William K. Black as Attorney General and every Bankster is behind bars.

[Octafish]

"And so the saying in the savings and loan industry is true again: Holder was chasing mice while lions roam the campsite."

After Eric Holder Resigns, A Look at His Record on Bank Prosecutions

Former financial regulator Bill Black says Holder's legacy on "too big to fail" is "too big to jail"

The Real News - October 3, 14, 2014

EXCERPT...

PERIES: So what raced through your mind as you heard the news this morning about Eric Holder's resignation?

BLACK: Well, I'll focus on the areas I know about. And in your introduction, the war on whistleblowers will be the most relevant part, along, of course, with the complete strategic failure, the greatest strategic failure in the history of the Department of Justice, which I once worked at, against elite white-collar crime epidemics.
And so Eric Holder has surprised me. I always predicted that he would at least find one token case to prosecute some bank senior executive for crimes that led to the creation of the financial crisis and the global Great Recession.

PERIES: Why did it surprise you, Bill?

BLACK: Well, he's actually going to leave without even a token conviction, or even a token effort at convicting. So, in baseball terms, he struck out every time, batting 0.000, but he actually never took a swing. So he was called out on strikes looking, as we would say in baseball. And I couldn't believe that he would leave without at least having one attempted prosecution against these folks. So he hasn't done the most--he never did the most elementary things required to succeed. He never reestablished the criminal referral process, which is from the banking regulatory agencies, who are the only ones who are going to do widescale criminal referrals against bank CEOs, because, of course, banks won't make criminal referrals against their own CEOs. Holder could have reestablished that criminal referral process in a single email on the first day in office to his counterparts in the banking regulatory agencies, and he's going to leave never having attempted to do so.

On top of that, if you're not going to have criminal referrals from the agencies, the only other conceivable way that you're going to learn about elite criminal misconduct of this kind is through whistleblowers. And as you mentioned, this administration, and Eric Holder in particular, are known for the viciousness of their war against whistleblowers. What the public doesn't know--and it doesn't know because of Eric Holder--is that in the three biggest cases involving banks--again, none of them, not a single prosecution of the elite bankers that drove this crisis--all three of those cases, against Citicorp, against JPMorgan, and against Bank of America, were made possible by whistleblowers. Eric Holder was the czar at the Department of Justice press conferences in each of these three cases, and he and the Justice Department officials, the senior Justice Department officials, at those press conferences, never mentioned the role of the whistleblowers--never praised the whistleblowers and never used those press conferences as a forum for asking whistleblowers to come forward. And so your viewers should take a look at the Frontline special on this, where the Frontline producers made clear that as soon as word got out that they were investigating the area, dozens of whistleblowers came forward, and each of them had the same story: the Department of Justice had never contacted them.

So, instead of going after the big guys--by the way, they didn't go after the small CEOs either. I keep talking about elite CEOs, for obvious reasons: they cause far greater damage. But there are all these CEOs of the not very big mortgage banks who are not prestigious, who are not politically powerful, and Eric Holder refused to prosecute them as well. What did he do instead? Well, he prosecuted several hundred mice. And so the saying in the savings and loan industry is true again: Holder was chasing mice while lions roam the campsite.

And most disgraceful of all, the official position of the Justice Department and the FBI, as I've written and quoted from their annual reports on mortgage fraud, is that mortgage fraud is largely supposedly an ethnic crime, with particular disfavored ethnic groups, like Russian Americans. This is (A) not true and (B) an obscenity, for the Department of Justice in particular, which is, after all, charged with preventing this kind of discrimination. Not only is the Justice Department and the FBI spreading this absolute lie about ethnic guilt, but they're following through, and they are disproportionately prosecuting folks of disfavored minorities. And that is a particular evil and disgusting thing that will be on the tombstone of Eric Holder when historians write about him.

CONTINUED...

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=12433

PS: And to think some may still wonder why We the People deserve austerity. Thankfully a few have noticed it's not what we deserve.

PPS: Thanks to the great DUer marym625 for suggesting this for an OP from "The Big Banks Had A Secret Agent In The Government."

[FlatBaroque]

1. Holder is a national disgrace. n/t

[Octafish]

2. Strange how it's OK for Banksters to loot trillions while people get tossed from their homes is OK.

Neil Barofsky, then-IG for TARP, explained current cornucopia of corruption.



For those lacking integrity, a pot of gold awaits...

Neil Barofsky Gave Us The Best Explanation For Washington's Dysfunction We've Ever Heard

Linette Lopez
Business Insider, Aug. 1, 2012, 2:57 PM

Neil Barofsky was the Inspector General for TARP, and just wrote a book about his time in D.C. called Bailout: An Insider Account of How Washington Abandoned Main Street While Rescuing Wall Street.

SNIP...

Bottom line: Barofsky said the incentive structure in our nation's capitol is all wrong. There's a revolving door between bureaucrats in Washington and Wall Street banks, and politicians just want to keep their jobs.

For regulators it's something like this:

[font color="green"]"You can play ball and good things can happen to you get a big pot of gold at the end of the Wall Street rainbow or you can do your job be aggressive and face personal ruin...We really need to rethink how we govern and how regulate," Barofsky said.[/font color]

CONTINUED... http://www.businessinsider.com/neil-barofsky-2012-8

...For those with integrity, along with most everyone else, it's Austerity Time for Ever.

[Scuba]

6. In his defense, Holder did prosecute several state-licensed MMJ growers.

[Octafish]

16. The Lilliputian

It took me 20 years after the S&L debacle to learn that a famous non-economist had described the Gresham’s dynamic centuries before Akerlof’s article. This acute observer was Irish.

The Lilliputians look upon fraud as a greater crime than theft. For, they allege, care and vigilance, with a very common understanding, can protect a man’s goods from thieves, but honesty hath no fence against superior cunning. . . . (W)here fraud is permitted or connived at, or hath no law to punish it, the honest dealer is always undone, and the knave gets the advantage (Swift, J., Gulliver’s Travels (1726)).

On February 3, 2015, the U.S. Department of Justice (DOJ) announced a settlement of well over $1 billion with the credit rating agency, S&P. DOJ’s civil complaint alleged that S&P engaged in fraud by inflating credit ratings on toxic housing derivatives in order to keep the business of the issuers of those derivatives (who generated a successful Gresham’s dynamic by setting the credit rating agencies in competition with each other for laxity.

SOURCE: http://neweconomicperspectives.org/2015/02/oral-testimony-william-k-black.html

Keep punching, Scuba! Wall Street-on-the-Potomac may not notice, but a future AG just might.

[truedelphi]

26. IN late Sept 2012, Eric Holder released the equivlent of the Cracken on

A neighborhood in Santa Rosa Calif.

Since one household had been seen to growing pot, either for pleasure or for medicinal reasons, the local police, ICE, and DOJ entered the homes of 37 other householders, and threw the folks inside to the floor. (Except for that first household, there were NO WARRANTS!)

Many people were rounded up; children sat crying on the curbs while parents were hauled away.

I tried to explain to some of my DNC type friends about this atrocity, but they were all like, "At least they cleared out some hispanics, who probably were not here legally anyway."

[Octafish]

3. Whatever happened to SEC regulator and whistleblower Carmen Segarra?

Back when "Government by Goldman Sachs" was a new phrase, former SEC regulator Carmen Segarra taped the top federal regulator at Goldman say certain laws don't apply to the rich.



Those interested in justice may want to download a copy before they're gone:

The Secret Recordings of Carmen Segarra

From This American Life:

An unprecedented look inside one of the most powerful, secretive institutions in the country. The NY Federal Reserve is supposed to monitor big banks. But when Carmen Segarra was hired, what she witnessed inside the Fed was so alarming that she got a tiny recorder and started secretly taping.

SOURCE: http://www.thisamericanlife.org/radio-archives/episode/536/the-secret-recordings-of-carmen-segarra

What another economist noted before he got fired and then won the Nobel Prize:

Larry Summers: Goldman Sacked

Monday, September 16, 2013
By Greg Palast for Reader Supported News

Joseph Stiglitz couldn't believe his ears. Here they were in the White House, with President Bill Clinton asking the chiefs of the US Treasury for guidance on the life and death of America's economy, when the Deputy Secretary of the Treasury Larry Summers turns to his boss, Secretary Robert Rubin, and says, "What would Goldman think of that?"

Huh?

Then, at another meeting, Summers said it again: What would Goldman think? A shocked Stiglitz, then Chairman of the President's Council of Economic Advisors, told me he'd turned to Summers, and asked if Summers thought it appropriate to decide US economic policy based on "what Goldman thought." As opposed to say, the facts, or say, the needs of the American public, you know, all that stuff that we heard in Cabinet meetings on The West Wing.

Summers looked at Stiglitz like Stiglitz was some kind of naive fool who'd read too many civics books.

CONTINUED...

http://www.gregpalast.com/larry-summers-goldman-sacked/

Then there's Goldman Sach's legendary generosity, not limited to the Executive and Legislative branches.

Here's The REAL Connection Elena Kagan Has To Goldman: Three Days Of Easy Work

Newly nominated Supreme Court Justice Elena Kagan's supposed connection to Goldman Sachs is much ado about nothing.

Reports are flying around that she "worked for Goldman," when she straight up did not.

She was one of many on a council that spent three days (one day each year from 2005-2008) advising on the Research Advisory Council of the Goldman Sachs Global Markets Institute. Kagan was paid $10,000.

Justice Department spokeswoman Tracy Schmaler explains in HuffPo, "They met once a year for a day-long conference organized around public policy matters. The group was not involved in making any investment decisions for the company."

SOURCE: http://www.businessinsider.com/heres-the-real-connection-elena-kagan-has-to-goldman-three-days-of-easy-work-2010-5

Nice people, all, I'm sure, even if Ms. Kagan sided with Karl Rove over Gov. Don Siegelman and 100 former state attorneys general. The thing is, people without money don't get much help from government these days.

[truedelphi]

27. Great OP and other posts here in this topic.

And I forget when and where it was said, but someone on Wall Street told someone from the DOJ that "These are not the types of people who can go to jail."

I mean really, the audacity that we in the penny galleries should be shouting for heads!!

If Wall Street types were to go to jail, who would iron their linen designer suits? Who would feed them their caviar. Who would take their places on the ski runs of Aspen or Squaw Valley?

[Jefferson23]

4. Bill K Black ever became AG? Wall Street would freak out like never before.

They'd be calling their lawyers faster than you can say, loot.

What I would give to see such a thing.


on edit for clarity.

[Fuddnik]

5. Nah, they'd be jumping.

As in "Jump you fuckers"!

Hurry up and appoint him!

[Jefferson23]

20. When I think about the damage they've done...incredible crimes.

That was one of my favorite signs, the one that said, Jump you Fuckers.

[Octafish]

7. Financial frauds had a friend in Holder

Simple.

Financial frauds had a friend in Holder

Attorney general will leave office as a historic failure on white collar crime

by William K. Black
Al Jazeera, September 26, 2014 6:00AM ET

Eric Holder was U.S. attorney general at a time when the world desperately needed the nation’s chief law enforcement officer to hold accountable the elite bankers who oversaw the epidemic of fraud that drove the 2008 global financial crisis and triggered the Great Recession. After nearly six years in office, Holder announced on Sept. 25 that he plans to step down, without having brought to justice even one of the executives responsible for the crisis. His tenure represents the worst strategic failure against elite white-collar crime in the history of the Department of Justice (DOJ).

In both the U.S. savings and loan debacle of the late 1980s and the Enron-era accounting frauds of the early 2000s, there were more than 1,000 successful felony convictions in cases designated as major by the DOJ. In both those fraud epidemics, federal prosecutors prioritized the top executives of the corporations responsible. This context makes Holder’s failure to prosecute — much less convict — the elite bank frauds that caused this far larger crisis all the more damning.

In addition to the failure to prosecute the leaders of those massive frauds, Holder’s dismal record includes:

1) failing to prosecute the elite bankers who led the largest (by several orders of magnitude) price-rigging cartel in history — the LIBOR scandal, in which the world’s largest banks conspired to rig the reported interest rates at which the banks were willing to lend to one another, which affected prices on over $300 trillion in transactions;

2) failing to prosecute the massive foreclosure frauds (robo-signing), in which bank employees perjured themselves by signing more than 100,000 false affidavits in order to deceive the authorities that they had a right to foreclose on homes;

3) failing to prosecute the bid-rigging cartels of bond issuances in order to raise the costs to U.S. cities, counties and states of borrowing money in order to increase banks’ illegal profits;

4) failing to prosecute money laundering by HSBC for the murderous Sinaloa and Norte del Valle drug cartels;

5) failing to prosecute the senior bank officers of Standard Chartered who helped fund of terrorists and nations that support terrorism; and

6) failing to prosecute the controlling officers of Credit Suisse who for decades helped wealthy Americans unlawfully evade U.S. taxes and then obstructed investigations by the DOJ and Internal Revenue Service for many years.

Holder and his defenders will respond to such charges by appealing to the size of the civil settlements the DOJ obtained from the major banks under his tenure. But his case is risible. First, the civil fines, while sounding large, would never be large enough to pose even the slightest risk that the banks’ capital would be impaired, because Holder and White House continue to embrace the too-big-to-fail doctrine, that the responsible banks are too important to the economy to allow the risk of their collapse. Such fines amount to the cost of doing business — a very lucrative one, in fact, for the controlling officers.

Second, the CEOs knew that they could trade off a slightly larger fine in return for complete immunity for themselves and other officers who might otherwise be flipped by federal prosecutors to testify against more senior officers. The fines, of course, would be paid not by the CEOs but by the banks they ran. Indeed, one of the lesser-known aspects of the crisis is that the DOJ almost never sued a banker (as opposed to a bank) and virtually never sought to claw back bankers’ fraud proceeds. It is telling that, as even Holder admitted last week, “A corporation may enter a guilty plea and still see its stock price rise the next day.”

CONTINUED...

http://america.aljazeera.com/opinions/2014/9/eric-holder-resignationjusticefinancialcrisisfraud.html

So, those interested in covering for these guys have a simple solution: Label the Whistleblower "troublemaker" and watch how many nice jobs said whistleblower enjoys for the rest of his or her long career swabbing the church gym.

The happy alternative: "A corporation may enter a guilty plea and still see its stock price rise the next day." -- Eric Holder

PS: For years, I've needed to learn to simplify, Jefferson23. Bill Black as AG for Banksters Behind Bars

[Jefferson23]

21. This is why a Bernie Sanders presidency will be hard to realize, they know who to fear.

I am a big fan of Bill Black.

[marym625]

8. K&R!

we have been sold down the river so many times that I'm surprised there's anything left to sell.

Thank you for this great post!!

[Octafish]

10. DERIVATIVES are one reason so many Americans HATE smart people...

Oral Testimony of William K. Black

Note: This oral testimony was delivered on February 5, 2015 in Dublin, Ireland before the Oireachtas’ Joint Committee of Inquiry into the Banking Crisis. These are my prepared remarks. My actual oral testimony differed considerably. A transcript is available from the Inquiry, as is complete video.

To: Joint Committee of Inquiry into the Banking Crisis
From: William K. Black
Date: February 3, 2015


Introduction

Thank you for the invitation to assist Ireland as you face among the most important questions Ireland and many other nations must answer correctly if we are to put a stop to our recurrent, intensifying financial crises. I am William K. Black and I come to you wearing four disciplinary and three institutional “hats.” My primary appointment is in economics with a joint appointment in law at the University of Missouri-Kansas City. I am a white-collar criminologist and a former senior financial regulator. My research specialties include elite white-collar crime and corruption, regulation, and financial crises. I am the Distinguished Scholar in Residence for Financial Regulation at the University of Minnesota’s Law School. I am a professor at the Instituto de Altos Estudios Nacionales es la Universidad de Posgrado del Estado in Quito, Ecuador. My testimony, of course, is solely my personal views rather than the official position of any of these universities.

There is Nothing More Expensive than Failed Banking Regulation

There is nothing a nation does in the domestic sphere that is more expensive than ineffective regulation. Bankers cause bank losses. Bank regulators can reduce bank losses dramatically and prevent the hyper-inflation of the bubble and the resultant financial crisis. Bank regulators do not require super powers to succeed. They do not have to be able to foresee the crisis or even realize that there is a bubble to succeed.

The Three Maladies

To prevent the most common and severe form of bank crises, bank regulators need to understand, and act vigorously and promptly to stop, three maladies – the “recipe,” indefensible loan underwriting (leading to “adverse selection”), and the Gresham’s dynamic. Each of those maladies is profoundly harmful, so acting promptly and vigorously to stem them is highly desirable. Acting to block these three maladies unambiguously aids honest bankers’ banks and their shareholders, creditors, and customers. Each of these maladies had been in the relevant literature for decades prior to the Irish bank crisis.

A Caution on Interpreting my Use of the Word “CEO”

For reasons solely of brevity, I use the term “CEO” rather than the phrase “the persons controlling the bank.” When I use the term “CEO” I am NOT referring to any individual who may have held that title at a particular Irish bank at a particular time. I am using the term generically and collectively to mean whatever officials exerted control over the strategic decisions of the non-Irish banks. I do not refer in my testimony to any Irish bank CEOs.

My testimony does not directly address the causes of the current Irish banking crisis. My testimony focusses on what causes the worst and the most common banking crises in other nations. Those factors are also the most likely to cause future severe banking crises in Ireland and other nations. Preventing and minimizing future banking crises is my focus.

Countering “Criminogenic” Environments

Bank regulators who understood these three maladies have demonstrated the ability to regulate effectively and prevent systemic financial crises. They have figured out what policies make an environment “criminogenic.” A criminogenic environment is one in which the incentive structures are so perverse that they produce widespread crime. The primary means by which bank CEOs create these perverse incentives is through compensation, retention, and promotion systems. Irish bank regulators can learn to identify and counter these perverse incentives, preventing and limiting the three maladies in the future and holding even elite individuals personally accountable for their misconduct in future failures.

My description of the need to counter these perverse incentives that make the three maladies widespread is not the only function of good bank regulators, but it is the paramount function. Preventing future criminogenic environment in banking would not simply accomplish the paramount function of banking regulators, but also greatly reduce the frequency and severity of future abuses by bankers such as the massive sales of inappropriate financial products to customers. The same type of perverse compensation/reward systems that produce the three maladies also produce endemic product sale abuses by bankers.

The Terrible Cost of Not Understanding the Concept of “Looting”

George Akerlof (Nobel Laureate in Economics, 2001) and Paul Romer chose to end their famous article entitled “Looting: The Economic Underworld of Bankruptcy for Profit” with this paragraph in order to emphasize the reason for the deregulatory failure and how to prevent future financial disasters.

“Neither the public nor economists foresaw that the (S&L deregulations) of the 1980s were bound to produce looting. Nor, unaware of the concept, could they have known how serious it would be. Thus the regulators in the field who understood what was happening from the beginning found lukewarm support, at best, for their cause. Now we know better. If we learn from experience, history need not repeat itself” (1993: 60).

The key words in this paragraph are “concept” and “unaware.” Akerlof and Romer were unduly kind to economists in this passage. First, economists who studied banking knew that, historically, elite insider fraud and abuse had long been the leading cause of the most expensive banking failures. Second, economists did not provide “lukewarm support” to “the [S&L] regulators in on the field” who understood the looting “from the beginning.” Economists were our most virulent opponents in trying to stop the elite looters. Third, economists did not “learn from [the S&L] experience.” They doubled-down on their unrestricted support for the elite bank CEOs.

Failing to understand a critical risk concept (or excluding the concept from public policy formulation through cognitive dissonance) makes it impossible for regulators to take any deliberate safeguards against that critical risk. Ignorance of key risks also leads to regulatory complacency. This is particularly true when the concept that the regulators do not know exists (1) represents the paramount cause of catastrophic individual bank failures, (2) is increasingly likely, due to modern executive compensation, to produce a Gresham’s dynamic that can hyper-inflate financial bubbles and spark systemic banking crises, and (3) initially produces exceptional (albeit fictional) reported banking income.

The bank regulator who is unaware of the concept of looting, therefore, creates a regulatory philosophy based on the implicit presumption that “accounting control fraud” does not exist. Implicit assumptions pose unique dangers. Because we do not know that we have made them, we never test their validity. When bank regulators implicitly assume out of existence the paramount risk to banks, the banking system, the public, the economy, and the Treasury they make real the great warning. The great warning is that it isn’t the things we don’t know that cause disasters – it’s the things we do know, but aren’t true. The bank regulators “knew” that the elite bankers were the solution rather than the problem. They could not have made a worse assumption.

CONTINUED (w links to transcripts, video)...

http://neweconomicperspectives.org/2015/02/oral-testimony-william-k-black.html

[marym625]

18. I HATE HATE HATE Derivatives!

Derivatives are the biggest bunch of bullshit EVER! And the IFRS rules on accounting for them change with the wind. Or more accurately, with the largest company and what they need on their BS.

Fuck this nonsense. Seriously. We're not just killing our country, we're killing the world with the ridiculous crap we allow when it comes to money. It changes EVERYTHING in our world. EVERYTHING.

Another great post, Octafish! I truly appreciate all the information you are putting out there.

[Octafish]

19. Rightfully so, seeing how We the People are on the HOOK for them.

This is one of those things I'd hope would change. I was wrong.

New law means taxpayers must back banks' 'incredibly risky' derivatives deals, Rep. Mark Pocan says

By Tom Kertscher on Wednesday, January 7th, 2015 at 5:00 a.m.

Most of us don't deal in investments known as derivatives, but most of us use banks.

That means we should worry about the so-called "cromnibus bill" passed recently by Congress, according to U.S. Rep. Mark Pocan, D-Madison.

"Our taxpayer money will back them up on these incredibly risky ventures for the biggest banks out there that do these," Pocan said Dec. 17, 2014 on a Madison-area liberal talk show.

So, Pocan is claiming that derivatives are "incredibly risky" financial ventures.

And that the new federal law requires taxpayers to back up banks that lose money on them.

CONTINUED...

http://www.politifact.com/wisconsin/statements/2015/jan/07/mark-pocan/new-law-means-taxpayers-must-back-banks-incredibly/

This is all because of the repeal of Glass-Steagall.

PS: You are most welcome, marym625. Truth is our best weapon.

[marym625]

22. Yep. Absolutely deregulation did this

Unfortunately, I know a little bit about the derivatives. I don't think anyone can know everything because it keeps changing. But there are people much more expert than I. You are obviously one.

Another bullshit item is RECs (not here on DU ) but Renewable Energy Credits. They're made of nothing and sold to companies that put out carbon to pretend they're green. These often trade between companies that are actually owned by the same people. Duke will buy them form a Duke subsidiary. And there's just as much carbon in the air, there is no tax on them in most places, and we get to pretend we're all green and good. It's just bullshit made out of polluted air.

[bluesbassman]

9. Thanks for posting this Octafish.

I hear it asked from time to time; "prosecute the banksters for what?", the implication being that while much of what they did was morally bankrupt the reality is that they were operating within "the law". The problem with that rationale is fraud and conspiracy are not "within the law" (the LIBOR index manipulation and the fraudulent packaging of sub-prime loans as AAA securities being two quick examples) and that Justice did not go after any CEOs who most certainly had to have had their hands in the scams.

I'm afraid that until the revolving door between Washington and Wall Street is nailed shut we will never see any meaningful reform in this area.

[Octafish]

12. The Revolving Door is like Dual Citizenship: Wall Street and Washington. Ask Michael Froman...

Michael Froman and the revolving door

By Felix Salmon December 11, 2009

Michael Froman is one of those behind-the-scenes technocrats who never quite makes it into full public view. But according to Matt Taibbi, he’s one of the most egregious examples — up there with Bob Rubin, literally — we’ve yet seen of the way the revolving door works between business and government generally, and between Citigroup and Treasury in particular.

I’m not sure how much of this information is new, but a lot of it was new to me, especially the bit about Froman “leading the search for the president’s new economic team” — while he was still pulling down a multi-million-dollar salary at Citigroup, no less. Apologies for quoting at length:

Leading the search for the president’s new economic team was his close friend and Harvard Law classmate Michael Froman, a high-ranking executive at Citigroup. During the campaign, Froman had emerged as one of Obama’s biggest fundraisers, bundling $200,000 in contributions and introducing the candidate to a host of heavy hitters — chief among them his mentor Bob Rubin, the former co-chairman of Goldman Sachs who served as Treasury secretary under Bill Clinton. Froman had served as chief of staff to Rubin at Treasury, and had followed his boss when Rubin left the Clinton administration to serve as a senior counselor to Citigroup (a massive new financial conglomerate created by deregulatory moves pushed through by Rubin himself).

Incredibly, Froman did not resign from the bank when he went to work for Obama: He remained in the employ of Citigroup for two more months, even as he helped appoint the very people who would shape the future of his own firm. And to help him pick Obama’s economic team, Froman brought in none other than Jamie Rubin, a former Clinton diplomat who happens to be Bob Rubin’s son. At the time, Jamie’s dad was still earning roughly $15 million a year working for Citigroup, which was in the midst of a collapse brought on in part because Rubin had pushed the bank to invest heavily in mortgage-backed CDOs and other risky instruments…

On November 23rd, 2008, a deal is announced in which the government will bail out Rubin’s messes at Citigroup with a massive buffet of taxpayer-funded cash and guarantees… No Citi executives are replaced, and few restrictions are placed on their compensation. It’s the sweetheart deal of the century, putting generations of working-stiff taxpayers on the hook to pay off Bob Rubin’s fuck-up-rich tenure at Citi. “If you had any doubts at all about the primacy of Wall Street over Main Street,” former labor secretary Robert Reich declares when the bailout is announced, “your doubts should be laid to rest.”

It is bad enough that one of Bob Rubin’s former protégés from the Clinton years, the New York Fed chief Geithner, is intimately involved in the negotiations, which unsurprisingly leave the Federal Reserve massively exposed to future Citi losses. But the real stunner comes only hours after the bailout deal is struck, when the Obama transition team makes a cheerful announcement: Timothy Geithner is going to be Barack Obama’s Treasury secretary!

Geithner, in other words, is hired to head the U.S. Treasury by an executive from Citigroup — Michael Froman — before the ink is even dry on a massive government giveaway to Citigroup that Geithner himself was instrumental in delivering. In the annals of brazen political swindles, this one has to go in the all-time Fuck-the-Optics Hall of Fame.

Wall Street loved the Citi bailout and the Geithner nomination so much that the Dow immediately posted its biggest two-day jump since 1987, rising 11.8 percent. Citi shares jumped 58 percent in a single day, and JP Morgan Chase, Merrill Lynch and Morgan Stanley soared more than 20 percent, as Wall Street embraced the news that the government’s bailout generosity would not die with George W. Bush and Hank Paulson.

How much influence did Froman have over the appointment of Geithner as Treasury secretary? Geithner, who wanted to become Treasury secretary and who as New York Fed president was a central (if not the central) figure in orchestrating the massive Citigroup bailout just after the election, knew what Froman’s job was in the Obama transition team, and knew that Froman was a senior executive at Citigroup.

CONTINUED...

http://blogs.reuters.com/felix-salmon/2009/12/11/michael-froman-and-the-revolving-door/

PS: You are most wellcome, bluesbassman! These guys and gals get paid to leave their work and "regulate" their former bosses who just paid them. Nice work if you can get it -- and stomach losing one's integrity.

[bluesbassman]

14. More great info! I remember Froman's activities...

It was one of the first signals to me that Obama was going to be relying heavily on industry insiders for his cabinet and support team. Was not a very comforting feeling, and the results have been all too predictable.

Thanks again for your effort, it's much appreciated!

[Zorra]

11. We should lobby Bernie to appoint him AG immediately after he is inaugurated.

Because Bernie is the only candidate who will appoint an Attorney General who would work assiduously protect the interests of all the people.

[Octafish]

13. Wall Street Pays Bankers to Work in Government and It Doesn't Want Anyone to Know

by David Dayen
The New Republic, Feb. 4, 2015

EXCERPT...

The handouts recently received attention when Antonio Weiss, the former investment banker at Lazard now serving as counselor to Treasury Secretary Jack Lew, acknowledged in financial disclosures that he would be paid $21 million in unvested income and deferred compensation upon exiting the company for a job in government. Weiss withdrew from consideration to become the undersecretary for domestic finance under pressure from financial reformers, but the counselor position—which does not require congressional confirmation—probably still entitles him to the $21 million. The terms of the award are part of a Lazard employee agreement that nobody has seen.

These payments are routine at major banks, several of which have explicit policies, found in filings with the SEC, outlining automatic awards for executives who rotate into government. Goldman Sachs offers “a lump sum cash payment” for government service, for example.

Other banks’ policies are subtler. Banks often defer certain types of compensation in order to retain talent. When an executive terminates employment, unvested stock options and other forms of deferred compensation are usually forfeited. But several companies let executives’ equity options continue to vest if they leave for a government position, or allow them to keep retention bonuses that would otherwise be returned to the firm. A 2004 tax law banned accelerated payments but made an exemption for employees who leave for government service. Critics wonder whether the gifts are intended to fill the government with friendly faces who will act in their former employer’s interests.

“It fuels the revolving door between banks and the government,” said Michael Smallberg, an investigator for the Project On Government Oversight (POGO), whose 2013 report detailed these types of compensation agreements. The average executive branch salary is substantially less than these millions in awards, so the bonuses effectively supplement the lower pay, raising questions about who the government officials actually work for.

SNIP...

Last November, Trumka wrote letters to seven mega-banks—Citi, Goldman Sachs, Morgan Stanley, JPMorgan Chase, Bank of America, Wells Fargo and Lazard—asking their compensation committees to explain why giving incentives to executives for government service benefits shareholders or the company. The labor federation holds shares in many public companies through its pension funds. “We oppose compensation plans that provide windfalls to their executives unrelated to performance,” the letter states.

CONTINUED...

http://www.newrepublic.com/article/120967/wall-street-pays-bankers-work-government-and-wants-it-secret

PS: Absolutely, Zorra. I'm thinking what you're thinking.

[Ghost in the Machine]

15. ***ALWAYS*** a "K&R" for an Octafish thread! Keep up the good fight, my friend!

Your posts, and journal, are priceless treasure troves of information!

Keep up the good fight!

Peace,

Ghost

[Octafish]

17. 'My administration...is the only thing between you and the pitchforks.'--Pres. Obama, March 27, 2009

Seriously.

On 3 April 2009, Politico bannered innocuously (and deceptively, given the shocking core that was buried here - Obama's statement), "Inside Obama's Bank CEOs Meeting." Eamon Javers reported Obama telling Wall Street's CEOs, inside the White House, "My administration ... is the only thing between you and the pitchforks." (This essentially secret meeting, and the comment itself, had occurred on 27 March 2009, but Javers failed to cite the date, which was indicated only under the accompanying AP wire photo of the CEOs coming out of this publicly unannounced event.) Obama's remark was implicitly analogizing here: he implied that he was protecting these people not from prosecutions for crimes (which he actually was), but instead from angry irrational mobs outside, who were driven by blind hatred (like the lynch mobs were in the Old South). Obama was metaphorically siding here with the plantation owners, not with the slaves; with the KKK, not with their victims. This elite Black was telling them that he would protect them from prosecution. He wasn't going to protect the public - which he here analogized to simply a hate-obsessed mob of bigots.

SOURCE: http://www.huffingtonpost.com/eric-zuesse/obama-finally-lays-his-ca_b_3025743.html

Politico article referenced above: http://www.politico.com/news/stories/0409/20871.html

"We're all in this together." -- Robert Gibbs, White House Press Secretary

The thirteen bankers, as reported by The Wall Street Journal, were:

Ken Chenault, American Express
Ken Lewis, Bank of America
Robert Kelly, Bank of New York Mellon
Vikram Pandit, Citigroup
John Koskinen, Freddie Mac
Lloyd Blankfein, Goldman Sachs
Jamie Dimon, JPMorgan Chase
John Mack, Morgan Stanley
Rick Waddell, Northern Trust
James Rohr, PNC
Ronald Logue, State Street
Richard Davis, US Bank
John Stumpf, Wells Fargo

SOURCE: http://13bankers.com/title/

PS: Peace to you and thank you for the kind words, Ghost in the Machine. As a Democrat -- in every election since my first, 1976 -- I believe all people are created equal and no one is above the law, including the rich and powerful. For some reason, since Jimmy Carter left office in 1981, they get bailouts and We the People get called to pick up their tab, some kind of 24-karat Buy-Partisanship.

[JEB]

23. K&R&bookmark.

Important information.

[Octafish]

24. William K. Black warned Washington. So, Washington ignored the dean of financial regulation...

WILLIAM K. BLACK: Fraud is deceit. And the essence of fraud is, "I create trust in you, and then I betray that trust, and get you to give me something of value." And as a result, there's no more effective acid against trust than fraud, especially fraud by top elites, and that's what we have.

http://www.pbs.org/moyers/journal/04032009/watch.html

One of the things I understood would happen if we won in 2008 was that the swamp would be drained. Little did I know the only thing that would change are the dominant predator reptiles.

Banking Is a Criminal Industry Because Its Crimes Go Unpunished

Charles Ferguson
Huffington Post| Jul 16, 2012 08:23 AM EDT

Consider just (July's) news in financial services.

First, Barclay's has been manipulating the Libor, the main interest rate upon which most other interest rates and financial transactions are based, since 2005. Moreover, Barclay's traders were colluding with traders in many other banks to assist them in manipulating the Libor too, so that they could all profit from their bets on it.

Second, JP Morgan Chase is having a really great month. Recent reports describe how it is resisting Federal subpoenas related to price-fixing in U.S. electricity markets. It is also accused (by former employees among others) of deliberately inflating the performance of its investment funds to obtain business. And finally, JP Morgan's failed "London whale" trade, which has now cost over $5 billion, is being investigated to determine whether the loss was initially concealed from regulators and the public.

Third, HSBC is paying a fine because it allowed hundreds of millions, perhaps billions, of dollars of money laundering by rogue states and sanctioned firms, including some related to terrorist activities and Iran's nuclear efforts. But HSBC is only one of at least 12 banks now known to have tolerated, and in some cases aggressively courted, money laundering by rogue states, terrorist organizations, corrupt dictators, and major drug cartels over the last decade. Others include Barclay's, Lloyds, Credit Suisse, and Wachovia (now part of Wells Fargo). Several of the banks created special handbooks on how to evade surveillance, created special business units to handle money laundering, and actively suppressed whistleblowers who warned of drug cartel activities.

SNIP...

Just another month in financial services. Is it unusual? No, it's not. If we go back just a little further, we have UBS, HSBC, Julius Baer, and other banks actively marketing tax evasion services to wealthy U.S. and European citizens. We have senior executives of several banks (including JP Morgan Chase and UBS) strongly suspecting that Bernard Madoff was running a Ponzi scheme, but deciding to make money from him rather than turn him in. And then, of course, we have the financial crisis and everything that led to it. As I show in great detail in my book Predator Nation, we now possess overwhelming evidence of massive securities fraud, accounting fraud, perjury, and criminal Sarbanes-Oxley violations by mortgage lenders, investment banks, and credit insurers (including senior executives of Countrywide, Citigroup, Morgan Stanley, Goldman Sachs, Bear Stearns, AIG, and Lehman Brothers) during the housing bubble that caused the financial crisis. If we go back to the late 1990s, we have the massively fraudulent hyping of Internet stocks, and several banks (including Merrill Lynch and Citigroup) actively aiding Enron in committing its frauds.

CONTINUED...

http://www.huffingtonpost.com/mobileweb/charles-ferguson/bank-crimes_b_1675714.html

Thank you for caring about our nation's future, JEB. It's becoming more and more Ronald Reagan's Crocodile Dream World.

[think]

25. K&R.

[Erich Bloodaxe BSN]

28. I'd like to see Lewis Black as President Sanders' Press Secretary, as long as we're talking Black.nt

[pa28]

29. Prosecution of corporate crime went down by 29% despite the financial crisis.

Hard to believe the Bush administration prosecuted corporate criminals more vigorously than Eric Holder but that is fact.

Prosecution of Corporate Crime Has Plummeted Under Obama Administration: Report

http://www.democraticunderground.com/10027258438

I'd love to see someone like Bill Black as AG to reverse this trend but as long as third way Democrats are in charge you will never see him at the table.

[tularetom]

30. Thanks again Octafish for shining the light on the massive failures of the Obama administration

particularly as it pertains to dealing with crimes of the financial sector.

AG Lynch so far is proving a worthy successor to AG Holder.