Spring Donation Drive
No, this is not a story about putting a Justice on the Supreme Court, it is however just as important.
For over a decade there has been an unofficial and underreported agreement between Wall Street Executives, our Congress and the Department of Justice. The agreement is simple, Wall Street will do what it pleases and continue to share its wealth with our Politicians and in return our Politicians will make sure the Department of Justice never prosecutes the Wall Street Executives.
Per William D. Cohan of Bloomberg Markets, The Holder Doctrine, a June 1999 memorandum written by the then–deputy attorney general warning of the dangers of prosecuting big banks—a variant of the “too big to fail” argument that has since become so familiar. Holder’s memo asserted that “collateral consequences” from prosecutions—including corporate instability or collapse—should be taken into account when deciding whether to prosecute a big financial institution. That sentiment was echoed as late as 2012 by Lanny Breuer, then the head of the Justice Department’s criminal division, who said in a speech at the New York City Bar Association that he felt it was his duty to consider the health of the company, the industry, and the markets in deciding whether or not to file charges.
Even though in 2008 there was eight trillion dollars in wealth destroyed through Wall Street fraud, no employees of the Credit Rating Agencies or major U.S. Banks were ever charged or went to jail. Only one poor Banker from Credit Suisse Bank was prosecuted and received a 30-month sentence for stealing billions of dollars.
In fact, since 1999 almost no Bankers have been prosecuted or convicted while they gladly paid hundreds of billions in fines in exchange for all their criminal behavior. The unspoken rule on the fines is that when Wall Street gets caught engaging in criminal behavior, the fines should never be more than half of the money they have stolen and the fines can be offset with special tax credits instead of cash. The last piece of this understanding is that the regulatory agencies will take many years to levy the fines, subduing the public outcry for prosecution while running the clock on the Statue of Limitations for those considering civil or legal actions.
Wall Street gets rich, the Politicians get their money and the leadership at the DOJ and SEC get to keep their jobs. When those bureaucrats finally leave government service they have well-paid private positions waiting for them on Wall Street.
There is only one problem, Wall Street is getting bolder and our Country’s wealth is quickly disappearing.
Washington’s culture allows corrupt career politicians to stay in office until they die, during their tenor, they get more corrupt and this organized criminal enterprise just gets bigger.
In April of 2016, this criminal agreement reached a new level with the passing of the Puerto Rico Oversight, Management, and Economic Stability Act or PROMESA. In this Act, Wall Street, through former Treasury Director Lew, asked our Politicians to revoke all the legal rights of the innocent victims and pass legislation to prevent any lawsuits. Money exchanged hands between Wall Street and our Politician’s and the legislation was passed.
Why the radical change? There was too much evidence of criminal wrong doing with the issuance of $70 billion dollars in municipal bonds. Even with the participation of the DOJ in this criminal enterprise, it would be impossible to stop all the civil and criminal lawsuits that would be filed. Many citizens that were robbed of their savings and could get not help from the DOJ were filing RICO lawsuits. RICO is the, Racketeer Influence and Corrupt Organizations Act. RICO prosecution was used by the FBI and US Attorney’s to break up organized crime. A civilian can start the process with a private RICO lawsuit and force the DOJ to take it over later.
Puerto Rico held special committee hearings in which municipal executives testified that Moody’s Fitch and S&P knew them to be technically bankrupt but offered to issue good ratings anyway for the right fees. The testimony also identified major banks like Citibank and Wells Fargo who knowing sold these fraudulent bonds to innocent investors, for the right fee. Several financial audits also identified major accounting fraud including misleading audited financial statements from Ernst and Young. In fact, the amount of criminal activity is mind bending.
Since Citibank was among the first Banks to sell these fraudulent bonds while Treasury Secretory Lew was the COO, it made sense to put Secretary Lew in charge of the government solution.
Secretary Lew had a problem. Paul Ryan, the Speaker of the house made it clear he would not support legislation that would override decades of case law to bail out Puerto Rico. Speaker Ryan also pointed out that the government would be confiscating whatever part of the $70 billion dollars was left without compensating the victims. A legal cornerstone of our justice system.
Secretary Lew met privately with Speaker Ryan and within a few days, donations from a wide assortment of Wall Street firms started to pour into Paul Ryan’s reelection accounts. I suspect that Secretary Lew suggested that if Paul Ryan had any future desire for a higher public office he would need the support of Wall Street to finance that election, PROMESA would go a long way to achieving Paul Ryan’s personal goals.
Victims were so upset at what they were witnessing they ran television commercials in Washington DC to tell the legislatures they understood what was being done to them.
Here is a sample of one of those commercials:
To date, senior officials at both the Securities and Exchange Commission and the FBI, acknowledge all this criminal activity but refuse to act on it.
Richard Lawless is a former senior banker who has specialized in evaluating and granting debt for over 25 years. He has a Master’s Degree in Finance from the University of San Diego and Bachelor’s Degree from Pepperdine University. He sits on several Corporate Boards and actively writes for several finance publications.