As the economy's meltdown confuses politicians and economists, and stresses businesses and wage earners, the FBI has suddenly discovered a new path to career advancement. It has announced open season on the financial community with 530 corporate fraud investigations.
The FBI also claimed that 38 of these new investigations involve some of the biggest names on Wall Street, and that it has a record 1,800 investigations digging into mortgage fraud. Mortgage industry professionals, including the CEOs of companies, brokers, and lawyers are apparently being scrutinized for their roles in the evaporation of hundred of millions of dollars.
Some of the disappearance is related to the $700 billion Troubled Asset Relief Program's cash distribution already dispensed. No-one was watching. What can really be expected for the stimulus money Obama and Congress will shortly be disposing of? Neil Barofsky, the special inspector general of the TARP program put it rather aptly, "History teaches us that an outlay of such money in such a short period of time will inevitably draw those seeking to profit criminally."
This is evidently a behavior newly discovered among these so-called pages of history. We can assume that anyone of the millions of taxpayers who are being asked to go into massive debt, could easily have lent a more watchful eye over the apportionment of cash than the amateurish efforts which the Administration and Congress have provided.
All of this, of course, is intended to allay, even anesthetize the public fears that its precious cash is, and will be, judiciously dispensed throughout the attempt to stimulate the economy. Taxpayers must be convinced that the trillions that will be borrowed on their behalf to bailout failing or troubled businesses, are in good hands.
Every tactic, including fear and panic, is being applied to convince America that this unprecedented borrowing is justified, and execution of the cash distribution will be diligently overseen by government agencies. Taxpayers must also be persuaded that government intrusion in corporate America will, in time, have positive affect. How else can the emergence of future Madoffs be prevented? Shifting public consciousness is a slow multi-level, multi-dimensional process.
We can rest assured that the FBI investigation, along with an allegedly revived SEC, will not delve too deeply into any affairs of financially healthy friends of the Administration or Congress. Future results will be consistent with past inaction on abuses perpetrated by former executives of organizations such as Fannie Mae and Freddie Mac. Where was the SEC's oversight during the past few months or the past year? Where is it now?
America can look forward to being entertained by in-depth coverage of occasional culprits assembled into the corral constructed specifically for scapegoats. Sure, they will be guilty, and mountains of evidence will be collected then disgorged on their heads with flamboyance in the public square, but they will be bit players in the game.
The new FBI initiative is another tool in the arsenal prescribed for taking the taxpayer's eye off the ball. Fraudsters should be punished. All fraudsters, including the ones at the top of any fraudulent food-chain, even those whose cosy relationships provide insulation from prosecution. Delivering otherwise is repeating tired myths, and is a prolonging of past disrespect of taxpayers.
James Raider writes The Pacific Gate Post