Outrage: S.E.C. Lets Firms That Wrecked the Economy Get Away With Fraud
If you and I commit fraud by, say, writing a check for which we know we have no funds on deposit, or by selling a product we know cannot produce the benefits we claim for it, well, we go to jail. Wall Street moguls (and by that term I mean the largest financial firms in the country) who committed securities fraud on a grand scale and crashed the economy requiring the US taxpayers to bail them out, on the other hand, routinely pass go with nary a worry that their "indiscretions" will result in prosecution. Too big to fail means too big to bring to justice, as well. Over the past ten years large financial firms have frequently skipped merrily away from any punishment for their crimes by the Department of Justice, even when caught red-handed, according to a NY Times report:
[The SEC] has repeatedly allowed the biggest firms to avoid punishments specifically meant to apply to fraud cases.
An analysis by The New York Times of S.E.C. investigations over the last decade found nearly 350 instances where the agency has given big Wall Street institutions and other financial companies a pass on those or other sanctions. Those instances also include waivers permitting firms to underwrite certain stock and bond sales and manage mutual fund portfolios.
JPMorganChase, for example, has settled six fraud cases in the last 13 years, including one with a $228 million settlement last summer, but it has obtained at least 22 waivers, in part by arguing that it has “a strong record of compliance with securities laws.” Bank of America and Merrill Lynch, which merged in 2009, have settled 15 fraud cases and received at least 39 waivers.
This is a bipartisan failure, for it has not made any difference who sat in the Oval Office over the past decade, the results have been the same. The rich financiers fleece the rest of us while making profits off their criminal malfeasance, and both Republican and Democratic administrations have turned a blind eye toward their fraud and deceit, crimes that have cost our economy trillions of dollars, led to massive unemployment and what would be called outright theft, if an individual burglar were involved rather than a multi-billion dollar institution.
Yet, why should they change their ways? No one is holding them accountable now for their nefarious schemes. We've have had proof since a Congressional Committee report issued last year that Wall Street firms rigged the Mortgage backed derivatives game to benefit themselves and defraud their customers on a massive scale:
The great and powerful Oz of Wall Street was not the only target of Wall Street and the Financial Crisis: Anatomy of a Financial Collapse, the 650-page report just released by the Senate Subcommittee on Investigations, chaired by Democrat Carl Levin of Michigan, alongside Republican Tom Coburn of Oklahoma. Their unusually scathing bipartisan report also includes case studies of Washington Mutual and Deutsche Bank, providing a panoramic portrait of a bubble era that produced the most destructive crime spree in our history — "a million fraud cases a year" is how one former regulator puts it.
These fraudulent criminal schemes led to the near collapse of our global economy, yet what has been done since then to bring the principals, corporations and individual alike, who were responsible for these frauds, to justice? Next to nothing, unfortunately. Republicans rail against the (meager) oversight and reforms passed by the Democrats prior to the 2010 mid-term elections and would overturn them in a heartbeat if they could, and prominent Democrats, including my Senator from New York, Chuck Schumer stands in Wall Street's corner, ever alert to protect these "mobsters" (for that is in effect what they are) from ever having to face the music.
And people still question why the Occupy Wall Street movement arose, organically, and attracted so many adherents to its cause despite lack of funding from billionaires like the Koch brothers, physical abuse by law enforcement of peaceful protesters and the unlawful use of force and arrests of thousands of people merely for seeking to express their first amendment rights.
The answer is obvious. It's as plain as the millions of corporate dollars pouring into to "Super Pacs" to run unprecedented numbers of attack ads in 2010 and in the Republican primaries this year, thanks to a Supreme Court that defines money as speech and includes corporations as "persons" (albeit persons with far more cash to exercise their "free speech rights), and no police officers to bash in their skulls, or use pepper spray designed to thwart grizzly bear attacks against them, when they do.
We are in the midst of a crisis far worse than any we have faced since the Civil War. A crisis that has resulted in the loss of our civil liberties at the expense of monopolistic multinational corporations. It is a fair question to ask if we are even a democracy anymore, though we follow the forms of holding elections, because of the the immense influence corporations exert over the individuals we "elect" as our representatives, and because of the power they exert over our news media and judicial system.
You and I, under the Constitution have the de jure right to be free of government interference regarding free speech, unlawful searches and seizures of our persons and property, and the right to due process. However, those rights are all too often not being enforced by our authorities, and so we have in a real sense witnessed a de facto diminishing of our civil liberties. Meanwhile, large corporations (and not just Wall Street) operate unfettered from the laws and rules the rest of us must obey. Indeed, one can say that these corporate persons have gained the right not to be bothered by our laws, nor subject to criminal prosecution for their crimes, provided they are big enough. Oh yes, on occasion we hear of fines and other "slaps on the wrist," but those are for show, nothing more. The profits made from evading the law far outweigh any minor financial sanctions incurred by these firms. And who among their executives has gone to jail, other than individuals such as Bernie Madoff whose principal crime was not being smart enough to cover his tracks, and too dumb to create a Ponzi scheme that it was possible to ignore forever. Indeed, one can argue he played the role of the "scapegoat" for the rest of the banksters, that sacrifice of a small animal that obscures the sins of the larger community of greed and avarice that has stolen our livelihoods, our country and our future from us.
Madoff was a convenient symbol. He was used to distract is from the big criminals, in much the same way that Republicans and the "conservative media" used fake muckrakers like James O'Keefe to tar ACORN, and to lay the entire blame for the economy's fall from grace at the feet of Fannie Mae and Freddy Mac, Democrats, our social safety net and, last but not least, that "Negro" (though they would never say that world publicly) in the White House.
We live in dangerous times, where the truth is condemned as damn lies, and lies masquerade as God's own truth. And the cause of this crisis? The greed and heartlessness of a few men and women who have used their corporate masks, and their willingness to destroy this nation of ours, so long as there is profit in it for them.
The system that FDR and the New Deal began, a government that saw its mission as promoting the welfare of the greatest number of Americans (even if at times it came up short on meeting that ideal) has been eradicated. The challenge before us is to transform our nation back to the pursuit of that ideal in a nation where too many deluded individuals drink the corporate-financed right wing Kool-Aid and say "thank you very much, may I have another?" It will not happen in a single election (2008 was proof of that). It will take a generation, and even more misery, before, if we are lucky, we can remove this yoke of oligarchy from our necks. Yet what else can we do? The other path that can be taken leads to fascism, madness, death, greater oppression and endless wars. In short, to tyranny.
We are too far along that path as it is.