Posts Tagged ‘Prosecuting Wall Street’

Who goes to jail? America’s injustice gap

April 17, 2014

In an interview with Democracy Now, Matt Taibbi talked about the contrast between the refusal of the federal government to investigate and prosecute corporate crime with the increasingly arbitrary and brutal treatment of ordinary citizens by police and prosecutors.   This is the topic of his new book, The Divide.

How can it be, he asked, that somebody can go to prison for having half a marijuana cigarette in his pocket, yet no executive of HSBC has been indicted for laundering billions of dollars for the Mexican and Colombian drug cartels?

Or that a black man can be charged with obstructing pedestrian traffic, just for standing in front of his home at 1 a.m. when nobody is on the street, yet the federal government lets Wall Street bankers off the hook for the financial fraud that led to the 2008 market crash?

Good questions, and I think we all know the answers.

For a transcript of the interview, click on the following link.

For more about Taibbi’s book, click on the following links:  [added 4/19/14]

[Added 8/28/14]

Here are some of my later posts of Matt Taibbi’s The Divide

Above the law and below it in the USA

Matt Taibbi on impunity for rich criminals

The incentives to ignore due process of law

A predatory business model based on lawbreaking

Prosecuting Wall Street: time is running out

September 14, 2012

Two governmental agencies which investigated the causes of the 2008 financial meltdown—the Financial Crisis Inquiry Commission and the U.S. Senate Criminal Investigations Subcommittee—made criminal referrals to the U.S. Department of Justice.  These referrals were never acted on.  Soon the six-year statute of limitations on prosecuting financial fraud will run out, and it will be too late to prosecute.

Chris Swecker, former assistant FBI director in charge of its Criminal Investigations Division, issued a public warning back in 2004 about an explosion of mortgage fraud that could lead to calamity.  The warning was not heeded.  He told Al Jazeera English that the Justice Department has not allocated sufficient resources for investigation and prosecution.  He noted that Attorney General Eric Holder and Criminal Division Chief Larry Breur were white-collar defense attorneys and have a “defense mindset.”

Bryan Georgiou, who served on the Financial Crisis Inquiry Commission, said the Justice Department’s inaction shows “a lack of accountability that is really quite unique in American history.”

Part of the reason is the large sums of money the big Wall Street firms spend on campaign contributions and lobbying.  Goldman Sachs was President Obama’s largest corporate donor in 2008; the Justice Department terminated its criminal investigation of Goldman in August, saying there was no basis for indictments.  Another reason is the revolving door between working for government and working on Wall Street.

William Black, an expert on white collar crime and litigation director of the Federal Home Loan Bank Board during the savings and loan crisis of the late 1980s, said the impact of the recent financial meltdown is roughly 70 times as great, in terms of its economic impact, as the S&L crash, yet the investigative and prosecution effort is much smaller.  The subprime mortgage crisis was fraud from start to finish, from knowingly signing up borrowers based on false information to repackaging the loans and selling them based on false information.

He said the Justice Department appears not to understand “accounting control fraud,” in which executives who control a company loot it for their own benefit.  “The best way to rob a bank is to own or control one,” he said.   Unless President Obama and Attorney General Holder change course, the robbers will get away with it.  And, no, there is no reason to think that Mitt Romney, with his shady financial history, would be any different.