The AIG allegations: We used the Levin/Coburn Report to review the list of potential criminal activity in that case here.GE Capital deceptions: That's the company whose politically-connected CEO was given a presidential appointment. Referring investigators were stunned to find that no criminal charges would be filed over its fraudulent deception of investors, even though they had identified specific individuals in the accounting department who had cooked GE's books. GE Capital has also been implicated in fraudulent mortgage practices.
Wells Fargo drug-money laundering: That's the case in which bankers laundered money for the Mexican cartels that have killed tens of thousands of people. You know the gangsters we mean -- they're the guys who decapitate people.
JPMorgan Chase's "London Whale": With particular concern about the cover-up of billion-dollar losses, with special concerns about CEO Jamie Dimon's statement to investors that its London losses were "a tempest in a teapot." Dimon later admitted he had made mistakes. (If he had made false statements to investors, that would be stock fraud, a crime.)
And there are others, too numerous to mention all of them here: Countrywide. Citigroup. HSBC. The list goes on and on.
The Justice Department's argument for inaction seems to come down to this: Bank cases are complicated. They're hard to win. We don't want to try. And it has repeatedly used an argument that's also been made by the president and Treasury Secretary as well, as they've tried to explain away the inactivity: that bad banking behavior isn't necessarily criminal behavior. That claim's been repeated many times, especially in the context of "ABACUS" and other Goldman Sachs misdeeds contained in the Coburn/Levin report.
But it's not true. It's already illegal to lie to clients, to knowingly conceal important information from in order to get their money under false pretenses, or to withhold materially important information from shareholders. And yet that flimsy argument seems to lie at the core of the DOJ's explanation for once again declining to pursue the evidence wherever it may lead.
Here's what really happened in this case: Goldman was selling its clients "crap" investments (a Goldman employee's word), and which it knew to be "crap," while at the same time betting against those investments. And it concealed the fact that these investments were selected, not by the people it told investors were doing the choosing, but by somebody who was well-known for betting against the "crap" -- and who would make a fortune if they failed.
Under the massive civil settlement for ABACUS, the parties acknowledged that it was a "mistake" for Goldman marketing materials to claim that "the reference portfolio was 'selected by' ACA Management LLC without disclosing the role of Paulson & Co. Inc. in the portfolio selection process and that Paulson's economic interests were adverse to CDO investors."
"Mistake"? That's more of the linguistic evasion that's used when crooked bankers pay hundreds of millions to settle criminal and civil charges while "neither admitting nor denying wrongdoing." Goldman paid a record amount -- more than half a billion dollars -- to settle this case. The total settlement came to $550 million. That's 550 million admissions of wrongdoing.
As they say: Money talks.
We're not into speculating about the motives for the Justice Department's inaction. But it's not surprising when others who do come to unflattering conclusions, and not just about Holder. This is an issue which the president himself will ultimately have to address -- for his campaign, and ultimately for his legacy.
Meanwhile, the cases the Justice Department hasn't prosecuted have led to billions of dollars in settlements. Eric Holder says that his department and this administration are doing everything they can to prosecute Wall Street fraud and make sure it doesn't happen again. There's only one thing that makes that statement hard to believe: It's a troublesome little thing called "facts."(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
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