On 24 September 2013, Syracuse University's "TRAC Reports," which is the only organization that tabulates the federal government's prosecutions of elite financial crimes, headlined "Slump in FBI White Collar Crime Prosecutions," and reported that "prosecutions of white collar criminals recommended by the FBI are substantially down during the first ten months of Fiscal Year 2013." This was especially so in the Wall Street area: "In the last year, the judicial District Court recording the largest projected drop in the rate of white collar crime prosecutions -- 27.8 percent -- was the Southern District of New York (Manhattan)."
Thus, President Obama has kept the promise that he had made in secret to the assembled Wall Street CEOs inside the White House on 27 March 2009 (but that was leaked out), "My administration ... is the only thing between you and the pitchforks."
On 15 November 2011, TRAC Reports noted that ever since TRAC had started counting these prosecutions, back in 1991, the prosecutions were now at an all-time low, down more than half since the year 2000, continuing the plunge that had started when George W. Bush entered the White House. Under President Obama, these prosecutions were about 30% below the GWB annual average. Though these prosecutions should have been at record-setting highs in the wake of the biggest orgy of financial crimes in this nation's history, which was the period leading up to the 2008 GWB-era collapse, they were instead at record-setting lows now, under Obama.
There were certainly numerous prosecutable crimes, but no White House interest in pursuing them.
The Huffington Post's Shahien Nasiripour bannered, on 16 May 2011, "Confidential Federal Audits Accuse Five Biggest Mortgage Firms Of Defrauding Taxpayers," and he reported that the Inspector General of the U.S. Department of Housing and Urban Development had carried out audits of Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, and Ally Financial, and found, in each case, that they had swindled the Federal Government.
"The internal watchdog office at HUD referred its findings to the Department of Justice, which had to decide whether to file charges" under "the False Claims Act, a Civil War-era law crafted as a weapon against firms that swindle the government." All of "the audits conclude that the banks effectively cheated taxpayers by presenting the Federal Housing Administration with false claims: They filed for federal reimbursement on foreclosed homes ... using defective and faulty documents." Obama's "Justice" Department refused even to prosecute, much less to pursue, any of these mega-crooks, who had cheated the U.S. Government -- ultimately U.S. taxpayers.
At lower levels of the Federal Government, there was a desire to prosecute banksters. The official "2010 Mortgage Fraud Report" by the FBI found that "mortgage fraud continued at elevated levels in 2010, consistent with levels seen in 2009." However, the FBI is only an investigative arm of the U.S. Government, not actually a prosecutorial agency. Only the Executive is that: the president, via his chosen U.S. Attorney General, who refuses to prosecute banksters.
Many expensive federal studies have been ignored. On 13 April 2011, U.S. Senator Carl Levin's committee issued "Wall Street and the Financial Crisis: Anatomy of a Financial Collapse." It simply ignored any role that criminality might have played, though it did document some things that might have constituted federal crimes. In January 2011, there was "The Financial Crisis Inquiry Report" from the FCIC that was appointed by the President and the leaders of both political parties in Congress.
It was rigged. For example, on 21 September 2013 in The New York Times, William D. Cohan, formerly of Wall Street but now an independent investigative journalist, headlined "Was This Whistle-Blower Muzzled?" and he described how Richard M. Bowen III, who had testified to the FCIC, was muzzled by them. Bowen testified because he claimed that he had been fired by Citigroup after allegedly having told Robert Rubin (who made $142 million there) that the bum mortgages they were selling to the public were rigged and would bomb. Cohan wrote that Bowen was advised by his attorney, "Remove the names of people at Citi," as the way to prevent further retaliation. Bowen refused, so his testimony was blocked from being made public until 2016, when the crimes can no longer be prosecuted.
Finally, however, a federal agency was permitted to go after criminal banks (if not their CEOs), because it was the investigative arm of the Federal Housing Finance Agency, which was left holding the bag on lots of the fraud-encrusted mortgages, via Fannie Mae and Freddie Mac. On 30 April 2012, the FHFA's "Semiannual Report to the Congress" described their efforts to at least fine the mega-banks, and on its page 79 identified who was really being protected by Wall Street's federal bailout: "foreign central banks, commercial banks, fund managers, insurance companies, state and local governments, corporate pensions, individuals, and nonprofit foundations." In terms of the individuals who benefited, it was mostly the top 1% richest individuals, the individuals who, in this country, have experienced 95% of the economic benefits from the Obama economic "recovery" from the Bush crash. In other words: the Wall Street bailout has gone virtually only to the top 1%.
But still, none of its elite perpetrators has been pursued by Obama and the cabinet officers he has hired.
So: taxpayers lost, homeowners lost, stockholders in the banks lost, and the bottom 95% generally lost, but top executives and the top 1% generally gained, and have continued to gain during Obama's economic "recovery."
On 14 January 2014, Cohan headlined at Bloomberg News, "Prosecutors Balk, Bankers Walk," and he summed up the outcomes for the people who had planned and orchestrated these thefts by fraud:
"Jimmy Cayne, the former chief executive officer of Bear Stearns & Co., continues to enjoy playing bridge and golf, his $400 million-plus fortune, his sprawling mansion in Elberon, New Jersey, and his duplex at the Plaza Hotel."
"Dick Fuld, the former CEO of Lehman Brothers Holdings Inc., ... is closer to $520 million, according to people who prepared and studied Lehman's public filings."
"When Stan O'Neal resigned from Merrill Lynch & Co. in 2007, less than a year before it almost went bankrupt, he was given a parting gift of $161.5 million and a board seat -- which he still holds -- at Alcoa Inc."
"Angelo Mozilo, the former Countrywide Financial Corp. CEO, ... walked off center stage with a net worth of about $600 million."
Those are just a few.
Of course, none of them has been prosecuted, even though they all masterminded their respective organization's role in the mega-crime, and benefited enormously from doing that. It was for reasons like these that on 12 November 2013, Reuters headlined "Judge Criticizes Lack of Prosecution Against Wall Street Executives for Fraud," and reported that:
"The federal judge [Jed Rakoff] who oversaw the recent civil fraud trial against Bank of America Corp criticized the U.S. Department of Justice on Tuesday for failing to prosecute high-level executives over the financial crisis. U.S. District Judge Jed Rakoff of Manhattan said while companies have been prosecuted for causing the 2007-2009 financial meltdown, Wall Street executives have escaped justice."
The people who attack Obama on this are Democrats, like Rakoff. Republicans can't do it, because their ideology is: greed is good, the "invisible hand" should rule, and not only should the super-rich not be restrained by the criminal law, but they shouldn't even be restrained by regulatory agencies. Government itself is bad, in their view; "private enterprise" is good. Corruption is creed, to the Republican Party; so, you don't see this issue pushed by them against Obama.
Meanwhile, the people whom Obama had hired, such as the now-recently hired Warburg Pincus President, and recent former U.S. Treasury Secretary, Timothy Geithner, have either gone off to Wall Street (like Geithner) where they don't need to do anything but lend their name in order to become fabulously wealthy; or else they are planning to do that, in either Wall Street, or Washington D.C.
When Willie Sutton was asked why he robbed banks, he was alleged to have said "because that's where the money is." But when interviewed later about that, he said that, actually, "Why did I rob banks? Because I enjoyed it. I loved it." There are even movies about the fun of today's Wall Street; so, maybe things haven't really changed much except regarding how it's done -- and what the consequences are for the perpetrators. If times have changed in any basic way, it's because, now, the best way to rob a bank is to own one.
As to why Obama wants those people to get off scot-free, he very much needs to be asked that, and asked it repeatedly, and with ceaseless follow-up questions about it, to get him to honesty about it; and anyone in the White House press corps who doesn't do that should simply be fired.
This country can no longer stand a White House press corps that's more concerned to please the President than it's concerned to do its most basic job.
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Investigative historian Eric Zuesse is the author, most recently, of They're Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST'S VENTRILOQUISTS: The Event that Created Christianity.