Protecting Criminal Bankers

As we the self-governing American people are being entertained by the Washington fiscal cliff and debt ceiling circuses, real financial criminals continue to get  away free, imperiling both our financial security and our democracy.

One change has occurred since financial criminals nearly destroyed life as we know it in 2008: politicians everywhere now loudly proclaim the evils of bankers, and we are suddenly deluged with Government actions allegedly designed to prevent further abuse of the American people by those bankers. One cannot but recall Augustus pledging fealty to “the people” and swearing to obey their every command as he destroyed the Roman Republic and became the First Emperor, for in truth all the foxes have been carefully left–their mouths still stuffed with chicken–in charge of the hen house..

Despite the fact that DOJ imposed a $1.9 billion (£1.2bn) fine which included $655 million (£408m) in civil penalties, not a single senior officer at HSBC was criminally charged with enabling Mexican drug cartels and Al Qaeda terrorists to illegally move money through its American subsidiaries. [The Fourth Media 1/14/13.]

Perhaps the real meaning of pretending that “corporations are people” is this: if the corporation is a person and is judged guilty and pays, then no actual real people need to pay. The criminal has already been convicted! Thus, all biological criminal corporate executives are automatically–by definition–innocent regardless of the actions of the legal corporate person they command. Corporate crime implemented by innocent humans. People don’t commit crimes; corporations do.

In an essay on the preferential treatment given major white-collar criminals, ex-Scotland Yard fraud crime detective Rowan Bosworth Davies zeros in on the importance of convicting large-scale “white-collar” financial criminals:

what clearly works beyond any other measure is a conviction for what could be termed ‘an ordinary criminal offence’. It immediately places the defendant in the ranks of ordinary mortals, and its commercial exclusionary impact has been amply demonstrated. Being convicted of a crime is the route to the door marked ‘exit’, and it means that the convicted person can never come back into the City because no-one will be willing to work with him or employ him in future. [Ian Frasier blog 10/18/12.]

It speaks volumes about the immoral and discriminatory nature of the “democratic” system the U.S. and Britain share that something this obvious needs to be pointed out. Well, perhaps not. Presumably the man in the street understands this, and as for the elite, well, they are only protecting themselves!

Rolling Stone’s Matt Taibbi summed up the cloak of immunity from prosecution for financial crime wrapped snugly around the shoulders of Bankers Too Big to Prosecute by the Obama Administration (for crimes committed in the run-up to the Bush Recession of 2008) in 2011 (nothing has changed since):

Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What’s more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even “one dollar” just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick “The Gorilla” Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars. [Gold Stock Bull 2/20/11.]

Taibbi then asks the billion-dollar question that pierces the heart of American democracy:

whether we have created a class of people whose misdeeds are no longer perceived as crimes, almost no matter what those misdeeds are

Are those–like Bill Black, Taibbi, and myself–who label the misdeeds of financial big-shots “criminal” giving honest capitalism an unfairly pejorative label?  In an essay pointedly entitled “Why the major global banks have become the enemy of the State and should be treated in the same way as Organised Crime or Financial Terrorists!”, Bosworth-Davies explains:

Their real role is to facilitate the safe handling and onward transmission of Naylor’s  vast ball of hot, criminal money which rolls around the financial world, seeking temporary accommodation. [concept of Canadian economist R. Naylor; see ‘Hot Money and the Politics of Debt’.]

They each take it in turn to earn a profit from their actions before helping the money to move on again to the next facilitator. That’s what the major financial institutions in the UK exist to do and have done for many years, and vast fortunes have been built on this facilitation of such criminal activity. These banks (now on a global basis) exist to facilitate the ambitions of international organised crime, because they have the available capital which needs storing, housing, a safe haven, and onward transmission in a disguised form. These institutions are merely an extension of the criminal facilitation process, because the money which they seek to manage and attract is no longer the proceeds and profits of ordinary commercial businesses, but the proceeds of white-collar criminals, organised crime gangs, drug traffickers, and foreign dictators. [Rowans Blog 12/31/12.]

Banks have become “an extension of the criminal facilitation process!”

Bank fraud specialist Bill Black sheds light on one major form of bank crime–mortgage robosigning:

Robosigning may sound like, well, they were just doing it mechanically and quickly, and that was impersonal, maybe, but certainly not criminal. No. It was axiomatic that what they were doing was—involved multiple crimes. Robosigning primarily involved signing—knowingly signing false affidavits that said, I have checked the following things and the facts are as follow. And not due to investigations by the United States government, or even by the states, but due to competent depositions by, frequently, small firm, even sometimes solo practitioner firms, they finally took the testimony under oath of these people, and they admitted that they systematically, as a matter of policy, filed false affidavits, which is a felony. 

And they didn’t do this a little bit. The large servicers did it over 10,000 times a month, over 100,000 times a year, and they did not stop it through any internal process. In other words, it was speeding up until private counsel found these felonies. No one—and this stuff is all done under the management of senior lawyers. No senior lawyer, to my knowledge, involved in this massive filing of false affidavits has been sanctioned in any way by state ethics boards for attorneys, either. [Real News.]

Holding the super-rich of the financial world legally responsible for their actions is the first step toward facing the need to restructure the big banks–breaking up those too big to tolerate, too big to manage, too big to control. Restructuring the big banks is the first step toward redesigning the financial system to return it to its original position as a tool for enriching society rather than a tool for impoverishing society…and corrupting our fragile democracy.


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