Lately we've been hearing some strong words from the President about Wall Street crime. But when the cameras and lights aren't around, his Administration's been working feverishly to protect bankers from state law enforcement officials.
Six conscientious Attorneys General believe the law applies to everyone. While they're working to bring justice to Wall Street, White House officials are obstructing them by pushing a sweetheart deal with the banks that would end their investigations and prevent them from prosecuting crooked bankers.
If more people knew what was happening, the White House would be flooded with calls and emails demanding that it stop protecting Wall Street.
It's still not too late for that.
The Evidence
The evidence for Wall Street's criminality is overwhelming. The big banks have already signed consent decrees and other documents in response to well-documented charges of perjury and filing of false documents; illegal foreclosures; criminal solicitation through the repeated use of law firms and foreclosure servicers known to have violated the law; investor fraud; and other major crimes.
Wall Street's lawbreaking crashed the economy, left millions of people jobless, and cost the world's economy trillions of dollars in lost wealth. People have been illegally evicted, and millions were deceived into borrowing money for real estate whose value had been artificially inflated through illegal means, and who now owe that money to the same bankers who committed the crimes.
But none of the criminals have gone to jail - and they're still collecting on those loans.
The Resistance
The responsibility for prosecuting crooked bankers belongs to both the Justice Department and the Attorneys General who serve as their states' Chief Law Enforcement Officers. AGs for all fifty states were brought together to negotiate with the banks over Wall Street mortgage fraud, and quickly came under intense pressure from the Administration and corporate interests. Under the leadership of self-serving Iowa Attorney General Tom Miller, the group began to discuss a White House-backed deal that would protect criminal bankers from prosecution and let the banks settle for pennies on the dollar.
The first AG to reject the deal was New York's Eric Schneiderman, whose jurisdiction includes Wall Street. Schneiderman had been pursuing criminal investigations and asked the group not to accept any agreement that would shut them down before all the evidence was in. He immediately came in for some heavy arm-twisting from Obama officials like HUD Secretary Shaun Donovan and top people at the Justice Department - the same Justice Department that has refused to prosecute a single banker for criminal fraud, and can only offer weak and implausible excuses for its failure to do so.
Ohio's Miller immediately removed Schneiderman from the committee leading negotiations for the 50-member AG group, despite his state's key role in prosecuting bank fraud. That move was either designed to remove Schneiderman from the room while negotiating with (and for) the banks, or it was Miller's petty way of saying "you can't sit with us in the school cafeteria anymore." Maybe it was both.
Schneiderman nevertheless soldiered on, apparently undeterred by either the Administration's arm-twisting or Miller's "you are so not hanging with us, dude" tactics.
Kentucky Attorney General Jack Conway soon stepped up and backed Schneiderman, saying "There should be absolutely no criminal or civil immunity given to banks for activity that has not yet been investigated." Delaware's Beau Biden also joined with Schneiderman, and that's important. Many New York-based companies, including my ex-employer AIG, are legally incorporated in Delaware to take advantage of that state's favorable corporate tax policies. (Biden's also resisting the Administration that his dad serves as Vice President, which must make for interesting dinner table conversations at holiday time.)
Massachusetts AG Martha Coakley has sued five banks for allegedly seizing private property illegally. And the AGs of California and Nevada, Kamala Harris and Catherine Cortez Masto, have announced a joint investigation of the massive bank mortgage activity in their states.
These AGs are fighting corporate influence in order to uphold the law. They're on the right side of this fight. Look who's not.
The Deal
For reasons known only to themselves, officials in the Obama Administration have spent more than a year trying to undercut these AGs. They're pushing a deal that would end their investigations before they're even completed and would immunize bankers from criminal prosecution.
Like the SEC's notorious sweetheart deals, this Obama-backed settlement would let banks buy their way out of prosecution with a slap-on-the-wrist settlement of $20-$25 billion. It would also create a phony refinancing program to make it look like banks are doing something about the tragedies they've created by promising to refinance "as many as" 300,000 underwater mortgages (meaning the real number could be much smaller than that).
It's one more get-out-of-jail-free card for criminals on Wall Street.
The Damage
The social damage from this deal would be enormous. Consider:
It reinforces criminal behavior: Once again crooked bankers would go unpunished. That would guarantee they'll commit these kinds of crimes again and again, knowing they'll never pay for it with their time or their money. Thanks to other soft deals like this one, big bank executives have already promised to stop their crimes (while "neither admitting nor denying wrongdoing") -- and then repeated them again and again, 51 times!
The victims will pay for the crimes: Bankers defrauded their own investors by concealing their own true financial picture. The money paid in this settlement deal will be paid, not by the lawbreaking bankers who got rich off their own crimes, but by the very same shareholders they defrauded.
It places the perps in charge of their own restitution: The refinancing program (for "as many as" 300,000 homeowners) will be run by the banks themselves. The last Administration program designed to 'help' homeowners became a tool for banks to rip them off even more .Mortgage servicers misstated their figures in that program as much as 80 percent of the time. Bankers used it to extract more money from homeowners, then foreclosed on them anyway (often with false documents or inaccurate figures) while the Administration looked the other way
The settlement amount is a tiny fraction of the harm caused: There are 11.1 million underwater mortgages. Homeowners still owe the banks $750 billion for housing value that has evaporated. The banks artificially pumped out real estate values, these homeowners borrowed against the inflated prices, the housing market crashed -- and they're left holding the bag while bankers are holding their bonuses. And they still owe the banks all that money.
It undermines the fabric of social trust: This deal reinforces the message that there's one code of justice for the rich and powerful and another for everyone else. And that government works for the rich and powerful, while the rest of us are on our own.
The Letter
We should be grateful for the courage and determination of these AGs. They need and deserve the public's recognition and support. Voters need to tell the President that it's wrong and unacceptable to push for a bank-friendly deal and undermine these public servants.
What's your note to the White House going to say? Mine will go something like this:
Dear Mr. President:
That was one terrific speech you gave in Kansas the other day. It was great when you promised to make sure that "penalties count" for bankers. And you were absolutely right when you said that "Wall Street firms (keep) violating major anti-fraud laws because the penalties are too weak and there's no price for being a repeat offender."
If you believe that, why is your Administration working so hard to protect bankers from state law? I admire Eric Schneiderman, Beau Biden, Jack Conway, Martha Coakley, Kamala Harris, and Catherine Cortez Masto. Why is your staff pressuring them to stop investigating these crimes and let bankers off the hook?
If you meant what you said, Mr. President, please tell your staff to back off and let these good people do the jobs they were elected to do.
Mr. President, you said in Kansas that "a strong middle class can only exist in an economy where everyone plays by the same rules, from Wall Street to Main Street." So why is your Administration trying to stop the states from enforcing those rules?
You were right when you said that "there is a deficit of trust between Main Street and Wall Street." Please restore and protect the trust between those streets - and with Pennsylvania Avenue - by directing your Administration to stop pushing this corrupt deal and support Attorneys General Schneiderman, Biden, Conway, Coakley, Harris, and Masto.
Respectfully yours,
A Voter
__________
(Related posts from OurFuture.org)
Pictures Of MERS, Part 1: Corporate Documents Illustrate The Mortgage Shell Game
Fix Foreclosure Fraud With A Borrowers' Bill Of Rights
Getting Medieval On Your Assets: Four Reasons Foreclosure Fraud Really, Really Matters
Follow Richard (RJ) Eskow on Twitter: www.twitter.com/rjeskow
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http://www.justice.gov/opa/pr/2011/December/11-ag-1591.html
Does this Justice Dept rhetoric jibe with administration and other efforts to limit state AG’s investigation/prosecution of financial fraud/abuse or absense of Federal prosecutions? Do the coercive tactics used to limit state investigations and buffalo state AG’s pushed by Prez Obama, and instead insulate and absolve the perpetrators, and settle for pennies on the dollar with no further criminal or financial liability seem n remotely on the same page with the above statements?
The power of the uber-wealthy & connected, those able, through control of money, to gain advantage unavailable to average people, is shown clearly by this abdication of responsibility by POTUS & Co... Wall St players, through deliberate manipulation of laws, ignoring common decency, working for their own advantage, did cause million extreme hardship & severe diminution of their lives, savings & property; they began the so-called “economic downturn" (a BS Euphemism) reaching around the world; they haven’t paid any price for their criminal greed, quite the contrary, most gained further advantage, wages, bonuses, new positions, even in the Obama administration, making a mockery of the rule of law; & there stands President Obama defending by omission & overt support their criminal acts & the misery they directly caused millions.
US AG Holder, a failure IMO, in his critical position in our society, focus elsewhere, abandoned being an independent agent/force of equality under the law, to be just another functionary in an administration working for the "middle road", “compromiseâ€, & campaign-contribution bribes to assure re-election for an administration that’s been a sorry disappointment.
Some say a person is what they say, I say a person is what they fight for; Barack Obama as president has openly fought for damn near nothing except his re-election triangulation scheming & protecting profits for a few; AG Holder brings-up the rear.
Too little, too late re-election sophistry
http://www.justice.gov/opa/pr/2011/December/11-ag-1591.html
http://www.theodore-roosevelt.com/images/research/speeches/trnationalismspeech.pdf
THE NEW NATIONALISM
Osawatomie, Kansas
August 31, 1910.
"...There can be no effective control of corporations while their political activity remains. To put an end to it will be neither a short nor an easy task, but it can be done.
We must have complete and effective publicity of corporate affairs, so that people may know beyond peradventure whether the corporations obey the law and whether their management entitles them to the confidence of the public. It is necessary that laws should be passed to prohibit the use of corporate funds directly or indirectly for political purposes; it is still more necessary that such laws should be thoroughly enforced. Corporate expenditures for political purposes, and especially such expenditures by public-service corporations, have supplied one of the principal sources of corruption in our political affairs..."
In 2010, as per the well-respected "http://www.opensecrets.org," Congress =acknowledged= accepting $3,051,000,000.00 from 12,941 professional bribers.
In the past ten years, they have accepted over $40 Billion.
This money is paid to all three Branches of Government, including to the Supreme Court who calmly declared that "this isn't corruption" and "this isn't bribery" but "this is Freedom."
In slavish Obedience, this Government works steadfastly within all three of its Branches to ensure, not only that perpetrators do not get prosecuted, but that they =cannot= get prosecuted, ever.
Should the States try to exercise any powers at all, the Court will simply issue another "royal proclamation" to annul any such pathetic attempts ... oh, let's say, "under the Commerce Clause."
I'm very sorry to say this, Richard. It breaks my heart and drives my own sense of fear and justice off the scale, but there IS one lesson we can learn from the Tale of the Prodigal Son: that even though humans may plainly see that their own actions are leading to self-destruction, their powers of self-denial are even greater.
What saddens me is that so few Americans understand the severity of this issue and how it impacts every American in some way. The majority of Americans don't think the "deadbeats' " problem affects them or will happen to them.
Home prices have plummeted, titles are clouded, home loans are difficult to obtain, municipal services in most towns and cities have been cut drastically due to lack of tax revenue and public school budgets have been gutted.
Folks seem to fall into two categories - those who castigate the "deadbeats" and the folks who are well-informed with facts about how the banksters do business and about the crimes they've committed. The State Attorneys General “settlement†is nothing but a paltry drop-in-the bucket - not even a slap on the wrist; just a finger-wagging.
The Fraudclosure topic, for the majority, falls into the same category as leprosy.
There is not a snowball's chance you'll get my vote, Mr. President. There's not enough time left in this campaign to convince us you're not just a Wall Street puppet, and since you act like one, excuse me for staying home this election.
We also need to encourage our state's Attorney General to stay strong.
Without rule of law, property ownership has no value. If homeowners can't trust that property laws will be enforced fairly and equally, their ownership has no value relative to renting. If fact, home ownership could end up with negative value if the enforcement of real property law is only against homeowners, and always in favor of the big banks. That would give homeowners all this risks of downside responsibilities, and only a shaky claim on upside gains. The fair enforcement of the law is necessary to give property ownership real value. If buyers can't trust in that fairness, they won't buy, and the housing market won't recover.
Thank you for your efforts.