Facing the Ugly Truth About American Politics

The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. – Caroll Quigley, author of Tragedy and Hope

Steve Nolan, Contributor
Activist Post

Why is it that almost four years have passed since the financial crisis of 2008 and no one has been convicted by the Justice Department despite hundreds of other criminal prosecutions? Not one senior executive at any of the large financial institutions faces criminal charges. This is in stark contrast to the S&L crisis over two-and-a-half decades ago when authorities jailed some of banking’s greatest wielders of power and influence such as Michael Milken and Charles Keating Jr.

According to David Heath writing for the Huffington Post:

Banks have reported massive amounts of fraud to the Treasury Department but have not had themselves—or their top executives—responsible, instead pinning blame on borrowers, independent mortgage brokers and others.

If we took a stroll down memory lane back to the S&L crisis, you may recall the United States suffered 747 failures out of 3,234 savings and loan associations. As a result, there were over 10,000 criminal referrals that resulted in over 1,000 felony convictions.

As of December 31, 1995, the Resolution Trust Corporation (RTC) estimated that the total costs of this financial crisis was $87.9 billion. Under intense political pressure in the late 1980s, the Justice Department and thrift regulators implemented a series of high-profile investigations into the failed S&Ls looking for evidence of fraud targeting the highest of banking executives.

This stands in great contrast to the fact that the Justice Department in 2008 scaled back plans to assign more field agents to investigate the deepening mortgage fraud suspicions spreading across the country. As a matter fact, there has not been one single prosecution since the 2008 financial crisis . . . which was probably the largest fraud committed in history!

So why is this the case in the aftermath of this latest financial catastrophe, which has crippled our country and left the average American holding the bag? It is because corruption and influence in DC by Wall Street is so pervasive that there is no accountability any more. We had some of the biggest firms going under, their shareholders lost everything, the taxpayers were left holding the bag, and the Wall Street executives walked away with some of the biggest bonus packages in history. What is wrong with this picture?!?

Consider that in 2004 Martha Stewart was convicted and sentenced to 5 months in prison for lying to S.E.C. investigators after she sold shares of a biotech company that was about to come out with negative news about one of its drugs. Any statement to a government official can be the basis for a prosecution under what is known as the false statement statue. So why is no legal authority interested in the fact that Jon Corzine, former Senator and former Governor of New Jersey, former CEO of Goldman Sachs, and leading fund raiser for Obama, testified to the House Financial Services Subcommittee hearing:

Let me be clear. While the last few days of MF Global were chaotic, I did not instruct anyone to lead customer funds to MF Global or any of its affiliates, nor was I told that anyone had done so.

Let’s take a closer look at who Jon Corzine is….

ABC News reported, “President Obama once hailed [Corzine] as an ‘honorable man’ and one of his ‘best partners’ in the White House.”

Jon Corzine, who is a Bilderberg attendee, was on the short list to be selected for Obama’s Secretary of Treasury along with Clintonites Lawrence Summers and Robert Rubin. According to the NJ.com, the former governor has long, deep ties to Obama after having been an early advocate for the president-elect’s upstart campaign for US Senate in 2004. Since then, Corzine has played a key role in Obama’s circle of influence acting as an economic adviser and mega-booster for his presidential re-election campaign.

Let’s now take a look at the MF Global investigation involving $1.6 billion in missing customer money. Bart Chilton, a Democratic member of the Commodity Futures Trading Commission said:

The lost money is sort of like a lost child. Every day that passes is more and more concerning and there’s less and less hope.

Meanwhile, a growing number of twenty plus Republican lawmakers are pressing Attorney General Eric Holder to appoint an independent counsel to investigate the collapse of MF Global on October 31, 2011. Could the fact that Eric Holder and Lanny Breuer, the Assistant Attorney General for the Criminal Division, were partners for many years at the Washington law firm Covington & Burling answer some of these questions?

According to an article by Scot J. Paltrow at Reuters:

Both the Justice Department and Covington declined to say if either official had personally worked on matters for the big mortgage industry clients. Justice Department spokeswoman Tracy Schmalter said Holder and Breuer had complied fully with conflict of interest regulations, but she declined to say if they had recused themselves from any matters related to former clients.

According to court recovers, Holder’s former law firm provided legal advice to Virginia-based MERS Corporation which runs a vast computerized registry of mortgages. MERS, which stands for Mortgage Electronic Registration Systems, has been ground-zero for complaints and erroneous mortgage documentation. In the 1990s, Covington & Burling law firm provided legal opinion letters to create MERS on behalf of Fannie Mae, Freddie Mac, Bank of America, JP Morgan Chase and several other large banks. Could this explain why the Attorney General has been reluctant to pursue any criminal prosecutions in the case of the 2008 financial crisis or the MF Global debacle?

To illustrate how crooked and deep this goes, a former MF Global employee accused former President Bill Clinton of collecting $50,000 per month through his Teneo advisory firm in the months leading up to MF Global’s demise and Chapter 11 bankruptcy. Teneo was hired by MF Global’s former CEO Jon Corzine to improve his image and enhance his connections within the Clinton’s political circle. “They were supposed to be helping Corzine improve his image as a CEO—I guess you can tell how that went,” the former MF Global employee said. Corzine resigned as CEO and chairman November 4 [2011]. The Teneo contract with MF Global lasted at least five months, he said. “The board cancelled it after Corzine resigned.”

But the corruption doesn’t start or stop with so called “elected” officials. The Chicago Mercantile Exchange has blood on its hands. What they did with respect to MF Global and its wronged clients is not only unfathomable, but also unprecedented.

According to broker Ann Barnhardt, speaking on the James J. Puplava’s Financial Newshour said of the Mercantile Exchange (Merc):

‘The Merc itself basically did the equivalent of sticking a nine millimeter in their mouth and pulling the trigger by not stepping forward, backstopping [covering] the MF Global client accounts and at the very least, Merc should have allowed the MF Global customers to liquidate their accounts and then transfer to other firms.’ She explained, ‘What the Merc did was the worst possible thing—they froze those people out of their accounts and didn’t allow them to liquidate while the markets continued to trade. This has never happened before. This was a complete breach of fiduciary duty by the Chicago Mercantile Exchange.’

So why on earth would Jon Corzine risk what he did? The answer is a simple one. He knew that he’d get away with it. None of his peers had been investigated or prosecuted since the 2008 financial crisis. Besides, he had purchased significant influence with the Clintons and being one of Obama’s highest fundraisers was a great insurance policy. Many suspect that MF Global was just the tip of the iceberg that exposes the massive industry exposure to European sovereign debt.

“This is not some evil conspiracy of two guys sitting in a room saying we should let people create crony capitalism and steal with impunity,” said William K. Black, a professor of law at University of Missouri, Kansas City, and the federal government’s director of litigation during the savings and loan crisis. “But their policies have created an exceptional criminogenic environment. There were no criminal referrals from the regulators. No fraud working groups. No national task force. There has been no effective punishment of the elites here.”

Consider that:

Merrill Lynch for example underestimated its risky mortgage holdings by hundreds of billion dollars.
The Chief Executive Officer of Countrywide Financial praised his mortgage company’s practices, yet was at odds with his private eMails and sold shares during this period. The stock subsequently fell sharply as the company’s losses became known.
Executives at Lehman Brothers assured investors assured investors in the summer of 2008 that the company’s financials were sound, despite the fact they counted assets of certain holdings pledged by Lehman to other companies.
Bear Stearns, the first Wall Street firm to collapse may have had the firm’s executive’s pocketing revenues that should have gone to investors to offset losses when complex mortgage securities soured.

And then the government and the Federal Reserve allowed the US taxpayer bailout of AIG’s default swap fiasco to the tune of $13 billion at 100 cents on the dollar! It is clear that Jon Corzine and the other Wall Street banksters knew they could continue to take these wild risks with impunity! The Wall Street / DC connection is so blatant with “legal” insider trading by our so-called “elected officials” and obscene political contributions to both parties to advance the special interests. And witness the ranks of millionaire career-politicians who pad their fortunes on their relatively modest six-figure salaries . . . .

Where would all this corruption lead us to but more corruption and more profligate government spending—advancing this once-great nation to an inevitable financial cataclysm?!

It is a crying shame that we see it unfold right before our very eyes and we, the people, are practically powerless to stop it . . . .

In the meantime, keep your powder dry and your faith strong!

This article first appeared at Survival Week

Steve Nolan is the Co-Founder of SurvivalWeek.com and Publisher of The Beacon.