Factchecking WaPo’s Factchecker on Sanders and the Trillion-Dollar Bailout view post on FAIR.org Glenn Kessler (Washington Post, 3/18/19) calls Bernie Sanders’ claim of a trillion-dollar Wall Street bailout “slippery and exaggerated.” Glenn Kessler, the Washington Post Fact Checker, gave Bernie Sanders “Two Pinocchios” on Monday (3/18/19) for saying that the Wall Street banks got a trillion-dollar bailout. Kessler raises several points of contention: First, whether the Wall Street banks actually got that much money. Second, whether it can really be called a bailout, since the government made a profit on the loans. Third, that the bailout was necessary to keep the financial system running. Taking these in turn, Kessler points out that the money that went from the TARP to the Wall Street banks, the congressionally approved bailout, was in the low hundreds of billions, far less than $1 trillion. He does note that a much larger amount of loans went from the Federal Reserve Board to the banks. However, the piece points out both that the Fed is nominally independent of the government, and that many of these loans were short-term, so that rolling them over would count twice. (If a bank got overnight loans for $1 billion for a week, this would count as $7 billion.) Sanders seems on pretty solid ground here when including the Fed loans. First, the reason the Fed has the power it does is because it is the central bank of the United States. It is true that when it was established in 1913, it was set up as a mixed public/private entity, with the banks having a direct voice in setting policy. However, its ability to print an essentially unlimited amount of money is due to the fact that it is the central bank of the United States. All the other major central banks (e.g. the European Central Bank, the Bank of England, the Bank of Japan) are fully public institutions. The fact that the United States allows private banks to have a voice in setting Fed policy doesn’t really change the fact that it is a government institution, and therefore loans from the Fed should be seen as coming from the government. The fact that many of the loans made by the Fed were very short-term does make adding them up more complicated, but there were many points at which the outstanding loans and guarantees to the banks were well over $1 trillion. In fact, it set up special lending facilities specifically for Bank of America and Citigroup, each of which had well over $100 billion in loans and guarantees at the peak of the crisis in 2009. As far as the government making a profit on the loans, this is a rather dubious claim. The measure of profit here is the difference between what the banks repaid and the government’s cost of borrowing. The latter was of course quite low, since the government was one of the few secure borrowers in the world at that point. 2008 anti-bailout protest, New York City. (cc photo: Alane Golden) Anyhow, the notion of this being a bailout stems from the fact that these loans were granted at interest rates that were far below the market rate at the time. This allowed banks like Bank of America and Citigroup to stay in business at a point where they would have been pushed into bankruptcy if the market was allowed to work its magic. In fact, then–Federal Reserve Chair Ben Bernankeargued at a Brookings forum last fall that all 13 of the country’s largest banks would have gone into bankruptcy if the market had been allowed to run its course. The government quite explicitly acted to save the banks from the market. As then–Treasury Secretary Timothy Geithner says repeatedly in his autobiography, they acted to ensure that there would be no more Lehmans. The fact that they charged an interest rate that was above the rate paid on government borrowing is pretty much irrelevant. The interest rate paid by the banks on their loans was far less than the market rate they would have paid at the time in the absence of government support, and, for this reason, can accurately be called a “bailout.” Finally, there is the issue of whether the bailout was necessary. There seems unanimity from the people who could not see the $8 trillion housing bubblewhose collapse led to the crisis that we would have faced a “Second Great Depression” without the bailout. This is hard to see. The government has a long history of keeping a bank operating through bankruptcy. This is the reason the Federal Deposit Insurance Corporation (FDIC) exists. The FDIC takes over a bank when it becomes insolvent and, for the most part, its depositors never even know anything has changed until they get a note in the mail. Having the country’s largest banks implode would have been a huge burden on the FDIC, and there undoubtedly would have been glitches, but having these glitches imply a Second Great Depression (ten years of double-digit unemployment) involves some very serious hand-waving. There is little doubt that the initial downturn would have been worse if the market was allowed to work its magic and put the Wall Street banks out of business, but there is nothing that would have prevented a large government stimulus from boosting the economy back to more normal levels of output. It is worth noting, on this issue, that one of the main rationales for the TARP bailout—that the commercial paper market was shutting down—was completely dishonest. The Fed single-handedly had the ability to support the commercial paper market. The world discovered this fact the weekend after Congress approved the TARP, when the Fed announced the creation of a commercial paper market lending facility. Anyhow, in the same way that the fear of a shutdown of the commercial paper market was used to sell the TARP, “saving us from a Second Great Depression” has repeatedly been used as an after-the-fact rationale for the larger bailout. Neither is true.  A version of this post originally appeared on CEPR’s blog Beat the Press (3/19/19). Messages can be sent to the Washington Post at letters@washpost.com, or via Twitter @washingtonpost. Please remember that respectful communication is the most effective.

FAIR/Fairness & Accuracy In Reporting
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New York NY 10001
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Elizabeth Warren letters to the Department of Justice Inspector General, and to the Director of the Federal Bureau of Investigation

Elizabeth Warren letter to Michael E. Horowitz, Department of Justice Inspector General

http://www.warren.senate.gov/f iles/documents/2016-9-15_Refer ral_DOJ_IG_letter.pdf

Elizabeth Warren letter to The Honorable James Comely, Director of the Federal Bureau of Investigation

http://www.warren.senate.gov/f iles/documents/2016-9-15_Comey _letter.pdf

Citigroup, JPMorgan Chase, Barclays and Royal Bank of Scotland guilty of felonies....JAIL? NO!

http://www.nytimes.com/2015/05/21/business/dealbook/5-big-banks-to-pay-billions-and-plead-guilty-in-currency-and-interest-rate-cases.html?_r=1

Since the Feds have failed, perhaps this is what state law was made for! Carve out time to be part of the Pass Mass Amendment signature gathering team this fall! We need EVERY "person who cares" to stand up and collect YOUR SHARE of signatures! If we're going to be "we the people", we have to learn to be IN CHARGE of our government. Gathering signatures is a VERY powerful way to "BE the People" who are actually IN CHARGE! Sept 16th blast off. Please contact us to find out who your regional coordinator is... or if you want to BE a coordinator in your region, let us know! Plenty of room for more leaders! PassMassAmendment@gmail.com

Occupy Democrats

And yet young kids are getting thrown in jail for selling an ounce of pot.

"On Wednesday, four large global banks — Citigroup, JPMorgan Chase, Barclays and Royal Bank of Scotland — pleaded guilty to a series of federal crimes over a scheme to manipulate the value of the world’s currencies. The Justice Department accused the banks of collusion in one of the largest and yet least regulated markets, noting that at one bank one trader remarked 'the less competition the better.' 'If you aint cheating, you aint trying,' one trader at Barclays wrote in an online chat room where prosecutors say the price-fixing scheme was hatched."

Read more here: http://nyti.ms/1PBuswI
Image by Occupy Democrats

Too big to fail

Please add your name:

It's time to break up the banks.

The greed, recklessness, and illegal behavior on Wall Street drove this country into the worst recession since the Great Depression. Their casino-style gambling has helped divert 99 percent of all new income to the top one percent. And it has contributed to the most unequal level of wealth and income distribution of any major country on earth.

In the midst of all of this grotesque inequality sits a handful of financial institutions that are still so large, the failure of any one would cause catastrophic risk to millions of Americans and send the world economy into crisis.

If it's too big to fail, it's too big to exist. That's the bottom line.

I introduced legislation in Congress that would break up banks that are too big to fail. Can you sign on as a citizen co-sponsor of my bill to show your support?

Click here to add your name as a citizen co-sponsor of my bill to break up the banks.

Banking should be boring. It shouldn't be about making as much profit as possible by gambling on esoteric financial products. The goal of banking should be to provide affordable loans to small and medium-sized businesses in the productive economy, and to Americans who need to purchase homes and cars.

That is not what these financial institutions are doing. They're instead creating an economy which is not sustainable from a moral, economic, or political perspective. It's a rigged economy that must be changed in fundamental ways.

Let's be clear who we're talking about: JPMorgan Chase, Bank of America, Citigroup, Goldman Sachs, Wells Fargo, Morgan Stanley, and other institutions; they're all too big to fail. So they must be broken up.

Wall Street can't be an island unto itself separate from the rest of the productive economy whose only goal is to make as much money as possible. I fear very much that the financial system is even more fragile than many people may perceive.

Millions of Americans are working longer hours for lower wages, while virtually all new income goes to the people who need it the least. In fact, the top 14 wealthiest people saw their wealth grow more last year than the bottom 130 million have in total.

We must break this cycle to save the middle class in America. Can you show your support for my bill to break up the banks?

Add your name as a citizen co-sponsor to my legislation to break up banks that are too big to fail.

I'm running for President of the United States because I believe that it is incumbent on us to try to take back our country from the billionaires and make it thrive again for the working and middle class. Breaking up the banks is a critical part to making that a reality.

Thank you for all of your support.

Senator Bernie Sanders

Paid for by Bernie 2016

(not the billionaires)

PO Box 905 - Burlington VT 05402 United States - (855) 4-BERNIE

Genuflecting to Wall Street? or defining Moral Bankruptcy?

The Casino Capitalism of Wall Street destroyed the Global Economy, imposed austerity on unsuspecting people, left many homeless, destroyed families...are we going to forget what uncontrolled GREED accomplished and follow like sheep?

American taxpayers were forced to bailout these greedy clowns....

...and the Corporate Media marches in lockstep.....some might call it 'Goose Stepping'...

...are we just gonna follow again?



FROM DFA:

I bet Wall Street wasn't expecting this.

When the news leaked that Citigroup and a bunch of other big Wall Street banks were considering withholding donations to the Democratic Senatorial Campaign Committee (DSCC) in order to "punish" Elizabeth Warren and other progressive leaders in the party, Robert Reich asked Democracy for America members to see their bet and then raise it -- by asking the DSCC to proactively turn down donations from all big banks, period.

As incredible as the response has been to Elizabeth Warren's stand and Robert Reich's call-to-action, we need to build more support ASAP. Here's why taking a stand here and now is important:

The 1% think they can buy anything, including our government. And to some degree, Democrats have let them.

In the post-Citizens United world, more and more Democrats have become so fixated on keeping up with the Republicans on fundraising that they've opened themselves up to being bullied by corporations like Citigroup who are more interested in protecting their fat bonus checks than in rebuilding our middle class.

Enough is enough. We need a Democratic Party that works for all of us, not just big Wall Street banks like Citigroup. And that means we need Democratic Party organizations like the DSCC -- as well as Democratic candidates -- to tell the big Wall Street banks to get lost.


FROM ROBERT REICH:


I don't remember the last time I was this outraged by something I read in the news. A few days ago, Reuters broke this shocking news with the following headline:

Exclusive: Upset By Elizabeth Warren, U.S. Banks Debate Halting Some Campaign Donations

That's right, Wall Street is throwing a temper tantrum about Elizabeth Warren. They're threatening to take their money and go home:

"Representatives from Citigroup, JPMorgan, Goldman Sachs and Bank of America, have met to discuss ways to urge Democrats, including Warren and Ohio Senator Sherrod Brown, to soften their party's tone toward Wall Street, sources familiar with the discussions said this week...

Citigroup has decided to withhold donations for now to the Democratic Senatorial Campaign Committee (DSCC) over concerns that Senate Democrats could give Warren and lawmakers who share her views more power, sources inside the bank told Reuters."

My first reaction? Good riddance. Democrats don't need their money.

As I thought about it more, Wall Street's plan became clear. They aren't going to stop donating. They are using this as a threat. The big banks want Democrats to stop listening to Elizabeth Warren and other progressive voices and start doing what Wall Street demands, no matter how damaging it is to the American people.

It's time we went on offense. The DSCC should not wait for Wall Street to decide its next move. Instead, the DSCC should tell Wall Street to get lost. We believe that the DSCC must stop chasing Wall Street money and start focusing on electing Democrats who will stand with Elizabeth Warren and other progressives. Will you stand with us?

Take a stand against these Wall Street bullies. Join me in signing DFA's petition asking the DSCC to refuse to accept donations from Wall Street banks.

How did Elizabeth Warren respond to this news? Exactly the way you thought she would. She's not going to waver one bit from her agenda:

"I'm not going to stop talking about the unprecedented grasp that Citigroup has on our government's economic policymaking apparatus. I'm not going to stop talking about the settlement agreements that JPMorgan makes with our Justice Department that are so weak, the bank celebrates by giving their executives a raise. And I'm not going to pretend the work of financial reform is done, when the so-called "too big to fail" banks are even bigger now than they were in 2008.

The big banks have issued a threat, and it's up to us to fight back. It's up to us to fight back against a financial system that allows those who broke our economy to emerge from a crisis in record-setting shape while ordinary Americans continue to struggle. It's up to us to fight back against a regulatory system that is so besieged by lobbyists -- and their friends in Congress -- that our regulators forget who they're working for."

She's absolutely right. We've got to fight back. Let's start by having the Senate Democrats declare independence from Wall Street. Big money is already corrupting our political process. The DSCC should tell Wall Street to take a hike.

Join me in signing DFA's petition: Tell the DSCC to refuse to take donations from Wall Street banks like Citigroup.

It's not like the DSCC would be risking their chances of taking back the Senate in 2016 by refusing to take money from Wall Street banks. Right now, the maximum that an individual bank can give to the DSCC each year is $15,000.

Instead, Democrats would actually make it more likely that they'll take back the Senate. We saw in 2014 that Senate Democrats who ran strong populist campaigns that took on Wall Street -- like Al Franken, Brian Schatz, and Jeff Merkley -- had no problem winning. Democrats who tried to appease Wall Street, however, struggled and often lost.

Democrats should also remember how President Franklin D. Roosevelt dealt with the rich and powerful of his time. Just days before the 1936 election, he gave a famous speech at Madison Square Garden. The wealthy elite had spent the first four years of FDR's presidency attacking him. Here's how he responded in that historic speech:

"They are unanimous in their hate for me -- and I welcome their hatred."

FDR won 60% of the vote just four days later and was reelected in a landslide. As we head into the 2016 campaign, the DSCC should give the same response to the big banks when they whine about populist policies to reform the financial industry.

Tell the DSCC you welcome Wall Street's hatred as well. Join me and sign DFA's petition urging the DSCC to reject Wall Street campaign donations.

Thank you for standing up and fighting back against these Wall Street bullies.

Robert Reich
Former Secretary of Labor

Paid for by Democracy for America, http://www.democracyforamerica.com/?t=5&akid=6068.127462.BJbmZk and not authorized by any candidate. Contributions to Democracy for America are not deductible for federal income tax purposes.

RSN: A Whistleblower's Horror Story

Reader Supported News

THE SMALLER DONORS ARE CERTAINLY RESPONDING: Yesterday was our best day of the month in terms of the number of people who responded. But not in terms of funding, the dollar figures were too small for any meaningful progress. We have some larger donations this month, but overall the average donation is smaller once again. It is encouraging from a standpoint of community participation. That is half the battle. Larger donors, where for art thou? / Marc Ash - Founder, Reader Supported News

Sure, I'll make a donation!

 



Rolling Stone investigative journalist Matt Taibbi. (photo: HBO)

A Whistleblower's Horror Story

By Matt Taibbi, Rolling Stone

19 February 15

his is the age of the whistleblower. From Chelsea Manning to Edward Snowden to the latest cloak-and-dagger lifter of files, ex-HSBC employee Hervé Falciani, whistleblowers are becoming to this decade what rock stars were to the Sixties — pop culture icons, global countercultural heroes.

But one of America's ugliest secrets is that our own whistleblowers often don't do so well after the headlines fade and cameras recede. The ones who don't end up in jail like Manning, or in exile like Snowden, often still go through years of harassment and financial hardship. And while we wait to see if Loretta Lynch is confirmed as the next Attorney General, it's worth taking a look at how whistleblowers in America fared under the last regime.

 

One man's story in particular highlights just about everything that can go wrong when you give evidence against your bosses in America: former Countrywide/Bank of America whistleblower Michael Winston.

 

I visited with Michael in California last year and spoke with him over the phone several times in recent weeks. If you think you've had a tough year, wait until you hear his story.

 

Two years ago this month, Winston was being celebrated in the news as a hero. He'd blown the whistle on Countrywide Financial, the bent mortgage lender that one could plausibly argue nearly blew up the global economy in the last decade with its reckless subprime lending practices.

 

He described Countrywide's crazy plan to give anyone who could breathe a mortgage in a memorable January, 2013 episode of Frontline called "The Untouchables," a show that caught the eyes of several influential politicians in Washington. The documentary inspired Senate hearings and even the crafting of new legislation to combat too-big-to-jail corruption in the financial world.

 

Winston was later featured in the New York Times as the man who "conquered Countrywide." David Dayen of Salon described Winston as "Wall Street's greatest enemy."

 

But today, Winston is tasting the sometimes-extreme downside of being a whistleblower in modern America.

 

He says he's spent over a million dollars fighting Countrywide (and the firm that acquired it, Bank of America) in court. At first, that fight proved a good gamble, as a jury granted him a multi-million-dollar award for retaliation and wrongful termination.

 

But after Winston won that case, an appellate judge not only wiped out that jury verdict, but allowed Bank of America to counterattack him with a vengeance.

 

Last summer, the bank vindictively put a lien on Winston's house (one he'd bought, ironically, with a Countrywide mortgage). The bank eventually beat him for nearly $98,000 in court costs.

 

That single transaction means a good guy in the crisis drama, Winston, had by the end of 2014 paid a larger individual penalty than virtually every wrongdoer connected with the financial collapse of 2008.

 

When Winston protested his preposterous punishment on the grounds that a trillion-dollar company recouping legal fees from an unemployed whistleblower was unreasonable and unnecessary, a California Superior Court judge denied his argument — get this — on the grounds that Winston failed to prove a disparity in resources between himself and Bank of America!

 

This is from the court's ruling:

 

Plaintiff argues that the disparity in the resources between the individual plaintiff and the defendant Bank of America make it unfair to place the cost of the premium on plaintiff. Plaintiff offered no evidence in support of this argument; it is rejected.

 

"I mean, Carlos Slim, the world's richest individual, is nothing next to Bank of America," says Winston today. "I just have to shake my head at all of it."

 

An articulate, well-educated family man who speaks with great pride about his two grown children, who've stood by him throughout his troubles, Winston's life has been turned upside down by his experience.

 

"I've never in my life not worked, but I'm unemployable now," says Winston, a longtime high-level executive at blue-chip corporations like McDonnell-Douglas and Lockheed Martin. Although he spent most of a lifetime scrupulously saving, he says he's "worried now that there will be a time when I won't be able to support my family."

 

Even worse, while the bank was going after his savings, Winston was diagnosed with laryngeal cancer. He has been undergoing painful treatment ever since and is literally fighting for his life now, on top of everything else.

 

"It's been a very difficult year," he says.

 

Yet Winston would likely bear all of this more easily were it not for bitterness over the fact that the sacrifices of whistleblowers like himself have too often resulted in dead ends or worse in recent years.

 

In the finance sector, many of the biggest cooperators have seen their evidence disappeared into cushy settlement deals that let corporate wrongdoers off the hook with negligible fines.

 

In fact, many of the companies mentioned in that once-damaging Frontline report have since been allowed to painlessly pay their way out of trouble. The whistleblowers featured back then have been vindicated factually, but many are still waiting for action.

 

Cozy deals with firms like Citigroup (read on to see who negotiated that deal) and JP Morgan Chase have threatened to reduce the gutsy actions of whistleblowers like Richard Bowen and Alayne Fleischmann to footnotes in an increasingly corrupt grand scheme of things.

 

This is a serious problem, given that anyone considering coming forward is usually paying at least some attention to how the government has dealt with other cooperators.

 

"Anyone thinking about becoming a whistleblower looks at what happened to whistleblowers before," says Fleischmann.

 

"What I worry about," says Winston today, "is that someone is going to see wrongdoing, and then see what's happened to people like me, and decide it's not worth it."

 

Winston joined Countrywide, which was booming financially at the time, in 2005.

 

Unbeknownst to him, his new firm was at the forefront of a mass movement to pump the global economy full of fraudulent, born-to-lose subprime loans, a movement destined to rapidly overinflate the global economy with debt and cause a catastrophic recession.

 

In essence, his firm was mass-producing and then selling financial snake oil. Countrywide, Winston says, would give home loans to anyone who could "fog a mirror."

 

The firm didn't really bother to hide what it was up to.

 

"In most places, trying to find evidence of fraud is like looking for a needle in a haystack," says Winston. "At Countrywide, it was like finding a haystack on a pile of needles. It was impossible to miss."

 

He told Frontline a story about seeing a personalized license plate in the company parking lot. It read, "FUND 'EM." Alarmed, he asked a fellow executive what the plate meant.

 

He was told that "FUND 'EM" was "[CEO] Angelo Mozilo's growth strategy" and that the company had "a loan for every customer."

 

A fiscal (and, at the time, political) conservative who had been raised in staid, risk-averse corporations like Lockheed and Motorola, Winston flipped. There was no way handing out loans to everyone was good business. As he explained to Frontline, he tried to get an explanation from his new bosses, asking:

 

"What if the person doesn't have a job?

"Fund 'em," the guy said.

And I said, "What if he has no income?"

"Fund 'em."

"What if he has no assets?"

And he said, "Fund 'em."

 

Winston tried to sound the alarm within the company. He thought he was doing the firm a favor, that the bosses somehow just didn't realize their mistake.

 

As it turned out, Countrywide execs knew exactly what they were doing, and Winston quickly went the way of most whistleblowers, losing his job when Bank of America acquired the firm in 2008.

 

He sued for improper retaliation and wrongful termination, and in 2011, after a month of testimony, a jury voted to award him $3.8 million. He'd declined a hefty settlement offer in order to get his day in court.

 

"I was offered a lot of money to make it all go away, quietly, but I thought to myself, do I want to be that person?" he said. "And I realized that I couldn't take it. I needed to see someone held accountable."

 

After his 2011 jury win, that seemed like not only the right move, but a smart one.

 

Eventually, reporters latched on to his story. The Frontline documentary so angered a group of Senators that it led directly to one of Eric Holder's most embarrassing moments as Attorney General — the infamous (I'm paraphrasing) Yes, Senators, some banks are too big to prosecute testimony before the Senate Judiciary Committee.

 

But four years later, we're still waiting for the first criminal conviction against any individual for crisis-era corruption. And while politicians like Ohio's Sherrod Brown have spent upwards of half a decade now fighting to bring the "Too Big to Jail" issue to a vote, there's been no significant reform there, either.

 

What we've seen instead is a series of cash deals with the most corrupt companies. Curiously, the most egregious deals seemingly all involved companies whose secrets had been exposed by a whistleblower.

 

Winston's old company got one of the best deals. Last summer, Bank of America — now responsible for all of Countrywide's liability — was allowed to buy its way out of years of fraud and other abuses with a "historic" $17 billion settlement.

 

Crucially, the deal left many of the facts of the company's years of misconduct hidden, as the government never submitted any part of the deal to a judge to review.

 

I visited with Winston in California this past summer right after that Bank of America deal had been announced. He was in a highly stressed state, because of what he was going through with his own battles with the bank. Since winning his $3.8 million award, Winston's case had taken one nightmare turn after another.

 

In 2013, Bank of America's lawyers somehow convinced a higher appellate court to review the verdict. A panel of judges, eschewing the usual appellate mission of focusing on errors of law, then tossed his case out on evidentiary grounds.

 

The case was so bizarre that it led to an investigation by the Government Accountability Project, which called the case "vitally important" and worried about the precedent of a jury verdict being "nullified" by an appellate judge.

 

In the context of all of this, Winston was almost too angry to speak about Holder's sweetheart deal with Bank of America.

 

"I just can't believe, after all of this, that it all gets swept under the rug," he said, shaking his head.

The BOA deal came after Holder had already orchestrated a similar deal with J.P. Morgan Chase, which was allowed to pay $13 billion (really, $9 billion, after a closer look) to get out from a similar litany of abuses, including a seemingly airtight case of fraud reported by Alayne Fleischmann, the Canadian attorney profiled in Rolling Stone last fall.

 

Then there was Citigroup, which paid $7 billion to get out from under basically identical charges that it knowingly packaged and resold massive amounts of defective home loans to sucker customers around the world.

 

In Citi's case, the loans were so bad that its own internal analyst wrote that "we should start praying," and "I would not be surprised if half these loans went down."

 

Richard Bowen, at the time the bank's chief underwriter, wrote a memo to senior bank executives (including board chairman, key Obama advisor, and former Clinton Treasury Secretary Bob Rubin), issuing a stark warning. He said that as much as 60 percent of the mortgages the bank was acquiring and packaging did not meet the company's credit guidelines.

 

Bowen noted the urgency of the situation and even gave company bigwigs like Rubin his cell number, so that they could call him over the weekend. "Please contact me. You need to know the details behind this," he said. "There are risks to the company."

 

Of course, those risks were ignored, and Citi ended up broke and throwing itself at the taxpayer's ankles. It ended up receiving the single largest federal bailout, around $476 billion in cash and federal guarantees.

 

Why bring this up now? Because like Winston's tale, the Citigroup story has a shocker punch line. The investigation into that bank, and the subsequent whitewashing deal, was led by the U.S. Attorney for the Eastern District of New York, a prosecutor with a reputation for being a highly professional, old-school law-and-order type: Loretta Lynch.

 

Many lawyers who've dealt with Lynch describe being impressed by her professionalism and her fairness ("Solid. Not an ideologue. Much less of a dope than Holder," was one interesting comment by a New York lawyer who has opposed her in court) and the story is not meant to disparage her.

But it's important to understand, as Lynch staggers toward approval for Holder's old job, that she was part of a Justice Department enforcement policy that for years dealt out soft landings for the very companies that have harassed cooperators and made the term "Too Big to Jail" famous.

 

The Snowden and Manning cases are extreme examples of a phenomenon that's been raising eyebrows in and around American law enforcement for years, one where whistleblowers are themselves treated as problems, or even targeted for investigations themselves.

 

Gary Aguirre is a onetime SEC investigator who famously won a $755,000 wrongful termination award after blowing the whistle on the SEC, which had improperly quashed his investigation into an insider trading case involving an influential Wall Street figure.

 

He now represents whistleblowers in private practice and says senior government investigators are sometimes wary of wrapping their arms too tightly around such cooperators, since doing so might queer their inevitable returns to the corporate defense community.

 

"I would say the people who head government," says Aguirre, "are always thinking about their return to the public sector, where whistleblowers are perceived as a threat, something to be exterminated."

 

Even the government's attempts to encourage whistleblowers were misguided. Eric Holder talked extensively about aiding cooperators by making more resources available to them — essentially, offering them higher monetary rewards for coming forward.

 

But nobody in the financial services industry comes forward just for the money. The easy money is already there to be had, just by keeping your mouth shut. What Wall Street whistleblowers really need, above all else, is to see real cases made using their evidence, which is exactly what we haven't seen in recent years. Otherwise, the sacrifices — which range from merely miserable to life-altering and catastrophic — aren't worth it.

 

The newest scandal involving HSBC and its global tax-evasion scheme provides an example of how things are broken. That, too is a whistleblower case, one in which the French-Italian cooperator Falciani delivered a cache of secret tax files to French authorities close to seven years ago.

 

According to multiple reports, the United States gained access to Falciani's information as far back as 2010, yet the state still went on in 2012 to give HSBC a cushy deferred prosecution deal on money laundering charges.

 

The nominee Lynch also handled that settlement, which involved no criminal charges and not even any individual fines for executives who'd admitted to laundering over $800 million for Mexican and South American drug cartels.

 

Winston points to HSBC as another example of mishandled evidence. "It's yet another instance of a big bank engaged in illicit activities and being aided and abetted by the government," he says. "I can hear Roger Daltrey singing it now: 'Meet the new boss, same as the old boss.'"

 

Aguirre is equally skeptical that anything will change. "The Lynch thing is a cross-section of government corruption put under an electron microscope showing the same DNA everywhere present," he says.

 

The pattern of whistleblowers coming forward and seeing their information either misused or absorbed into pain-free cash settlements may push the next generation of potential witnesses in a more cynical direction.

 

"The number one concern is that it incentivizes people to do nothing," Fleischmann says. "The likely thing people will do in the future is just quit."

 

Winston today insists he would do the same thing, if he had to do it all over again. But unless the next Attorney General radically changes the policy toward whistleblowers, the future might see even fewer people come forward.

 

"People won't worry about it now," says Winston. "But one day they'll wonder why their air is polluted or their drinking water isn't safe. And this will be the reason why."

 

 

 

RSN: Former IMF Chief Economist: Break Up Citigroup

It's Live on the HomePage Now:
Reader Supported News

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FOCUS | Former IMF Chief Economist: Break Up Citigroup

Simon Johnson, Project Syndicate
Johnson writes: "From the perspective of anyone seeking the nomination of either of America's political parties, here is an issue that cuts across partisan lines. 'Break up Citigroup' is a concrete and powerful idea that would move the financial system in the right direction."
READ MORE

 

 

 

 

 

Remarks by Senator Warren on Citigroup and its bailout provision

From MoveON:

This speech could make Elizabeth Warren president.

 

You need to watch this speech. It's electrifying. It's historic.
Barack Obama's 2004 Democratic Convention speech launched him into the running for President. This could do the same for Elizabeth Warren.

So turn up your speakers and watch the whole thing. And then chip in to support MoveOn's work, as we get Elizabeth Warren's back in the Senate—and encourage her to run for president.

When big banks wrecked our economy, they went to Congress for a half-a-trillion-dollar bailout. Now—six years later—Citigroup thought they could quietly sneak a provision into a must-pass spending bill to let them gamble with taxpayer money again. But Senator Warren fought back hard, and is winning in the court of public opinion.

Barack Obama's 2004 Democratic Convention speech launched him into the running for president. This could do the same for Elizabeth Warren.

Please watch the video right now. And then chip in to help MoveOn as we support Elizabeth Warren's work in the Senate and encourage her to run for president.

Thanks for all you do.

–Mark, Robert, Kristin, Ilya, and the rest of the team

Sources:

1. "The Speech That Could Make Elizabeth Warren the Next President of the United States," The Huffington Post, December 13, 2014
http://www.moveon.org/r/?r=302028&id=105927-3735812-oWJvA5x&t=1

http://warren.senate.gov
Senator Elizabeth Warren spoke on the floor of the Senate on Dec. 12, 2014 about the provision that Citigroup added to the omnibus budget package.

RSN: Earth Faces Sixth 'Great Extinction' With 41% of Amphibians Set to Go the Way of the Dodo

It's Live on the HomePage Now:
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A WALK ON PART IN A WAR | Pink Floyd once asked the question “Did you exchange, a walk on part in the war for a lead role in a cage?” We made our choice, we started Reader Supported News. Which will you choose. We need you to do this. / Marc Ash, Founder Reader Supported News

Sure, I'll make a donation!

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Andy Borowitz | Citigroup to Move Headquarters to U.S. Capitol Building

Andy Borowitz, The New Yorker
Borowitz writes: "The banking giant Citigroup announced on Friday that it would move its headquarters from New York to the U.S. Capitol Building, in Washington, D.C., in early 2015."
READ MORE

The Palaces That Torture Built
Michael Daly, The Daily Beast
Daly writes: "James Elmer Mitchell and John Bruce Jessen are not the first Americans to employ waterboarding and other 'enhanced interrogation techniques' against our enemies. But they are almost certainly the only ones to get rich doing it."
READ MORE

Thousands Rally in U.S. Cities to Protest Police Killings
Jennie Matthew, Agence France-Presse
Matthew writes: "Tens of thousands of protesters gathered in New York and Washington, stepping up demonstrations across the United States demanding justice for black men killed by white police."
READ MORE

In Ferguson, Oath Keepers Draw Both Suspicion and Gratitude
Brian Heffernan, Al Jazeera America
Heffernan writes: "Since Nov. 25, members of the group - many of them armed - have been patrolling rooftops and sidewalks in the St. Louis suburb. Oath Keepers, regarded by some as a militia - although they reject that characterization - is made up of current and former members of the military, law enforcement and fire departments and other first responders from around the country."
READ MORE

What's Next? Prosecuting a Pregnant Woman for Working Full Time?
Alexa Kolbi-Molinas, American Civil Liberties Union
Kolbi-Molinas writes: "This summer, Tennessee thumbed its nose at doctors, nearly every national medical association, addiction experts, and women's right activists and passed a law that essentially criminalizes pregnancy. In short, this deeply misguided law risks the health of women and babies by threatening expectant mothers who struggle with addiction or substance abuse with jail time."
READ MORE

Earth Faces Sixth 'Great Extinction' With 41% of Amphibians Set to Go the Way of the Dodo
Robin McKie, Guardian UK
McKie writes: "A stark depiction of the threat hanging over the world's mammals, reptiles, amphibians and other life forms has been published by the prestigious scientific journal, Nature."
READ MORE

Lima Climate Change Talks Reach Global Warming Agreement
Suzanne Goldenberg, Guardian UK
Goldenberg writes: "International negotiators at the Lima climate change talks have agreed on a plan to fight global warming that would for the first time commit all countries to cutting their greenhouse gas emissions."
READ MORE

 

 

 

 

 

 

Elizabeth Warren was told to stay quiet, but she didn’t – and it’s paying off...and Massachusetts is PROUD!

Take a look at BMG and see just how TOXIC this legislation is:

Massachusetts Delegation Says No to the Cromnibus



Don't ya think we've been ripped off enough by Wall Street's Casino Capitalism?


Elizabeth Warren was told to stay quiet, but she didn’t – and it’s paying off
By Zachary A. Goldfarb December 14


Sen. Elizabeth Warren (D-Mass.), right, a member of the Senate Banking Committee, and Rep. Maxine Waters (D-Calif.), ranking member of the House Financial Services Committee, express their outrage to reporters about the changes to the 2010 Dodd-Frank law in the $1.1 trillion spending bill. (J. Scott Applewhite/AP)



In her book released this year, Sen. Elizabeth Warren recounted a dinner she had with President Obama’s chief economic adviser, Larry Summers, in April 2009, when Warren was the outspoken chairman of a congressionally appointed panel probing the government’s response to the financial crisis.

Larry leaned back in his chair and offered me some advice. ... He teed it up this way: I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want. But people on the inside don’t listen to them. Insiders, however, get lots of access and a chance to push their ideas. People — powerful people — listen to what they have to say. But insiders also understand one unbreakable rule. They don’t criticize other insiders.
I had been warned.

Warren ignored the warning.

And if the past few weeks are any indication, she can operate as an insider without giving her up outsider credentials. She’s remained outspoken, but has become even more influential. She hasn't stopped throwing bombs at the rich and powerful — and causing trouble for the White House — but she's won a spot in Senate leadership, changed the shape of congressional debates over financial regulation and continued to draw widespread attention as a potential presidential candidate.

It all helps to explain why – for the 300 former Obama campaign officials who last week urged her to run in 2016 – she is the one they’ve been waiting for.

“Rising income inequality is the challenge of our times, and we want someone who will stand up for working families and take on the Wall Street banks and special interests that took down our economy,” they wrote.

Over the past week, Warren galvanized liberals across Capitol Hill against a government spending bill that weakened a key provision of the 2010 Dodd-Frank law that tightened oversight of Wall Street.

The Senate may have passed the legislation late Saturday, but it was not before Warren and other liberals asserted their power in a confrontation with the White House, even winning over House Democratic Leader Nancy Pelosi, who had previously supported the legislation.

Warren is also in an unusually public battle with the White House and Treasury Department over Antonio Weiss, an investment banker who has been tapped for a key Treasury position. White House officials say Weiss is deeply sympathetic to Democratic views and is the right man for the job. But Warren has won over several colleagues in trying to block the nomination, saying the administration is too cozy with Wall Street.

It’s a topic she reprised in a speech Friday evening after losing the battle over the spending bill, in which see singled out mega-bank Citigroup as an example of a bank with too much power.

“Enough is enough with Wall Street insiders getting key position after key position and the kind of cronyism we have seen in the executive branch,” she said. “Enough is enough with Citigroup passing 11th-hour deregulatory provisions that nobody takes ownership over but that everybody comes to regret. Enough is enough.”

Critics of Warren, even if they're sympathetic to her view, would say that by taking absolutist positions, she won't achieve much more than fiery rhetoric.

On the government spending bill, Obama could have pushed for more, but ultimately gotten less – especially in a new Congress controlled by Republicans next year. And opposing hiring finance industry officials for Treasury jobs, one might argue, is like fighting for a Justice Department staffed with people who never worked for a private law firm.

The history of Obama's presidency, in many ways, is a story of compromises that disappointed liberals but still achieved substantial policy gains for Democrats, including the Affordable Care Act.

Looking forward, the power of Warren and likeminded senators seems only to be growing. Senate Majority Leader Harry Reid (D-Nev.) made her a member of leadership. In the next Senate, the top Democrat on the Banking Committee will be liberal leader Sen. Sherrod Brown (D-Ohio). The top Democrat on the Senate Budget Committee will be Bernie Sanders (I-Vt.), a self-avowed socialist.

It's hard to imagine any of them leading the way on any legislation the Senate will actually consider, and it's equally difficult to know how Warren would respond if she was actually in a position where she had to negotiate legislation. To the degree he seeks congressional accords in his final two years, Obama will be forging them with Republican leadership in the House and Senate, and bringing along as many Democrats as he can.

But should he move far in hopes of a compromise with the GOP — on trade, the budget or any other issue — Obama will likely find Warren leading a liberal flank in opposition. It's hard to know if she would succeed, but the past few weeks show that she has the influence to make a difference.

Zachary A. Goldfarb is policy editor at The Washington Post.

http://www.washingtonpost.com/blogs/wonkblog/wp/2014/12/14/elizabeth-warren-is-changing-washington-without-giving-up-her-outside-status/?hpid=z1

December 12, 2014, 8:01pm

Sen. Warren's Historic Blast vs. Banks. Video to Come

By J.J. Goldberg

http://blogs.forward.com/jj-goldberg/210868/sen-warrens-historic-blast-vs-banks-video-to-come/?

 

 

December 12, 2014, 8:01pm

Sen. Warren in Historic Blast vs. Banks. Video to Come

By J.J. Goldberg

Getty Images

Sen. Elizabeth Warren

Elizabeth Warren just delivered a slashing speech on the Senate floor about the Dodd-Frank rollback provision in the omnibus spending bill. She went through a list of Citigroup alumni holding top positions in the current administration, laid out the imperative for preventing the big banks from making the same crazy derivatives gambles that blew up in everyone’s faces six years ago. The provision would ease regulation of derivatives and promise future taxpayer bailouts for banks that lose big on derivatives bets.

She talked about the millions who lost their homes and jobs and are now about to have their tax dollars put on the line to bail out the banks again the next time these gambles explode. She quoted Teddy Roosevelt on breaking up the big trusts because they had too much power — not too much economic power but too much political power. And she asked how we got to the point where the big banks could now sneak through such a crazy provision, something that overwhelming majorities on both sides are opposed to, and attach it to a bill that we need simply to keep our government operating.

The American people didn’t elect us to stand up for Citigroup. They elected us to stand up for all the people.

One of the most stirring Senate speeches in memory. I’ll post the video as soon as it’s available.
She is cosponsoring an amendment with Republican Senator David Vitter of Louisiana to strip the provision from the bill. Not clear that Majority Leader Harry Reid will allow a vote on the amendment. Reid “filled the tree” — that is, shut off further amendments, at least for tonight. Some senators hope they’ll have another chance to raise the amendment tomorrow. President Obama is going all out for passage of the bill as is.

Read more: http://blogs.forward.com/jj-goldberg/210868/sen-warren-in-historic-blast-vs-banks-video-to-com/#ixzz3LmnJXXfN

 

 

 

Elizabeth Warren: Video Of Floor Speech Here:

http://www.democraticunderground.com/1017232073

 

 

 

 

This & That .....

Being Liberal

(M) This would definitely be a good start.

Thanks to Americans Against The Republican Party for sharing this.

 

 

CLICK ON THE LINK TO SEND A MESSAGE:

 

SOMETHING INSANE JUST HAPPENED:

 

Members of the House:
you’ve sold out —
now step down

 

 

 

 

The U.S. House just passed a bill called H.R. 992 — the Swaps Regulatory Improvement Act — that was literally written by mega-bank lobbyists. It repeals the laws passed in 2010 to prevent another meltdown like the one that crashed our economy in 2008. The repeal was cosponsored by a former Goldman Sachs executive and passed with bipartisan support from some of the House’s largest recipients of Wall Street cash. It’s so appalling… so unbelievable… so blatantly corrupt… that you’ve got to see it to believe it:

In 2010, Congress passed the “Dodd-Frank” law to clamp down on risky “derivatives trading” that led to the financial collapse of 2008. Dodd-Frank was weakened by banking lobbyists from the start and has been under attack by those lobbyists ever since. Now a new law written by Citigroup lobbyists (we couldn’t make this stuff up if we tried) exempts derivatives trading from regulation, and was passed this week by the House of Representatives with broad bipartisan support.
It sounds bad… but don’t worry, it gets much, much worse:

• The New York Times reports that 70 of the 85 lines in the new House bill were literally written by Citigroup lobbyists (Citigroup was one of the mega-banks that brought our economy to its knees in 2008 and received billions in taxpayer money.)
• The same report also revealed “two crucial paragraphs…were copied nearly word for word.” You can even view the original documents and see how Citigroup’s lobbyists redrafted the House Bill, striking out ideas they didn’t like and replacing them with ones they did.
• The bills are sponsored by Randy Hultgren (R – IL), and co-sponsored by Rep. Jim Himes (D-CT) and others. Himes is a former Goldman Sachs executive, and chief fundraiser for the Democratic Congressional Campaign Committee.
• Maplight reports that the financial industry is the top source of campaign funding for 6 of the bills’ 8 cosponsors.
• Maplight’s data shows that members of the House received $22,425,740 million from interest groups that support the bill — that’s 5.8 times more than it received from interest groups opposed.
• “House aides, when asked why Democrats would vote for this proposal even though the Obama administration opposes it, offered a political explanation. Republicans have enough votes to pass it themselves, so vulnerable House Democrats might as well join them, and collect industry money for their campaigns.” — New York Times

Yep, it’s actually that bad. For the full story, check out this revealing piece by Represent.Us Communications Director Mansur Gidfar. You can also find out if your Rep. voted for H.R.992 here.

We elect Representatives to the House to represent us, the people — but both parties now refuse to do the job we elected them to do. And they won’t until we force them to. The American Anti-Corruption Act would stop this corruption, and Represent.Us is the movement behind the Act.

Together, we can make blatant corruption illegal with simple reforms. It’s common sense that elected officials should be barred from collecting money from the industries they regulate.
Help us build enough momentum to take America back.

https://represent.us/action/something-insane-just-happened-house-representatives/

 

Larry Summers is the architect for the Global Financial Collapse according to a confidential memo released by Greg Palast,  among other things.
 
Articles posted HERE.

Larry Summers' Citigroup Problem

Could a possible conflict of interest derail the former Treasury secretary's appointment to run the Federal Reserve?

—By Erika Eichelberger

| Thu Sep. 12, 2013

 

 

Former Treasury Secretary Larry Summers' consulting gig with the banking behemoth Citigroup could come back to haunt him if he is nominated to succeed Ben Bernanke as chairman of the Federal Reserve. Bernanke's term expires in January, and Summers and Janet Yellen, the central bank's vice-chair, appear to be front-runners for the post, with media reports suggesting that President Barack Obama is fond of the controversy-prone Summers. But there may be a hitch with a Summers appointment. After Obama took office in 2008, he enacted sweeping ethics rules that say that no presidential appointee can work on matters directly related to a former employer for two years after taking a government job. That means that unless Obama grants Summers an exemption from the rules—a move that could be politically controversial—the former Treasury secretary will have to recuse himself from a slew of Fed decisions involving Citi, which is the third-largest bank in America. Experts say those recusals could hamper Summers' ability to run the Fed effectively.

"Citigroup is a behemoth on Wall Street, and constantly subject to Fed regulatory actions," says Craig Holman, the architect of Obama's 2009 ethics rules and currently a government affairs lobbyist for the consumer watchdog Public Citizen. "I would expect Summers would have to recuse himself quite frequently." He adds, "Recusal can be expected to be so frequent as to hinder Summers' ability to carry out his job as Fed chairman."

The Obama administration has granted dozens of ethics rules waivers since 2009, but they have mostly gone to lower-level appointees with limited conflicts of interest. Were Summers to be granted a waiver, according to Holman, it would be the most significant one yet.

If appointed, Summers might have to remove himself from consultations on penalties levied against Citi for things like sketchy foreclosure practices and inadequate anti-money-laundering protections. Nor would he be able to vote on post-financial crisis rules that Congress ordered the Fed to draft, including restrictions on CEO pay and guidelines for how much emergency capital Citi has to keep on its books. (The Fed board votes on all regulations, mergers, and applications to form new banks; it has voted 20 times so far in 2013. Penalty decisions are often delegated to staff or regional reserve banks, but the board consults on them.)

 

Neither the White House nor a spokesman for Summers would comment for this story.

Summers' potential conflict of interest wouldn't incapacitate the Fed. The six other governors on the Federal Reserve board would still be able to vote to approve regulations. And Obama's ethics rules wouldn't block Summers, who is a former director of Obama's National Economic Council, from having a say on broader regulations mandated by the 2010 Dodd-Frank financial reform law that affect the biggest banks, including Citi. This would include the Volcker rule, which is supposed to limit high-risk trading by commercial banks.

But it's difficult to see how working "on a rule that affects only Citi and its largest competitors" wouldn't constitute a potential conflict of interest for Summers, says Marcus Stanley, policy director at the advocacy group Americans for Financial Reform. Michael Greenberger, an expert on financial markets and professor at the University of Maryland school of law, agrees: "Whatever he does for everybody, he does for Citigroup."

"Even if there's not a formal conflict," Greenberger adds, "there is an appearance of conflict."
Citi isn't the only Wall Street entity that has hired Summers. He also has done consulting work for a number of smaller financial firms, including the hedge fund D.E. Shaw and the venture capital firm Andreessen Horowitz. If he gets the job, he'd have to step aside if they have business before the Fed. (Summer has also made money giving speeches at top financial firms, including JPMorgan Chase, Merrill Lynch, and Goldman Sachs, but speechifying is not considered employment under Obama's ethics rules.)

Yellen, the other main contender for Fed chair and the underdog in this race, has no Wall Street hang-ups. She has spent the past 20 years at the Fed.

Holman says Summers' potential conflicts of interest should trouble the White House. "You'd expect that if he represents a behemoth and has to recuse himself so frequently, that should be a factor in considering not appointing him." But Sanford Weill, the architect of the merger that created Citigroup and its chairman until 2006, is not worried. On Tuesday, he noted that that he has "unbelievable confidence" in Summers' ability to do the job.

 

 

Erika Eichelberger

Reporting Fellow

Erika Eichelberger is a reporting fellow in Mother Jones' Washington bureau. She has also written for The Nation, The Brooklyn Rail, and TomDispatch. Email her at eeichelberger [at] motherjones [dot] com. RSS | Twitter

 

 

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  Citigroup lobbyists drafted a bill to allow more risky dealings by taxpayer-backed banks and—what do you know?—the House financial services committee passed nearly identical legislation.

• Today's Most Interesting Argument Against Larry Summers as Fed Chair

  His only strong point is crisis management, but that's the one thing that barely matters at all.

• 6 More Reasons Larry Summers Should Not Be Fed Chair

  There are a number of reasons the former director of Obama's National Economic Council shouldn't be nominated to head the Federal Reserve. But he would be particularly bad on financial reform.

• How to Fire People the Citigroup Way

• For Pity's Sake, Let's Not Nominate Larry Summers to Run the Fed

 

http://www.motherjones.com/politics/2013/09/larry-summers-citigroup-conflict-interest-fed-chair