Bankers Have Done More Damage Than Mobsters Let’s refresh our memories about the financial crimes for which there has been a complete absence of criminal prosecution over the last decade. We’ve seen executives: lying on a huge scale about the characteristics and quality of mortgage-backed securities; creating and selling mortgage securities marketed as safe investments while secretly betting on their collapse; rigging the Libor interest rates so that traders could profit; conspiring to fix energy prices; laundering hundreds of billions of dollars for assorted drug lords, kleptocrats, rogue states and tax evaders; conspiring to assist wealthy tax evaders to conceal assets; colluding and bid-rigging in private equity transactions; and defrauding students and the federal government in bank-owned for-profit online education operations. And, of course, their behavior brought the planet to the brink of financial collapse in 2008, leaving enormous human destruction. If Wall Street illegality is not organized crime, what is? Why not turn statutes designed to prosecute gangsters against fraudulent bankers? If this isn’t organized crime, what is? Yet contrast the federal government’s response to the financial sector with its treatment of people who grow, smuggle and sell marijuana, a drug now effectively legal in many states. Those people have their assets seized, their phones tapped, undercover agents deployed and their organizations prosecuted under the Racketeer Influenced and Corrupt Organizations Act, a federal statute, often used against the mafia, which gives prosecutors greater leeway to indict. Why can’t the government use RICO against bankers? But President Obama, his attorney general and many U.S. attorneys have been utterly silent on the question of why no major financial executives have been prosecuted. Occasionally, President Obama has said that their behavior wasn’t illegal (demonstrably false), and Attorney General Eric Holder has said that prosecuting entire companies could endanger the financial system. None of them have addressed the question of why conspiracies by financial executives involving criminal activity have never been prosecuted. There is good reason for their silence: they have no good reason for their inaction. As a result, the lesson to be drawn from the financial crisis is that if you work for a big bank, you can destroy the global economy without the slightest fear that anything will happen to you. Charles Ferguson is the director of Inside Job, a movie about the global financial crisis that won the Academy Award for Best Documentary in 2011, and the author of Predator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America.
Posted on: Mon, 11 Nov 2013 06:17:04 +0000
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