Why Aren't They In Jail?

[marmar]

from the Working Life blog:



Why Aren't They In Jail?
by Jonathan Tasini

Friday 04 of September, 2009
Posted to Front Page Posts


I often ask the question: why aren't more of the bankers and Wall Street financiers going to jail for the financial collapse they created with their manipulations and thirst for greed? Not only are they not serving time, but they still have their jobs--while millions of others lost their jobs because of the bursting of the financial bubble.

Now, you may think my musings about the need for justice are not shared outside a particular line of political thought. But, today, a main columnist of the Financial Times, Gillian Tett, asks the same question:

How many financiers do you think ended up in jail after America’s Savings and Loans scandals? The answer can be found in a fascinating, old report from the US Department of Justice.

According to some of its records, between 1990 and 1995 no less than 1,852 S&L officials were prosecuted, and 1,072 placed behind bars. Another 2,558 bankers were also jailed, often for offenses which were S&L-linked too.

Those are thought-provoking numbers. These days the Western world is reeling from another massive financial crisis, that eclipses the S&L debacle in terms of wealth destruction.

Yet, thus far, very few prison terms have been handed out. For sure, there have been a few high-profile dramas. Bernie Madoff is one, obvious, example.

But one reason why the Madoff drama has grabbed so much attention and already sparked a slew of books this month, is precisely because there are precious few other financiers behind bars, or facing momentous fines. Compared to the S&L days, the level of retribution so far seems almost non existent.

And:

But, on the other hand, if there is no retribution against financiers, it will be very difficult to force a real change in behaviour. After all, no amount of twiddling with Basel rules or pious statements about bonuses will ever scare a financier as much as the thought of jail.

Moreover, without some retribution it will also be hard to persuade voters that finance is really being reformed, or has any credibility or moral authority. That is bad for politicians and regulators. However, it is also bad for bankers too. So, in the months ahead, keep a close eye on what happens to the legal cases in the system and, above all, watch to see just how many do (or do not) quietly die, compared to those S&L days.

I added the emphasis. This is the key. How do you ask people to get involved with a political system that people think is simply rigged and won't adhere to any kind of fair play or rule of law?


http://www.workinglife.org/blogs/view_post.php?content_id=14474

[kenny blankenship]

1. They stole too much money

If a prosecutor tried to explain and tote up how much money these guys swindled, no jury composed of ordinary people would believe it.

[onethatcares]

2. in response to your question,

because they've already bought off everyone involved in any meaningful prosecution. They are the "Club".

[Phoebe Loosinhouse]

3. Remember, they never "caught" Bernie Madoff. He turned himself in

I guess out of shear exhaustion when some people were looking to cash out when the market skeered them and he just couldn't keep the balls in the air anymore. He survived more thanone half-assed SEC investigation.

In order for big time financier/swindler/crook/embezzler types to actually be caught, you need someone like Elliot Spitzer.

[Octafish]

9. Bernie ''touched'' the family of SEC investigator

Madoff had contact with SEC officials while running Ponzi scheme.

Small world.

[KoKo]

4. Thanks for posting. And, the anger against Health Reform is in part a deflection from this Wall St.

Crookery, Thievery and Cronyism. It tarnishes Obama that the same folks who helped concoct or turned a blind eye to the crookery and cronyism are there in his administration. The "Tea-Baggers" rage in part comes from rage that should go to Bush, Wall Street and Regulators and now goes to Obama and the rest by the crazies who are useful tools for the "Powers that Be" to cover up the outrage against what Wall St. and Cronies have done to the country.

[onager]

5. Somebody in Congress agrees...

Just the other day I watched the PBS Frontline show, "Breaking The Bank." Definitely worth a watch if you haven't seen it.

It deals with the weekend in Nov. 2008 when Henry Paulson ordered that shotgun wedding between Merrill-Lynch and Bank of America.

You probably remember the reason that deal was held up: M-L honcho John Thain demanded huge bonuses for himself and his staff.

Soon after that cock-up, the heads of the biggest banks were hauled before a Congressional committe to explain.

During the hearing, one Congressman explodes off-camera: "I can't believe you people haven't been prosecuted!"

[KansDem]

6. It's becoming painfully clear to me that we have two groups of people in this country...

The ones who live under laws and the ones who don't...

Really, though, there's been no other event in US history that has demonstrated this as much as the Wall Street/banking meltdown.

We've always expected it: we've seen who goes to war and who doesn't; we've seen the "no millionaires on death-row" example, to name a couple...

But now we've seen that if we make a financial mistake, we have to live with it and correct it with interest and penalty fees. But if they make a financial mistake, they get bailed out with taxpayer billions... No "interest" or "penalty fees"...just multi-million dollar bonuses.

Yesterday a rep from Sears called me about a late payment (Sears accounts are now overseen by CityBank). She put me through the hoops: verify name, address, phone number...etc. I told her I'd make the payment next Thursday. She asked me the reason for my late payment and if I was sure I could make the payment (?). I laughed at her and said, "Put down in my file whatever reason your CEO said was the reason for the taxpayer bailout!"

[notesdev]

7. They have threatened to crash the financial system

and our government has knuckled under to the threat.

[leveymg]

8. This could be titled, "Too Big to Jail."

Everyone in a position of responsibility during the Bush-Cheney years should be under investigation. Too rich, too powerful to take them on - Washington is doing nothing now but treading water in a sea of circling sharks. You might as well arrest the sharks.