Look: who started this? Who got the ball rolling on:
US Imperialism
Dumbing down education
exponentiating debt
deliberate economic destruction
degredation of morality and ethics
globalism
media domination of the American hive-mind
Marxists in the 'left
Fascists in the 'right'
Do I need go on?
It's the 'elite'-the banksters, the CFR 'think tank' that has turned America political institutions into their cartel, it's the millions of BAR Attorneys who make the laws, administer the laws and try is by their laws.
And, all the people that usually crop up for the hate-the federal bureaucrats and agents, and all the revenuing oath traitors they're the foot soldiers in all this.
Should've started shooting DECADES ago-hell, the GI's of Athens TN should've had a clue and kept that revolt against the McMinn political syndicate going into a full-blown revolution, the papers of that era shat themselves at the prospect, but being good ol' patriotic country boys kicked back after their victory and the scum and the traitors got back in stronger than ever.
The GIs of Athens TN in 1946 had the right ideal-taking over local government using recall elections backed up by force. We in theory can do so much better today and we will need to.
We're going to. I'm going to see to that.
J. Croft
Denninger: If You Read One Article This Month...
Denninger links to this Rolling Stone article by Matt Taibbi on how FedGov insiders from POTUS on down are helping Wall Street banksters continue the largest scam in human history.
Read both in full, please, but note: language alert on each.
Since the utterly-predictable collapse of the Dead Elephants on both the budget and the defunding of Obamacare over the past week, I have felt a curious lift in my spirits.
I know now that the aircraft is undoubtedly going into the water, and that I will have to use my ditch gear and training.
If I survive the crash, that is.
But today, the clouds came in again, as the Wisconsin public-union thug demonstrations made me realize that the good guys are deeply and perhaps irretrievably disadvantaged by their own rule-set.
As a good guy, I was raised to respect the law (whatever it was), work hard, follow the rules, and keep my own nose clean. Doing so, taught my parents and the culture of first-half Sixties America, would ensure my success and that of the community in which I lived.
But the cataclysm that struck America in the second half of the Sixties and continues today tore away those social rule-set foundations.
That country and that culture are gone, almost certainly never to return absent a Renaissance presently unforeseeable in the coming decades.
I have fought in the nearly 30 years since my own personal resurrection from drug and alcohol addiction not just to believe in those rules, but to live by them.
Don't lie.
Don't steal.
Don't hurt people (at least those who don't need hurting).
Pay your taxes.
Wear clean underwear.
Obey the law.
Respect authority.
Be a good citizen.
Don't break things that don't belong to you.
Read the major news periodicals so that you are familiar with the issues of the day.
Register and vote in every election.
Pick up after yourself.
Be kind to others.
And don't get me wrong -- I have, in varying degrees and frequency, failed to live up to each of those "musts".
But at core, I believed in each of them and, even as I failed, tried the next time to do better.
Events of the past year have convinced me that I have been nothing but a rube, a naif, a fool.
The rule of law in this country is dead.
The idea that you have to work for what you have is dead.
What respect should one have when your country's leadership in both parties are accessories before, during, and after the fact to a parade of frauds and corruption bordering on the unimaginable in both scope and consequence?
The vast majority of my fellow North American residents actually accept the idea of soon being de facto slaves to our creditors -- or, at the very most, will only grumble at the prospect.
What we have, here on the first springish day in the wintry South of the USA, 2011, is a worldwide collection of street gangs, each of whom understands that now and for the foresesable future is the time for root, hog, or die.
And Alex, we'll take "root" for 3 trillion, please.
Each gang has its own colors, uniforms, language, and other anthropological markers.
The lawyer gangs, the cop gangs, the banker gangs, the politician gangs, the regulator gangs, the union gangs, the government employee gangs, the immigrant gangs, the NGO and QUANGO gangs, the drug gangs, the tax enforcement gangs, the gun enforcement gangs, the disability-rights gangs, the street crime gangs, the climate gangs, the commercial sex gangs, the pundit gangs, the enviro-gangs, the academic gangs, the Islamic gangs, the collectivist gangs....the list is nearly endless.
But the key commonality between all such groups is this:
There are those in the group, and then there is everyone else.
"Everyone else" breaks into two subcategories:
1) Other gangs (each of which can be, at any given time, an ally, an enemy, a takeover target, or an acquiring entity), and
2) The "unaffiliateds": Individuals or small groups of individuals who are not part of any clearly-differentiated gang.
Guess who's on the menu 24/7/365 for every other group looking for resources, victims, food, or just a bit of the old ultra-V?
Guess too where falls the average good guy or good gal who still believes in the old values?
Do you see the problem?
It's all nice and happy to talk about "activism" and "fighting back" and "standing up". And I don't for a minute mean to disparage any of the good folks that I have met anywhere along the path of the last eight years of trying to do what I thought was (and likely was) the "right thing".
But understand - in the Endarkenment, there is no such thing as "the right thing".
There is only the cannibal pot.
Those unaffiliateds who hold to the old values rather than embracing the new savagery place a "kick me" sign on their own backs -- a request that every gang thug of whatever persuasion within booting range will be glad to oblige.
But just know that the really bad guys will read that "kick me" sign as meaning:
"Beat me, take my stuff, savage and then kidnap for further savaging any females with me, and, if you're feeling peckish and have dispensed with the primal taboos, throw me in the stewpot when you're done."
And spare me, please, just this once, the bellowing, chesty "From my seventy-pounds-overweight cold, dead hands in a pile of hot brass with my .308 man's rifle by any means necessary but only after sufficient provocation lest we slide into the abyss when we gaze into becoming the beast we are fighting for our eternal souls" self-serving-and-deluding masturbatory-fantasy horseshit.
Just this once.
Please. For the love of all that is holy.
Readers of this blog know how few people will actually show up, let alone fight - in any circumstance.
Snyder called it right.
Let me be blunt, dear friends -- anybody noticed any bankers going missing lately?
Anyone?
How about union leaders?
Government lawyers?
The other major and minor cannibals strutting about your AO - every single one of them still has all ten fingers and ten toes, right?
You do understand that these gang members have destroyed the country into which you were born, and ensured that your children and grandchildren face a nearly-inescapable future as debt serfs, right?
Go back now, please, and re-read those last six questions.
Think for a few seconds on each.
Do you understand yet?
At least this old rule still applies:
When you're sitting around the card table, trying to decide who the sucker is, and you can't tell......
It's you.
The old way's over, boys and girls.
New World Order, indeed.
Form your own gang, or get eaten by someone else's gang.
It's just that simple, and just that inescapable.
New era.
New rules.
Evolve.
Or die.
Walter Mitty's Second Amendment
By Jeff Snyder
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Once upon a time, there was a people who inhabited a majestic land under an all-powerful government. Now this government had the resources to control practically every aspect of human existence; hundreds of thousands of "public servants" could access the most personal details of every citizen's life because everyone was issued a number at birth with which the government would track him throughout his life. No one could even work in gainful employment without this number.
True, the government left certain domains of individual action largely free, particularly matters concerning speech and sex. These activities posed no real threat to the state. When not used to entertain and divert, the power of speech was used principally to clamor for more or better goods from the state, or for "reforms" to make the state work "better," thereby entrenching the people's dependency. And insofar as sex was concerned, well, the people's behavior in this area also really had no effect on the scope of state power. In fact, the rulers noted that people's preoccupation with matters of sexual morality -- whether premarital, teenage pregnancy, adultery, divorce, homosexuality or general "who's zooming who" -- diverted the people's attention from the fact that they were, for economic and all other intents and purposes, slaves.
Slaves, though, who labored under the illusion that they were free. The people were a simple lot, politically speaking, and readily mistook the ability to give free reign to their appetites as the essence of "personal freedom."
In that fruitful land, the state took about 50 percent of everything the people earned through numerous forms of taxation, up from about 25 percent only a generation earlier. However, this boastful people, who believed themselves to be the freest on earth, retained the right to keep and bear arms. Tens of millions of them possessed firearms just in case their government became tyrannical and enslaved them.
In that land, an astronomical number of regulations, filling more than 96,000 pages in the government's "code of regulations," were promulgated by persons who were not elected by the people. The regulators often developed close relationships with the businesses they regulated, and work in "agencies" that had the power both to make law -- and to enforce it.
The agencies were not established by the government's constitution, and their existence violated that instrument's principle of separation of powers. Yet the people retained the right to keep and bear arms. Just in case their government, some day, ceased to be a "government of the people."
In that land, the constitution contemplated that the people would be governed by two separate levels of government -- "national" and "local." Matters that concerned the people most intimately -- health, education, welfare, crime, and the environment -- were to be left almost exclusively to the local level, so that those who made and enforced the laws lived close to the people who were subject to the laws, and felt their effects.
So that different people who had different ideas about such things would not be subject to a "one size fits all" standard that would apply if the national government dealt with such matters. Competition among different localities for people, who could move freely from one place to another, would act as a reality check on the passage of unnecessary or unwise laws.
But in a time of great crisis called the Great Economic Downturn, the people and their leaders clamored for "national solutions to national problems," and the constitution was "interpreted" by the Majestic Court to permit the national government to pass laws regulating practically everything that has been reserved for the localities.
Now the people had the pleasure of being governed by not one, but two beneficient governments with two sets of laws regulating the same things. Now the people could be prosecuted by not one, but two governments for the same activities and conduct. Still this fiercely independent people retained the right to keep and bear arms. Just in case their government, some day, no longer secured the blessings of liberty to themselves or their posterity.
In that fair land, property owners could be held liable under the nation's environmental legislation for the cleanup costs associated with toxic chemicals, even if the owners had not caused the problem.
Another set of laws provided for asset forfeiture and permitted government agencies to confiscate property without first establishing guilt.
Yet the people retained the right to keep and bear arms. Just in case their government denied them due process by holding them liable for things that were not their fault. (The Majestic Court had long ago determined that "due process" did not prevent government from imposing liability on people who were not at fault. "Due process", it turned out, meant little more than that a law had been passed in accordance with established procedures. You know, it was actually voted on, passed by a majority and signed by the president. If it met those standards, it didn't much matter what the law actually did.)
Oh well, the people had little real cause to worry. After all, those laws hardly ever affected anyone that they knew. Certainly not the people who mattered most of all: the country's favorite celebrities and sports teams, who so occupied the people's attention. And how bad could it be if it had not yet been the subject of a Movie of the Week, telling them what to think and how to feel about it?
In that wide open land, the police often established roadblocks to check that the people's papers were in order. The police -- armed agents of the rulers -- used these occasions to ask the occupants whether they were carrying weapons or drugs. Sometimes the police would ask to search the vehicles, and the occupants -- not knowing whether they could say no and wanting to prove that they were good guys by cooperating -- would permit it.
The Majestic Court had pronounced these roadblocks and searches lawful on the novel theory, unkown to the country's Founding Forebears, that so long as the police were doing this to everyone equally, it didn't violate anyone's rights in particular.
The roadblocks sometimes caused annoying delays, but these lovers of the open road took it in stride. After all, they retained their right to keep and bear arms. Just in case their government, some day, engaged in unreasonable searches and seizures. In that bustling land, the choice of how to develop property was heavily regulated by local governments that often demanded fees or concessions for the privilege. That is, when the development was not prohibited outright by national "moistland" regulations that had no foundation in statutory or constitutional law.
Even home owners often required permission to simply build an addition to their homes, or to erect a tool shed on their so-called private property. And so it seemed that "private property" became, not a system protecting individual liberty, but a system which, while providing the illusion of ownership, actually just allocated and assigned government-mandated burdens and responsibilities.
Still, this mightily productive people believed themselves to live in the most capitalistic society on earth, a society dedicated to the protection of private property. And so they retained the right to keep and bear arms. Just in case their government ever sought to deprive them of their property without just compensation.
Besides, the people had little cause for alarm. Far from worrying about government control of their property, the more immediate problem was: what to buy next?
The people were a simple lot, politically speaking, and readily mistook the ability to acquire and endless assortment of consumer goods as the essence of personal freedom.
The enlightened rulers of this great land did not seek to deprive the people of their right to bear arms. Unlike tyrants of the past, they had learned that it was not necessary to disarm the masses. The people proved time and time again thaty they were willing accomplices to the ever expanding authority of the government, enslaved by their own desire for safety, security and welfare.
The people could have their guns. What did the rulers care? They already possessed the complete obedience that they required.
In fact, in their more Machiavellian moments, the rulers could be heard to admit that permitting the people the right to keep and bear arms was a marvelous tool of social control, for it provided the people with the illusion of freedom.
The people, among the most highly regulated on earth, told themselves that they were free because they retained the means of revolt. Just in case things ever got really bad. No one, however, seemed to have too clear an idea what "really bad" really meant. The people accepted the fact that their government no longer even remotely resembled the plan set forth in their original constitution. And the people's values no longer remotely resembled those of their Founding Forebears. The people, in their naiveté, really believed that the means of revolt were to be found in a piece of inanimate metal! Really it was laughable. And pathetic.
No, the rulers knew that the people could safely be trusted with arms. The government educated their children, provided for their retirement in old age, bequeathed assistance if they lost their jobs, mandated that they receive health care, and even doled out food and shelter if they were poor.
The government was the very air the people breathed from childhood to the grave. Few could imagine, let alone desire, any other kind of world.
To the extent that the people paid any attention to their system of government, the great mass spent their days simply clamoring for more or better "programs", more "rational" regulations, in short, more of the same. The only thing that really upset them was waste, fraud, or abuse of the existing programs. Such shenanigans brought forth vehement protests demanding that the government provide their services more efficiently, dammit! The nation's stirring national anthem, adopted long ago by men who fought for their liberty, ended by posng a question, in hopes of keeping the spirit of liberty alive. Did the flag still fly, it asked, over the land of the free?
Unfortunately, few considered that the answer to that question might really be no, for they had long since lost an understanding of what freedom really is.
No, in this land "freedom" had become something dark, frightening, and dangerous. The people lived in mortal terror that somewhere, sometime, some individual might make a decision or embark upon a course of action that was not first approved by some government official.
Security was far more preferable. How could anyone be truly free if he were not first safe and protected?
Now we must say goodbye to this fair country whose government toiled tirelessly to create the safety, fairness and luxury that all demanded, and that everyone knew could be created by passing just the right laws. Through it all, the people vigorously safeguarded their tradition of firearms ownership.
But they never knew -- and never learned -- that preserving a tradition and a way of life is not the same as preserving liberty. And they never knew -- and never learned -- that it's not about guns.
American Handgunner, Sep/Oct 1997, reprinted without permission
NOTE: HERE'S THE RESULT OF US FUCKING OURSELVES WITH OUR AFORMENTIONED 'ETHICS':
If You Read One Article This Month...
Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.
"Everything's ****ed up, and nobody goes to jail," he said. "That's your whole story right there. Hell, you don't even have to write the rest of it. Just write that."
I put down my notebook. "Just that?"
"That's right," he said, signaling to the waitress for the check. "Everything's ****ed up, and nobody goes to jail. You can end the piece right there."
Yep.
And it gets better, of course.
Conversely, one has to consider the powerful deterrent to further wrongdoing that the state is missing by not introducing this particular class of people to the experience of incarceration. "You put Lloyd Blankfein in pound-me-in-the-ass prison for one six-month term, and all this bull**** would stop, all over Wall Street," says a former congressional aide. "That's all it would take. Just once."
Ok, which former congressional aide reads The Ticker and is talking to Taibbi? That's one of my favorite phrases, and I've used it liberally over the last four years. I can guess who that might be, but I won't bother (although if you're he, drop me an email. 
)
)Indeed, the shocking pattern of nonenforcement with regard to Wall Street is so deeply ingrained in Washington that it raises a profound and difficult question about the very nature of our society: whether we have created a class of people whose misdeeds are no longer perceived as crimes, almost no matter what those misdeeds are. The SEC and the Justice Department have evolved into a bizarre species of social surgeon serving this nonjailable class, expert not at administering punishment and justice, but at finding and removing criminal responsibility from the bodies of the accused.
Some people call it "regulatory capture." Others call it "control fraud" (William Black, primarily, along with me.) But I take it further; this is Control Fraud within the government, which is the most-pernicious form of all.
Consider this: What if organized crime was able to do this? Then any of their "muscle" could show up at any bank in the United States, any "stop and rob" on the corner, and do exactly that - stick it up. And the result? A fine. Maybe.
Well, that's a hell of a deal! You pull 100 jobs, you get caught doing five, you pay five fines equal to the loot you took those five times.
But you keep the fruits of the other 95 criminalities, so the fines simply become a cost of doing business. And since winding up in "pound-me-in-the-ass" Federal Prison is not one of your risks, there is no deterrence against you doing it again.
But the real fireworks came when Khuzami, the SEC's director of enforcement, talked about a new "cooperation initiative" the agency had recently unveiled, in which executives are being offered incentives to report fraud they have witnessed or committed. From now on, Khuzami said, when corporate lawyers like the ones he was addressing want to know if their Wall Street clients are going to be charged by the Justice Department before deciding whether to come forward, all they have to do is ask the SEC."We are going to try to get those individuals answers," Khuzami announced, as to "whether or not there is criminal interest in the case — so that defense counsel can have as much information as possible in deciding whether or not to choose to sign up their client."
And there, my friends, is the evidence.
Raw collusion between government and the financial industry.
There is no longer prosecution. There is now negotiation so that the SEC is a middleman between the cops and the robbers, and "negotiates" a fine only when caught.
Again, we now appear to have a formal structure where you can pull the equivalent of one hundred bank jobs, get caught at five of them, and simply give the money back without any risk of going to prison.
So there you have it. Illegal immigrants: 393,000. Lying moms: one. Bankers: zero. The math makes sense only because the politics are so obvious. You want to win elections, you bang on the jailable class. You build prisons and fill them with people for selling dime bags and stealing CD players. But for stealing a billion dollars? For fraud that puts a million people into foreclosure? Pass. It's not a crime. Prison is too harsh. Get them to say they're sorry, and move on. Oh, wait — let's not even make them say they're sorry. That's too mean; let's just give them a piece of paper with a government stamp on it, officially clearing them of the need to apologize, and make them pay a fine instead. But don't make them pay it out of their own pockets, and don't ask them to give back the money they stole. In fact, let them profit from their collective crimes, to the tune of a record $135 billion in pay and benefits last year. What's next? Taxpayer-funded massages for every Wall Street executive guilty of fraud?
No Matt, it's not a massage.
They're getting and giving blowjobs to and from the 536 most-wanted criminals in Washington DC.
Why Isn't Wall Street in Jail?
Financial crooks brought down the world's economy — but the feds are doing more to protect them than to prosecute them
Illustration by Victor Juhasz
"Everything's fucked up, and nobody goes to jail," he said. "That's your whole story right there. Hell, you don't even have to write the rest of it. Just write that."
I put down my notebook. "Just that?"
"That's right," he said, signaling to the waitress for the check. "Everything's fucked up, and nobody goes to jail. You can end the piece right there."
Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.
This article appears in the March 3, 2011 issue of Rolling Stone. The issue is available now on newsstands and will appear in the online archive February 18.
The rest of them, all of them, got off. Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What's more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even "one dollar" just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick "The Gorilla" Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.
Invasion of the Home Snatchers
Instead, federal regulators and prosecutors have let the banks and finance companies that tried to burn the world economy to the ground get off with carefully orchestrated settlements — whitewash jobs that involve the firms paying pathetically small fines without even being required to admit wrongdoing. To add insult to injury, the people who actually committed the crimes almost never pay the fines themselves; banks caught defrauding their shareholders often use shareholder money to foot the tab of justice. "If the allegations in these settlements are true," says Jed Rakoff, a federal judge in the Southern District of New York, "it's management buying its way off cheap, from the pockets of their victims."
Taibblog: Commentary on politics and the economy by Matt Taibbi
To understand the significance of this, one has to think carefully about the efficacy of fines as a punishment for a defendant pool that includes the richest people on earth — people who simply get their companies to pay their fines for them. Conversely, one has to consider the powerful deterrent to further wrongdoing that the state is missing by not introducing this particular class of people to the experience of incarceration. "You put Lloyd Blankfein in pound-me-in-the-ass prison for one six-month term, and all this bullshit would stop, all over Wall Street," says a former congressional aide. "That's all it would take. Just once."
But that hasn't happened. Because the entire system set up to monitor and regulate Wall Street is fucked up.
Just ask the people who tried to do the right thing.
Wall Street's Naked Swindle
Here's how regulation of Wall Street is supposed to work. To begin with, there's a semigigantic list of public and quasi-public agencies ostensibly keeping their eyes on the economy, a dense alphabet soup of banking, insurance, S&L, securities and commodities regulators like the Federal Reserve, the Federal Deposit Insurance Corp. (FDIC), the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC), as well as supposedly "self-regulating organizations" like the New York Stock Exchange. All of these outfits, by law, can at least begin the process of catching and investigating financial criminals, though none of them has prosecutorial power.
The major federal agency on the Wall Street beat is the Securities and Exchange Commission. The SEC watches for violations like insider trading, and also deals with so-called "disclosure violations" — i.e., making sure that all the financial information that publicly traded companies are required to make public actually jibes with reality. But the SEC doesn't have prosecutorial power either, so in practice, when it looks like someone needs to go to jail, they refer the case to the Justice Department. And since the vast majority of crimes in the financial services industry take place in Lower Manhattan, cases referred by the SEC often end up in the U.S. Attorney's Office for the Southern District of New York. Thus, the two top cops on Wall Street are generally considered to be that U.S. attorney — a job that has been held by thunderous prosecutorial personae like Robert Morgenthau and Rudy Giuliani — and the SEC's director of enforcement.
The relationship between the SEC and the DOJ is necessarily close, even symbiotic. Since financial crime-fighting requires a high degree of financial expertise — and since the typical drug-and-terrorism-obsessed FBI agent can't balance his own checkbook, let alone tell a synthetic CDO from a credit default swap — the Justice Department ends up leaning heavily on the SEC's army of 1,100 number-crunching investigators to make their cases. In theory, it's a well-oiled, tag-team affair: Billionaire Wall Street Asshole commits fraud, the NYSE catches on and tips off the SEC, the SEC works the case and delivers it to Justice, and Justice perp-walks the Asshole out of Nobu, into a Crown Victoria and off to 36 months of push-ups, license-plate making and Salisbury steak.
That's the way it's supposed to work. But a veritable mountain of evidence indicates that when it comes to Wall Street, the justice system not only sucks at punishing financial criminals, it has actually evolved into a highly effective mechanism for protecting financial criminals. This institutional reality has absolutely nothing to do with politics or ideology — it takes place no matter who's in office or which party's in power. To understand how the machinery functions, you have to start back at least a decade ago, as case after case of financial malfeasance was pursued too slowly or not at all, fumbled by a government bureaucracy that too often is on a first-name basis with its targets. Indeed, the shocking pattern of nonenforcement with regard to Wall Street is so deeply ingrained in Washington that it raises a profound and difficult question about the very nature of our society: whether we have created a class of people whose misdeeds are no longer perceived as crimes, almost no matter what those misdeeds are. The SEC and the Justice Department have evolved into a bizarre species of social surgeon serving this nonjailable class, expert not at administering punishment and justice, but at finding and removing criminal responsibility from the bodies of the accused.
The systematic lack of regulation has left even the country's top regulators frustrated. Lynn Turner, a former chief accountant for the SEC, laughs darkly at the idea that the criminal justice system is broken when it comes to Wall Street. "I think you've got a wrong assumption — that we even have a law-enforcement agency when it comes to Wall Street," he says.
In the hierarchy of the SEC, the chief accountant plays a major role in working to pursue misleading and phony financial disclosures. Turner held the post a decade ago, when one of the most significant cases was swallowed up by the SEC bureaucracy. In the late 1990s, the agency had an open-and-shut case against the Rite Aid drugstore chain, which was using diabolical accounting tricks to cook their books. But instead of moving swiftly to crack down on such scams, the SEC shoved the case into the "deal with it later" file. "The Philadelphia office literally did nothing with the case for a year," Turner recalls. "Very much like the New York office with Madoff." The Rite Aid case dragged on for years — and by the time it was finished, similar accounting fiascoes at Enron and WorldCom had exploded into a full-blown financial crisis. The same was true for another SEC case that presaged the Enron disaster. The agency knew that appliance-maker Sunbeam was using the same kind of accounting scams to systematically hide losses from its investors. But in the end, the SEC's punishment for Sunbeam's CEO, Al "Chainsaw" Dunlap — widely regarded as one of the biggest assholes in the history of American finance — was a fine of $500,000. Dunlap's net worth at the time was an estimated $100 million. The SEC also barred Dunlap from ever running a public company again — forcing him to retire with a mere $99.5 million. Dunlap passed the time collecting royalties from his self-congratulatory memoir. Its title: Mean Business.
The pattern of inaction toward shady deals on Wall Street grew worse and worse after Turner left, with one slam-dunk case after another either languishing for years or disappearing altogether. Perhaps the most notorious example involved Gary Aguirre, an SEC investigator who was literally fired after he questioned the agency's failure to pursue an insider-trading case against John Mack, now the chairman of Morgan Stanley and one of America's most powerful bankers.
Aguirre joined the SEC in September 2004. Two days into his career as a financial investigator, he was asked to look into an insider-trading complaint against a hedge-fund megastar named Art Samberg. One day, with no advance research or discussion, Samberg had suddenly started buying up huge quantities of shares in a firm called Heller Financial. "It was as if Art Samberg woke up one morning and a voice from the heavens told him to start buying Heller," Aguirre recalls. "And he wasn't just buying shares — there were some days when he was trying to buy three times as many shares as were being traded that day." A few weeks later, Heller was bought by General Electric — and Samberg pocketed $18 million.
After some digging, Aguirre found himself focusing on one suspect as the likely source who had tipped Samberg off: John Mack, a close friend of Samberg's who had just stepped down as president of Morgan Stanley. At the time, Mack had been on Samberg's case to cut him into a deal involving a spinoff of the tech company Lucent — an investment that stood to make Mack a lot of money. "Mack is busting my chops" to give him a piece of the action, Samberg told an employee in an e-mail.
A week later, Mack flew to Switzerland to interview for a top job at Credit Suisse First Boston. Among the investment bank's clients, as it happened, was a firm called Heller Financial. We don't know for sure what Mack learned on his Swiss trip; years later, Mack would claim that he had thrown away his notes about the meetings. But we do know that as soon as Mack returned from the trip, on a Friday, he called up his buddy Samberg. The very next morning, Mack was cut into the Lucent deal — a favor that netted him more than $10 million. And as soon as the market reopened after the weekend, Samberg started buying every Heller share in sight, right before it was snapped up by GE — a suspiciously timed move that earned him the equivalent of Derek Jeter's annual salary for just a few minutes of work.
The deal looked like a classic case of insider trading. But in the summer of 2005, when Aguirre told his boss he planned to interview Mack, things started getting weird. His boss told him the case wasn't likely to fly, explaining that Mack had "powerful political connections." (The investment banker had been a fundraising "Ranger" for George Bush in 2004, and would go on to be a key backer of Hillary Clinton in 2008.)
Aguirre also started to feel pressure from Morgan Stanley, which was in the process of trying to rehire Mack as CEO. At first, Aguirre was contacted by the bank's regulatory liaison, Eric Dinallo, a former top aide to Eliot Spitzer. But it didn't take long for Morgan Stanley to work its way up the SEC chain of command. Within three days, another of the firm's lawyers, Mary Jo White, was on the phone with the SEC's director of enforcement. In a shocking move that was later singled out by Senate investigators, the director actually appeared to reassure White, dismissing the case against Mack as "smoke" rather than "fire." White, incidentally, was herself the former U.S. attorney of the Southern District of New York — one of the top cops on Wall Street.
Pause for a minute to take this in. Aguirre, an SEC foot soldier, is trying to interview a major Wall Street executive — not handcuff the guy or impound his yacht, mind you, just talk to him. In the course of doing so, he finds out that his target's firm is being represented not only by Eliot Spitzer's former top aide, but by the former U.S. attorney overseeing Wall Street, who is going four levels over his head to speak directly to the chief of the SEC's enforcement division — not Aguirre's boss, but his boss's boss's boss's boss. Mack himself, meanwhile, was being represented by Gary Lynch, a former SEC director of enforcement.
Aguirre didn't stand a chance. A month after he complained to his supervisors that he was being blocked from interviewing Mack, he was summarily fired, without notice. The case against Mack was immediately dropped: all depositions canceled, no further subpoenas issued. "It all happened so fast, I needed a seat belt," recalls Aguirre, who had just received a stellar performance review from his bosses. The SEC eventually paid Aguirre a settlement of $755,000 for wrongful dismissal.
Rather than going after Mack, the SEC started looking for someone else to blame for tipping off Samberg. (It was, Aguirre quips, "O.J.'s search for the real killers.") It wasn't until a year later that the agency finally got around to interviewing Mack, who denied any wrongdoing. The four-hour deposition took place on August 1st, 2006 — just days after the five-year statute of limitations on insider trading had expired in the case.
"At best, the picture shows extraordinarily lax enforcement by the SEC," Senate investigators would later conclude. "At worse, the picture is colored with overtones of a possible cover-up."
Episodes like this help explain why so many Wall Street executives felt emboldened to push the regulatory envelope during the mid-2000s. Over and over, even the most obvious cases of fraud and insider dealing got gummed up in the works, and high-ranking executives were almost never prosecuted for their crimes. In 2003, Freddie Mac coughed up $125 million after it was caught misreporting its earnings by $5 billion; nobody went to jail. In 2006, Fannie Mae was fined $400 million, but executives who had overseen phony accounting techniques to jack up their bonuses faced no criminal charges. That same year, AIG paid $1.6 billion after it was caught in a major accounting scandal that would indirectly lead to its collapse two years later, but no executives at the insurance giant were prosecuted.
All of this behavior set the stage for the crash of 2008, when Wall Street exploded in a raging Dresden of fraud and criminality. Yet the SEC and the Justice Department have shown almost no inclination to prosecute those most responsible for the catastrophe — even though they had insiders from the two firms whose implosions triggered the crisis, Lehman Brothers and AIG, who were more than willing to supply evidence against top executives.
In the case of Lehman Brothers, the SEC had a chance six months before the crash to move against Dick Fuld, a man recently named the worst CEO of all time by Portfolio magazine. A decade before the crash, a Lehman lawyer named Oliver Budde was going through the bank's proxy statements and noticed that it was using a loophole involving Restricted Stock Units to hide tens of millions of dollars of Fuld's compensation. Budde told his bosses that Lehman's use of RSUs was dicey at best, but they blew him off. "We're sorry about your concerns," they told him, "but we're doing it." Disturbed by such shady practices, the lawyer quit the firm in 2006.
Then, only a few months after Budde left Lehman, the SEC changed its rules to force companies to disclose exactly how much compensation in RSUs executives had coming to them. "The SEC was basically like, 'We're sick and tired of you people fucking around — we want a picture of what you're holding,'" Budde says. But instead of coming clean about eight separate RSUs that Fuld had hidden from investors, Lehman filed a proxy statement that was a masterpiece of cynical lawyering. On one page, a chart indicated that Fuld had been awarded $146 million in RSUs. But two pages later, a note in the fine print essentially stated that the chart did not contain the real number — which, it failed to mention, was actually $263 million more than the chart indicated. "They fucked around even more than they did before," Budde says. (The law firm that helped craft the fine print, Simpson Thacher & Bartlett, would later receive a lucrative federal contract to serve as legal adviser to the TARP bailout.)
Budde decided to come forward. In April 2008, he wrote a detailed memo to the SEC about Lehman's history of hidden stocks. Shortly thereafter, he got a letter back that began, "Dear Sir or Madam." It was an automated e-response.
"They blew me off," Budde says.
Over the course of that summer, Budde tried to contact the SEC several more times, and was ignored each time. Finally, in the fateful week of September 15th, 2008, when Lehman Brothers cracked under the weight of its reckless bets on the subprime market and went into its final death spiral, Budde became seriously concerned. If the government tried to arrange for Lehman to be pawned off on another Wall Street firm, as it had done with Bear Stearns, the U.S. taxpayer might wind up footing the bill for a company with hundreds of millions of dollars in concealed compensation. So Budde again called the SEC, right in the middle of the crisis. "Look," he told regulators. "I gave you huge stuff. You really want to take a look at this."
But the feds once again blew him off. A young staff attorney contacted Budde, who once more provided the SEC with copies of all his memos. He never heard from the agency again.
"This was like a mini-Madoff," Budde says. "They had six solid months of warnings. They could have done something."
Three weeks later, Budde was shocked to see Fuld testifying before the House Government Oversight Committee and whining about how poor he was. "I got no severance, no golden parachute," Fuld moaned. When Rep. Henry Waxman, the committee's chairman, mentioned that he thought Fuld had earned more than $480 million, Fuld corrected him and said he believed it was only $310 million.
The true number, Budde calculated, was $529 million. He contacted a Senate investigator to talk about how Fuld had misled Congress, but he never got any response. Meanwhile, in a demonstration of the government's priorities, the Justice Department is proceeding full force with a prosecution of retired baseball player Roger Clemens for lying to Congress about getting a shot of steroids in his ass. "At least Roger didn't screw over the world," Budde says, shaking his head.
Fuld has denied any wrongdoing, but his hidden compensation was only a ripple in Lehman's raging tsunami of misdeeds. The investment bank used an absurd accounting trick called "Repo 105" transactions to conceal $50 billion in loans on the firm's balance sheet. (That's $50 billion, not million.) But more than a year after the use of the Repo 105s came to light, there have still been no indictments in the affair. While it's possible that charges may yet be filed, there are now rumors that the SEC and the Justice Department may take no action against Lehman. If that's true, and there's no prosecution in a case where there's such overwhelming evidence — and where the company is already dead, meaning it can't dump further losses on investors or taxpayers — then it might be time to assume the game is up. Failing to prosecute Fuld and Lehman would be tantamount to the state marching into Wall Street and waving the green flag on a new stealing season.
The most amazing noncase in the entire crash — the one that truly defies the most basic notion of justice when it comes to Wall Street supervillains — is the one involving AIG and Joe Cassano, the nebbishy Patient Zero of the financial crisis. As chief of AIGFP, the firm's financial products subsidiary, Cassano repeatedly made public statements in 2007 claiming that his portfolio of mortgage derivatives would suffer "no dollar of loss" — an almost comically obvious misrepresentation. "God couldn't manage a $60 billion real estate portfolio without a single dollar of loss," says Turner, the agency's former chief accountant. "If the SEC can't make a disclosure case against AIG, then they might as well close up shop."
As in the Lehman case, federal prosecutors not only had plenty of evidence against AIG — they also had an eyewitness to Cassano's actions who was prepared to tell all. As an accountant at AIGFP, Joseph St. Denis had a number of run-ins with Cassano during the summer of 2007. At the time, Cassano had already made nearly $500 billion worth of derivative bets that would ultimately blow up, destroy the world's largest insurance company, and trigger the largest government bailout of a single company in U.S. history. He made many fatal mistakes, but chief among them was engaging in contracts that required AIG to post billions of dollars in collateral if there was any downgrade to its credit rating.
St. Denis didn't know about those clauses in Cassano's contracts, since they had been written before he joined the firm. What he did know was that Cassano freaked out when St. Denis spoke with an accountant at the parent company, which was only just finding out about the time bomb Cassano had set. After St. Denis finished a conference call with the executive, Cassano suddenly burst into the room and began screaming at him for talking to the New York office. He then announced that St. Denis had been "deliberately excluded" from any valuations of the most toxic elements of the derivatives portfolio — thus preventing the accountant from doing his job. What St. Denis represented was transparency — and the last thing Cassano needed was transparency.
Another clue that something was amiss with AIGFP's portfolio came when Goldman Sachs demanded that the firm pay billions in collateral, per the terms of Cassano's deadly contracts. Such "collateral calls" happen all the time on Wall Street, but seldom against a seemingly solvent and friendly business partner like AIG. And when they do happen, they are rarely paid without a fight. So St. Denis was shocked when AIGFP agreed to fork over gobs of money to Goldman Sachs, even while it was still contesting the payments — an indication that something was seriously wrong at AIG. "When I found out about the collateral call, I literally had to sit down," St. Denis recalls. "I had to go home for the day."
After Cassano barred him from valuating the derivative deals, St. Denis had no choice but to resign. He got another job, and thought he was done with AIG. But a few months later, he learned that Cassano had held a conference call with investors in December 2007. During the call, AIGFP failed to disclose that it had posted $2 billion to Goldman Sachs following the collateral calls.
"Investors therefore did not know," the Financial Crisis Inquiry Commission would later conclude, "that AIG's earnings were overstated by $3.6 billion."
"I remember thinking, 'Wow, they're just not telling people,'" St. Denis says. "I knew. I had been there. I knew they'd posted collateral."
A year later, after the crash, St. Denis wrote a letter about his experiences to the House Government Oversight Committee, which was looking into the AIG collapse. He also met with investigators for the government, which was preparing a criminal case against Cassano. But the case never went to court. Last May, the Justice Department confirmed that it would not file charges against executives at AIGFP. Cassano, who has denied any wrongdoing, was reportedly told he was no longer a target.
Shortly after that, Cassano strolled into Washington to testify before the Financial Crisis Inquiry Commission. It was his first public appearance since the crash. He has not had to pay back a single cent out of the hundreds of millions of dollars he earned selling his insane pseudo-insurance policies on subprime mortgage deals. Now, out from under prosecution, he appeared before the FCIC and had the enormous balls to compliment his own business acumen, saying his atom-bomb swaps portfolio was, in retrospect, not that badly constructed. "I think the portfolios are withstanding the test of time," he said.
"They offered him an excellent opportunity to redeem himself," St. Denis jokes.
In the end, of course, it wasn't just the executives of Lehman and AIGFP who got passes. Virtually every one of the major players on Wall Street was similarly embroiled in scandal, yet their executives skated off into the sunset, uncharged and unfined. Goldman Sachs paid $550 million last year when it was caught defrauding investors with crappy mortgages, but no executive has been fined or jailed — not even Fabrice "Fabulous Fab" Tourre, Goldman's outrageous Euro-douche who gleefully e-mailed a pal about the "surreal" transactions in the middle of a meeting with the firm's victims. In a similar case, a sales executive at the German powerhouse Deutsche Bank got off on charges of insider trading; its general counsel at the time of the questionable deals, Robert Khuzami, now serves as director of enforcement for the SEC.
Another major firm, Bank of America, was caught hiding $5.8 billion in bonuses from shareholders as part of its takeover of Merrill Lynch. The SEC tried to let the bank off with a settlement of only $33 million, but Judge Jed Rakoff rejected the action as a "facade of enforcement." So the SEC quintupled the settlement — but it didn't require either Merrill or Bank of America to admit to wrongdoing. Unlike criminal trials, in which the facts of the crime are put on record for all to see, these Wall Street settlements almost never require the banks to make any factual disclosures, effectively burying the stories forever. "All this is done at the expense not only of the shareholders, but also of the truth," says Rakoff. Goldman, Deutsche, Merrill, Lehman, Bank of America ... who did we leave out? Oh, there's Citigroup, nailed for hiding some $40 billion in liabilities from investors. Last July, the SEC settled with Citi for $75 million. In a rare move, it also fined two Citi executives, former CFO Gary Crittenden and investor-relations chief Arthur Tildesley Jr. Their penalties, combined, came to a whopping $180,000.
Throughout the entire crisis, in fact, the government has taken exactly one serious swing of the bat against executives from a major bank, charging two guys from Bear Stearns with criminal fraud over a pair of toxic subprime hedge funds that blew up in 2007, destroying the company and robbing investors of $1.6 billion. Jurors had an e-mail between the defendants admitting that "there is simply no way for us to make money — ever" just three days before assuring investors that "there's no basis for thinking this is one big disaster." Yet the case still somehow ended in acquittal — and the Justice Department hasn't taken any of the big banks to court since.
All of which raises an obvious question: Why the hell not?
Gary Aguirre, the SEC investigator who lost his job when he drew the ire of Morgan Stanley, thinks he knows the answer.
Last year, Aguirre noticed that a conference on financial law enforcement was scheduled to be held at the Hilton in New York on November 12th. The list of attendees included 1,500 or so of the country's leading lawyers who represent Wall Street, as well as some of the government's top cops from both the SEC and the Justice Department.
Criminal justice, as it pertains to the Goldmans and Morgan Stanleys of the world, is not adversarial combat, with cops and crooks duking it out in interrogation rooms and courthouses. Instead, it's a cocktail party between friends and colleagues who from month to month and year to year are constantly switching sides and trading hats. At the Hilton conference, regulators and banker-lawyers rubbed elbows during a series of speeches and panel discussions, away from the rabble. "They were chummier in that environment," says Aguirre, who plunked down $2,200 to attend the conference.
Aguirre saw a lot of familiar faces at the conference, for a simple reason: Many of the SEC regulators he had worked with during his failed attempt to investigate John Mack had made a million-dollar pass through the Revolving Door, going to work for the very same firms they used to police. Aguirre didn't see Paul Berger, an associate director of enforcement who had rebuffed his attempts to interview Mack — maybe because Berger was tied up at his lucrative new job at Debevoise & Plimpton, the same law firm that Morgan Stanley employed to intervene in the Mack case. But he did see Mary Jo White, the former U.S. attorney, who was still at Debevoise & Plimpton. He also saw Linda Thomsen, the former SEC director of enforcement who had been so helpful to White. Thomsen had gone on to represent Wall Street as a partner at the prestigious firm of Davis Polk & Wardwell.
Two of the government's top cops were there as well: Preet Bharara, the U.S. attorney for the Southern District of New York, and Robert Khuzami, the SEC's current director of enforcement. Bharara had been recommended for his post by Chuck Schumer, Wall Street's favorite senator. And both he and Khuzami had served with Mary Jo White at the U.S. attorney's office, before Mary Jo went on to become a partner at Debevoise. What's more, when Khuzami had served as general counsel for Deutsche Bank, he had been hired by none other than Dick Walker, who had been enforcement director at the SEC when it slow-rolled the pivotal fraud case against Rite Aid.
"It wasn't just one rotation of the revolving door," says Aguirre. "It just kept spinning. Every single person had rotated in and out of government and private service."
The Revolving Door isn't just a footnote in financial law enforcement; over the past decade, more than a dozen high-ranking SEC officials have gone on to lucrative jobs at Wall Street banks or white-shoe law firms, where partnerships are worth millions. That makes SEC officials like Paul Berger and Linda Thomsen the equivalent of college basketball stars waiting for their first NBA contract. Are you really going to give up a shot at the Knicks or the Lakers just to find out whether a Wall Street big shot like John Mack was guilty of insider trading? "You take one of these jobs," says Turner, the former chief accountant for the SEC, "and you're fit for life."
Fit — and happy. The banter between the speakers at the New York conference says everything you need to know about the level of chumminess and mutual admiration that exists between these supposed adversaries of the justice system. At one point in the conference, Mary Jo White introduced Bharara, her old pal from the U.S. attorney's office.
"I want to first say how pleased I am to be here," Bharara responded. Then, addressing White, he added, "You've spawned all of us. It's almost 11 years ago to the day that Mary Jo White called me and asked me if I would become an assistant U.S. attorney. So thank you, Dr. Frankenstein."
Next, addressing the crowd of high-priced lawyers from Wall Street, Bharara made an interesting joke. "I also want to take a moment to applaud the entire staff of the SEC for the really amazing things they have done over the past year," he said. "They've done a real service to the country, to the financial community, and not to mention a lot of your law practices."
Haw! The line drew snickers from the conference of millionaire lawyers. But the real fireworks came when Khuzami, the SEC's director of enforcement, talked about a new "cooperation initiative" the agency had recently unveiled, in which executives are being offered incentives to report fraud they have witnessed or committed. From now on, Khuzami said, when corporate lawyers like the ones he was addressing want to know if their Wall Street clients are going to be charged by the Justice Department before deciding whether to come forward, all they have to do is ask the SEC.
"We are going to try to get those individuals answers," Khuzami announced, as to "whether or not there is criminal interest in the case — so that defense counsel can have as much information as possible in deciding whether or not to choose to sign up their client."
Aguirre, listening in the crowd, couldn't believe Khuzami's brazenness. The SEC's enforcement director was saying, in essence, that firms like Goldman Sachs and AIG and Lehman Brothers will henceforth be able to get the SEC to act as a middleman between them and the Justice Department, negotiating fines as a way out of jail time. Khuzami was basically outlining a four-step system for banks and their executives to buy their way out of prison. "First, the SEC and Wall Street player make an agreement on a fine that the player will pay to the SEC," Aguirre says. "Then the Justice Department commits itself to pass, so that the player knows he's 'safe.' Third, the player pays the SEC — and fourth, the player gets a pass from the Justice Department."
When I ask a former federal prosecutor about the propriety of a sitting SEC director of enforcement talking out loud about helping corporate defendants "get answers" regarding the status of their criminal cases, he initially doesn't believe it. Then I send him a transcript of the comment. "I am very, very surprised by Khuzami's statement, which does seem to me to be contrary to past practice — and not a good thing," the former prosecutor says.
Earlier this month, when Sen. Chuck Grassley found out about Khuzami's comments, he sent the SEC a letter noting that the agency's own enforcement manual not only prohibits such "answer getting," it even bars the SEC from giving defendants the Justice Department's phone number. "Should counsel or the individual ask which criminal authorities they should contact," the manual reads, "staff should decline to answer, unless authorized by the relevant criminal authorities." Both the SEC and the Justice Department deny there is anything improper in their new policy of cooperation. "We collaborate with the SEC, but they do not consult with us when they resolve their cases," Assistant Attorney General Lanny Breuer assured Congress in January. "They do that independently."
Around the same time that Breuer was testifying, however, a story broke that prior to the pathetically small settlement of $75 million that the SEC had arranged with Citigroup, Khuzami had ordered his staff to pursue lighter charges against the megabank's executives. According to a letter that was sent to Sen. Grassley's office, Khuzami had a "secret conversation, without telling the staff, with a prominent defense lawyer who is a good friend" of his and "who was counsel for the company." The unsigned letter, which appears to have come from an SEC investigator on the case, prompted the inspector general to launch an investigation into the charge.
All of this paints a disturbing picture of a closed and corrupt system, a timeless circle of friends that virtually guarantees a collegial approach to the policing of high finance. Even before the corruption starts, the state is crippled by economic reality: Since law enforcement on Wall Street requires serious intellectual firepower, the banks seize a huge advantage from the start by hiring away the top talent. Budde, the former Lehman lawyer, says it's well known that all the best legal minds go to the big corporate law firms, while the "bottom 20 percent go to the SEC." Which makes it tough for the agency to track devious legal machinations, like the scheme to hide $263 million of Dick Fuld's compensation.
"It's such a mismatch, it's not even funny," Budde says.
But even beyond that, the system is skewed by the irrepressible pull of riches and power. If talent rises in the SEC or the Justice Department, it sooner or later jumps ship for those fat NBA contracts. Or, conversely, graduates of the big corporate firms take sabbaticals from their rich lifestyles to slum it in government service for a year or two. Many of those appointments are inevitably hand-picked by lifelong stooges for Wall Street like Chuck Schumer, who has accepted $14.6 million in campaign contributions from Goldman Sachs, Morgan Stanley and other major players in the finance industry, along with their corporate lawyers.
As for President Obama, what is there to be said? Goldman Sachs was his number-one private campaign contributor. He put a Citigroup executive in charge of his economic transition team, and he just named an executive of JP Morgan Chase, the proud owner of $7.7 million in Chase stock, his new chief of staff. "The betrayal that this represents by Obama to everybody is just — we're not ready to believe it," says Budde, a classmate of the president from their Columbia days. "He's really fucking us over like that? Really? That's really a JP Morgan guy, really?"
Which is not to say that the Obama era has meant an end to law enforcement. On the contrary: In the past few years, the administration has allocated massive amounts of federal resources to catching wrongdoers — of a certain type. Last year, the government deported 393,000 people, at a cost of $5 billion. Since 2007, felony immigration prosecutions along the Mexican border have surged 77 percent; nonfelony prosecutions by 259 percent. In Ohio last month, a single mother was caught lying about where she lived to put her kids into a better school district; the judge in the case tried to sentence her to 10 days in jail for fraud, declaring that letting her go free would "demean the seriousness" of the offenses.
So there you have it. Illegal immigrants: 393,000. Lying moms: one. Bankers: zero. The math makes sense only because the politics are so obvious. You want to win elections, you bang on the jailable class. You build prisons and fill them with people for selling dime bags and stealing CD players. But for stealing a billion dollars? For fraud that puts a million people into foreclosure? Pass. It's not a crime. Prison is too harsh. Get them to say they're sorry, and move on. Oh, wait — let's not even make them say they're sorry. That's too mean; let's just give them a piece of paper with a government stamp on it, officially clearing them of the need to apologize, and make them pay a fine instead. But don't make them pay it out of their own pockets, and don't ask them to give back the money they stole. In fact, let them profit from their collective crimes, to the tune of a record $135 billion in pay and benefits last year. What's next? Taxpayer-funded massages for every Wall Street executive guilty of fraud?
The mental stumbling block, for most Americans, is that financial crimes don't feel real; you don't see the culprits waving guns in liquor stores or dragging coeds into bushes. But these frauds are worse than common robberies. They're crimes of intellectual choice, made by people who are already rich and who have every conceivable social advantage, acting on a simple, cynical calculation: Let's steal whatever we can, then dare the victims to find the juice to reclaim their money through a captive bureaucracy. They're attacking the very definition of property — which, after all, depends in part on a legal system that defends everyone's claims of ownership equally. When that definition becomes tenuous or conditional — when the state simply gives up on the notion of justice — this whole American Dream thing recedes even further from reality.
http://www.rollingstone.com/politics/news/why-isnt-wall-street-in-jail-20110216?print=true
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