Banks Walk, Dept. of Justice Makes Excuses
February 9, 2012 in Uncategorized
By the end of the S&L crisis, vast financial fraud had devastated the real estate market, contributed to the early-90′s recession, and banks have cost the US taxpayer $124 billion. Bad as this was, at least a reckoning was made: thousands of bank executives were prosecuted, and more than 1,000 went to jail.
This time around, vast financial fraud has wrecked the entire world’s economy, put millions of people out of work, and cost trillions of dollars. And how many banks execs have gone to jail?
Gee, why not? The Wall Street Journal today lists the
Since the financial crisis erupted in 2008, many legal experts have said the U.S. government faced an uphill battle in prosecuting financial-industry executives. Criminal intent is especially hard to prove in complex financial cases, because prosecutors must convince jurors, beyond a reasonable doubt, that a fraud was intentional.
Some financial executives have said it is unfair to punish them for what is nothing more than their failure to predict the financial crisis. Many legal experts have said much of the most controversial behavior likely was a product of poor judgment, not criminal wrongdoing.
Uh-huh. But maybe there’s a simpler explanation, maybe banks aren’t all bad…:
[William Black, former litigation director of the Federal Home Loan Bank Board]: The most direct reason is the regulatory agencies became controlled by anti-regulators and they ceased making criminal referrals. In the savings and loan debacle, our agency made well over 10,000 criminal referrals. In this crisis, the office of thrift supervision that was supposed to regulate Washington Mutual, IndyMac, Countrywide, made zero criminal referrals.
[NPR's Robert Siegel]: Do they have as many lawyers, investigators, are there as many FBI agents available who could make those cases if they wanted to?
BLACK: No. As a result of the 9/11 attacks, 500 white collar FBI specialists were transferred out of doing white collar cases to doing national security, quite understandable. But what’s not understandable is the administration refused to allow the FBI to replace those folks.
Look, it’s not that hard. While it’s true the SEC itself can only bring civil charges, FBI investigators and federal prosecutors rely on the SEC to make criminal referrals — because only the SEC has the range of knowledge and expertise necessary. A bankster-friendly Congress has “dramatically underfunded” the SEC for years, if not decades; enforcement attorneys have steadily declined in number. Indeed,
the largest Wall Street firms (whom the SEC must regulate) spend more than four times the entire $1.3 billion SEC budget – just on their information technology.
And no surprise, we get what we pay for.
by Mike Cooper – from mikecooperbooks.com