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Greenwald writes: "Of all the ignominious actions of the Obama administration, the steadfast, systematic shielding of Wall Street from criminal liability is probably the most corrupt in the traditional sense of that word."

Why are these men not in jail? (photo: Getty Images)
Why are these men not in jail? (photo: Getty Images)

Wall Street's Immunity

By Glenn Greenwald, Salon

11 May 12


f all the ignominious actions of the Obama administration, the steadfast, systematic shielding of Wall Street from criminal liability is probably the most corrupt in the traditional sense of that word. In Newsweek this week, Peter Boyer and Peter Schweizer have an excellent examination of what happened and why, tying together crucial threads. First they lay out the basic facts, including the core deceit of the President’s campaigning for re-election like he’s some sort of populist crusader:

With the Occupy protesters resuming battle stations, and Mitt Romney in place as the presumptive Republican nominee, President Obama has begun to fashion his campaign as a crusade for the 99 percent - a fight against, as one Obama ad puts it, “a guy who had a Swiss bank account.” Casting Romney as a plutocrat will be easy enough. But the president’s claim as avenging populist may prove trickier, given his own deeply complicated, even conflicted, relationship with Big Finance.

Obama came into office vowing to end business as usual, and, in the gray post-crash dawn of 2009, nowhere did a reckoning with justice seem more due than in the financial sector. . . . Two months into his presidency, Obama summoned the titans of finance to the White House, where he told them, “My administration is the only thing between you and the pitchforks.” . . .

Candidate Obama had been their guy, accepting vast amounts of Wall Street campaign money for his victories over Hillary Clinton and John McCain (Goldman Sachs executives ponied up $1 million, more than any other private source of funding in 2008). Obama far outraised his Republican rival, John McCain, on Wall Street - around $16 million to $9 million. As it turned out, Obama apparently actually meant what he said at that White House meeting - his administration effectively would stand between Big Finance and anything like a severe accounting. To the dismay of many of Obama’s supporters, nearly four years after the disaster, there has not been a single criminal charge filed by the federal government against any top executive of the elite financial institutions.

“It’s perplexing at best,” says Phil Angelides, the Democratic former California treasurer who chaired the bipartisan Financial Crisis Inquiry Commission. “It’s deeply troubling at worst.”

The Newsweek reporters note that “financial-fraud prosecutions by the Department of Justice are at 20-year lows”; in fact, such prosecutions under Obama “are just one third of what they were during the Clinton administration” - even though the 2008 financial crisis was drowning in financial fraud. Contrast that with the reaction of George H.W. Bush to the much less severe Savings & Loan crisis of the 1980s:

“There hasn’t been any serious investigation of any of the large financial entities by the Justice Department, which includes the FBI,” says William Black, an associate professor of economics and law at the University of Missouri, Kansas City, who, as a government regulator in the 1980s, helped clean up the S&L mess. Black, who is a Democrat, notes that the feds dealt with the S&L crisis with harsh justice, bringing more than a thousand prosecutions, and securing a 90 percent conviction rate. The difference between the government’s response to the two crises, Black says, is a matter of will, and priorities. “You need heads on the pike,” he says. “The first President Bush’s orders were to get the most prominent, nastiest frauds, and put their heads on pikes as a demonstration that there’s a new sheriff in town.”

The Newsweek article offers two well-grounded theories for why Wall Street has been so aggressively protected by the DOJ. The first is that Obama filled his highest level Cabinet positions with Wall Street-subservient officials, beginning with Attorney General Eric Holder, who had been working as a highly-paid corporate lawyer for the law firm Covington & Burling, which represents “Goldman Sachs, JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, and Deutsche Bank.” The other top-tier DOJ positions were similarly filled with corporate lawyers from large law firms closely tied to and depended upon the financial industry. The problem is obvious:

Some suggest there is also the potential for conflicting interest when the department’s top officials come from lucrative law practices representing the very financial institutions that Justice is supposed to be investigating. “And that’s where they’re going back to,” says Black. “Everybody knows there is a problem with that.” (Two members of Holder’s team have already returned to Covington.)

Why would top DOJ officials - with bulging bank accounts from prior Wall Street service and, with their elevated status as top DOJ officials, future plans for even more bulging bank accounts upon returning - possibly alienate the very industry that will enrich them by prosecuting its top-level criminals? The full-scale immunity bestowed on Wall Street provides the answer.

Then there’s the reliance on Wall Street money for President Obama’s re-election effort. Newsweek notes the multiple investigations that documented numerous criminal acts leading to the financial crisis, including some explicitly incriminating top Wall Street firms such as Goldman Sachs. Anticipating possible indictments, “Goldman executives, including the firm’s chief executive officer, Lloyd Blankfein, started hiring defense lawyers.” Moreover, Black “says the conduct could well have violated federal fraud statutes - ’securities fraud for false disclosures, wire and mail fraud for making false representations about the quality of the loans and derivatives they were selling, bank fraud for false representations to the regulators.’” Beyond the Wall-Street-subservient officials, why have those led to no prosecutions?

Meanwhile, Obama’s political operation continued to ask Wall Street for campaign money. A curious pattern developed. A Newsweek examination of campaign finance records shows that, in the weeks before and after last year’s scathing Senate report, several Goldman executives and their families made large donations to Obama’s Victory Fund and related entities, some of them maxing out at the highest individual donation allowed, $35,800, even though 2011 was an electoral off-year. Some of these executives were giving to Obama for the first time.

Justice insists that political operations such as fundraising are kept strictly distanced from the department, in order to avoid even the appearance of political influence. But the attorney general and his team are not unfamiliar with the process; Holder was himself an Obama bundler - a fundraiser who collected large sums from various donors - in 2008, as were several other lawyers who joined him at Justice.

It would be a leap to infer these Goldman contributions were made - or received - as quid pro quo for dropping a criminal investigation. Still, the situation constitutes what one Justice veteran acknowledged is a “bad set of facts.”

The article goes on to detail the pressure that was continuously placed by the Obama administration on state attorneys general to agree to a lax settlement with banks regarding foreclosure fraud, and how they ultimately co-opted the holdouts to agree to the deal. It notes that while Obama, through last fall, “had collected more donations from Wall Street than any of the Republican candidates” (even “employees of Bain Capital donated more than twice as much to Obama as they did to Romney, who founded the firm”), Wall Street money is now beginning to flock to Romney. That’s almost certainly because Wall Street dislikes some of Obama’s populist rhetoric (financial industry executives are very sensitive and coddled and dislike any hint of criticism, no matter how symbolic and insincere) and because Romney is one of them (they certainly can’t go wrong with Romney either). But it also is clear that they are attempting to leverage Obama’s need for their support into even further concessions: ones that, if the past is any indication, will be eagerly forthcoming.

This is a vital part of the Obama legacy. The prior decade witnessed the most egregious crimes imaginable by the nation’s most powerful actors: torture and warrantless eavesdropping from political officials (with the aid of corporate giants), and massive fraud from financial elites. None has been held accountable; the opposite is true: the Obama administration has steadfastly protected all of them. Echoing the prime theme of my last book - that America’s elites are virtually immune from the rule of law - the Newsweek article notes:

Maintaining public faith in the justice system is one of the reasons why people such as Angelides continue to call for a rigorous criminal investigation into Wall Street. “I think it’s fundamental that people in this country need to feel that the justice system is for everyone - that there’s not one system for those people of enormous wealth and power, and one for everyone else,” he says.

But that’s exactly the principle that has undergone such a relentless assault under this administration. That general development is odious in its own right. That the specific shielding of Wall Street is driven by such corrupt ends makes it even worse. But the worst part of it all is that Obama is going to spend the next six months deceitfully parading around as some sort of populist hero standing up for ordinary Americans and the safety net against big business, and hordes of people who know how false that is will echo it as loudly and repeatedly as they can, tricking many people who don’t know better into believing it.


UPDATE: In comments, Montecarlo recalls this amazing New York Times article from March, which I wrote about at the time, lamenting the extreme levels of corruption in Afghanistan’s ruling class (“a narrow business and political elite defined by its corruption”), made all the worse by this: “Despite years of urging and oversight by American advisers, Mr. Karzai’s government has yet to prosecute a high-level corruption case.” It was that phrase “despite years of urging and oversight by American advisers” - as though the U.S. is a beacon of accountability for ruling class corruption - that was really quite remarkable. your social media marketing partner


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+20 # erogers 2012-05-11 15:50
The more that is learned about Wall Street, the more the average American becomes disenchanted with the entire house of pimps and whores called Congress. When one looks at the alternatives being sent out way for the November election the more one realizes that this system is entirely broken. Please don't tell me to vote Tea Party either. That gang is the biggest bunch of whores and pimps going. America needs a new beginning or this country is finished. I intend sitting out 2012 in protest. To hell with all of the jerks.
+13 # suziemama 2012-05-11 23:33
I totally understand your disgust and frustration, but I would suggest you vote for Dr. Jill Stein, the Green Party presidential candidate, instead of sitting out the election.

I met Jill Stein recently, and I was very impressed by her intelligence, compassion, integrity, and eloquence. Stein and the Green New Deal offer a very workable plan of how to satisfy human needs while protecting the environment and creating a more just and peaceful society.

If Jill Stein's campaign can bring in about $5000 in contributions from each state I believe, then the Green Party will get federal campaign funds. If she polls at 15% or more, then she will be included in the presidential debates. Believe me, if Jill Stein in in the debates putting forth a truly progressive vision, it will change the debate entirely.

Major political change in the US has always happened when a political movement and third parties exerted pressure on the dominant parties. American politics has been characterized by the two party system, but it hasn't always been the same two parties!

Check out
+2 # Garrett Connelly 2012-05-12 11:06
I like Jill, too, but there is another way : write in None of the Above. Modern democracy includes check box for a None of the Above option. Occupy democracy by writing in None of the Above. Vote for Jill in the second round, after None of the Above wins.
+7 # DPM 2012-05-11 22:20
I can no longer vote for the "least" worst!
Occupy for change!
+7 # tomo 2012-05-11 22:27
Though Demorobots give me thumbs down every time I say it, this Obama, whom I did all I could to get nominated, and to whose election I devoted much time, is, as Solon and Newsweek help to reveal, the must successfully duplicitous President we have had. Everybody knew better than to buy a used car from LBJ. Nixon and G.W. had body language that said: "C'mon folks; don't believe a word I say!" Reagan told the nation bedtime stories which everyone not altogether addicted to bedtime stories recognized for the barbiturate they were. Obama has sold us out to Wall Street in a way from which we may never recover. Republicans don't blame him for it because they approve of such selling out. Democrats don't blame him for it because they have gotten into a kind of paralyzed mindset in which they blame Republicans for everything Obama has or hasn't done. And now Obama is about to play stage two of the same con. Fool me once, shame on you; fool me twice and, as that phrase-maker G.W. once said, "I really shouldn't let you do that to me."
+7 # pernsey 2012-05-12 08:27
I do blame republicans, its not a paralyzed mindset its the truth. Contrary to what the the right wingers think, the 8 years of George W. Bush and his deconstruction of America really did exsist and he really ruined our country. Just because you dont talk about him and his gang of thugs, doesnt mean they didnt exsist. It just means the GOP are hoping because its not talked about that people wont remember.

I will always remember the 8 years of hell, that took our country to the brink of financial ruin. It all happened under Bush's watch before Obama was elected.
+10 # tomo 2012-05-12 11:49
Where you lose me, pernsey, is "it all happened under Bush's watch before Obama was elected." I agree with you about Bush/Cheney. I'll say, if ever there was an administration from hell, it was the Bush/Cheney administration. What the Demorobots have not realized is that Obama, elected to reject that administration, has, on the contrary, institutionaliz ed it. That is the major happening of the last three years.
+1 # John Locke 2012-05-13 09:01
Obama retained all the Bush advisers and then employed the rest who were responsible for the thsft "Inside Job" exposed the continuing corruption,

Bush Senior as corrupt as he was still went after those responsible for the S&L crisis, remember Charles Keeting!

But of Course one of the Bush's wasn't prosecuted! But then the S&L's didn't control the Republican Party like Wall Street has all come down to the money...and that is a sure sign America is in its last days, just as Rome failed so to will the US Empire!
0 # John Locke 2012-05-13 08:54
DPM, and Tomo thank you! Obama is a one world promoter and part of the Wall Street Agenda... The only way we can have the change obama promised us, but lied about, is a real American Tax revolt...THEY need the income tax,,,by cutting that off I believe we can win, then we have to look for a real American who is not afraid of taking on the banks...that may be our only hope...and that will not be with either of the two parties that Wall Street owns
+6 # cgberling 2012-05-11 22:31
It's time to play smart. Calls to not vote for Obama are totally nonproductive.
A Republican win makes things worse and an
Obama win may not change things, but it does buy time, four years, to bring a Progressive party into the game, and totally clean house. It will take at least
that long, possibly more, but we MUST. The right wing has worked for 3-4 decades to bring us to this mess. They may not be smarter, but they are dedicated to money and are willing to continually work at it
+1 # robbeygay 2012-05-12 00:54
As a Gay liberal Lawyer well appreciated past his Wiki entry reads like an OZ series lawyer. I can't guess if he has a color worry with Obiwan, with his partner Brazilian that sounds odd.

He should know Obi had a 1st term take it soft to get a 2nd term plan and now toughened to act. Has to win to be in, has to be in to do anything and 1st term hostile house to boot.

Asks why employ Wall Street Lawyers in cabinet? Well who best knows crooks than a lawyer who acted for financial crooks that murdered etc. "Set a thief to catch a thief" sounds ok to me.

Please look again more carefully Dear Glenn you aren't representing GOP rich now you closed the practice and Obi-wan's side are supporting gay union.

Give him fair go and with your kind profile offer his committee gay & legal drafting PR help perhaps.

You will be appaled at what hipocritical Romney religious politics might come out with. Remember the Bush's & Gaham's cooperation sprung on us. You want anothe Billy & Franklin religious capitalist anti-gay President?
+8 # John Locke 2012-05-12 04:37
Obama is in bed with Wall Street, it appears it is them against the 99%...we should have looked for a real candidate when we had the chance, There will be NO change if Obama is re-elected...we MUST stop playing the revolving door politics and abandon the two corrupt parties Wall Street controls with their money...

also we are headed for yet one more bank bail out...Watch the administration find money for that and eliminate more of our Benefits....

Wake up folks!
+6 # Donald2 2012-05-12 05:39
Obama is not staffing the group charged with investigating the banks. He got Schwartwman, NY State Attorney General to head the commission, promising resources. (In the last banking crisis 1000 attorneys were hired to investigate.) Obama has only funder 50. 50. 50. Not enough eyes to get anything done. Shameful.
-1 # MidwestTom 2012-05-12 07:07
Mr. Corzine of MF Global admitted taking over $200 million of other people's money, and he is not charged. No instead Obama's Justice Department files charges against some nutty Sheriff for rounding up illegals. I know he is a lottle nutty, but Ron Paul ,may be the only one in Washington not owned by Wall Street and AOPAC.
+7 # MidwestTom 2012-05-12 07:25
My fear is that history may be repeating . In Germany in the 1920's most of the top bankers and 80% of the lawyers were Jewish. When the depression hit they repossessed farms, homes and factories, t was easy for Hitler to exploit the hatred of bankers and lawyers into hatred of Jews. As conditions deteriorate here and Occupy grows in strength, as more and people lose their homes to NYC banks and the bankers go unpunished, anything could happen here. My Poster child is Corzine, a former Goldman Sacks executive who ran MFGlobal when it lost #1.2 billion of investor money that it was supposed to be just handling, not investing; and then Mr. Corzine admitted transferring $200 million to his personnel accounts, and no charges have been filed. Under Obama Wall Street is playing "how much can we steal and get away with?" So far the sky is the limit it appears.
+6 # Garrett Connelly 2012-05-12 07:59
The most gross corruption of truth, dignity and justice by Obama was inviting the new dictator of Honduras into the White House and referring to him a "Democracy Healer." I feel so sorry for the gentle people of Honduras that I am writing in None of the Above this November.
-4 # Listner 2012-05-12 10:17
I don't believe Obama or his staff knew how truly bad the situation was when he first took office.His first priority had to be preventing collapse.Geitne r were perfect for the job. It's where they're from.The first two years had to be pretty scary.They pulled it off and the world is now on the road to recovery, or at least most of it.
Is this the time for him to go after the culprits? I think not. "Financial Industry executives are very sensitive and don't like criticism" as quoted from above. This would insure that "one term" McConnel speaks so passionately about.Why not wait until the "second term" Obama speaks so passionately about and line them up like cord wood for prosecution?Wha ts the down side then? None The dems look like heroes to America, the big Corporations begin giving money to the dems to prevent investigations into their business practices and tax situations and the justice department hires more lawyers to finish it all before the election Obama doesn't care about. I think my money is on the black man on this one. I will vote for him and encourage others to do the same.If he can pull this off, he would insure Democrats control the White House for many years to come.
+3 # paulrevere 2012-05-12 11:47
Your first paragraph needs some work lISTNER...there never was a choice. NO president since maybe Carter has been exercising their own volition.

The economy is NOT 'on the road to recovery', even in the slightest. I say that because the true camel the sociopathic money grubbers, built and then unceremoniously placed in the tent as if it were some new wizbang product is the derivative realize the number is now regularly admitted to be 1,250,000,000,0 00,000...that is one thousand two hundred and fifty TRILLION in obligations world wide...the total world GDP is around 65 trillion.

Recovered economy indeed...!
+5 # PGreen 2012-05-12 12:07
It seems fairly clear that the Obama administration has made it a priority to protect the oligarchy. Even if you allow for his approach to the financial bailout, there is the decision to fore go prosecution of the Bush tortures. He also goes a step further in his prosecution of whistleblowers, which is the most extreme in US history. Obama is actively, not passively (in response to circumstance) supporting the elite and suppressing individual liberties.
I may end up voting for Obama, as Romney is worse, but I'm under no illusions.
+4 # Feral Dogz 2012-05-12 11:54
Hold your nose and vote for the lesser evil. A vote for a third party candidate might make you feel more "independent", but its a wasted vote.

A vote for any republican is, at this moment in history, a surrender to the forces of greed and ignorance in the form of tea party lunacy and Grover Norquist's dream of a free ride for the rich at the expense of everyone "fortunate" enough to be working for the "job creators".

Republican strategists have been actively encouraging small business owners to hold off on expanding and creating jobs in the hope of really cashing in on cheap labor and lower taxes after a big win in Nov. How is that good for American workers?

Obama wants to create jobs right now, rebuilding infrastructure and developing alternative energy. How is that bad?

Regulating (and punishing) bad behavior on Wall St. is certainly a job that needs to be done, but will never be accomplished as long as congress refuses to fund the SEC.

Most of the "crimes" committed by Wall St. can best be described as rich people scamming each other to see who will die with the biggest stack of dollars. We only care about it when we lose our jobs or homes. Its been decades since the average worker has had enough income to allow participation in capitalism.

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