Welcome login | signup
Language en es fr

Forum Post: The Untouchables: How the Obama administration protected Wall Street from prosecutions

Posted 5 years ago on Jan. 24, 2013, 7:02 p.m. EST by PeterKropotkin (1050) from Oakland, CA
This content is user submitted and not an official statement

Glen Greenwald

PBS' Frontline program on Tuesday night broadcast a new one-hour report on one of the greatest and most shameful failings of the Obama administration: the lack of even a single arrest or prosecution of any senior Wall Street banker for the systemic fraud that precipitated the 2008 financial crisis: a crisis from which millions of people around the world are still suffering. What this program particularly demonstrated was that the Obama justice department, in particular the Chief of its Criminal Division, Lanny Breuer, never even tried to hold the high-level criminals accountable.

What Obama justice officials did instead is exactly what they did in the face of high-level Bush era crimes of torture and warrantless eavesdropping: namely, acted to protect the most powerful factions in the society in the face of overwhelming evidence of serious criminality. Indeed, financial elites were not only vested with immunity for their fraud, but thrived as a result of it, even as ordinary Americans continue to suffer the effects of that crisis.

Worst of all, Obama justice officials both shielded and feted these Wall Street oligarchs (who, just by the way, overwhelmingly supported Obama's 2008 presidential campaign) as they simultaneously prosecuted and imprisoned powerless Americans for far more trivial transgressions. As Harvard law professor Larry Lessig put it two weeks ago when expressing anger over the DOJ's persecution of Aaron Swartz: "we live in a world where the architects of the financial crisis regularly dine at the White House." (Indeed, as "The Untouchables" put it: while no senior Wall Street executives have been prosecuted, "many small mortgage brokers, loan appraisers and even home buyers" have been).

As I documented at length in my 2011 book on America's two-tiered justice system, With Liberty and Justice for Some, the evidence that felonies were committed by Wall Street is overwhelming. That evidence directly negates the primary excuse by Breuer (previously offered by Obama himself) that the bad acts of Wall Street were not criminal.

Numerous documents prove that executives at leading banks, credit agencies, and mortgage brokers were falsely touting assets as sound that knew were junk: the very definition of fraud. As former Wall Street analyst Yves Smith wrote in her book ECONned: "What went on at Lehman and AIG, as well as the chicanery in the CDO [collateralized debt obligation] business, by any sensible standard is criminal." Even lifelong Wall Street defender Alan Greenspan, the former Federal Reserve Chair, said in Congressional testimony that "a lot of that stuff was just plain fraud."

A New York Times editorial in August explained that the DOJ's excuse for failing to prosecute Wall Street executives - that it was too hard to obtain convictions - "has always defied common sense - and all the more so now that a fuller picture is emerging of the range of banks' reckless and lawless activities, including interest-rate rigging, money laundering, securities fraud and excessive speculation." The Frontline program interviewed former prosecutors, Senate staffers and regulators who unequivocally said the same: it is inconceivable that the DOJ could not have successfully prosecuted at least some high-level Wall Street executives - had they tried.

What's most remarkable about all of this is not even Wall Street had the audacity to expect the generosity of largesse they ended up receiving. "The Untouchables" begins by recounting the massive financial devastation the 2008 crisis wrought - "the economy was in ruins and bankers were being blamed" - and recounts:

"In 2009, Wall Street bankers were on the defensive, worried they could be held criminally liable for fraud. With a new administration, bankers and their attorneys expected investigations and at least some prosecutions."

Indeed, the show recalls that both in Washington and the country generally, "there was broad support for prosecuting Wall Street." Nonetheless: "four years later, there have been no arrests of any senior Wall Street executives."

In response to the DOJ's excuse-making that these criminal cases are too hard to win, numerous experts - Senators, top Hill staffers, former DOJ prosecutors - emphasized the key point: Obama officials never even tried. One of the heroes of "The Untouchables", former Democratic Sen. Ted Kaufman, worked tirelessly to provide the DOJ with all the funds it needed to ensure probing criminal investigations and even to pressure and compel them to do so. Yet when he and his staff would meet with Breuer and other top DOJ officials, they would proudly tout the small mortgage brokers they were pursuing, in response to which Kafuman and his staff said: "No. Don't show me small-time mortgage guys in California. This is totally about what went on in Wall Street. . . . We are talking about investigating senior level Wall Street executives, even at the Board level". (The same Lanny Breuer was recently seen announcing that the banking giant HSBC would face no criminal prosecution for its money laundering of funds for designated terrorist groups and drug networks on the ground that the bank was too big to risk prosecuting).

As Kaufman and his staffers make clear, Obama officials were plainly uninterested in pursuing criminal accountability for Wall Street. One former staffer to both Biden and Kaufman, Jeff Connaughton, wrote a book in 2011 - "The Payoff: Why Wall Street Always Wins" - devoted to alerting the nation that the Obama DOJ refused even to try to find criminal culprits on Wall Street. In the book, this career-Democratic-aide-turned-whistleblower details how the levers of Washington power are used to shield and protect high-level Wall Street executives, many of whom have close ties to the leaders of both parties and themselves are former high-level government officials. This is a system, he makes clear, that is constituted to ensure that those executives never face real accountability even for their most egregious and destructive crimes.

The reason there have been no efforts made to criminally investigate is obvious. Former banking regulator and current securities Professor Bill Black told Bill Moyers in 2009 that "Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong." In the documentary "Inside Job", the economist Nouriel Roubini, when asked why there have been no such investigations, replied: "Because then you'd find the culprits." Underlying all of that is what the Senate's second-highest ranking Democrat, Dick Durbin, admitted in 2009: the banks "frankly own the place".

The harms from this refusal to hold Wall Street accountable are the same generated by the general legal immunity the US political culture has vested in its elites. Just as was true for the protection of torturers and illegal eavesdroppers, it ensures that there are no incentives to avoid similar crimes in the future. It is an injustice in its own right to allow those with power and wealth to commit destructive crimes with impunity. It subverts democracy and warps the justice system when a person's treatment under the law is determined not by their acts but by their power, position, and prestige. And it exposes just how shameful is the American penal state by contrasting the immunity given to the nation's most powerful with the merciless and brutal punishment meted out to its most marginalized.

The real mystery from all of this is that it has not led to greater social unrest. To some extent, both the early version of the Tea Party and the Occupy movements were spurred by the government's protection of Wall Street at the expense of everyone else. Still, Americans continue to be plagued by massive unemployment, foreclosures, the threat of austerity and economic insecurity while those who caused those problems have more power and profit than ever. And they watch millions of their fellow citizens be put in cages for relatively minor offenses while the most powerful are free to commit far more serious crimes with complete impunity. Far less injustice than this has spurred serious unrest in other societies.




Read the Rules
[-] 2 points by OTP (-203) from Tampa, FL 5 years ago

Racket Runners.

[-] 1 points by conservatroll (187) 5 years ago

About time someone started a thread on a program aired 48 hours ago. I figured no one would discuss it here since it painted a rather unflattering picture of the Obama/Holder DOJ.

On the bright side, I read a blurb on some leftwing forum linked from here that Lenny Breuer (lead DOJ investigator who wouldn't bring criminal charges for "lack" of evidence) got canned after the airing of this informative Frontline expose. Maybe that means Obama.Holder will go after some jr vp's on ws?

[-] 1 points by DebtNEUTRALITYpetition (647) 5 years ago

I have legal arguments that could set the credit card companies and the banks on their heels.

Does anyone want to hear them, or take an interest.

Why is that? Because it means they don't get all the credit saving the day. But hey, lets stand in the streets and be noticed and make connections, maybe smoke some dope, get laid, its all good.

[-] 1 points by owsarmy (271) 5 years ago

Have you launched a legal assault?

[-] 1 points by DebtNEUTRALITYpetition (647) 5 years ago

I tried doing my own cases pro per. But the more I researched, the more work I ended up doing until I ran out of time and the judge would not accept my documents.

Amazingly, I have been false served twice, but I was not able to use that as a proper defense to vacate the verdict, just to overturn the original default and set up a court date. In the meantime I was false served again by a second entity, and while all that was going on, I was trying to monitor one of the biggest the consumer fraud cases.

It was just too much to do on no pay while also being an unpaid caregiver for another person. I'm still going forward, but a lot more slowly because it's all on the free.

[-] 1 points by DebtNEUTRALITYpetition (647) 5 years ago

I have two websites I created in 2007 that I am extremely proud of.

www.credit-card-cap.com I referred to the Credit Card Reform Bill Act and there is a paragraph on page one of my website that pretty much is mirror of what then was put into the credit card reform bill act of 2009.

www.credit-protector.com warns of the damage that credit-protector credit card insurance was doing to millions of credit card customers. Four and 1/2 years later and the consumer protection financial bureau fined credit card companies close to a BILLION DOLLARS, but in doing so they missed the real damage this program did.

So it's hard for me to talk to attorneys who try and shut me up within 10 seconds of dialogue. I just can't deal with their arrogance, plus even if I do, their going to argue what they want to argue, and blow off my ideas.

And that, is how wall street gets away with their shit.

[-] 1 points by TrevorMnemonic (5827) 5 years ago


[-] 2 points by nomdeguerre (1775) from Brooklyn, NY 5 years ago

Absolutely. Chief racketeer: Eric Holder, the firewall of criminality. Misgovernance by control fraud. Criminal syndicates hold power behind the scenes, manipulate public face of government. Eric Holder is the inside man, pretending to be chief law enforcement officer of the land. His role is actually stealth accessory-after-the-fact criminal to Crimes-R-Us banksters and other criminal syndicates.

[-] 1 points by inclusionman (7064) 5 years ago

continued agitation and pressure on all politicians. Definitely those who use progressive rhetoric especially.


[-] 1 points by inclusionman (7064) 5 years ago

The Wall st bankster 1% oligarchs control the peoples government. They control the 99% with high interest indentured servitude. Protest all pols against this obscenity. Fight for money out of politics. Support movetoamend.org and occupies corporationsarenotpeople.webuda.com

[-] 1 points by owsarmy (271) 5 years ago

Excellent show. Obviously banksters still control our gov. It is our failure that things got this bad, it can only be our action that will correct it. Increase our activity, bring in new occupiers!

[-] 1 points by inclusionman (7064) 5 years ago

I agree. we can't expect any one politician to save us. We have to do it ourselves.