How Wall Street Crooks Get Out of Jail Free

Posted By: Rumor
Date: Sunday, 27-March-2011 15:42:12

Rob a bank, you go to Jail, if the bank robs you, they get protection from the judicial system, and you could get more legal action against you if you no longer have the money to cover your financial obligations.

Corporate person-hood has all the benefits, and none of the obligations you and I have. Corporate Monopolies in operation, per Mussolini, was what he based his Fascism on as that is how it operates.



When Charles Ferguson received an Oscar for his documentary on the financial crisis, Inside Job, he reminded the audience that “not a single financial executive has gone to jail, and that’s wrong.” Given the abundant evidence of massive fraud, Americans everywhere have asked the same question: Why haven’t any of those bankers gone to jail? If federal investigators could not establish criminal intent for any top-flight executives, didn’t they have enough evidence to prosecute banks or financial houses as law-breaking corporations?

Kaufman, now retired, sounded slightly embarrassed when I reminded him of his question. “When you look at what we got, it ain’t very much,” he conceded. “I’m genuinely concerned there are a lot of guys walking around Wall Street, the bad apples, saying, ‘Hey, man, we got away with it. We’re going to do it again.’”

If the legal system cannot locate the villains in this story, then “the law is a ass—a idiot,” as Charles Dickens put it. The technical difficulties in making a case for criminal prosecutions are real enough, given the complexities of modern finance. But the government’s lack of response to enormous wrongdoing reflects a deeper conflict of values. Will society’s sense of right and wrong prevail, or will corporate capitalism’s amoral need to maximize profit? So far, the marketplace appears to be winning.

The government’s ambivalence about prosecuting the largest corporate interests could be heard in the president’s comments. “Nothing will be gained by spending our time and energy laying blame for the past,” Barack Obama said in a different context (crimes of torture and unlawful detention committed under the Bush administration). Treasury Secretary Timothy Geithner bluntly dismissed the “public desire for Old Testament justice.” That might be morally satisfying, he said, but it would be “dramatically damaging” to economic recovery.

No one had to tell federal prosecutors to go easy. They can read the newspapers. The Treasury’s inspector general called the financial system “a target-rich environment” for financial fraud. But the government at the same time expended a vast fortune in public funds to rescue and restore the biggest banks and brokerages. Criminal indictments would not be good for investor confidence.

The economic argument dilutes, even checks, law enforcement. This occurred in government policy long before the financial crisis erupted, with its revelations of widespread fraud. During the past decade, the government demonstrated a similar reluctance to act aggressively against corporations. The Justice Department instead adopted a softer, more forgiving approach, at least for major companies. The intention was to limit the economic damage that can result from vigorous prosecution.

Instead of “Old Testament justice,” federal prosecutors seek “authentic cooperation” from corporations in trouble, urging them to come forward voluntarily and reveal their illegalities. In exchange, prosecutors will offer a deal. If companies pay the fine set by the prosecutor and submit to probationary terms for good behavior, perhaps an outside monitor, then government will defer prosecution indefinitely or even drop it entirely. The corporation thus avoids the stigma of a criminal trial and the bad headlines that depress stock prices. More to the point, the “deferred prosecution agreement,” as it’s called, allows the company to escape the more severe consequences of criminal conviction—the loss of banking and professional licenses, charters, deposit insurance or other government benefits, including eligibility for federal contracts and healthcare programs. In other words, the punishment prescribed in numerous laws.

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