GOING AFTER GOLDMAN: A CRACKDOWN ON FINANCIAL CRIME OR A KABUKI PLAY MANEUVER TO AVOID BRINGING CRIMINAL CHARGES?
By Danny Schechter
Director, Plunder The Crime Of Our Time
Fox Business News was engrossed in interviewing a blonder than thou reality TV bimbo when the news that the Securities And Exchange Commission was filing fraud charges against Goldman Sachs broke on Friday afternoon.
The breaking news bulletins were already flying through cyberspace before the Fox Means Business network got around to moving from a snickering interview with a starlet confessing to commodifying and monetizing her appeal to the biggest story in months on the Street beat. Corporate fraud allegations seem to make free market boosters nervous. (Update: I was booked to go on the Fox Business Channel to discuss these issues but they took umbridge at critical remarks I have made about the Channel, and CANCELLED me because of intervention from the Fox Media Relations Department!)
At last, the mightiest of investment bank, described as a "giant squid on the face of humanity" by Matt Taibbi in a much-read diatribe, appeared to be in deep trouble. Taibbi himself was not convinced that the Government has the goods on Goldman.
He commented, ""What's interesting is that I heard whiffs of this story going back as far as a year and you know I'm one of the harshest critics of Goldman Sachs and I actually backed off the story because I didn't really believe it. I thought it was too outlandish. So that tells you exactly how crazy this story is coming out now."
The timing of the story was suspicious, he said. "This story has been out there for awhile. The [NEW YORK] Times first broke it really in December. So why are they doing this now? Cleary it could have been because this bill is about to hit, crucial period in Washington, this financial regulatory reform bill, maybe this, you can look at this as a shot across Wall St's bow during that period."
Federal prosecutions of white-collar criminals has not been a growth industry, or very successful, in recent years.
AP predicts there will be a flood of lawsuits to come and that "the fraud charges against Goldman Sachs & Co. that rocked financial markets Friday are no slam dunk, as hazy evidence and strategic pitfalls could easily trip up government lawyers". A former dot.com millionaire told me that Goldman has the best lawyers and would most likely beat the rap. Publicly Goldman denied all charges and vowed to restore their "reputation.
The Republicans who know about how to politicize everything were quick to point out that Goldman and its employees had been among President Obama's biggest backers. At the same time, Politico reported out that taking on Goldman gives the White House a big propaganda asset in the coming fight over financial reform.
"Charges of fraud against one of the most storied firms on Wall Street come at a time when the Obama administration is seeking to pass significant new regulation of the financial sector. A reform bill is expected to hit the Senate floor next week, and observers said Friday that the Goldman charges would likely give new momentum to the administration's efforts to put tougher regulations on the banking sector."
Already Obama's Organizing For America has produced online ads citing the Goldman case as an argument for financial reform.