HE PUNKED THE
AMERICAN PEOPLE TWICE BUT WILL STILL GO DOWN IN HISTORY HAS ONE OF AMERICA’S
WORST AND MOST CORRUPT PRESIDENTS.
“I’m not here to
punish banks!” Bankster-owned Barack Obama from the floor of the Senate, State
of the Union Message.
During Obama’s
first two years alone, banks made more profits than under all eight years of
Bush. The Obama bank’s profits and crimes soared, as did foreclosures.
MEXICAN DRUG
DEALER OPERATES IN OUR BORDERS
THE MEXICAN
DRUG CARTELS OPERATE IN 2,500 AMERICAN CITIES AND WHOLEHEARTEDLY ENDORSE
OBAMA’S OPEN AND UNDEFENDED BORDERS AGENDA.
“Oropeza,
48, was arrested May 31, 2007, by police in Saraland, Ala., who stopped him on
a traffic violation. Checking his record, they learned of the investigation in
Texas.
They
searched the van and discovered 185 pounds of cocaine hidden under a false
floor. That allowed federal agents to freeze Oropeza's bank accounts and search
his marble-floored home in Brownsville, Robinette says.”
The
government, like the banks, had a vested interest in shutting down the
investigation, as the results of any genuine inquiry would have exposed
negligence and collusion on the part of the regulators as well as gross
violations of law by the banks that would have made it more difficult for the
Obama administration to avoid criminal prosecutions.
The Times also reported that such “independent
investigators” played a key role in the HSBC money laundering scandal, helping
cover up the extent of the British-based bank’s money laundering operation for
Mexican drug cartels.
World Socialist Web Site
Firms make billions as middlemen in government cover-up of Wall
Street crimes
By Andre Damon
7 February 2013
7 February 2013
In the network of corrupt and incestuous relations between
government financial regulatory agencies and the banks they nominally police, a
growing role is played by private, for-profit “consulting” firms that serve as
middlemen in the government cover-up of corporate crime.
The New York Times in a front-page article last week called
attention to this lesser-known mechanism used by the government to protect Wall
Street from being held to account for the fraudulent and illegal practices in
which it engages on a daily basis.
The Times wrote: "Federal authorities are scrutinizing
private consultants hired to clean up financial misdeeds like money laundering
and foreclosure abuses, taking aim at an industry that is paid billions of
dollars by the same banks it is expected to police."
The firms in question operate in essentially the same way as the
credit rating agencies that facilitated the subprime meltdown. Just as Standard
& Poor’s Rating Services and Moody’s Investors Service are paid by the
banks whose securities they rate, the consulting firms tasked with
investigating banks are chosen and paid by the very institutions they are
investigating. This arrangement is based on a howling conflict of interest.
Consulting firms that want to keep old clients and add new ones, and increase
their profits, are obviously under pressure to cover up the misdeeds of their
banking paymasters.
Moreover, the same revolving door by which individuals move
seamlessly between Wall Street and the regulatory agencies exists between the
consulting firms and the banks and regulatory bodies.
Last month's $8.5 billion foreclosure fraud settlement with major
US lenders lifted the lid on bank regulators' increasing use of these
“independent investigators.” Tasked with finding the extent of fraud and
illegality in the processing of home foreclosures, these companies helped the
banks cover up their fraudulent activities and ensure that the extent of their
wrongdoing was not brought to light.
The settlement between ten major mortgage lenders and the Office
of the Comptroller of the Currency (OCC), a branch of the Treasury Department,
related to widespread fraud committed by the banks in their rush to foreclose
on as many homes as possible in 2009 and 2010. To expedite the foreclosure
process, the banks had employees or contractors sign off on thousands of
mortgage documents every month, swearing that they had intimate knowledge of
their contents when, in reality, they had not even read them.
This resulted in the improper expulsion of an unknown number of
families—probably in the hundreds of thousands—from their homes.
In April of 2011, the OCC, the Office of Thrift Supervision (OTS),
and the Board of Governors of the Federal Reserve System ordered individual
reviews of foreclosures carried out between 2009 and 2010 by fourteen mortgage
lenders, including Bank of America, Citibank, JPMorgan Chase and Wells Fargo.
The investigation was intended to individually review all cases in
which homeowners claimed that they were improperly foreclosed on, so that each
victimized household could receive a cash payout. The findings of such an
investigation would have undoubtedly shown that foreclosure fraud was far more
prevalent than had been previously known, and laid the basis for further
lawsuits against the lenders.
Instead of reviewing the foreclosures themselves, regulators had
the banks hire so-called independent investigators, who, while receiving $2
billion in fees from the lenders, dragged their feet in reviewing the
foreclosure cases.
Last month, government regulators closed down the review on the
grounds that it was too time-consuming and too expensive for the banks and came
up with a sweetheart settlement that cost the banks a relative pittance.
Instead of payouts to individuals who were harmed by the banks'
wrongdoing, the lenders agreed to split a $3.3 billion cash payout among 4.2
million foreclosed homeowners, without "determination of harm." As a
result, homeowners will receive a check of under $1,000 even if they were
illegally thrown out of their homes.
The government,
like the banks, had a vested interest in shutting down the investigation, as
the results of any genuine inquiry would have exposed negligence and collusion
on the part of the regulators as well as gross violations of law by the banks
that would have made it more difficult for the Obama administration to avoid
criminal prosecutions.
When setting up the "Independent Foreclosure Review" in
April 2011, regulators claimed that they had to rely on independent contractors
such as Promontory Financial and PricewaterhouseCoopers because regulators
themselves had neither the money nor the manpower the review the claims.
"The Office of the Comptroller of the Currency employs just
3,800 people, only about 2,000 of whom are bank examiners," said Bryan
Hubbard, director for public affairs operations at the OCC in a telephone
interview Monday. "It would simply not have been practical to hire the
staff necessary for the review."
He added that "independent consultants are used often by many
regulators, not just the OCC, in support of enforcement actions. It was not
unusual." He added that the decision to end the review "will provide
more money to more borrowers than maintaining the original course."
The argument that closing down the investigation resulted in
greater compensation for victimized borrowers is absurd.
The growing scandal over the role of “independent consultants” in
the foreclosure abuse settlement prompted Senator Elizabeth Warren and
Representative Elijah Cummings to send a letter to the US Federal Reserve and
office of the Comptroller of the Currency last week, asking them to publish
documents related to the role of the consultants hired by the banks to review
foreclosures.
The role of such "independent investigators" in covering
up the banks' crimes goes beyond the foreclosure settlement. Since the 2008 financial
meltdown, it has become increasingly common for financial regulators to rely on
such companies in regulatory actions. The New York Times reported that
the OCC required the hiring of such consultants in more than 130 regulatory
actions since 2008.
The Times
also reported that such “independent investigators” played a key role in the
HSBC money laundering scandal, helping cover up the extent of the British-based
bank’s money laundering operation for Mexican drug cartels. The newspaper
reported that HSBC was cited for its loose money laundering protections in 2003
and turned to the consulting firm Deloitte & Touche to review its
compliance with regulations.
In 2010, the bank was again investigated in connection to its
money laundering activities, ultimately leading to a $1.9 billion settlement
with regulators late last year. To help determine the fine to be levied, HSBC
was ordered to hire an independent consultant to assess the extent of its legal
transgressions.
The bank hired
its reliable ally of previous years, Deloitte & Touche, which, according to
the Times, "generously bundled hundreds of missed transfers into a
single report," which "may have helped save the bank from some
government fines."
"Independent investigators" like Deloitte and Promontory
are staffed largely by former regulators, who, having gained experience in
government, have turned to using their knowledge to help banks skirt
regulations, for sizable fees. Promontory Financial, which examined loans for
Bank of America and Wells Fargo, is a case in point. The company was founded in
2000 by Eugene Ludwig two years after he left his position as Comptroller of
the Currency.
Last month, Promontory announced that Julie Williams, the former
chief council at the OCC, would join the group to become the firm's director of
advisory practice. “I thought I could do more good helping firms understand and
comply with government expectations—which are not always just what’s in rules
and regulations—at Promontory,” she said upon taking the job.
PricewaterhouseCoopers, which carried out the foreclosure fraud investigation for Citigroup, brags to potential clients that its "teams consist of experienced regulatory risk specialists, including ex-regulators, who not only know the rules, but have also implemented and assessed compliance against them." OBAMA PROMISED HIS CRIMINAL BANKSTER DONORS NO PRISON TIME AND NO REAL REGULATION. DID HE DELIVER?
The JPMorgan
scandal also throws into relief the government’s failure to prosecute those
responsible for the 2008 financial meltdown. Despite overwhelming evidence of
wrongdoing and criminality uncovered by two federal investigations last year,
those responsible have been shielded from prosecution.
Records show that four out of Obama's
top five contributors are employees of financial industry giants - Goldman
Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup
($358,054).
The settlement, reported to be worth $25 billion,
was announced February 9 and hailed by President Obama as a serious rebuke to
the banks and boon to distressed homeowners. (See: “Obama
administration brokers pro-bank mortgage fraud settlement”).
*The social and historical catastrophe confronting mankind is not simply the product of an economic crisis in the abstract. This crisis is mediated by class interests, and these class interests find expression in definite actions. Behind the central banks and governments stand the interests of a financial elite whose relationship to the rest of society is fundamentally parasitic.