The Open Dimension

Commentary on social issues; politics; religion and spirituality

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Location: Laguna Hills, California, United States

I am a semi-retired psychotherapist/psychiatric social worker and certified hypnotherapist. Originally a practicing attorney, I changed careers during the 1980's. My interests include history, constitutional law, Hindustani classical music, yoga, meditation and spirituality.

Monday, September 29, 2014

The Segarra tapes: Why the Obama administration has not prosecuted even one crooked banker.

( ), September 27, 2014

Roger Malcolm Mitchell

Back in 2012, we published, “The end of private banking: Why the federal government should own all banks.”The title says it all.

I was reminded of that article when I read this one:
The Secret Goldman Sachs Tapes

SEPT 26, 2014, By Michael Lewis

(A) reporter, Jake Bernstein, has obtained 46 hours of tape recordings, made secretly by a Federal Reserve employee (Carmen Segarra), of conversations within the Fed, and between the Fed and Goldman Sachs.

First, a bit of background. After the 2008 financial crisis, the New York Fed commissioned a study of itself. This study, which the Fed also intended to keep to itself, set out to understand why the Fed hadn’t spotted the insane and destructive behavior inside the big banks, and stopped it before it got out of control.
(The results:) The Fed failed to regulate the banks because bank regulators were discouraged from (doing their jobs.

In early 2012, Carmen Segarra was assigned to regulate Goldman Sachs, and so was installed inside Goldman. (She found that) Fed employees would defer to the Goldman people; if one of the Goldman people said something revealing or even alarming, the other Fed employees in the meeting would either ignore or downplay it.

For instance, in one meeting a Goldman employee expressed the view that “once clients are wealthy enough certain consumer laws don’t apply to them.” After that meeting, Segarra turned to a fellow Fed regulator and said how surprised she was by that statement — to which the regulator replied, “You didn’t hear that.”
(Before you hear the tape recordings:)

1. You sort of knew that the regulators were more or less controlled by the banks. Now you know.

2. The only reason you know is that one woman, Carmen Segarra, has been brave enough to fight the system. She has paid a great price to inform us all of the obvious. She has lost her job, undermined her career, and will no doubt also endure a lifetime of lawsuits and slander.

So what are you going to do about it? At this moment the Fed is probably telling itself that, like the financial crisis, this, too, will blow over. It shouldn’t.
By now, you may be asking yourself why the Fed employees were so afraid to point out criminal wrongdoing by wealthy bankers, when that is exactly what they are paid to do.
Criminality often starts at the top — in this case, first with President Obama and then with U.S. Attorney General Eric Holder.

There are the two reasons why criminal banksters were not sent to jail, and not only still have their jobs, but received big bonuses. Here is the more benign of the two. We’ll call it the “Holder’s good intentions error”:
How Eric Holder Failed the Economy
In 2002 testing of Enron Corp. auditor Arthur Andersen LLP caused the company to fold, and thousands of innocent people lost their jobs.

Fearing a repeat of the Arthur Andersen debacle, prosecutors were careful to leave companies standing, even as they extracted tens of billions of dollars from banks for transgressions ranging from mortgage-related fraud to laundering money for drug cartels.
Under U.S. Attorney General Holder’s leadership, prosecutors lost sight of what mattered most: holding individuals, not companies, accountable for crimes. Of 21 separate actions against major financial companies from 2009 through May 2014, only eight were accompanied by charges against individuals, and none of them were high-level executives.

Failing to pursue individuals has sent executives the message that if they commit crimes, the worst that can happen is they’ll lose their jobs and shareholders will have to pay up.
Holder was so concerned about hurting innocent people, he didn’t go after the criminals.
Stupid? Yes. Criminal? Maybe. But give the man the benefit of the doubt, and call it “misguided.”
There is, however, a more sinister reason why no banker has gone to jail. Political contributions, aka “bribery.” For example:
Bank of America’s Political Contributions
Bank of America has spend $26.3 million on political contributions since 1989.
Despite tilting heavily toward Barack Obama in 2008, it reversed itself in 2012 on the heels of heightened regulatory scrutiny.
Translation: “We bought Obama but he didn’t stay as bought as he promised. He started to look at us, so we decided to buy the other guy. Too bad he didn’t get elected.”
And then there was:
The Goldman Sachs Group, Inc.
> Total contributions (2012-ongoing): $4,769,994
> Donations to Democratic Party: 29%; Donations to Republican Party: 71%
> Spending on lobbying (2012-ongoing): $1,380,000
Of course, these totals only represent corporate donations, not the millions in private donations from bank executives and other employees.

So the question is, how hard are you going to chase a criminal who gives millions to your political campaign?

And that amount of bribery is why the Obama administration has not prosecuted a single bankster. The money flow simply is too great.

Large, privately owned banks are a curse. Their size, their control over vast amounts of money, combined with their profit motive, makes them ungovernable and their criminality inevitable.
And that is why the federal government should own all banks, especially large banks..

Remove the profit motive and you remove the bribery.

Meanwhile, we wait with great anticipation, for the mainstream media (owned by the rich) to pick up on the Segarra tapes.