Here's an astounding "admission" by our former assistant A.G. in which "he" confesses that his lucrative career would be over if he ever prosecuted any banksters. Likely there was, in this video clip, a faked voice-over that was substituted for his actual remarks, especially in view of his mention of how many asses he has kissed and how many fellow Americans he has "screwed" by way of his actions. And yet the truth comes out.

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What follows here is a synopsis of a recent discussion between Bill Moyers and Matt Taibbi.  

This week, two United States senators insisted that the Justice Department come clean:   Why are Wall Street's big banks not only too big to fail but too big to jail?   Senators Sherrod Brown of Ohio, a Democrat, and Chuck Grassley of Iowa, a Republican, are outraged that the giant banks violate the law with impunity -- laundering money, cheating homeowners, falsifying information -- every trick in the book.   So they sent a letter to Attorney General Eric Holder demanding to know why the banksters get away with fines instead of jail time.

Maybe they had their anger roiled by "Frontline's" recent report called "The Untouchables."   It described how the Department of Justice has looked the other way for fear that prosecuting the banksters would do even more damage to the American economy than their banks have already done to it.

ELIOT SPITZER:   Justice backed off.

NARRATOR:   Did the government fail?

MARTIN SMITH:   A number of people told us that you, Lanny Breuer, didn't make this a top priority.

LANNY BREUER:   Well I'm sorry they think that because I made it an incredibly top priority.

That's Lanny Breuer the former assistant attorney general in charge of the criminal division at the Justice Department.   A week after the Frontline report, he left his post and is now expected to return to private corporate practice -- one more government appointee passing through the lucrative revolving door between Washington and Wall Street.   And listen to this astounding "admission" by Mr. Breuer in which "he" confesses that his lucrative career would be over if he ever prosecuted any of the top people on Wall Street.   I'm almost certain there was, in this video clip, a faked voice-over that was substituted for Mr. Breuer's actual remarks, especially in consideration of his mention of how many asses he has kissed and how many fellow Americans he has "screwed" by way of his actions or lack thereof.   But if Breuer were ever to tell the truth, I'm sure that what he would say would not be much different from what you hear "him' say in this video clip.

Is the lucrative revolving door the reason why government treats the banks with kid gloves?

But if so, at what cost to the rest of us?  

A man who once worked for a big investment bank, Citigroup, Jack Lew, the president's former chief of staff, was recently picked to be the new Treasury Secretary.   Mary Jo White, the newly named head of the SEC (Securities and Exchange Commission), was a chief litigator at a top law firm representing big investment banks like Morgan Stanley.   But how will these folks deal with corruption and crime at big investment banks, like that laid out in the next couple of paragraphs, when in all likelihood both these people will be returning to very lucrative employment with such banks or the law firms that serve them?

The HSBC settlement was a shocking new low in the history of the too-big-to-fail issue.  

HSBC was a serial money launderer.   They had been twice given formal cease-and-desist orders by the government (one dating back as far as 2003, another one in 2010) for "inadequately policing the accounts" in their system.   Translation:   They laundered more than $800 million for drug cartels in Colombia and Mexico.   They also laundered money for terrorist-connected banks in the Middle East, and also for Russian gangsters.   Basically they broke every law in the book by servicing, aiding and abetting every kind of big-time criminal you can possibly imagine.   And except for the relatively small fine they had to pay, they got off scot free.   Total amount of criminal proceeds laundered:   $1.9 billion.   But there were no criminal charges whatsoever, and not even any individual fines, which is dumbfounding.  

The LIBOR price fixing conspiracy

This was perhaps the biggest financial crime of all time.   Some of the world's biggest banks got together and conspired (illegally) to artificially rig the global interest rates which are based on the London inner bank offered rate, which is a rate that determines how much it costs banks to lend money to each other.

This LIBOR rate affects the prices of hundreds of trillions of dollars of financial products.   It applies to everything from credit cards to mortgages to municipal bonds.   Basically everything in the world has a price that is somehow connected to the LIBOR rate.   And these guys were monkeying around with this for their personal profit and for that of their buddies.   But once again there were no criminal charges, which is again dumbfounding.

Martin Smith questioning Lanny Breuer in the "The Untouchables" on Frontline:

"You made a reference to losing sleep at night worrying about the possibility of larger financial consequences as a result of a lawsuit against one large financial institution.   Is it really the job of a prosecutor to worry about anything other than simply pursuing justice?"

Lenny Breuer's reply:   In a case like this, I think a responsible prosecutor should speak to regulators and experts first.   Why?   Because if I bring a case against institution A, and as a result of bringing that case there's some huge economic effect, a kind of ripple effect, so that counter-parties and other financial institutions, or other companies that had nothing to do with this, are then very badly affected, then that's a factor we should know about, understand, and consider in advance -- before we go ahead with the prosecution.   (Note:   Lanny Breuer was originally employed at a very prestigious Washington law firm and left his job at the Justice Department a week after this interview was broadcast, presumably to eventually go back to Wall Street's big bucks.)  

But think about what Breuer is saying here.   He's essentially telling us that some individuals are so systemically important that they can't be arrested and put in jail!   Now consider the unspoken but implied corollary to that, which is that if some people are too systemically important to arrest, there are other people who can be safely be arrested.   In other words, the assistant attorney general is dividing society into two classes:   one that is arrestable, and another that is not arrestable -- which flies in the face of one of the sacred principles (equal justice under the law) on which this country was founded.   Bottom line:   there's really no good reason the Justice Department couldn't have indicted a number of individuals from some of these companies and put them on trial if the jury thought that was warranted.

Historically, we've always put bad guys on trial, no matter how big their corporate standing.   Even under the Bush administration, if you go back just ten years, there was WorldCom, Enron, and Adelphia.   We took the leading individuals of these companies and put them on trial to make an example out of them.   And this is exactly what we're not doing now.   But why not?   Those three companies just mentioned were systemically important then.   So why not do the same thing now?

More on Mary Jo White

As a law firm partner, Mary Jo White was pulling down $10-15 million a year at Debevoise and Plimpton, and she essentially received that money from a specific group of clients -- and now, at the SEC she is being put in charge   of policing them, these very clients to which she had been beholden.   This doesn't really comport with how aggressive a prosecutor must be.   It compromises what her attitude towards the people she's supposed to be policing should be.   (You'd much rather see a career civil servant doing her job.   Or let someone like her do the job if there was a law forbidding her from going back into private practice at any of the firms on which she had ruled.)

Ms. White is too cozy with Wall Street.   She has served as a director of the Nasdaq stock exchange and on its Executive, Audit and Policy Committee.   And, as The W.S. Journal pointed out, she should face questions over her role as defense attorney for Bank of America's former head Kenneth Lewis in his civil trial.

In 1997, aides to Manhattan District Attorney Robert M. Morgenthau accused her of trying to thwart a state insider-trading investigation by allowing a defendant charged by the district attorney's office to plead guilty to federal charges.   Doing so effectively ended Mr. Morgenthau's case, but Ms. White was unapologetic.  

So, when Mary Jo White leaves her job as head of the SEC and makes the move that a lot of top regulators make -- leaving government to make boatloads of money working for the people she used to police, then what rewards will be in store for her at any of the companies she used to police, based on the breaks she gives them while head of the SEC?    In other words, how much of a break will she give them in anticipation of eventually taking an unprecedentedly large, multimillion-dollar salary at one or more of these firms, if she plays her cards right?

As a clue that should help answer this question, consider the case of an SEC investigator Gary Aguirre who was pursuing an insider trading case against the future CEO of Morgan Stanley.   Aguirre asked for permission to interview that future CEO, John Mack.   Permission denied.   Note that this denial stemmed from the communication between Morgan Stanley's lawyer, who at the time was Mary Jo White, and the higher ups at the SEC, which included the director of enforcement, Linda Thomsen.   Aguirre persisted, and was consequently fired, for complaining about having his investigation squelched.   In a nutshell, Aguirre blew the whistle and for that reason was fired, leading to the SEC being forced to pay a $750,000 wrongful termination suit to Aguirre because of this wrongful firing.  

What's especially significant is that Aguirre's boss, the guy who killed that case against Morgan Stanley, then went to work for Mary Jo White's firm (Morgan Stanley) nine months after the case died, presumably to collect a very handsome reward for his good service to them while at the SEC.   And, sure enough, he was there rewarded with a multi-million dollar position at the company, for the favor he did them while he was at SEC.  

Regulators at the SEC know that there's a very lucrative job out there waiting for them if they play their cards right.   So how hard are they really going to try to regulate these companies when they know they can later pick up that extraordinarily lucrative job?

In Washington, people just kind of shake their heads at something like this because it's so common.   Lawyers regularly move from government back to these high priced legal defense firms that represent the banks.   And then they go back to government again.   Bottom line:   There's a coterie of between a 100 and 200 lawyers who run this entire charade.   It's all the same people on both sides, going back and forth between Washington and Wall Street.   Yes it's a charade, a pretense of effective regulation.   But at what cost to America is this complete lack of real regulation?

Jack Lew, Obama's pick for Treasury secretary

Jack Lew, the incoming secretary of the Treasury, served three years at Citigroup.   His record there, according to The Wall Street Journal was not very lustrous for a man who's about to take over the Treasury Department.   No surprise then that the W.S. Journal suggests he got his job at Treasury not because he had the experience, but because he was a crony -- and perhaps an agent? -- of Citigroup's Robert Rubin.

Jack Lew had served in the Clinton administration.   He worked in the OMB (Office of Management of the Budget) and he was one of the key players in helping pass the repeal of Glass-Steagall, which more than anything else led to extraordinary big-bank profits and the financial catastrophe to which that led, in turn.  

Glass-Steagall was repealed specifically to legalize the merger of CitiGroup.   "Coincidentally," Robert Rubin, who was the Treasury secretary, and Jack Lew, then end up working at CitiGroup five or ten years later, at very fat salaries indeed.   Surprise, surprise.   And then they go back to government!   Once again, this is the sort of incestuous merry-go-round that everybody in Washington knows about but prefers to not think too deeply about.   It's just the way things work.   But again:   At what cost to investors, ordinary citizens, and the economy as a whole?

How do we explain President Obama's change in position on this?  

When he was running for president, he expressly promised to "close the revolving door" that we've been talking about.   And he seemed genuinely shocked at the collapse of the financial system and the banks' role in it.   But he also was raking in massive campaign contributions from these very people who should be indicted.   So, did those contributions by the banks to his campaign simply turn out to be "good investments" for the banks, or is Obama just overwhelmed by the corruption in the system that's controlled by these guys?   Or both?

It's likely that Obama and his administration genuinely accept the explanation that they should hear from all these people who run these Wall Street companies -- people like Bob Rubin and Larry Summers, who are close confidants of the Obama administration and are probably telling them, "Look, if we start prosecuting all kinds of people for   X, Y and Z, there's going to be major instability in the markets.   Investors are going to flee America.   They're going to withdraw capital from the American financial system.   It'll be a disaster.   Millions of jobs will be lost."  

But this is just not acceptable as an explanation.   Why not?   Because the rule of law isn't really the rule of law if it doesn't apply equally to everybody.   If you're going to put somebody in jail for having a joint in his pocket, you can't then let high-ranking HSBC officials off, for laundering $800 million for the worst drug dealers in the world!   These high-level drug dealers, for whom the big banks were/are performing an essential service, not only deal drugs, they are guilty of thousands of murders.

Eventually a dichotomy like this eats away at the very fabric of society . . as some people guilty of selling small amounts of drugs go to jail, and other people, guilty of so very much more (i.e. the things that very much facilitate and encourage those sales) don't go to jail.

Authors Bio:

Several years after receiving my M.A. in social science (interdisciplinary studies) I was an instructor at S.F. State University for a year, but then went back to designing automated machinery, and then tech writing, in Silicon Valley. I've always been more interested in political economics and what's going on behind the scenes in politics, than in mechanical engineering, and because of that I've rarely worked more than 8 months a year, devoting much of the rest of the year to reading and writing about that which interests me most.