No, I am not going to talk about Mitt Romney, Paul Ryan, Barack Obama, or the “presidential” “election”. After all, what is there to say? The “winner” has been picked, and guess what? You are the loser. When the unrepentant I-got-wealthy-sending-your-job-to-China Mitt tries to make himself appear somewhat related to the human species, with laughable results, and Paul Ryan, Mitt’s running mate, brags about his budget plan which, by the way, would eliminate 4.1 million jobs within 2 years, raise taxes on the middle class, lower them for the wealthy, and increase the deficit, and Obama whines that he is not getting enough credit for being willing to cut social security and medicare, you have to face the fact that there is not much else to say. The only difference between Mitt and Barack is that currently Barack has the power to arrest and detain you indefinitely, or just assassinate you outright, depending on how he feels this morning; Mitt does not currently have that power, but he’d sure like to. They both intend to help rich people get richer and put the hurting on poor people. “Poor people”, those at or near poverty, now includes nearly one third of the nation. The Dec., 2011 US mayors’ report on poverty claims 50% are at or near poverty. – http://wsws.org/articles/2011/dec2011/pove-d16.shtml
Nope, this week’s winner is one of the proud sponsors of the 2008 and 2012 “elections” and also, coincidentally, one of the major looters and sackers in the Kill The Economy Sweepstakes…Ladies and Gentlemen, I present this week’s award in the ‘getting out of jail free’ category to….Goldman, Sachs. Long noted for their breath-taking and inventive economic assaults on countries worldwide and their mass destruction of the American Dream at home, this company can now claim three big wins in one week. What a performance! Bravo, I say, oh, bravo! Pay attention, Jamie, the King’s favored one – these guys might have a word or two of advice even for you. [http://www.salon.com/2012/07/03/barclays_head_forced_out_jpmorgan_head_remains/ ]
12 August, 2012
Attorney General to US: Nothing to See on Wall Street, Folks, Just Move Along
By Richard (RJ) Eskow
Yesterday the Justice Department announced that once again it’s not going to pursue evidence of Wall Street crimes which has been sent its way. It has already failed to act on information sent to it by sources whose investigators are apparently more dogged than its own, including several other government agencies and the Financial Crisis Inquiry Commission. Now the bipartisan committee which was led by Senators Carl Levin and Tom Coburn can be added to the list of sources whose leads weren’t pursued by Attorney General Eric Holder and his staff.
Holder was on the defensive yesterday, a sign that the mounting criticism of his inaction is getting his attention. He was also scornful of that criticism, saying that it’s belied by “a troublesome little thing called facts.” There’s something troublesome here, all right, but it isn’t the facts.
A Justice Department press release announced that there will be no prosecutions based on the Levin/Coburn report:
“After a careful review of the information provided in the report and more than a year of thorough investigation, the Department of Justice … the FBI and the Special Inspector General for the Troubled Asset Relief Program (and other agencies) have determined that, based on the law and evidence as they exist at this time, there is not a viable basis to bring a criminal prosecution with respect to Goldman Sachs or its employees in regard to the allegations set forth in the report.”
The press release goes on to say that “the department and its investigative partners conducted an exhaustive review of the report and its exhibits, independently gathered and scrutinized a large volume of other documents, and tenaciously pursued potential evidentiary leads, including conducting numerous witness interviews.”
The DoJ also boasts that “Since FY 2011, the Department of Justice’s financial fraud enforcement efforts have resulted in at least $185 billion in civil and criminal forfeitures, restitution, civil settlements and other penalties.” (Bankers have continued to collected huge salaries and bonuses, however, so the lack of criminal prosecution gives them no reason to stop committing crimes.)
The statement goes on to describe DoJ’s “aggressive” pursuit of bank fraud, adding that “The Department of Justice has not hesitated to investigate and take enforcement action when the evidence and facts support doing so.”
Holder himself was considerably more testy: “There have been, I guess, 2,100 or so mortgage-related matters that we have brought here at United State Department of Justice. Our state counterparts have done a variety of things. The notion that there has been inactivity over the course of the last three years is belied by a troublesome little thing called facts.”
Unfortunately, the Holder Justice Department has had a troublesome relationship with facts. That dates back to its ginned-up and ultimately discredited claims about something called “Operation Blind Trust,” in which it claimed credit for dozens of mortgage-related convictions that it said had resulted from a coordinated operation of that name. As the New York Times noted, many of those investigations had actually concluded before the 2008 election, Holder’s appointment, and the creation of “Blind Trust.” […]
And despite Holder’s claims, the convictions obtained over the least three and a half years have been strictly for small fry. The Justice Department hasn’t even tried any cases against major financial executives, despite seemingly overwhelming evidence which includes:
The AIG allegations: We used the Levin/Coburn Report to review the list of potential criminal activity in that case here.
GE Capital deceptions: That’s the company whose politically-connected CEO was given a Presidential appointment. Referring investigators were stunned to find that no criminal charges would be filed over its fraudulent deception of investors, even though they had identified specific individuals in the accounting department who had cooked GE’s books. GE Capital has also been implicated in fraudulent mortgage practices.
Wells Fargo drug-money laundering: That’s the case in which bankers laundered money for the Mexican cartels that have killed tens of thousands of people. You know the gangsters we mean – they’re the guys who decapitate people.
JPMorgan Chase’s “London Whale”: With particular concern about the cover-up of billion-dollar losses, with special concerns about CEO Jamie Dimon’s statement to investors that its London losses were “a tempest in a teapot.” Dimon later admitted he already knew that those losses would be at least two billion. (Making false statements to investors is stock fraud, a crime.)
And there are others, too numerous to mention all of them here: Countrywide. Citigroup. HSBC. The list goes on and on.
The Justice Department’s argument for inaction seems to come down to this: Bank cases are complicated. They’re hard to win. We don’t want to try. And it has repeatedly used an argument that’s also been made by the President and Treasury Secretary as well, as they’ve tried to explain away the inactivity: that bad banking behavior isn’t necessarily criminal behavior. That claim’s been repeated many times, especially in the context of “ABACUS” and other Goldman Sachs misdeeds contained in the Coburn/Levin report.
But it’s not true. It’s already illegal to lie to clients, to knowingly conceal important information from in order to get their money under false pretenses, or to withhold materially important information from shareholders. And yet that flimsy argument seems to lie at the core of the DOJ’s explanation for once again declining to pursue the evidence wherever it may lead.
Here’s what really happened in this case: Goldman was selling its clients “crap” investments (A Goldman employee’s word), and which it knew to be “crap,” while at the same time betting against those investments. And it concealed the fact that these investments were selected, not by the people it told investors were doing the choosing, but by somebody who was well-known for betting against the “crap” – and who would make a fortune if they failed.[…]
Meanwhile, the cases the Justice Department hasn’t prosecuted have led to billions of dollars in settlements. Eric Holder says that his department and this Administration are doing everything they can to prosecute Wall Street fraud and make sure it doesn’t happen again. There’s only one thing that makes that statement hard to believe: It’s a troublesome little thing called “facts.”
On the same case and the concurrent announcement of the SEC dropping their investigation:
US drops investigations of Goldman Sachs
By Barry Grey 11 August 2012
The US Justice Department announced Thursday evening it was ending a one-year criminal investigation and would not file charges against the giant Wall Street investment bank Goldman Sachs or any of its employees.
In April 2011, the Senate Permanent Subcommittee on Investigations released a voluminous report on the role of major banks, federal regulators and credit rating firms in the collapse of the subprime mortgage market and ensuing financial crash of September 2008.
Of the report’s 640 pages, 240 pages, or 40 percent, were devoted to a detailed examination of Goldman Sach’s deceptive practices in marketing mortgage-backed securities and collateralized debt obligations. The report alleged that Goldman bilked clients by selling them mortgage-backed securities without informing them that the bank itself was betting the investments would fail.
The Senate report concluded by listing federal securities laws the committee believed had likely been violated by Goldman and other banks. The committee referred its findings to the Justice Department and federal prosecutors for a criminal investigation of Goldman and its executives. It also called for an investigation into whether Goldman CEO Lloyd Blankfein had perjured himself in his public testimony before the panel.
In releasing the report, the chairman of the committee, Senator Carl Levin of Michigan, said the panel’s two-year probe had found “a financial snake pit rife with greed, conflicts of interest and wrongdoing.” He recommended that charges be brought and said, “In my judgment, Goldman clearly misled their clients and they misled Congress.”
In its statement released Thursday, the Justice Department said it had conducted “an exhaustive review of the report,” but concluded that “based on the law and evidence as they exist at this time, there is not a viable basis to bring a criminal prosecution with respect to Goldman Sachs or its employees in regard to the allegations set forth in the report.”[…]
Also on Thursday, Goldman revealed in a regulatory filing that the Securities and Exchange Commission (SEC) had informed the bank it had ended a separate probe of a $1.3 billion subprime mortgage deal stemming from 2006, and had decided to take no action. This was an about-face by the SEC, which had notified the bank last February that it planned to pursue a civil action in relation to the Goldman security.
The SEC decision to drop the investigation comes as regulators are approaching a statute of limitations deadline for mortgage securities issued before 2007.[…]
Yesterday, Goldman won another one:
(Reuters) – Goldman Sachs Group Inc Chief Executive Lloyd Blankfein and other bank officials won the dismissal of a shareholder lawsuit accusing them of tolerating poor mortgage practices and quitting a federal bailout program early to boost executive pay.
U.S. District Judge William Pauley in Manhattan said the shareholders failed to show there were “red flags” to put bank directors on notice of “broken controls” in Goldman’s mortgage servicing business, including that workers at its Litton unit may have been “robo-signing” documents.
Pauley also cited a similar lack of red flags to suggest directors knew Goldman was packaging troubled loans in residential mortgage-backed securities, including loans the bank sold “short” in a bet they would lose value.
The judge also said the plaintiffs did not show that directors acted in bad faith in letting Goldman repay $10 billion taken from the Troubled Asset Relief Program early, in June 2009, freeing the bank from restrictions on executive pay.[…]
Goldman still faces other shareholder litigation. In June, for example, Pauley’s colleague Paul Crotty said shareholders may pursue claims that they lost money after Goldman concealed conflicts of interest in how it put together several collateralized debt obligation transactions.
Last week, the U.S. Department of Justice said it ended a criminal probe into Goldman activity that predated the financial crisis, while the bank said the U.S. Securities and Exchange Commission ended a civil probe into a sale of $1.3 billion of subprime mortgage debt.[…]
(Reporting by Jonathan Stempel in New York; Editing by Gerald E. McCormick, Richard Chang and Matthew Lewis)
For some background on the statute of limitations issue, see here: http://teri.nicedriving.org/2012/07/connect-the-dots/
You may read an analysis of the Abacus deal (one of the cases mentioned above) here: http://sevenpillarsinstitute.org/case-studies/goldman-sachs-and-the-abacus-deal
The details are, as someone put it to me the other day, lurid.
The Holder DoJ, the SEC, and the various states’ courts are running the clock out on these cases. It is truly…audacious. Yet for some reason, we hope for justice to come from one of the two presidential candidates, both of whom are funded magnificently by Wall St. and the big financial companies, and one of whom has had four years to do his Big Reveal, which turns out to be the revelation that he will not under any circumstances end too-big-to-fail or carry out Wall St. prosecutions. Perhaps someday, we sigh. Maybe eventually. As they say, you can put your wishes in one hand and piss in the other – and just watch which one fills up first.
(“So long, and thanks for all the fish!” – Goldman, Sachs, et al to the world.)