Our Morally Bankrupt Government, Justice Edition Part 1: Enforcement Against Financial Meltdown Perpetrators

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By | January 16, 2012

Perhaps the clearest window into a nation’s soul is its criminal justice system. Criminal law is legislated morality: certain acts are so vile, we exile the perpetrators to prison. But not every criminal. America will never have enough resources to catch and prosecute all criminals. As a result many guilty go free without ever being pursued, simply because the government decided spend its limited resources elsewhere. Looking at whom the government prosecutes, therefore, is an easy way to see law enforcers’ priorities in action.

Sadly, when it comes to the Financial Meltdown perpetrators, scrutiny reveals those priorities are deeply distorted. Our law enforcers chose to become the protection detail of our wealthy-beyond-dreaming-crooks-in-chief, while throwing the book at their guilty but less destructive subordinates.

Who should we be prosecuting? Well, there’s Dick Fuld of Lehman; James Cayne of Bear, Stearns; Joseph Cassano of AIGFP; Angelo Mozillo of Countrywide; and E. Stanley O’Neal of Merrill Lynch, just to name a few. There’s also all the bailed out top bankers still in power, such as Lloyd Blankfein, Jamie Dimon, and the meltdown era executives at the other biggest bailout recipients: Citigroup, Bank of America, Wells Fargo, Morgan Stanley. And that’s not an exhaustive list.

As I lay out below, AG Holder and President Obama have abandoned the cherished American principle–the core democratic principle–of equality before the law. That’s a kind of moral corruption that strikes at the heart of our national identity. And as best I can tell–again, the evidence follows–this corruption flows from Treasury Department/Wall Street fear mongering and revolving door conflicts of interest.

Worst of all, our top law enforcers abandoned equality before the law precisely when our democracy desperately needs it. Our only defense against the growing tyranny of the 1%, the only means we have of policing the bounds of their power, is the vigorous and equal enforcement of the law.

The Buck Stops with Holder and Obama

A couple of housekeeping notes first: Many at Justice and in the FBI are ethical and moral people who try very hard to do right by the American people. So even though I use the word “Justice” as in Justice Department throughout, my critique does not apply to the people below the very top. Fundamentally only Attorney General Eric Holder and President Obama are responsible our Department of Justice’s enforcement priorities.

Attorney General Holder runs the show, but President Obama gave him the job, and can fire him at any time. Holder’s enforcement priorities and strategies therefore must reflect Obama’s priorities. I realize that’s a very formal take, but it’s the only defensible one. I don’t care how much who knew about what, how decisions are or were in fact made, or any other framing or excusing of AG Holder & President Obama’s responsibility for our criminal justice priorities. In our democracy the only political control We, the People have on our national criminal enforcement priorities is our vote for President. And an incumbent President’s strongest advertisement of his enforcement priorities is his Attorney General and his record. The buck stops with them, period.

Judging Justice

Another important caveat about this critique: I’m only looking at all things Financial Meltdown. In this part one, I’m looking at the prosecution of perpetrators, bankers and the companies they run. In part two I look at Justice’s defense of our legal system, of the rule of law itself. While Justice is responsible for many other topics–combating terrorism, for example–the Financial Meltdown devastated our economy, deranged our democracy and destroyed trillions of dollars of ordinary Americans’ wealth. So though I’m only grading one subject, it’s not a gotcha quiz. Nor does it say anything about Justice’s performance in those other areas.

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10 Responses

  1. UPDATE FROM THE NEW CENTURY MORTGAGE AND HOME123 CORPORATION BANKRUPTCY COURT OMNIBUS HEARING THIS MORNING.

    THE JUDGE STATED VERY HEARTILY THAT THIS COURT WILL NOT BE GIVING HOUSES BACK TO HOMEOWNERS FOR FREE!
    THE ISSUE MANY ARE BRINGING TO THE ATTENTION OF THAT COURT IS THAT DUE TO ILLEGAL AND INVALID ASSIGNMENTS, THE DEEDS/LOANS REMAIN WITH THE BANKRUPTCY ESTATE AND NEVER WERE TRANSFERRED ANYWHERES.

    THE JUDGE, THE NEW CENTURY LIQUIDATING TRUST AND THE BKR TRUSTEE’S COUNSELS CONTINUE TO TRY TO SWEEP UNDER THE CARPET THE FACT THAT THERE IS NOTARY FRAUD AND OTHER EGREGIOUS AND ILLEGAL ACTS THAT HAVE OCCURRED SINCE THE BANKRUPTCY WAS FILED ON 4-2-2007.

    iT’S ALMOST LIKE THEY ARE SAYING ‘NOT OUR PROBLEM’. COMPLETE DENIAL.

    IN COURT TODAY, THE BANKRUPTCY TRUSTEE’S COUNSEL SAID ESSENTIALLY ‘NO THERE IS NOT AN INVESTIGATION’ WHEN ONE OF THE PRO SE’S STATED THERE IS AN ONGOING INVESTIGATION BY THE DA, THE STATE AG AND THE FBI INTO THE ILLEGAL NOTARY ACTS BY THE NEW CENTURY AND HOME123 EMPLOYEE-NOTARIES AND OTHER EMPLOYEES. I MEAN LIKE THE DA HAS CALLED ONE PRO SE TWICE ABOUT THE INVESTIGATION AND IN A TOTALLY DIFFERENT STATE, THE PRO SE HAS MET WITH THE SHERIFF AND THE DA AND THE MATTER IS NOW REFERRED TO THE FBI AND THE STATE AG.

    IN REALITY, THERE ARE INVESTIGATION(S). AND IT IS MY OPINION THAT THE BANKRUPTCY JUDGE HAS NOT BEEN READING THE PRO SE’S PLEADINGS NOR JUDICIAL NOTICES.

    THE JUDGE, BY AN ORDER, ALLOWED NEW CENTURY MORTGAGE AND HOME123 CORPORATION TO CONTINUE TO DO BUSINESS AS USUAL SHORTLY AFTER THEY FILED FOR THEIR BANKRUPTCY. MANY HAVE SAID, BUT THEY ARE NOT SUPPOSED TO BE DOING ILLEGAL BUSINESS AS USUAL!

    AGAIN, THE ISSUE CAME UP ABOUT THE LACK OF A BORROWER (AKA HOMEOWNER, PRO SE) COMMITTEE. AND THE NCLT TRUST IS OPPOSED AS IT MIGHT COST SOME MONEY. HOWEVER, THE NCLT TRUST ATTORNEYS ARE GETTING 100K-300k PER MONTH TO REPRESENT THE BRK TRUSTEE.

    ISN’T THERE AT LEAST ONE REALLY GOOD BKR ATTORNEY WHO’D JUMP IN AND WORK FOR 10-15 PRO SE HOMEOWNERS UP THERE?

    THE NCLT TRUST STILL HAS ABOUT $30 MILLION IN CASH AVAILABLE!!

  2. What Surplus?

    Surplus = Total Asset – Total Debt.

    he may have left with an annual operating surplus

    Total Revenue Collection – Total Current Liabilities = operating surplus

    The debt owed was still trillions and Clinton did not add any new debt. He also did not account for the trillions in unfunded ss and medicaid liability, underfunded pensions etc.. but neither do any of them. They just move forward blaming the last guy.

  3. @Alessandro,

    True: Clinton did leave office with surpluses in the coffers. True, it’s been unheard of for decades. I don’t really know enough (I wasn’t a voter in 1992… A foreigner, you see…) but I recall clearly what I predicted with Nafta. That part came to pass: we’ve been hemorraging jobs eversince!

    That said, Obama has been a major disappointment: his health insurance plan sucks (not even a universal system in there), he hasn’t touched WS, withdrawal of our troops from Iraq was already scheduled for 2011 when we went in, all in all: nothing to write home about. In fact, no more “home” to write to… And to top it off, the only republican who could have been an improvement over the pack of loonies currently running just pulled out and endorsed… Romney!!!

    At this point, anyone but will do.

  4. They are waiting to announce foreclosure freeze until right before elections, so the current confederate in office gets the: I’m sympathetic to your needs speech out, and gets a bump in polls. After the election, regardless of who is elected, it will be right back too:
    Homeowners are taking advantage and living in a house free because of paperwork problems, not fraud, distribution chain issues. I can see it already;
    “America needs to rebuild and put an end to the constant drag on the economy, which s the continued housing mess”. My new housing Czar has told this Congress that their is a major chance that this great Nation can slip back into recession without immediate action”. ” We have worked with the nations lenders and distressed homeowners will be provided a relocation package to help make that transition, which is also a transition toward growing this Country and creating jobs and economic activity again”.
    “One last thing my fellow Americans, please do not look behind the curtain because the taxpayer will be absorbing all the private banking losses and nobody is going to jail”. “So, please don’t ask again about indictments and how much this will cost the American Taxpayer”
    “In closing America, I spoke with Jamie Dimon, a controlling board member at the Federal Reserve Corp., and he informed me that JP Morgan Chase Bank, N.A., and all the rest of the reserve system banks have tremendous exposure to the EU default, so the taxpayer must understand that we will have to lend another 500 billion to foreign banks because their own sovereign state will not”.
    “Now I do not like this anymore than you folks, but.. errr – hey bernanke, what was that term you told me to use.. oh yeah.. hold on America. OK, yes America I do not like this anymore than you, but the systemic risk to the global banking system requires us to throw our constitution in the garbage and let these guys continue to socialize private banking losses”. “We are placing new regulation on derivatives to avoid this unforeseen risk from ever happening again”
    “I feel your pain, but this is in the best interest of the entire planet” “The moving truck will be by next week”
    Camera screens to small pan of an American flag, President leaves the set, trying to hold back his laughs. 57,000 news commentators take over to divide us from one another. Americans suffer until eventual dollar devaluation. End Movie, run credits!

  5. Enraged.

    Bill Clinton vetoed the original Glass Stegall act. Congress changed it, then approved it by a 90% mark so a veto again would have been pointless.

    I hope you realize that Bill Clinton has been the only president in the past 80 years that lowered the yearly budget deficit each and every year he was in office. No other president has done that in the past 80 years.

    The Clintons were hated by some because they were willing to use good ideas from both sides of the political spectrum. This incensed neo con republicans and ultra progressive democrats.

    And yet, Bill Clinton is also the ONLY PRESIDENT in the past 80 years who left office more popular than when he went in.

    Hillary Clinton’s campaign was true grass roots. She also got more primary delegates than Barack Obama, even without counting two of the biggest states that supported her, Michigan and Florida.

    Obama won because move on dot org hit the ground in the mainly republican stronghold states that only held caucuses. The caucus results were NEVER aligned with voter polls.

    2008 was a democratic fraud sham and I think it’s pretty obvious why wall street wanted Obama over Hillary Clinton. Obama pretends to do the right thing, then dwaddles and does a lot less then he promised.

    Why didn’t Obama select Warren in the same manner he selected Cordray, during a senate break? Because it’s somewhat of a scam in which Obama tries to do the right thing, then settles for much much less.

  6. @Alessandro,

    Whether you see it or not, the Clintons were as much a part of the problem as Reagan. They’ve been as much a part of the bank deregulation and the loss of jobs (NAFTA) as any republican since Nixon.

    I didn’t trust her then. I don’t trust her now.

    Who’s left? No one has stepped up to the plate with any solution… At this juncture, I don’t believe that any known politician has what it takes. Sad but true.

  7. MERS, the worst case scenario…

    http://www.nakedcapitalism.com/2012/01/mers-the-law-and-the-state.html

  8. There is a reason in 2008 that higher up democrats like Pelosi and Reid and certain well known and financially well off democrats like Winfrey and Huffington, plus celebs like Shriver went for Obama, instead of Hillary Clinton.

    You can blame them for the current foreclosure mess as Hillary Clinton was going to do something much more proactive about the situation than Obama has.

  9. When will the AG’s go after the “in-house” trustee sales operations owned by the servicer-lenderpretender?

    Why is it ok for an employee of the trustee company on the deed of trust to sign as a CEO of the servicer now fraudulently claiming to be a lender and beneficiary and then assign beneficial interest to anyone much less a trust that closed years ago that cannot accept mortgages in default and cannot and would not accept them at all by all kinds of laws and rules? If the trust owns it they don’t need a late date assignment (assignment means purchase for value doesn’t it – was it already done or not?) by anyone. And why is it ok for the trustee on the deed of trust or the non- beneficiary servicer to appear in court to defend the interests of the “beneficiary” and even go so far as to pretend they are authorized to represent the beneficiary when they have absolutely no relationship and even no knowledge of the beneficiary trust and hold that interest (the only secured interest) to be irrelevant)?

    From Cirilo E.Cruz, Plaintiff, v. Aurora Loan Services LLC et al ., August 11, 2011:

    “The trustee is bound by no fiduciary duties, and has no duty to defend the rights of the beneficiary, or authority to appear in the suit in its behalf. Id. at 462. The trustee of a deed of trust serves merely as a common agent of both parties. Vournas v. Fidelity Nat. Tit. Ins. Co. 73 Cal. App. 4th 668, 677 (1999). Because the beneficiary’s economic interests are threatened when the existence or priority of the deed of trust is challenged, it is the real party in interest under a deed of trust. Monterey, 49 Cal. 3d at 461 (trust deed beneficiary must be named in a mechanics lien foreclosure suit since trustee does not protect its interests). See also Diamond Heights Village Assn., Inc. v. Financial Freedom Senior Funding Corp., 196 Cal. App. 4th 290, 304 (2011) (beneficiary is the real party in interest in a fraudulent conveyance action to void the security).”

  10. Barry Fagan v Wells Fargo Re Two Expert Opinion Declarations Concerning Wells Fargo Document Fraud & Robosigning of Rhonda Bernard Thomas Signatures

    http://www.scribd.com/doc/77146474/Barry-Fagan-v-Wells-Fargo-Re-Two-Expert-Opinion-Declarations-Concerning-Wells-Fargo-Document-Fraud-Robosigning-of-Rhonda-Bernard-Thomas-Signatures

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