President. Nonetheless, although McCain did cosponsor the bill, it's a bit of a stretch for anyone to portray McCain as the unheeded would-be hero in this situation.
I seem to remember that when the Mafia was put out of business, they decided they would get into banking and the stock market where they could get away with their crimes while being in a "legitimate" business. They must have taken over the mortgage business.
I financed a loan for a purchase of a lot I owned and kept getting letters from all over the country from mortgage companies that wanted to relieve of the "stress and burden" of carrying the loan.
What a joke! The loan was paid off and there was never a problem.
Thank you, Joe. That's what I said when someone from my brokerage called to tell me I no longer had a dollar for each dollar in my money market account. He told me how much was there, and when I checked, I had lost $2,000.00.
I have no debts, but have to have money for taxes, fess, and insurance, etc. I am too old to find employment.
In the hearing it was mentioned that they almost wiped out all the money market accounts. These people have to be stopped, not bailed out!
Money and guns -- one should be allowed both. Oh yean, violate the rights inherent in ownership thereof and off to jail you go... for a long, long, long time.
I like it.
This is like the privatization of Social Security all over again. "It'll be GOOD for you," said the Bush lackeys. "If you don't do it we'll all go broke!"
Yet, somehow, even the cloth-coated Republican elderly in the hinterlands could see the swindle for what it was. It quickly became a joke, as the $700 billion-crook bailout is becoming.
But I despair of stopping it through petitions, phone calls, emails, etc. I spent time trying to get through with this result: "voice mailbox is full."
Further, although there might be a pansy-ass "blue-ribbon commission" to investigate "possible wrongdoing" (because the FBI will be pulled off the case for one cooked-up reason or another, like a bomb in a bookbag)--said commission will heave a sigh and say, well, although they may have acted badly, we can't say they acted illegally, nothing we can do except express our hurt feelings."
I realize it's just my opinion and predictions. We'll see how it plays out.
Bill08's attempt to portray this crisis as equally the fault of both parties is just flat out wrong. The GOP controlled Congress and the Presidency for 6 consecutive years, and somehow you come to the conclusion that Democrats are equally at fault for this mess? Please....
The one concession I will make to your argument is that the Glass-Steagall act was repealed in 1999 under the Presidency of Bill Clinton. President Clinton NEVER should have agreed to this action and deserves criticism for the fallout, which includes the current financial mess. However, the biggest proponent of this repeal, which has caused enormous suffering, was former Republican Senator Phil Gramm, who now serves as a key advisor to John McCain.
The GOP since Reagan has pushed again and again for deregulation of all industries, including the financial industries. The result has been a steady unraveling of the regulatory protections which worked so well after the Great Depression. Instead of protecting American citizens from criminal conduct by unscrupulous businesses, the GOP has aided this effort in its ideological determination to destroy government. When a party doesn't believe that there is any legitimate role for government regulation of the economy, you get the mess we're seeing now.
The Democratic Party did not campaign for the last 28 years on a platform of deregulating the economy; the GOP did and rightly deserves the lions share of the blame for this mess. If the Dems deserve any criticism for this debacle, it's for not standing up to the GOP and allowing this to happen without a bigger fight.
This guy Conason seems to be the real deal...a true fool.
We the People of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.
We the people of the United States of America have requested a total military budget of the United States for 2007 of $699 billion to ensure our continued policing of the world.
We the people of the United States WILL NOT demand justice for the following criminal acts that have been carried out in our name and against ourselves:
U.S. SECURITIES REGULATIONS OF WHICH KEY INSTITUTIONS HAVE BEEN SHOWN TO BE IN BREACH:
• NASD Rule 3120, et al.
• NASD Rule 2330, et al
• NASD Conduct Rules 2110 and 3040
• NASD Conduct Rules 2110 and IM-2110-1
• NASD Conduct Rules 2110 and SEC Rule 15c3-1
• NASD Conduct Rules 2110 and 3110
• SEC Rules 17a-3 and 17a-4
• NASD Conduct Rules 2110 and Procedural Rule 8210
• NASD Conduct Rules 2110 and 2330 and IM-2330
• NASD Conduct Rules 2110 and IM-2110-5
• NASD Systems and Programme Rules 6950 through 6957
• 97-13 Bank Secrecy Act, Recordkeeping Rule for funds transfers and transmittals of funds, et al.
U.S. LAWS ROUTINELY BREACHED BY THE CRIMINAL OPERATIVES AND BANKSTERS:
• Annunzio-Wylie Anti-Money Laundering Act
• Anti-Drug Abuse Act
• Applicable international money laundering restrictions
• Bank Secrecy Act
• Conspiracy to commit and cover up murder.
• Crimes, General Provisions, Accessory After the Fact [Title 18, USC]
• Currency and Foreign Transactions Reporting Act
• Economic Espionage Act
• Hobbs Act
• Imparting or Conveying False Information [Title 18, USC]
• Maloney Act
• Misprision of Felony [Title 18, USC] (1)
• Money-Laundering Control Act
• Money-Laundering Suppression Act
• Organized Crime Control Act of 1970
• Perpetration of repeated egregious felonies by State and Federal public employees and their Departments and agencies, which are co-responsible with the said employees for ONGOING illegal and criminal actions, to sustain fraudulent operations and crimes in order to cover up criminalist activities and High Crimes and Misdemeanours by present and former holders of high office under the United States
• Provisions pertaining to private business transactions being protected under both private and criminal penalties [H.R. 3723]
• Provisions prohibiting the bribing of foreign officials [F.I.S.A.]
• Racketeer Influenced and Corrupt Organizations Act [R.I.C.O.]
• Securities Act 1933
• Securities Act 1934
• Terrorism Prevention Act
• Treason legislation, especially in time of war.
Instead, We the People of the United States will give away a $700 Billion Dollars as a down payment, and additional unlimited funds, (whatever the cost), on behalf of the wealthiest and most elite 2% of our world citizenship so that they may purchase the next 7 generations of our children for purposes of servitude, bondage, homelessness and starvation.
We love you so much, but hate justice even more, therefore, we donate all of our children to ensuring that you and your descendants WILL NEVER HAVE TO WORK IN THIS TOWN AGAIN!
P.S. May our Congress have a great extended vacation now that they have voted themselves obsolete...don't forget to send postcards after you hide the cash in foreign accounts!
I think what we have here is a perfect example of the Discordian concept of "Beamptenherrschafft" -- beaurocracy caving in upon itself due to it's inherent, and inevitable internal rot (my own paraphrase...).
In regards to Wall Street, the people are shouting "Let them fail! Do not bail!". I say we include Congress in that, too! The worms that gnawed on the roots of Wall Street have Washington tottering on disaster as well.
If we want to bring the miscreants to justice, why limit the scope? Our parasitic Congress-critters are guilty of bribery as well as very poor judgement overturning the Depression era banking regulations (although that may be euphemistically criminal, it is not illegal...). And yeah, I trust the Department of Justice to "get to the bottom of this"! NOT!! How about an independent "Blue Ribbon Commission"? (Or the Citizens Committees of Revolutionary Paris? Pitch-forks, anyone?)
Wouldn't it just scare the Bejeezus out of them if we returned zero incumbents to Washington -- of either party -- in November? Food for thought...
Hail Eris!
The only fix:
1. repayments of mortgages of all defaulting owners should be restricted to 20% of their incomes, whatever they are;
2. all assets of all financial instritutions involved in this scandal should be frozen until further notice;
3. future field of operation of all financial institutions to be restricted to their resident states;
4. all financial "products" to be subject to governement financial standard approval.
I find it very interesting that we nothing from or about the culpability of large, prestigious CPA firms that earned millions in fees for issuing favorable opinions as to the accuracy of financial statements of financial corporations that were carrying billions in overstated assets. A major part of any audit process is to test the value of all major assets carried on the books. What gives? Culpability? Gross negigence? Complicity? I for one, would like some accountability.
I find it very interesting that we nothing from or about the culpability of large, prestigious CPA firms that earned millions in fees for issuing favorable opinions as to the accuracy of financial statements of financial corporations that were carrying billions in overstated assets. A major part of any audit process is to test the value of all major assets carried on the books. What gives? Culpability? Gross negigence? Complicity? I for one, would like some accountability.
I find it very interesting that we nothing from or about the culpability of large, prestigious CPA firms that earned millions in fees for issuing favorable opinions as to the accuracy of financial statements of financial corporations that were carrying billions in overstated assets. A major part of any audit process is to test the value of all major assets carried on the books. What gives? Culpability? Gross negigence? Complicity? I for one, would like some accountability.
I find it very interesting that we nothing from or about the culpability of large, prestigious CPA firms that earned millions in fees for issuing favorable opinions as to the accuracy of financial statements of financial corporations that were carrying billions in overstated assets. A major part of any audit process is to test the value of all major assets carried on the books. What gives? Culpability? Gross negigence? Complicity? I for one, would like some accountability.
I find it very interesting that we nothing from or about the culpability of large, prestigious CPA firms that earned millions in fees for issuing favorable opinions as to the accuracy of financial statements of financial corporations that were carrying billions in overstated assets. A major part of any audit process is to test the value of all major assets carried on the books. What gives? Culpability? Gross negigence? Complicity? I for one, would like some accountability.