Federal regulators said the decision to craft their own deal doesn’t preclude what they call a global settlement with banks that could also include the state attorneys general and Obama administration.
Officials from Justice Department, the Department of Housing and Urban Development and 10 state attorneys general met yesterday for a second time with banks to negotiate a broader settlement, Associate U.S. Attorney General Tom Perrelli told reporters. The group is discussing potential fines and whether servicers should be required to reduce the principal on some home loans.
The agreements “will not limit our pursuit of remedies and reforms,” Iowa’s Miller said yesterday in a statement. HUD Secretary Shaun Donovan said the deals support their broader effort.
Basically decent reporting that clarifies something jlars highlighted the other day, Wrists Out, Bankers! Oh Nevermind! We Forgive You (Again).. The deal with mortgage bankers absolving them of their sins is between government regulators and the banks. State Attorneys General and the US Justice Department can still pound on the banks. However, this regulator deal does dampen both the likelihood and the severity of any fines or jail time from either quarter.
Indeed, if you read Matt Taibbi’s piece, Why Isn’t Wall Street in Jail?, it become abundantly clear the game that is afoot:
As for President Obama, what is there to be said? Goldman Sachs was his number-one private campaign contributor. He put a Citigroup executive in charge of his economic transition team, and he just named an executive of JP Morgan Chase, the proud owner of $7.7 million in Chase stock, his new chief of staff. “The betrayal that this represents by Obama to everybody is just — we’re not ready to believe it,” says Budde, a classmate of the president from their Columbia days. “He’s really fucking us over like that? Really? That’s really a JP Morgan guy, really?”
Which is not to say that the Obama era has meant an end to law enforcement. On the contrary: In the past few years, the administration has allocated massive amounts of federal resources to catching wrongdoers — of a certain type. Last year, the government deported 393,000 people, at a cost of $5 billion. Since 2007, felony immigration prosecutions along the Mexican border have surged 77 percent; nonfelony prosecutions by 259 percent. In Ohio last month, a single mother was caught lying about where she lived to put her kids into a better school district; the judge in the case tried to sentence her to 10 days in jail for fraud, declaring that letting her go free would “demean the seriousness” of the offenses.
So there you have it. Illegal immigrants: 393,000. Lying moms: one. Bankers: zero. The math makes sense only because the politics are so obvious. You want to win elections, you bang on the jailable class. You build prisons and fill them with people for selling dime bags and stealing CD players. But for stealing a billion dollars? For fraud that puts a million people into foreclosure? Pass. It’s not a crime. Prison is too harsh. Get them to say they’re sorry, and move on. Oh, wait — let’s not even make them say they’re sorry. That’s too mean; let’s just give them a piece of paper with a government stamp on it, officially clearing them of the need to apologize, and make them pay a fine instead. But don’t make them pay it out of their own pockets, and don’t ask them to give back the money they stole. In fact, let them profit from their collective crimes, to the tune of a record $135 billion in pay and benefits last year. What’s next? Taxpayer-funded massages for every Wall Street executive guilty of fraud?
The mental stumbling block, for most Americans, is that financial crimes don’t feel real; you don’t see the culprits waving guns in liquor stores or dragging coeds into bushes. But these frauds are worse than common robberies. They’re crimes of intellectual choice, made by people who are already rich and who have every conceivable social advantage, acting on a simple, cynical calculation: Let’s steal whatever we can, then dare the victims to find the juice to reclaim their money through a captive bureaucracy. They’re attacking the very definition of property — which, after all, depends in part on a legal system that defends everyone’s claims of ownership equally. When that definition becomes tenuous or conditional — when the state simply gives up on the notion of justice — this whole American Dream thing recedes even further from reality.
The most shocking bit in Taibbi’s story? Mary Jo White who used to have great media about her integrity appears to be captive of this corrupt system. And people she hired while working for the government are not only in charge of prosecuting Wall Street, they openly schmooze with the firms and individuals taxpayers hire them to prosecute. Even an aide to Eliot Spitzer turns out to be corrupt. Both articles are worth a read, Bloomberg for the level of detail for a deal obscurely reported on (so far) and Taibbi for the disheartening detail about how corrupt our economy really is. And how it won’t get better any time soon.
This isn’t about neo-liberalism and different views about how to structure the economy. This is pure greed and pure corruption, nothing less.
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