Normally I try to avoid dumping on the same person twice in a short period of time, no matter how much they deserve it, but a post by masaccio at Firedoglake on the PR exercise known as the Financial Fraud Task Force deserves amplification. Recall when Schneiderman turned Quisling to the efforts by a small group of state attorneys general to craft a decent mortgage settlement, his shiny prize was being appointed as one of a number of co-chairmen to the so-called Financial Fraud Task Force. This was actually an effort to wrestle new propaganda value from an initiative that has been largely moribund since its creation in 2009 (technically, the 2012 effort is called the “Residential Mortgage-Backed Securities Working Group” of the Financial Fraud Task Force).
Occasionally, various interested parties look for signs of life from this group. They’ve consistently reported back that perilous little appears to be happening. Masaccio looked through press releases on the official website, and found they confirmed one of the theories voiced by Neil Barofsky and your humble blogger, among others, namely, that the task force was merely consolidating existing efforts, and not adding much (if anything) new.
Masaccio’s reading showed that the few big fish, such as the fines for Barclays over Libor-rigging and further fallout from the Bernie Madoff Ponzi scheme, were ongoing efforts on which some members of the task force arguably played a role, and had nothing to do with the State of the Union head fakery. And the few announcements that were mortgage related were so penny-ante so as to prove that there is still no intent to go after big players, despite widespread evidence of rampant fraud. Some of the howlers:
FBI Acting Special Agent in Charge Patrick Kiernan reaffirmed his commitment to pursuing these complex economic investigations stating, “This investigation has sent a strong message to the community at large, and the real estate community specifically, that abuses within the real estate industry will not be tolerated.
The fraud ran from 2004 to 2007.Five years later, the community is warned. Ho-hum…
7. Loan Officer Sentenced to 54 Months in Prison for Role in Mortgage Fraud Scheme That Resulted in More Than $9.2 Million in Losses. Hit the little guy, not the bosses at Countrywide or WaMu or Long Beach or ……
10. More mortgage fraud, this one in the range of $8 million. Apparently it didn’t require the assistance of the FFETF. Nor does it involve New Century…
I’ve gone back through February looking at the press releases, and this is a fair sample of the work of the FFETF. There is not a single case related to fraud in the creation, sale or operation of real estate mortgage-backed securities, the frauds that led to the Great Crash. The FFETF is a random collection of people working on cases that can be tied to financial fraud.
And rest assured, when the election approaches, this sorry list will be tallied up in some way so as to sound impressive and used upon occasion as a talking point (“Y prosecutions of financial fraud”). So keep asking, “And how many executives at big financial firms went to jail?”
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From the Daily Mail:
“Furious shareholders in Barclays are demanding the bank strips disgraced ex-boss Bob Diamond of his entitlement to an £18million bonus.
“The row emerged as the Serious Fraud Office confirmed it is pursuing criminal investigations against bankers involved in an industry-wide conspiracy to rig crucial interest rates.
“The SFO failed to conduct an inquiry last year because of lack of funding; its budget has been cut by 38 per cent over five years.”
(See: http://www.dailymail.co.uk/news/article-2169736/Bankers-face-prospect-jail-Serious-Fraud-Office-launches-criminal-probe-rate-fixing-Barclays.html#ixzz1zuwMkPmn)
A profile of the Daily Mail in the New Yorker last April was entitled ‘Mail Supremacy: The newspaper that rules Britain.’
An extract:
‘The Mail is the most powerful newspaper in Great Britain. A middle-market tabloid, with a daily readership of four and a half million, it reaches four times as many people as the Guardian, while being taken more seriously than the one paper that outsells it, the Sun. In January, its Web arm, Mail Online, surpassed that of the New York Times as the most visited newspaper site in the world, drawing fifty-two million unique visitors a month. The Mail’s closest analogue in the American media is perhaps Fox News. In Britain, unlike in the United States, television tends to be a dignified affair, while print is berserk and shouty. The Mail is like Fox in the sense that it speaks to, and for, the married, car-driving, homeowning, conservative-voting suburbanite, but it is unlike Fox in that it is not slavishly approving of any political party. One editor told me, “The paper’s defining ideology is that Britain has gone to the dogs.”’
(See http://www.newyorker.com/reporting/2012/04/02/120402fa_fact_collins#ixzz1zuxmPlYN )
The Mail website has an invaluable feature, enabling one to selected the ten best-rated comments. Looking at the best rated comments on the story from which I have quoted gives what I think is an accurate idea of the rage against bankers in a large swathe of conservative opinion here.
People like Diamond live in a cocoon — as do many politicians. They have been quite unprepared for the rage which has been unleashed. Your reference to Versailles c. 1780 was apt.
What is going to be the tipping point to get some of these folks into jail to change the moral tide of humanity?
If we don’t, and fairly soon, you can kiss what we call civilization goodbye.
I do not want to be carried away by optimism, but it is just possible it has come, over here. The current moment reminds me of the ‘winter of discontent’ back in 1979. The public service workers strike over the Labour government’s pay policy both demolished the notion that it was possible to govern in collaboration with trade unions, and also caused outrage — waste uncollected, corpses unburied.
That pave the way for Thatcher’s triumph. A similar disillusion is under way now, with the ‘banksters’ in the role the union leaders played then. Indeed, the boneheaded inability of Bob Diamond to see how the wind is blowing is rather reminiscent of the then miners’ leader, Arthur Scargill.
When an Economist cover story is headlined ‘banksters’ you know something has changed — even if the paper does not really succeed in grappling with the intractable nature of the problem.
(See http://www.economist.com/node/21558260
“When an Economist cover story is headlined ‘banksters’ you know something has changed — even if the paper does not really succeed in grappling with the intractable nature of the problem.”
Optimism or gullibility? I think the latter (its called hopium now). You have been “carried away”.
The headline is all part of the intentional coarsening of the society as it normalizes deception and incrementally increases the perpetual conflict and chaos so as to end up with a ruler and ruled societal structure.
The difference between 1979 and now is the massive strengthening of surveillance and police state forces in the UK and Us.
The sooner we all get to election boycotts and Constitutional rewrites the better.
Deception is the strongest political force on the planet.
& then… as g.singlaub said, “when deception fails, they will choose force” (see police crackdowns on free speech throughout 2012)
Again, Euro bankster prosecutions have been going on for two years now, they’re not that remarkable. This only looks like a positive turn if you assume the banksters are a monolithic Borg with no internal divisions.
If the trend of busting Euro banksters but “looking forward not backward” at Homeland banksters continues, the Homeland banksters will move in and pick up the pieces and at the end of the day there’ll be an industry dominated by fewer, more powerful banksters.
This seems more like a purge of the Euro banks in anticipation of creating a more centralized banking sector, one running more exclusively under American auspices, than a change of heart on Washington’s part toward banking fraud. The motivation here probably isn’t all that different than when Washington helped the broke big crooked banks buy up solvent medium-sized honest ones.
I wonder what would if citizens were to take matters in their own hands, producing headlines whereby the like of Diamond, Dimon, Blankfein and others were found dead on the streets from gunshot wounds a la mafia-style hits?
Not that I condone such actions or encourage them of course.
Shucks, the FFTF was just created in the vein of implementing that old saw, “Fight fraud with fraud.” Umm, or something like that. Close enough.
Yes indeed, Obama and Schneiderman are trying to take credit for “busting” Barclays Bank. Clicking through to the original Justice Department press release we see:
“This agreement is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.”
Yet the Justice Department appears to have hastily agreed to go easy on Barclays. They got to simply pay a fine. What other criminal suspect gets this treatment? Would a black man suspected of selling cocaine get to simply plead to a monetary fine or stipulate to a small amount of drugs at the very initial stages of the investigation? No. The cops are going to execute search warrants and find all the drugs they can and throw the book at him.
Smells terribly wrong and the fact they are trying to spin it into a Task Force win makes it even more dubious.
USA! USA! I want my set of posing Eric Inaction Figures, both of them.
They are also prosecuting a loan officer for his conduct from February 2006 through July 2008.
Surely this low level activity ending in 2008 should have been uncovered well before the Task Force was fake convened in 2012. The fact they are tooting their horns about a small fry loan officer and his small time shit tells you all you need to know.
I’m referring to that story in #7 above about the loan officer that got 54 months in prison.
Impressive. Busting Barclay’s when your office doesn’t even have a phone!
Truly.
And don’t let me lead you too far astray, but how about closing Indian Point with an AG with nuclear investments,
http://blog.timesunion.com/capitol/archives/138754/schneiderman-releases-tax-returns-losses-and-all/
“creepy”, Rex, “creepy”
And Schwab / Price Anderson Act slip and slide. Known as ‘an in-volved relation to politics and investing’.
Yes — that would be one scrappy can-do little operation pulling off miracles with a shoe-string budget. We could sure do with more of those (in the Real World)!
In early June, Firedoglake had an article “Why the DOJ Can’t Prosecute Banksters.” A commenter calculated and posted the following:
emptywheel had a post on how FBI allocates its resources: Why The DOJ Can’t Prosecute Banksters: Map of Clemens Investigation — see the map and the key:
FBI Investigation (3/5/2008 to present)
179 Interviewees
235 Interviews
68 Interview Locations
93 Officers/Agents
4 Assistant U.S. Attorneys
(93 agents to go after one guy who lied to Congress about using steroids? Compared to the 55 that might someday (…tick…tick…tick…) get staffed to mortgage origination/securitization/foreclosure fraud?)
Yet Abigail Field would have us believe Justice is chock full of upstanding people.
People that need to give New Meaning to whistleblowing, NOW.
Breaking News! This Just In!
Ever since they busted Barclays Bank for its manipulation of Libor, the Schneiderman Task Force have been grabbing front-page headlines and have been secluded from the media, working along with a team from Hollywood, on an upcoming musical which will be based on an epic poem by the nation’s new poet laureate Natasha Trethewey, to be called “The Battle of Barclays”.
The Battle of Barclays will consist of resounding stanzas which, taking as their subject the Schneiderman Task Force’s great victory over Barclays, are being planned for a National Rock and Worship Roadshow tour 2012 that will kick off on August 1 in Washington DC, and will run through Monday November 5, 2012, where it ends in Fresno, California.
Schneiderman added that world class mezzo-sopranos, including Cecelia Bartoli and Anne Sofie von Otter have been assigned the most recent portion of the opus while the reunited Spice Girls have been assigned to perform the bubbly mid-’90s dance pop scenes.
According to Schneiderman, such choices would have the further advantage of highlighting the unknown stanzas of Natasha Trethewey’s vast Battle of Barclay’s epic, underscoring this premiere, and making it truly sensational.
Story developing….
A Sneak Preview of the Schneiderman Task Force Rock and Worship Road Show, celebrating its’ great victory over Barclay’s:
http://www.youtube.com/watch?v=CwfYOnCtQmE
Hollywood, that’s the Pentagon subsidiary, right ?
More breaking news! This Just In!
It’s official now, Bob Woodward will be writing Eric Schneiderman’s biography, to be called: “Eric (Jack Rabbit) Schneiderman: The Man who Brought Down Barclays”
Jack Rabbit, of course, is part of the Schneiderman legend and is referring to the 25 square foot Jack Rabbit self-storage unit (with no phone, Internet or furniture) in Portsmouth, Virginia, that the Schneiderman Task Force was using for office space, at the time that “Honest Eric” brought down the mighty Barclays.
Like “Honest Abe”, who was born in a log cabin but went on to become America’s most beloved president, “Honest Jack Rabbit Eric” is destined to become an American Progressive folk hero.
Story developing…
And the storage unit was only a last minute concession to the quaint need for ‘hardcopy’ at a physical location.
The whole purpose of the task force is to advertise that justice can be yours, too, with smartphone apps. and a mobile web connection. Just look how hopelessly convicted the guilty have been found on this site, alone. This site is serving as the force’s inspiration, without a doubt.
The Barclays of Broadway!
Dancing! http://www.youtube.com/watch?v=bQxrTD7Hx-U
Well, to be fair, large scale investigations and prosecutions often begin with small fry victories. I have to agree these little tidbits don’t look like anything other than dead ends and sops to the braying mob, but I wouldn’t be 100% certain of that.
When corruption is widespread and systemic it is often difficult to get things off the ground, and sometimes you never do. Richard Nixon (maybe a bad example, but indulge me) bitterly complained about the FBI’s lackluster approach to the Alger Hiss investigation. But here’s the problem: there were lots and lots of people in Washington from the 1930’s on that might have had something to do with commies and commie spies, even if unwittingly. Too many to prosecute everyone – way too many. So how do you pick which ones to go after?
It winds up being whatever bubbles up into the public consciousness, whether through the press or otherwise. And sometimes there’s no rhyme or reason other than that, so later it turns out that much more guilty people got a pass while those that didn’t seemed to be arbitrarily selected.
See the problem?
The criminal prosecution process never really did make a dent in ferreting out commies and commie spies from the federal government, however you feel about the worthiness of that effort to begin with.
I think criminal prosecutions have their place, but the idea that it’s the solution to this particular sytemic problem is wrong-headed. I like Bill Black, for example, but people should think more critically about what he argues: sure, when he was a busy prosecutor in the S&L scandal of the 80’s/90’s they got thousands of convictions. So what? A few years later the whole financial “industry” is more of a cesspool than it was then.
It’s systemic. That’s the point. Criminal laws can only address deviance, not systemic behavior. When it’s systemic, you have to….change the system.
http://strikelawyer.wordpress.com/2011/12/27/saving-the-world-revised-edition-part-i/
http://strikelawyer.wordpress.com/2011/12/27/saving-the-world-revised-edition-part-ii/
http://strikelawyer.wordpress.com/2011/12/27/saving-the-world-revised-edition-part-iii/
“Criminal laws can only address deviance, not systemic behavior. When it’s systemic, you have to….change the system.”
Is the system going to change without criminal prosecutions? Speaking of “I am not crook” Nixon, Watergate changed the system, at least culturally. In the end, it was the exposed criminality that made the difference. Some Republicans were willing to vote for justice against their political interests. It is true that the criminal convictions of the S&L crisis did not seem to slow the momentum of financial deregulation, but that momentum was strong at the time. Now we are at a potential turning point. The failure to prosecute banksters is troubling. It could signal a political shift to prolonged plutocracy. As with Watergate, as with the Pecora Commission, justice can provide a lever that can overcome political interests.
Thanks, Congress, Ds and Rs:
Yeah. I agree with you that criminal prosecution is a very limited tool.
In general we use policing WAY TOO much. At one time I was partial to arguments like the one made in “No Equal Justice” by David Cole, that if white upper class Americans were subjected to the same justice system as poor black Americans they wouldn’t stand for it. So it’s tempting to say, “throw all the white kids in jail too to make it fair.”
But the solution is probably the opposite. It’s letting people out of jail. It’s stopping this insane spending on policing and jails.
Our masters have tricked us into adopting their fascist framework for problems; that we can jail our way out of it.
Taking assets is severe enough. Why can’t we seize the entire banking sector via eminent domain? Or at least the top 14 dogs, or however you want to define the TBTF dogs.
That would be a fun evaluation hearing. Shoot, the government may be entitled to just compensation for taking the dogs on rather than the other way around.
I don’t think sending a few, or even a few hundred or even a few thousand white collar criminals to jail would over-load the system. Even at a thousand, which is the number of white collar criminals sent to jail for crimes related to the Savings and Loan scandal under Regan, they would be but a minuscule fraction of our current prison population of two million. If we are going to fix a broken system that has come to depend on incarceration to solve all problems, I would start with blue collar crimes such as taking a hit off a joint when you happen to be black and poor, before extending such an enlightened approach to the wealthy elite.
It’s systemic. That’s the point. Criminal laws can only address deviance, not systemic behavior.
It’s called a “crackdown” when criminal laws are applied to systemic behaviour. Such things have actually been done in the past, you know.
This “commie” affect you refer to is a reaction to the awareness of looting. So it’s now to be looters and looter spies ?
The public has gained an awareness of looters and law enforcement FRAUD so now it’s to be ‘Taliban’ and ‘al-Qaida’, is it ?
“It’s systemic. That’s the point.” In the sense that J. Edgar was in possession of some serious “deviance” for his times and not a single Justice Dept. lawyer saw fit to investigate him.
Systemic law enforcement FRAUD.
John, I used to like your insights to various posts, and still do, but have come to think that you’re maybe just a bit too much of an insider. You sit there and blow about how difficult it is to prosecute “all of them”. My gosh, there’s just too many of those crooks in Washington, or on wall street. Wherever would you start?? Well John, answer me this then; Why is the justice department so damned good at enforcing laws against little people? I drive down the highway and its nothing to see 2 sheriff’s cars and a highway patrol in maybe 50 miles. Maybe they need to be reassigned? Get off your elitist bandwagon and see law enforcement for what it really is. Selective. Thats a big bunch of horsecrap if there ever was any that theres too many of them and where would you start…..
At bottom I agree with you. But I tend to think the solution is to stop prosecuting so much, not to prosecute more.
At common law there were only seven felonies. Legislatures didn’t get into the act of writing criminal laws until the middle of the 19th century; before that crimes were defined by courts and they were few in number. Now we have walls full of books with statutes criminalizing so many things we’re probably all criminals one way or the other.
I wasn’t justifying the approach of the government so far, so much as explaining sympathetically. When they decide to prosecute it’s a large commitment of time and resources. If it works there are kudos. If it doesn’t work there can be negative career consequences.
On that note, another thing that would really be interesting to discuss is the role of government in prosecuting. Up until about the same time – middle 19th century – crimes were prosecuted by the victims or their attorneys, there being few or no government prosecutors.
Sorry if this seems elitist, I’m just throwing things out there for the most part.
It seems as if the American people had to twist Obama’s arm behind his back to even get this far with tackling the mortgage and bankster fraud and corruption issue.
Do you think Obama understands how much he’s sunk both his real chances at fixing the American economy and getting re-elected by7 doing nothing? Or how much the phony charade is going to sink hie re-election chances even further?
Well, at least he’s getting aware enough that he’s trying to fake the American people out, that’s progress, I suppose. Maybe the next President will take real action. I’m voting for one that will which means I’m not voting for that fool Obama or that king of the banksters Romney.
Obama doesn’t care how low he has sunk in people’s estimation. His financial fortunes have risen proportionally.
As to re-election; he’s a shoo-in. The Republicans are doing everything in their power short of a marching band to make sure he gets re-elected. Put Romney in there with a Democratically controlled Senate and you throw a complete monkey wrench into their plans to go for the golden cows; SS and Medicare. With Obama, Republicans –protesting violently all the way– will get exactly what they want, which incidentally is exactly the same thing Democrats want, in half the time.
It gets me when people say, “OMG Romney will do such horrible things…, bla, bla, bla.” Has anyone ever heard from one of these people exactly WHAT horrible things Romney could do that would be so dastardly? Maybe they mean he might kill American citizens with no judicial review. That would indeed be horrible. Perhaps they mean he might enact a Trojan Horse health care bill, like he did in Massachusetts, that would enshrine corporate profligacy as the legitimate goal of the Medical industry. God a lot of people would suffer from that, though I imagine he would put some sugar in there somewhere — perhaps a toothless clause on preexisting conditions — to sell it to those gullible tea baggers that will vote for him no matter what he does. Or maybe they mean he would support and enact laws that stripped us of our rights to privacy or maybe he would send those horrible automated planes into Middle Eastern countries to kill innocent children (redefined as activists) who are just trying to run to the rescue of their parents who were just involved in a previous strike. Now that is downright disgusting and despicable. I’m not sure Romney is that cold blooded even though he is a Republican.
Anyway, I’ve never heard any of these delicate sensitive souls expand on exactly what Romney would or could do that is so horrendous. The list must be absolutely terrifying, otherwise, I’m sure they would enumerate.
Glenn Greenwald: It is a Disgrace that we have not Prosecuted Crimes on Wall Street; Obama is being Deceitful (
http://www.peakprosperity.com/dailydigest/79203/daily-digest-76-new-agency-plans-make-over-mortgage-market-stakes-jobs-figures-ris
indeed Greenwald via Jesse
doing nothing is doing something
its enabling
“These executives knew that they could take these huge risks and even break laws and pay no real price, and that’s what happened. It’s not just a travesty of justice that we haven’t punished them for past transgressions. The real danger is that we’re continuing to send the signal to the world’s most powerful financial actors that they don’t have any fear of criminal accountability when they commit these obvious crimes.”
Glenn Greenwald
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