FacebookTwitterRedditEmail

Wall Street Demanded the Nuclear Option and the Congress Delivered

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.

More articles by:

bernie-the-sandernistas-cover-344x550

April 23, 2019
Peter Belmont
The Monroe Doctrine is Back, and as the Latest US Attack on Cuba Shows, Its Purpose is to Serve the Neoliberal Order
David Schultz
The Mueller Report: Trump Too Inept to Obstruct Justice
Geoff Beckman
Crazy Uncle Joe and the Can’t We All Just Get Along Democrats
Medea Benjamin
Activists Protect DC Venezuelan Embassy from US-supported Coup
Patrick Cockburn
What Revolutionaries in the Middle East Have Learned Since the Arab Spring
Jim Goodman
Don’t Fall for the Hype of Free Trade Agreements
Lance Olsen
Climate and Forests: Land Managers Must Adapt, and Conservationists, Too
William Minter
The Coming Ebola Epidemic
Tony McKenna
Stephen King’s IT: a 2019 Retrospective
David Swanson
Pentagon Claims 1,100 High Schools Bar Recruiters; Peace Activists Offer $1,000 Award If Any Such School Can Be Found
Gary Olson
A Few Comments on the recent PBS Series: Reconstruction: America After the Civil War
April 22, 2019
Melvin Goodman
The NYTs Tries to Rehabilitate Bloody Gina Haspel
Robert Fisk
After ISIS, a Divided Iraq, Wounded and Grief-Stricken
Binoy Kampmark
Julian Assange as Neuroses
John Laforge
Chernobyl’s Deadly Effects Estimates Vary
Kenneth Surin
Mueller Time? Not for Now
Cesar Chelala
Yemen: The Triumph of Barbarism
Kerron Ó Luain
What the “White Irish Slaves” Meme Tells Us About Identity Politics
Andy Piascik
Grocery Store Workers Take on Billion Dollar Multinational
Seiji Yamada – Gregory G. Maskarinec
Health as a Human Right: No Migrants Need Apply
Howard Lisnoff
Loose Bullets and Loose Cannons
Ricardo Alarcón de Quesada
Dreaming in Miami
Graham Peebles
Consuming Stuff: The Polluting World of Fashion
Robert Dodge
Earth Day: Our Planet in Peril
Weekend Edition
April 19, 2019
Friday - Sunday
Andrew Levine
What Will It Take For Trump to Get His Due?
Roy Eidelson
Is the American Psychological Association Addicted to Militarism and War?
Jeffrey St. Clair
Roaming Charges: Time is Blind, Man is Stupid
Joshua Frank
Top 20 Mueller Report “Findings”
Rob Urie
Why Russiagate Will Never Go Away
Paul Street
Stephen Moore Gets Something Right: It’s Capitalism vs. Democracy
Russell Mokhiber
Why Boeing and Its Executives Should be Prosecuted for Manslaughter
T.J. Coles
The Battle for Latin America: How the U.S. Helped Destroy the “Pink Tide”
Ron Jacobs
Ho Chi Minh City: Nguyen Thai Binh Street
Dean Baker
Fun Fictions in Economics
David Rosen
Trump’s One-Dimensional Gender Identity
Kenn Orphan
Notre Dame: We Have Always Belonged to Her
Robert Hunziker
The Blue Ocean Event and Collapsing Ecosystems
Theodore C. Van Alst, Jr.
Paddy Wagon
Brett Wilkins
Jimmy Carter: US ‘Most Warlike Nation in History of the World’
John W. Whitehead
From Jesus Christ to Julian Assange: When Dissidents Become Enemies of the State
Nick Pemberton
To Never Forget or Never Remember
Stephen Cooper
My Unforgettable College Stabbings
Louis Proyect
A Leftist Rejoinder to the “Capitalist Miracle”
Louisa Willcox
Aldo Leopold’s Land Ethic and the Need for a New Approach to Managing Wildlife
Brian Cloughley
Britain Shakes a Futile Fist and Germany Behaves Sensibly
FacebookTwitterRedditEmail