Mr. Obama, why aren’t these people in jail?

(9 am. – promoted by ek hornbeck)

  This may be the only time in my life I will ever utter these words: “We could learn a lot from Indonesia.”

 Indonesian police have used tear gas and water canon to disperse about 2,000 anti-government protesters who tried to enter the parliament building in the capital, Jakarta.

  The scuffles broke out on Tuesday as members of parliament began a debate over the possible impeachment of the country’s vice-president and finance minister.

  His vice president, Boediono, and finance minister, Sri Mulyani Indrawati, approved the bailout and opposition leaders have demanded their resignation saying they must be held accountable for losses to the state.

 What an amazing concept!

 Imagine holding politicians accountable for the loss of public funds from controversial bank bailouts in 2008. Imagine the citizens of the nation taking the time off from watching TV to protest the funneling of taxpayer money to wealthy, politically-connected investors.

  I wonder if such wacky ideas could catch on in America?

“This is half-baked justice at best.”

 – US District Judge Jed Rakoff

 The fact that there are two kinds of justice in this country, one for the rich and one for the poor, is not a secret. However, it has rarely been so openly on display as it was last week in Judge Rakoff’s court room.

 The case arose out of Bank of America’s purchase of Wall Street investment firm Merrill Lynch in the fall of 2008. The SEC alleged that in seeking shareholders’ approval for the deal, Bank of America failed to tell investors about mounting financial losses at Merrill Lynch, as well as plans to pay billions of dollars in bonuses to the firm’s employees.

 Judge Rakoff has agreed to fine Bank of America $150 million, a settlement he calls “inadequate and misguided” because its penalties are “very modest.” Considering the penalty is just 4.1% of the amount of money in question, it should be considered “incentive” instead.

 Our story starts on December 8, 2008, shortly before Merrill Lynch was taken over by Bank of America. Bank of America shareholders had already approved the merger. Merrill gave out $3.62 Billion worth of bonuses, 36.3% of the money came from TARP funds and only employees making over $300,000 were eligible for the bonuses. Merrill’s Compensation Committee determined executive bonuses before the disastrous Q4 earnings had been determined.

  This was a departure from normal company practices. Bank of America was aware of Merrill’s intentions to award huge executive bonuses, but failed to tell its own shareholders prior to the vote. In fact, on August 3 they had released a proxy statement that Merrill wouldn’t pay year-end bonuses before the takeover without consent.

 The SEC only took up this case after shareholder outrage forced them to. After months of investigation the SEC decided that it had built its case and approached Bank of America with a settlement offer that basically amounted to a slap on the wrist.

But then something amazing and unprecedented happened: the sitting judge, Jed Rakoff, demanded accountability and disclosure.

 The judge wondered immediately why, given the “serious questions” raised in its complaint, the SEC wasn’t going after more facts. If BofA and Merrill conspired to lie to shareholders about bonuses that had been agreed to when the merger was signed, then why isn’t the SEC trying to figure out who is responsible? “Was it some sort of ghost? Who made the decision not to disclose [the bonuses]?” said Rakoff.

 Judge Rakoff called the settlement a “contrivance”, which allowed the SEC to appear to be a regulator, but doing nothing substantially. The SEC was only asking for a $33 million fine and didn’t seek to punish any  executives, or even to release their names. At least one Merrill executive got a bonus larger than $33 million.

  Judge Rakoff went on to question why the SEC wasn’t charging bank executives with fraud. However, the judge is only the judge, not the prosecution. He can’t force the SEC to actually do its job, and the SEC has flat out refused to protect the public. So last week Judge Rakoff agreed to a settlement that was “better than nothing.”

  Recall that this is the same SEC that failed to investigate Bernie Madoff despite receiving six “substantive complaints that raised significant red flags” about Madoff’s operations.

 The man who brokered the BofA/Merrill deal was none other than former Goldman Sachs CEO, and 2008 Treasury Secretary Hank Paulson. This is how it went:

 “Were you instructed not to tell your shareholders what the transaction was going to be?” the New York attorney general asked Bank of America CEO Ken Lewis in a hearing unrelated to the SEC’s investigation:

Lewis: I was instructed that ‘We do not want a public disclosure.’

NYAG: Who said that to you?

Lewis: Paulson…

NYAG: Had it been up to you, would you [have] made the disclosure?

Lewis: It wasn’t up to me.

 Paulson denies he forced Lewis to lie, and Lewis has since changed his story, but Paulson did admit that he threatened to have Lewis fired if he backed out of the deal.

  Paulson wasn’t the only one pushing this merger, Federal Reserve Chairman Ben Bernanke was also applying pressure.

 Let’s not forget that whether Paulson and Bernanke were fully complicit in the cover-up or not, there is no doubt that they were fully aware of it while it was happening and failed to tell anyone.

  By all appearances, not to mention documentation and witness testimony, this appears to be a case of massive corruption and fraud that reaches all the way from major Wall Street banks, to financial regulators, to major politicians.

 It also appears to be getting swept under the rug.

   Hank Paulson has since retired on his hundreds of millions of dollars. Lewis left BofA with $135 million in retirement benefits. John Thain, the head of Merrill, laid low for a year before becoming CEO of CIT Group, another bankrupt Wall Street financial firm.

  Meanwhile, the taxpayer has bailed out Bank of America and Merrill Lynch to the tune of $45 Billion. The Treasury backstopped Bank of America for another $97 Billion. BofA also managed to get $7.5 Billion in TARP money. Some of this money has been paid back. Some might never be.

 The BofA shareholders who got defrauded will share in the $150 million settlement – which works out to 1.7 cents a share. To put that into perspective, BofA stock was $26 a share on the day of the merger. It’s $16 a share today, after falling to $3 a share a year ago.

The Merry Band of Crooks

“And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place,”

 – Sen. Dick Durbin

  If Watergate made the term “cover-up” famous, then the Wall Street bailout of 2008-2009 should forever associate the phrase with the Federal Reserve.

  American International Group Inc., the bailed-out insurer, included the word “redacted” more than 1,000 times in regulatory filings tied to agreements for paying banks that bought credit-default swaps from the company.

  The insurer, asked by the Federal Reserve Bank of New York to limit disclosure, excluded a list of banks and collateral postings from a pair of 2008 filings, and then sought confidential treatment for the document in 2009 before making redacted versions available to the public.

 Bernanke has repeatedly assured Congress and the public that the Fed’s secrecy is only being done in the interests of the public and the economy. In fact, they are now appealing a lawsuit by Bloomberg to avoid revealing details of the trillions of dollars of bailouts that the Fed engineered in 2008-2009.

  It isn’t just the public and legislative branch of government that the Fed has decided it no longer answers to. It’s also decided that it doesn’t answer to the executive branch either.

 The Federal Reserve Board has rejected a request by U.S. Treasury Secretary Timothy Geithner for a public review of the central bank’s structure and governance, three people familiar with the matter said.

 You see, it isn’t necessary for the rest of the government to even review the structure of the central bank, much less audit it.

“You have been in politics long enough to know that no man in public office owes the public anything.”

 – Mark Hanna, Standard Oil

 Let’s not kid ourselves that the cover-up is limited to the Federal Reserve. The Treasury Department has plenty of dirt on its hands. The collapse of Lehman Brothers is a good example.

    William K. Black, the man who ran the S&L cleanup, has a damning verdict of the regulators during the bailout.

 Treasury Secretary Paulson and other senior Bush financial regulators flouted the law. The Bush administration wanted to cover up the depth of the financial crisis that its policies had caused.

Mr. Geithner, as President of the Federal Reserve Bank of New York since October 2003, was one of those senior regulators who failed to take any effective regulatory action to prevent the crisis, but instead covered up its depth.

 Black goes onto say that “the entire strategy is to keep people from getting the facts”.

Why would the regulators try to cover up the extent of the economic disaster? For starters, the largest campaign contributors in Washington are the very same TBTF banks. Just look at the current condition of the House Financial Services Committee. There are an absurd 71 members on that committee today.

  It’s a picture of congressmen greedily lining up at the trough to collect those legal bribes from the same people they should be regulating, and even throwing in jail, who are giving back taxpayer money that congress awarded them in the form of bailouts. It has all the appearances of legal money laundering.

 The only hope for reform in the face of this opposition is public disclosure of the true depth of the crisis and its roots in widespread “control fraud” and the need for fundamental reform. The administration would have to marshal public outrage, document the fraud and abuses, and provide a supporting theory to have any chance of success.

  Instead, the Obama administration and Fed Chairman Ben Bernanke have refused to investigate the nature and causes of the crisis.

 Not surprisingly, financial reform measures are stalled in Congress. Why? Numbers. There are five Wall Street lobbyists in Washington for every member of Congress.

Misdirected Outrage


A blackguard whose faulty vision causes him to see things as they are, not as they ought to be.

      – Ambrose Bierce, Devil’s Dictionary

 I have a hard time understanding Americans sometime. They seem to have unlimited ability for outrage against government workers collecting middle-class paychecks, immigrants that want minimum wage jobs, single moms that need help feeding their kids, and union workers that are trying to collectively raise wages, but can’t seem to work up a protest against a massive amount of fraud and theft from people who don’t live next door to them. Why is that?

  The protests in Indonesia prove that this misplaced anger isn’t a human condition. For an answer to this, look no further than the news media.

 When there was a clear direction implied, the study shows a striking bias in the use of the “class warfare” label: In all outlets combined, the phrase was almost 18 times more likely to describe bottom-up action-rhetoric or policy decisions perceived as benefiting the poor or lower classes-than it was to describe top-down action (90 percent vs. 5 percent of occurrences). One might expect any conflict termed a “war” to be covered as a two-way street, but the outlets only did so in 5 percent of the cases where the term was employed.

 The most massive theft in American history has just happened, and the leading news outlet isn’t the NY Times or Washington Post, but the Rolling Stone. This is, of course, following up on the news media’s failure to function as the government watchdog while reporting the Iraq War and the War on Terror in general. It appears that the news media, like the Treasury Department, the SEC, and the Fed, are complicit in a generational theft of the middle class.

  We, and by that I mean working people, have been betrayed at every level, and the average American just cannot accept it. The deception is so broad, and so complete, that Americans have turned to blaming scapegoats instead. Because we can’t accept that fact, when all the evidence points toward it, we are easily used and manipulated. Our crime is trusting people who are obviously lying to them. We have collectively refused to do our own research, to question official sources, or use basic logic. The punishment for this crime is that we will assist in our own destruction.


Skip to comment form

    • gjohnsit on March 3, 2010 at 5:56 am
    • dkmich on March 3, 2010 at 12:14 pm

    There will never be health care in this country as a right, unless of course, they put you in jail.  Then it would be cruel and unusual punishment to deny it to you.  

    Dennis Kucinich said it best, and it ended up on the cutting room floor.  Wouldn’t want to seem too wacky.

    They’re asking for another four years — in a just world, they’d get 10 to 20. ~~ Dennis Kucinich

    • banger on March 3, 2010 at 4:09 pm

    To the vast majority of the American people. I thought that the rantings of the group DEVO about devolution was a kind of gimmick. They were serious and right.

    I don’t think I could have imagined such a radical decline in American culture back then. And let me emphasize something: there is no turning around. There is no “movement”, no trend that will turn any of this around. I’ve looked and looked. Yes, there are many people working for positive change and reform but they are powerless at the moment.

    The only possible change will come through local efforts where communities who choose not to live in TV-inspired fantasies can break away and find a niche without inspiring the repression of the security services.

  1. I was so looking forward to falling under the protection of the FED

    March 3 (Bloomberg) — A U.S. Senate compromise to create a consumer protection unit in the Federal Reserve encountered a wall of resistance over the scope of the powers planned for the regulator.

    Senator Bob Corker, the Tennessee Republican, and Banking Committee Chairman Christopher Dodd, the Connecticut Democrat, drew immediate complaints from colleagues yesterday for suggesting a unit within the Fed..

    Considering their stellar record.

  2. Is supposed to be Treasury Secretary of the United States not Treasury Secretary for the globalist organization the CFR.  Such things are what we used to call a conflict of interest.  Such things used to be part of the Logan Act but of course law is there to be ignored.


    And of course when I attempted to point that out to the sheeple on WBZ’s idiot blog Conversation Nation WBZ responded by changing Tiny Tim’s picture to one NOT featuring the rather large Council Foreign Relations written all over the blue background.

    Why bother replacing a picture in an already up “news story”.

    Meaning the Illuminati controlled lamestream media outlet does not want me educating the sheeple.

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