Tuesday, July 12, 2016

US House Reports 'Too Big to Jail'

The results of the US House of Representatives three year investigation of why Wall Street execs escaped accountability for the global economic melt down in 2008 was released yesterday.  Its findings are not surprising.  The Current Occupant's administration decided the plutocrats were too big to jail for their rampant fraud and abuse of the financial system.  Who cares about fines, they are deductible as a cost of doing business on the Street.  What is needed is jail time to insure accountability, and that is exactly what the administration led by former Attorney General Eric Holder, now enjoying a comfy job at his old corporate mouthpiece Covington and Burling, helped the "banksters" to avoid.  In fact Covington lawyers whose client list is a who's who of corporate Amerika, drafted the legal justification for the private database that facilitated mortgage backed security trading by eliminating the necessity of filing mortgage records in each county where the encumbered real property is located.  As Salon says his job is an affront to Americans, but actually it is just business a usual in DC.

The Justice Department recommended that British based HSBC be prosecuted for money laundering and related offenses, but Holder overruled that recommendation.  It also appears from the record developed by the House Financial Services Committee that the UK's own investigation of HSBC hampered DOJ's disposition of the HSBC case.  UK's Chancellor of the Exchequer Osborne sent a letter to Fed Chairman Ben Bernanke complaining that DOJ was unfairly targeting a British bank, and ominously warned that a prosecution could lead to "financial contagion" that would destabilize the European banking system. A felony conviction could have led to revocation of HSBC charter to do business in the United States.  The influence worked. DOJ backed off its prosecution recommendation; Holder offered a deferred prosecution deal that HSBC was able to further modify in its favor. The Attorney General then mislead Congress in testimony about the reasons HSBC was not criminally prosecuted. It took the House investigators three years to obtain the documents showing how the DOJ decision was altered by raw political power.  What the committee staff report proves, is what we knew all along: the banks are too big to fail or prosecute for their criminal behavior.  Equal before the law?  Some are much more equal than others, especially if you are a big bank.