Saturday, February 26, 2011

"Why Isn’t Wall Street in Jail?"

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The below re-posted [from here]

Matt Taibbi: "Why Isn’t Wall Street in Jail?" (Complete Interview)

Nobody goes to jail,” "writes Matt Taibbi in his the new issue of Rolling Stone magazine. “This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth." Here is the complete interview from which we played an excerpt on our Feb. 22 show. Taibbi explains how the American people have been defrauded by Wall Street investors and how the financial crisis is connected to the situations in states such as Wisconsin and Ohio.

AMY GOODMAN: We turn now to Matt Taibbi. But before I do, let me read a sentence from a recent paper by Dean Baker, who concludes, "Most of the pension shortfall using the current methodology is attributable to the plunge in the stock market in the years 2007-2009. If pension funds had earned returns just equal to the interest rate on 30-year Treasury bonds in the three years since 2007, their assets would be more than $850 billion greater than they are today."

And this—he quotes David Cay Johnston of "The average Wisconsin pension is $24,500 a year, which is hardly lavish. But what is stunning is that 15% of the money contributed to the fund each year is going to Wall Street in fees," which is why we now ask the question, "Why isn’t Wall Street in jail?"

Actually, that’s the title of reporter Matt Taibbi’s new article for Rolling Stone magazine. In the piece, Matt writes, quote, "Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth."

Well, I interviewed Matt Taibbi on Sunday about his report, "Why Isn’t Wall Street in Jail?"

AMY GOODMAN: Welcome to Democracy Now!, Matt Taibbi.

MATT TAIBBI: Thanks for having me back.

AMY GOODMAN: Well, we’re seeing these mass protests in Madison, Wisconsin, and there’s other protests that are happening. We see the working poor, the middle class, under tremendous stress, and yet they’re the ones who are being hit hardest, not Wall Street. Explain what has happened. Why isn’t Wall Street in jail?

MATT TAIBBI: Well, it’s an incredible story. I mean, just to back up and provide some context, I think, for this Wisconsin thing, and especially for the Ohio thing, given what their governor used to do for a living—


MATT TAIBBI: Well, he was an employee for Lehman Brothers, and he was—

AMY GOODMAN: This is Governor Kasich.

MATT TAIBBI: Governor Kasich, yeah, and he was intimately involved with selling—getting the state of Ohio’s pension fund to invest in Lehman Brothers and buy mortgage-backed securities. And of course they lost all that money. And this, broadly, was really what the mortgage bubble and the financial crisis was all about. It was essentially a gigantic criminal fraud scheme where all the banks were taking mismarked mortgage-backed securities, very, very dangerous, toxic subprime loans, they were chopping them up and then packaging them as AAA-rated investments, and then selling them to state pension funds, to insurance companies, to Chinese banks and Dutch banks and Icelandic banks. And, of course, these things were blowing up, and all those funds were going broke. But what they’re doing now is they’re blaming the people who were collecting these pensions—they’re blaming the workers, they’re blaming the firemen, they’re blaming the policemen—whereas, in reality, they were actually the victims of this fraud scheme. And the only reason that people aren’t angrier about this, I think, is because they don’t really understand what happened. If these were car companies that had sold a trillion dollars’ worth of defective cars to the citizens of the United States, there would be riots right now. But these were mortgage-backed securities, it’s complicated, people don’t understand it, and they’re only now, I think, beginning to realize that they were defrauded.

AMY GOODMAN: Explain what the crime is. Who has profited? Who should be on trial?

MATT TAIBBI: Well, you know, again, the broad crime in all of this was just fraud. They were taking—these banks were taking, again, these subprime mortgages, and they would have these billion-dollar pools of mortgages where, in some cases, 70 or 80 percent of the loans were to people who had no identification or no jobs or who had put no money down into the mortgage. And then they were taking these loans and applying this phony baloney, hocus pocus math, these derivative instruments, and turning them into AAA-rated investments. And they were marketing, again, these securities to, say, state pension funds as AAA-rated investments, which means credit risk almost zero. So they took the stuff that they knew was very, very risky and very, very likely to default, and they were going to the state of Wisconsin, the state of Ohio, the state of New York, and saying, "Hey, this is almost as safe as—or in fact, it is as safe as United States Treasury bonds. You should buy this, and you’ll earn a little bit more than you’ll earn if you buy T-bills." The reality was, they were just taking absolutely worthless stuff and sticking it with these people and then fleeing the scene. This is no different than drug dealers who take a bag of oregano and sell it to you as, you know, a pound of weed. That’s exactly the same scam.

AMY GOODMAN: Talk about John Mack and Gary Aguirre.

MATT TAIBBI: This is an amazing story, just because it demonstrates how far above the law these people are. John Mack is one of the most powerful people on Wall Street. Right now he’s the chairman of the board at Morgan Stanley. He used to be their CEO. Way back in 2001, when he was sort of between jobs, he had left Morgan Stanley and was interviewing with Credit Suisse First Boston. He was involved in a case that was investigated by the SEC. A hedge fund called Pequot made a very suspicious investment into a company called Heller Capital, which was about to be acquired by General Electric. This hedge fund bought, you know, an enormous amount of Heller stock three weeks before this acquisition by GE of Heller. Credit Suisse First Boston was Heller’s investment banker. John Mack was interviewing for the job with Credit Suisse a few days before Pequot made its purchases, and he was in direct contact with the hedge fund guy who made those purchases. Under any normal circumstances, he would be targeted for investigation by the SEC.

AMY GOODMAN: And his name was?

MATT TAIBBI: The investigator’s name was Gary Aguirre. And Aguirre—

AMY GOODMAN: And the guy buying up?

MATT TAIBBI: Art Samberg was the name of this hedge fund manager. He was a big star on Wall Street. In fact, there are articles about, you know, how does Art Samberg manage his amazing returns year after year? Well, you know, this was sort of a clue as to how.

Anyway, this SEC investigator named Gary Aguirre wanted permission to go interview John Mack, and his superiors at the SEC told him—they basically told him that he couldn’t, and the reason they said was because Mack has, quote-unquote, "powerful political connections." At the time, he was a Ranger, one of Bush’s fundraising Rangers. He would later become a major fundraiser for Hillary Clinton. So he played both sides of the fence. This, again, is very typical of Wall Street. And Aguirre, when he pressed the matter, he was fired by the SEC.

AMY GOODMAN: And talk about the high-level people involved, like Mary Jo White.

MATT TAIBBI: Mary Jo White was the former U.S. attorney in the Southern District of New York. She was basically Rudy Giuliani for a few years. This is the top cop on Wall Street, basically. And she, at the time, was representing Morgan Stanley for the defense firm Debevoise & Plimpton. Again, this is what all these investigators do. When you leave a high-ranking position from the SEC or the U.S. attorney’s office, they all jump to these lucrative partnerships at corporate defense firms, where they make, you know, $2, $3, $4 million a year. So the incentives to really prosecute these guys are all backwards. And they all leave, and they take these jobs. Mary Jo White had left the U.S. attorney’s office. She’s representing Debevoise & Plimpton. She intercedes on behalf of Mack. And one of the SEC officials that she was in contact with, Paul Berger, Aguirre’s superior, ended up working for Debevoise & Plimpton a year later. And this is a very typical situation.

AMY GOODMAN: And Aguirre is fired.

MATT TAIBBI: He’s fired. He was—

AMY GOODMAN: He’s told to investigate, and then he starts to seriously investigate, and he’s fired.

MATT TAIBBI: Right. They gave him—two days after he started work at the SEC, one of his superiors handed him Pequot, just generally. They said, you know, "Look at this company." Within a year or so, he was onto the Samberg case, and he had targeted Mack as a clear suspect in the case. He had overwhelming evidence. I mean, there were emails, there was documentary evidence. They put Martha Stewart in jail for much, much less than they had on Mack.

AMY GOODMAN: What did they have on Mack?

MATT TAIBBI: Well, again, they had emails demonstrating that Mack had been in touch by telephone with Samberg. They had the fact that Samberg had a personal relationship with Mack. They knew that the company had never had any meetings about this Heller Capital. It was—Aguirre described it to me as though Samberg awoke one morning, and God Himself told him to start buying shares of Heller Capital. And they had the fact that Mack was clearly privy to the inside information. He had had this meeting with Credit Suisse. He would later say that he destroyed his notes of his meeting with Credit Suisse on the way home from Switzerland, after that meeting. But clearly, he was—under any normal circumstances, he would have been targeted, would have been interviewed, but he was not.

AMY GOODMAN: So, Pequot is bought up?

MATT TAIBBI: Right. Well, no, Heller was bought.

AMY GOODMAN: Heller was bought up.

MATT TAIBBI: By GE, of course.

AMY GOODMAN: By GE. And how much does Samberg make? How much does—

MATT TAIBBI: He made—Samberg made $18 million on that trade. Another important part of the story is that Mack—Samberg cut Mack into a different deal that Pequot was doing, and as a result of that deal, Mack made about $10 million. So, all the dots connect. You know, Mack comes back from Switzerland. Samberg starts buying Heller. GE acquires Heller. Samberg makes $18 million. Mack gets cut in for $10 million. This is the outlines of a classic insider trading case.

AMY GOODMAN: So you think Mack should be in jail.

MATT TAIBBI: Well, he should—absolutely he should have been on trial. I mean, you know, it’s not for me to say; I’m not a jury. But clearly, they have prosecuted on far less evidence before.

AMY GOODMAN: Matt Taibbi, talk about Dick Fuld.

MATT TAIBBI: Well, Richard Fuld, whose nickname on Wall Street was "The Gorilla," he was the head of Lehman Brothers. He was a much feared and ferocious character on Wall Street. And Fuld, again, he oversaw Lehman during this period when it was going through its death spiral, and there were a number of irregularities about Fuld that were extremely interesting.

I talked to a former Lehman Brothers lawyer named Oliver Budde, who was responsible for vetting some of Lehman’s public disclosures, and Budde discovered that Lehman had been hiding about $250 million worth of Fuld’s income from the SEC in its public disclosures. He, too, ended up having to leave his job because he was told that he couldn’t do his job. He protested the way that Lehman was doing its disclosures. He got kicked out. He went to the SEC in 2008, six months before its collapse. He gave them a huge packet of information about what Fuld was doing, and he was completely blown off by the SEC. He tried repeatedly over a period of six months to get them interested in the case. They said no.

When Fuld later testified before Congress, after the company’s collapse, he told Congress that he had only earned somewhere in the region of $350 million during his tenure at Lehman. Budde knew that the real number was more like $520 million. He told the committee members in Congress that Fuld had probably lied while he was testifying. And they weren’t interested in that, either. So here we have a situation where Roger Clemens is being investigated—you know, the state is trying to put Roger Clemens, baseball star, in jail for lying to Congress, but Dick Fuld apparently is not worth going after.

AMY GOODMAN: A man recently named the worst CEO of all time—


AMY GOODMAN:—by Portfolio magazine.

MATT TAIBBI: Absolutely. Again, Fuld presided over Lehman during this period where it was engaged in all sorts of irregularities. I mean, aside from this matter of hiding his own personal income, Lehman, during the last few years of its existence, was engaged in these very, very shady transactions called the "Repo 105" transactions. This was a kind of Enron-esque accounting where they were essentially borrowing tens of billions of dollars at the end of every quarter and then booking all that money as revenue. So, if you were an investor in Lehman Brothers and you’re looking at their bottom line, you’re thinking, "Hey, they’re making a lot of money. They’re doing great." In fact, those were all loans, and after the quarter was over they were repaying that money. And it was guys like Fuld who were cashing out while everybody else was staying in.

AMY GOODMAN: Oliver Budde, who was he?

MATT TAIBBI: He was Lehman’s lawyer. He was the guy who uncovered those irregularities about Fuld’s reporting income, and he was the guy who went to the SEC and was told that, you know, they weren’t interested in his story.

AMY GOODMAN: No regulation?

MATT TAIBBI: Well, no. I mean, clearly—you know, the interesting thing about the Fuld case is that Lehman had been taking advantage of a loophole in the SEC’s rules in the early part of the 2000s to misreport Fuld’s income. But they actually caught themselves. They noticed that this practice was very widespread, and they created a new rule specifically to target this kind of income hiding that Fuld was doing. But they created the rule, but they didn’t do anything about it. They had clear cases of this rule being misused, and they chose not to do anything about it. So, even when we do have regulation on Wall Street, the laws are really often meaningless, because you need someone who has the will to prosecute, the will to investigate, to make them real.

AMY GOODMAN: Has anyone gone to jail?

MATT TAIBBI: Well, Bernie Madoff. And clearly, he’s the only person in this whole tableau—

AMY GOODMAN: Always called the greatest swindle of all time.

MATT TAIBBI: Right. But Bernie Madoff, honestly, compared to all these other guys, he’s really small potatoes. He’s also not really representative of what went on on Wall Street during this period. He’s a garden variety Ponzi scheme artist. Of course, he did it on a much bigger scale than most Ponzi scheme artists, but this is a crime that could have happened in the '20s, the ’30s, the ’40s. It had nothing to do with this incredibly sophisticated, complex criminal fraud scheme involving, you know, the mortgage bubble and the sale of these phony baloney mortgage-backed securities. Madoff had nothing to do with that. He was just a garden variety criminal. And this is exactly the kind of case that the SEC and the Justice Department do prosecute: these outliers, these guys who are not part of the top echelon executives. And they make these cases, and they say, "Here's evidence we’re doing our job." The reality is very different.

AMY GOODMAN: So, talk, Matt Taibbi, about what are the repercussions of what happened. What did the 2008 crash mean?

MATT TAIBBI: Well, it was—you know, this was the collapse of a giant bubble scheme. You know, when they did this, when they pumped the whole country full of these defective cars, which were these defective mortgages, it created a very, very dangerous situation for the entire country. They ended up essentially bankrupting or fatally wounding pension funds and insurance companies and banks all over the country. And so, now we’re all paying for those phony scams.

But the other amazing thing that they did is, you know, the banks, when they flooded the market with these phony securities, some of them were smart enough to realize that they were eventually going to blow, so they started betting against them. They went to companies like AIG, and they took out trillions of dollars of credit default swaps and pseudo-insurance policies on these mortgages. When they all blew up, you know, it blew up some of these companies, like AIG. And that’s what the bailout was really all about. The bailout wasn’t really to pay off real losses in these mortgages. It was really to pay off the bets on these mortgages. So, not only did they flood the market with a trillion dollars of defective merchandise, they got the United States taxpayer to pony up $5, $6, $7 trillion worth of bailout money to pay off their bets on all this stuff.

AMY GOODMAN: Which brings in the Obama administration. You talk about a lot of this happening under President Bush, but talk about what the Obama administration, what Geithner—talk about also Alan Greenspan, through the Bush years.

MATT TAIBBI: Right. Well, the most important thing to get from the Obama administration is that its economic policy represented absolute continuity with the policy of the previous administration. Timothy Geithner was the principal architect of Bush’s bailouts, and he was retained. Ben Bernanke, who was the head of the Fed under Bush, stayed on under Obama.

And they essentially continued the same bailout policy, which, again, was essentially to tell Wall Street that we’re going to make you whole again. You know, after they flooded the entire international economy with all these toxic debt instruments, their policy was to get Wall Street well again, and ostensibly they were supposed to reinvest in the economy and put people back to work. But instead, they just kept the money. And, I mean, they literally went from being completely insolvent to, you know, making $150 billion bonus pools every year, and that money is all public money. It’s pure bailout gift from the taxpayer.

AMY GOODMAN: Is Obama doing this because he’s got to raise a billion dollars in 2012 for the presidential race, and he’s going to turn to Wall Street for this?

MATT TAIBBI: Well, clearly. You know, look, Barack Obama’s number one private campaign contributor was Goldman Sachs. He took more money from Wall Street than any other presidential candidate in history. He was heavily influenced by Wall Street guys. When he was elected, he immediately put Citigroup executives in charge of his economic transition team. I remember when I was covering his campaign how he promised never to bring a registered lobbyist into his cabinet. And one of the first things he did was put Mark Patterson, Goldman Sachs’s lobbyist, in the number two job at the Treasury. He’s got a JPMorgan Chase executive, who has $8 million in Chase stock, as the chief of staff right now. He’s been incredibly friendly to Wall Street. These guys have remained the architects of his economic policy.

AMY GOODMAN: And Jeffrey Immelt, head of GE?

MATT TAIBBI: Well, yeah. I mean, obviously he was a key player, as well. Again, its continuity with the previous administration is the key thing to focus on.

AMY GOODMAN: Alan Greenspan?

MATT TAIBBI: Well, Greenspan—I think what people don’t understand about the Fed is what an important role the Fed plays in this entire mess. Going back, you know, 20, 25 years, every time Wall Street gets in a lot of trouble, the Fed has been there to bail them out. They even had a term for it on Wall Street called the "Greenspan Put," which essentially meant that every time the banks blew up a speculative bubble, they could go back to the Fed and borrow money at zero or one or two percent, and then start the game all over again.

After the crash in 2008, interest rates were slashed to basically nothing. The banks could go to the Fed and get money for free, and then they’re out lending it to us at five, six, seven—I mean, how much is your interest on your credit cards? It’s 15, 20 percent. It’s almost impossible not to make money in banking if your cost of capital is zero. That’s what banking is all about. And that’s what the Fed has done. It’s provided a massive subsidy system for the banks on Wall Street.

AMY GOODMAN: You say in your article that the justice system has actually evolved into a highly effective mechanism for protecting financial criminals, not just not prosecuting them, but protecting them.

MATT TAIBBI: Right. Well, one of the things that I found out when I was interviewing former SEC officials and whistleblowers, people who had been involved in some of these cases, is, you know, when you look at the revolving door situation with all these—the Mary Jo Whites and the Gary Lynches and the Linda Thompsons, these former high-ranking financial cops who leave government service and they go to work in these millionaire partnerships on Wall Street, it creates this collegial atmosphere where it’s just a few—a small group of lawyers who all know each other, and they’re in this constant merry-go-round, from government, back to private service, back to government again, and they’re really in this—it’s far too collegial.

There’s a scene in my story where the current head of the SEC enforcement, Robert Khuzami, is giving a speech to all these lawyers, and he’s saying, you know, "We have a new policy now where if you’re a defendant or if you’re a company that’s being investigated, you can come to the SEC, and we will get you answers as to whether or not the Department of Justice has a criminal interest in your case." So, essentially, the SEC is now acting as a middleman for these companies, so they can go and find out whether they’re going to be criminally prosecuted. Then, once they get that information, they can make a decision about whether or not to settle financially with the SEC. And they pay a settlement. Nobody gets criminally prosecuted. No individuals ever get fined. They pay these fines, and they almost always have a little section in there that says that they do not admit wrongdoing. So, they don’t even have to say they’re sorry, essentially. These companies go and they pay their fines. No individuals have to suffer at all. And it’s all done in a very collegial way.

AMY GOODMAN: You suggest in your piece that Bernie Madoff went to jail because it was rich people who were the victims.

MATT TAIBBI: Absolutely. Every single former investigator or current investigator that I talked to said the same thing: Madoff went to jail because the wrong people suffered. You know, it was famous actors. It was, you know, the glitterati in New York. If these were teachers and firemen and all the usual suspects—you know, look at the—we have a million people in foreclosure in this country right now, and a lot of them are there because of predatory lending and because of this fraud scheme, but there are no criminal prosecutions. I think that’s the reality now, is that we don’t see anybody being criminally targeted unless their victims were powerful people themselves.

AMY GOODMAN: Talk about Lynn Turner, the former chief accountant for the SEC, the Securities and Exchange Commission.

MATT TAIBBI: Yeah, Lynn Turner was the guy that I talked to, the former chief accountant—the chief accountant’s job at the SEC is actually an investigatory position. What they do is they look at disclosure violations, which means, you know, when companies issue their SEC quarterly reports, they have to make sure that everything that they say in those reports are accurate. That’s the chief accountant’s job. And Turner told me that, you know, that was his job, and in his experience, he saw case after case in which they had good evidence against companies that were involved in very shady dealings, and these cases were either slowed down or not pursued at all.

He gave me an example, you know, the Rite Aid case, which of course turned into—there were many cases like Rite Aid, that, you know, they had this case years before the Enron case blew up. They maybe could have done something about Enron if they had proceeded fast enough.

AMY GOODMAN: And the Rite Aid case was?

MATT TAIBBI: Well, Rite Aid was a company that was hiding billions of dollars in losses. It’s similar to the Lehman Brothers situation. They were trying to make their bottom line look better for shareholders, so they created, you know, these little cookie jar companies to hide their losses in. This is very similar to what Enron was doing, very similar to what WorldCom was doing. They had plenty of evidence on this case, but the case went nowhere for seven, eight years. And this is the typical MO of the SEC. They just do not act fast enough.

AMY GOODMAN: You mention that before the corruption starts, the state is at a disadvantage because policing Wall Street requires serious intellectual firepower, and the banks seize a huge advantage from the start by hiring away the top talent.

MATT TAIBBI: Yeah, you know, one lawyer I talked to put it to me this way. He said everybody knows that the top 80 percent of all the graduating classes of all the best law schools, they go to Wall Street. They go to these corporate defense firms where they get the real money-making jobs. The bottom 20 percent, he says, go to the SEC. That’s the way this works. And, you know, the way he described it, he says, "It’s just such a mismatch, it’s not even funny." And even that 20 percent, of course, they get roped into the revolving door situation, so if any talent rises from that pool into positions of responsibility, they get lured away by the million-dollar partnerships.

So what your left is—you know, not to insult the people who work at the SEC, but clearly, the very best and brightest lawyers are working for these banks, where they continually come up with these very fiendish and almost brilliant defenses for the schemes that their companies are involved with. They always find a way to claim that what we did was legal, and they come up with these elaborate justifications. And some of these lawyers are really overwhelmed by these justifications, and they end up, you know, not having the gumption to prosecute or move forward with cases.

AMY GOODMAN: You think of the thousands of people who have been deported in the last years?

MATT TAIBBI: Three hundred and ninety-three thousand last year.

AMY GOODMAN: You think of the people who have gone to prison and what they’ve gone to prison for.

MATT TAIBBI: Right, right. You know, it’s incredible. I mean, there was a case in Ohio that somebody forwarded to me, where a woman, a single—a black single mother of two children, she lied about where she was living so that her two kids could get into a better school system. And the state of Ohio actually prosecuted her for fraud, and the judge in that case insisted—they sentenced her to, actually, I think it was five years in jail, but they insisted that she actually do 15 days. And the judge’s quote in that case was that if she didn’t do real jail time, that would demean the seriousness of the offense. And so, I mean, the case was ultimately commuted because of the public outcry, but this, to me, is symptomatic of what we’re dealing with here.

You have people in this country who—we have two-and-a-half million people in jail this country, you know, more than a million who are in jail for nonviolent crimes. And yet, we couldn’t find a single person on Wall Street to do even a day in jail for losing 40 percent of the world’s wealth in a criminal fraud scheme? And that tells you that we have—this goes beyond the cliché that rich people have better lawyers and they have an advantage. This is a step beyond that. This is a situation where the system is completely corrupted, and it’s true regulatory capture. The SEC and the Justice Department are essentially subsidiaries of Wall Street.

AMY GOODMAN: Finally, you mentioned Obama’s chief of staff, Bill Daley, newly appointed. What, $20 million he made last year, mainly from Chase.

MATT TAIBBI: Right, right. I mean, it’s—

AMY GOODMAN: What about the media coverage, when people are being appointed, when these deals are made, talking about just basic tenets of good journalism, following the money, talking about who’s profiting where and who’s surrounding those who are making these decisions?

MATT TAIBBI: Well, it’s funny. The general narrative with political journalism in this country—and I know, because I was one of these people for a long time. I covered presidential campaigns and presidential politics. A lot of the reporters who cover the stuff don’t know a whole lot about economics, and so they believe this sort of general notion that the guys on Wall Street are the experts; if you want to have somebody running your economy, you have to go to the experts; so it makes perfect sense that the President would want to surround himself with executives from Citigroup and Goldman Sachs and JPMorgan Chase. And I think that their thinking doesn’t really get any more sophisticated than that. And so, a lot of these guys get a pass. Then people don’t really look at what these companies have been up to, what kind of influence they might have over the President’s decision making. And so, I think there isn’t very much coverage. There isn’t enough debate about what these appointments mean.

AMY GOODMAN: If you were president, what would you do right now?

MATT TAIBBI: Well, I would certainly get rid of all those guys, you know, from Wall Street. I think there needs to be a freeze on foreclosures. I mean, there’s all kinds of things that need to be done. But the most important thing is we have to, you know, get the right people into bodies like the SEC and the Justice Department. Everybody I talked to said the same thing. The existing laws we have, you know, they’re not perfect, but they’re probably good enough to do some real good. It’s just that we don’t have the right people in the jobs, and the will isn’t there to do these prosecutions. So, I think we’ve just got to get the right people in the right jobs.

AMY GOODMAN: Matt Taibbi, his latest piece, "Why Isn’t Wall Street in Jail?" It’s in the latest issue of Rolling Stone magazine. Thanks so much.

MATT TAIBBI: Thank you, Amy.

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Former Connecticut Senator Chris Dodd was on the banking committee. He allegedly took bribes from banksters while "regulating" banks. If so, why hasn't Dodd been handcuffed, arrested, fingerprinted, and have his mugshot taken? Why isn't that scumbag in jail?


Friday, February 25, 2011

Corporate/Bankster/Drug Lord/US Gov McCarthyism


[source of below]

PayPal’s corporate McCarthyism


Offering no explanation other than internal policy, PayPal yesterday froze the account of an organisation raising funds for Wikileaks suspect Bradley Manning. We should be concerned when a company of such size and influence chooses to adopt an overtly political stance on so controversial an issue, says Ryan Gallagher.

Yesterday the online payment company Paypal froze the account of an organisation raising money for Bradley Manning, the soldier accused of leaking confidential military documents to WikiLeaks. Since 2006 the San Francisco-based organisation, Courage to Resist, has been using Paypal to raise funds for “military objectors” who have refused to participate in the wars in Afghanistan and Iraq. The group says there were no issues, however, until supporters were recently encouraged to donate to help fund a "Stand with Bradley Manning" campaign.

Late last year, Paypal made the news after they similarly froze the account of WikiLeaks. A short statement from the company at the time said that WikiLeaks had violated its Acceptable Use Policy, and pointed to a clause stating “our payment service cannot be used for any activities that encourage, promote, facilitate or instruct others to engage in illegal activity.”

This time, according to Courage to Resist, Paypal – whose annual revenue in 2010 was $3.4bn (£2.1bn) – made no reference to any clause in its terms of service. Instead, they restricted the group’s account pending “organisational verification.” Paypal executives then asked questions about “the intended use of the funds being solicited in support of Bradley Manning” and requested details of purchases made with funds received via Paypal. Eventually, the executives concluded that the appropriate course of action was to freeze the Courage to Resist account.

They were not legally obliged to do so. Rather, the decision was taken on the basis of an “internal policy” that they refused to divulge. As a private company, Paypal are of course entitled to shut down accounts as they see fit. But it is a problem when a company of such size and influence chooses to adopt an overtly political stance on an explosive, controversial issue like Bradley Manning with little explanation.

After Paypal’s decision was publicised yesterday morning, an internet backlash ensued. Within a few hours, 10,000 people had signed a petition calling for them to reinstate the Courage to Resist account. Likely realising they had a public relations disaster on their hands, Paypal promptly obliged. “This decision had nothing to do with WikiLeaks,” they said in a statement. “We have decided to lift the temporary restriction placed on their [Courage to Resist's] account.”

Yet the implications of their initial decision remain highly significant, and had there not been a huge backlash the Courage to Resist account would still be frozen. It is a serious matter of concern that by refusing to facilitate payments to a support fund raising finances for Bradley Manning’s legal aid – albeit temporarily – Paypal participated in what equates essentially to an act of political repression.

The question is: who next? If Bradley Manning is a policy problem for Paypal, technically every person accused of a crime is at risk of having their account frozen, especially if politics is involved. A quick Google search reveals prisoner support funds for animal rights activists, G20 protestors and even former Guantanamo Bay prisoners, all using Paypal to raise money. If the company is to take issue with Manning, then surely by extension of their own logic it is only a matter of time before they clamp down on others.

There is no going back for Paypal now. By adopting what appears to have been a political stance on an issue that should be far beyond their remit as an online payment provider, they have shown themselves to be cut from the same cloth as draconian forces at the highest echelons of American power. They have engaged in what it is difficult to conceive of as anything other than a kind of corporate McCarthyism, backpedalling only after thousands of voices boomed a chorus of discontent.

Ten days ago, US Secretary of State Hilary Clinton gave a speech in which she condemned political censorship in China, Iran, Burma, Egypt, Vietnam, Cuba, Tunisia and Syria. Though as this latest revelation in the Bradley Manning saga illustrates, Clinton could do worse than look closer to home for pertinent examples of repression. “Our commitment to internet freedom is a commitment to the rights of people,” she said at the time, “and we are matching that with our actions.” In the wake of their experiences with Paypal, it is very much doubtful the Stand with Bradley Manning campaign would agree.

Ryan Gallagher is a freelance journalist based in London.

Photo: Wikipedia, Joseph McCarthy

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"If law fails, CIA will assassinate Assange"

Text with above video:
RTAmerica | Feb 25, 2011 | likes, 6 dislikes

Judge Howard Riddle, the bane of Julian Assange's existence for the past three months, has granted Sweden's extradition request. The WikiLeaks founder has already repealed the ruling, but his worst fears have been cemented: the rape charges are going to follow him for the rest of his life, perhaps even after years of repeals. Former Reagan Administration Paul Craig Roberts says there is a concerted effort to shut Assange up. If the legal attempt fails, he'll be assassinated by a CIA assassination team.

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[click here] for:

The "Japanese CIA" and Re-Militarization?

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uploaded July 9, 2009:

Madsen: 'Whistle blown on secret 9/11 unit'

Text with video:
The US government has allegedly set up a special security wing with the sole task of distancing Washington from any involvement in the 9/11 terrorist attacks.

Investigative journalist Wayne Madsen claims the group has since grown into a disproportionate counter-intelligence force, mainly targeting journalists and prosecuting whistle–blowing security officials.

According to Madsen, this group is fully operational and is called the “Q Group” of the National Security Agency and its headquarters are within the headquarters of NSA at Fort Meade, Maryland. Q Group works in close cooperation with the FBI counter intelligence officers, as well as local police department intelligence units.

Madsen insists that the group is very large and approximately 1,000 agents and informers are employed by this secret agency within the already secretive NSA.

“Under Obama there has been no effort to curtail this organization. Unfortunately, the NSA’s power is growing because the Obama administration is now giving them new powers to conduct surveillance in cyberspace, placing cyber command under the control of NSA,” said Madsen.

Thursday, February 17, 2011

The US put Blacks in Prison Policy is now for Everyone

Lawyers make money, corporations make money, towns, states, and federal government make money, organized crime makes money. It is all a vicious cycle. When African Americans got more freedoms in the 1960's, they were paid back with a policy to bust them for drugs, or any excuse possible, and then put them in prison. There are so many prisons in the US, and so much money for insiders to make, no one is safe from just ending up serving time. I did, I got a year in prison for resisting being mugged. [that story]

Convicting the ex-cons

Text with video:
RTAmerica | February 16, 2011 | likes, 4 dislikes

Ex-convict Michael Ta'Bon is back in a prison of his own making. Ta'Bon who served nearly a decade behind bars for armed robbery, says divine inspiration has led him to preach a gospel of nonviolence from a homemade outdoor jail cell in Philadelphia. Editor for the Black Agenda Glen Ford says inside America's inner cities, by the time black men reach 30 years old, 80 percent have a prison record.

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[click here] for:

The Last Word on Overpopulation

Tuesday, February 15, 2011

State Tries To Turn Back Tide Of Justice

Journalist, blogger, and Connecticut Civil Rights Attorney, Norman Pattis

The below re-posted from the Connecticut Law Tribune [source]:

Hell froze over one day last year and two men skated to freedom, set free by a judge of the Superior Court, who found that they were convicted in error and were the victims of manifest injustice. Last week, the state’s lawyers appeared before the state Supreme Court and urged the court to send the men back to prison. The state looked like the Devil on ice skates, all movement, fuss and rage, but unable to keep its balance.

Superior Court Judge Stanley Fuger ordered Ronald Taylor and George Gould set free after a habeas corpus hearing. The court concluded that the men were imprisoned for a crime the state could not proven, murder, a horrible crime for which each man was sentenced to an 80-year term. Sixteen years after being convicted, the men walked out of prison. It was an event so rare as to be perhaps unprecedented in Connecticut, where habeas relief is rarely granted.

At the original trial of the two men for the murder of a shopkeeper, the prosecution told jurors that the case “rises and falls on the testimony” of a now-recanting witness, a drug-addled regular of a police informant in New Haven. Now that she has come clean and her testimony is discredited, there was, Judge Fuger ruled, no reason to hold Messrs. Taylor and Gould. Indeed, holding them for a crime the state could not prove would be obscene.

But the state thinks otherwise. Although the state may not be able to prove that the men committed the crime of murder, it believes they should be returned to prison. Why? Because in a habeas corpus proceeding, a person attempting to prove his or her actual innocence must do more than merely prove that no reasonable jury could have convicted him. He must also show that he did not, in fact, commit the crime.

Legal standards are tricky things in the hands of skilled lawyers, and few are as skilled on their feet as Assistant State’s Attorney Michael O’Hare. He is everything a prosecutor should be: he is smart, he is honest, and he is a man of impeccable integrity. But why, I wonder, is he seeking to turn back the tide of justice in this case? Does he truly think that men victimized by a miscarriage of justice should be required to prove their innocence or return to the belly of an iron beast to die? Why this walk in Beelzebub’s shadow?

Chief Justice Chase Roberts seemed tempted by O’Hare’s argument. Oh, she assured lawyers arguing for the newly freed men, I am persuaded that there was not enough evidence to convict the men, now that I have seen the testimony of the recanting witness. But the trouble is, she suggested, that these men need now to prove their innocence.

Just how, Madame Chief, are these men to do that? Can you give an account of your whereabouts on an ordinary evening some 17 or 18 years ago? Where were you eight days prior to your birthday in 1993? Produce your alibi witnesses! Tell us with specificity where you were, what your were doing, and with whom you were when the victim here was killed. If you cannot do that, then step down from the bench, abandon justice, and join Messrs. Taylor and Gould in the despairing cell of a prison.

The state’s argument comes down to this: two men who should never have been convicted must now prove that they could not have committed the crime. Yet this proof will be impossible to provide. Hence, they should remain convicts. They should die behind bars. Finality of judgment is transformed in a flash into a dangerous fetish.

A people that cared about justice would rise up and demand the shackles intended for these men be transformed by alchemy into gold as compensation for all the wasted time spent behind bars. Judges concerned with seeing that justice was done would not rely on a doctrinal trick to destroy confidence in our courts. We await a ruling in the case of Messrs. Taylor and Gould. I shudder to what this court will do with two innocent men. •

Norm Pattis is a criminal defense lawyer and civil rights attorney in Bethany. Most days he blogs at

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Wednesday, February 09, 2011

Torture Advocate Bush facing Justice?

Excerpt from Stephen Lendman's article:

It remains so under Obama, authorized at the highest levels of government as part of America's bogus war on terror to instill fear and target suspected political opponents globally, including at home. No matter that it violates US and international law that prohibits torture at all times under all circumstances with no allowed exceptions.

Nonetheless, on September 17, 2001, Bush issued a 12 page "memorandum of notification" directive to CIA's director and National Security Council members, authorizing CIA to capture suspected terrorists and Al Qaeda members, then hold and interrogate them in offshore detention facilities. It launched his torture program by vesting CIA operatives with unprecedented lawless power. It gave them carte blanche authority to function extra-judicially by whatever methods it chose.

Numerous subsequent Bush administration memos, Executive Orders, National and Homeland Security Presidential Directives, findings, and other documents explicitly or implicitly authorized torture, including one on August 2, 2002, written by John Yoo, then White House counsel Alberto Gonzales, Jay Bybee (now a federal judge), and David Addington. It argued for letting interrogators use harsh measures amounting to torture. It said federal and international laws don't apply when dealing with Al Qaeda because of presidential authorization during wartime. It "legalized" anything in the war on terror, as well as authorizing supreme presidential power.

On March 14, 2003, the same quartet issued another memo titled: "Military Interrogation of Alien Unlawful Combatants Held Outside the United States," now called the "Torture Memo." It swept away all legal restraints, authorizing military, CIA or other US interrogators to use extreme measures amounting to torture. It also gave the president "the fullest range of protect the nation," stating he "enjoys complete discretion in the exercise of his authority in conducting operations against hostile forces."

Other administration documents reflected John Yoo's views that interrogation methods may inflict "intense pain or suffering" short of what would cause "serious physical injury so severe that death, organ failure, (loss of significant body functions), or permanent damage" may result.

It was inquisitional ruthlessness, including sleep deprivation, prolonged isolation, waterboarding, painful stress positions, sensory deprivation or overload, beatings, electric shocks, induced hypothermia, and other extreme measures able to cause irreversible physical and psychological harm, including disabilities, psychoses, and at times deaths.

International Criminal Court (ICC) Complaint Against Bush/Cheney et al

On January 20, 2010, Professor Francis Boyle and Lawyers Against the War filed a complaint against "Bush, Cheney, Rumsfeld, Tenet, Rice and Gonzales for:

"their criminal policy and practice of 'extraordinary rendition' perpetrated upon about 100 human beings. This term is really their euphemism for the enforced disappearance of persons and their consequent torture. This criminal policy and practice by the Accused constitute Crimes against Humanity in violation of the Rome Statute establishing the ICC."

Though America isn't party to the treaty, "the Accused have ordered and been responsible for the commission of ICC statutory crimes within the respective territories of many ICC member states, including several in Europe. Consequently, the ICC has jurisdiction to prosecute the Accused (under) Rome Statute article 12(2)(a) that affords the ICC jurisdiction to prosecute (these crimes) in ICC member states."

The complaint also requested international arrest warrants be issued, pursuant to Rome Statute authority.

Center for Constitutional Rights (CCR)-Released Bush Torture Indictment (BTI)

On February 7, the ninth anniversary of Bush's lawless establishment of an "unlawful combatants" classification, CCR released a Bush Torture Indictment (BTI). [More from Source]

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[click here] for:

The "Japanese CIA" and Re-Militarization?

Tuesday, February 08, 2011

US President George W. Bush fearing arrest and prosecution for traveling outside US?

Torture, War Crimes, lying, cheating, stealing, and responsible for murders, does former US President George W. Bush have legitimate fears of being arrested and prosecuted for traveling outside the US?

Text with below video:
TheAlexJonesChannel | February 07, 2011 | likes, 4 dislikes

Alex welcomes back to the show retired CIA officer and co-founder of Veteran Intelligence Professionals for Sanity, Ray McGovern. Ray presented morning intelligence briefings at the White House for a number of presidents during nearly three decades in government. Upon retirement, McGovern was awarded the Intelligence Commendation Medal from Bush. He ultimately returned the award. Ray talks with Alex about George Bush's cancellation of a visit to Switzerland amid concerns that he could be arrested for allegedly authorizing the torture of prisoners and other war crimes. Alex also covers the latest news and takes your calls.

Retired CIA Officer Ray McGovern: Israel - The Elephant in The Room 1/3



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This blogger helped Vincent Bugliosi, the Charles Manson prosecutor, serve the Vermont Attorney General papers regarding prosecuting George W. Bush for murder in Vermont:

Text with video:
SvenVonErick | October 28, 2008 | likes, 0 dislikes

Prosecuting Bush, Serving the VT AG

Text with video:
SvenVonErick | October 26, 2008 | likes, 0 dislikes

More information, CLICK HERE:

Vote for Charlotte Dennett for Vermont Attorney General. Vincent Bugliosi will be be on task as special prosecutor to prosecute US President George W. Bush for murder.

Steven G. Erickson questions Phil Donahue

Text with video:
SvenVonErick | July 12, 2008 | likes, 0 dislikes

I ask him a question about 20 seconds in.

The topics of discussion are Phil Donahue's Documentary, "Body of War":

Should Bush be arrested for being a war criminal and crimes against humanity?

What about Free Speech, a Free Press, the economy, and our youth not be unnecessarily harmed and killed?

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This blogger asks the Connecticut Judiciary Committee Legislators if we the people get representation for our taxation, text of letter:


US using Manning to get to Assange

Text with video:
RTAmerica | February 07, 2011 | likes, 3 dislikes
WikiLeaks founder Julian Assange's extradition hearing to determine whether he will be sent to Sweden began Feb 7 in London. Meanwhile PFC Bradley Manning continues to sit in solitary confinement in the United States. While Assange's plight is in the public eye, Manning goes unseen. Amnesty International and a number of other organizations have called his treatment by the US military inhumane and unjust. MIT researcher and friend of Bradley Manning, David House, is one of the few people who has been allowed to visit Manning, and has sense found himself a target of the US government because of his support. He argued the US is selectively prosecuting Manning, but really gunning for Assange

Assange extradition highly political

Text with video:
RTAmerica | February 07, 2011 | likes, 1 dislikes

WikiLeaks founder Julian Assange's extradition hearing to determine whether he will be sent to Sweden began Feb 7 in London. Assange's lawyers argued based on Sweden's past, Assange's eventual extradition to the United States would be much more likely, and thus so would the possibility of facing the death penalty. Douglas McNabb, an attorney and expert in international extraditions explained it is possible Assange could face the death penalty, but it would depend on the charges. That being said, it is unlikely Sweden or any other European country would extradite him to the US without assurances he would not receive the death penalty.

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Monday, February 07, 2011

Police brutality increases in US

Text with video:
RTAmerica | February 03, 2011 | likes, 5 dislikes

Cops in America are heavily armed and trained to be bullies, routinely hurting people. After a number of mistakes committed by SWAT teams breaking into the wrong home of citizens and constant confrontations with people, are police overstepping their boundaries? Former Reagan Administration advisor Paul Craig Roberts says people who are attracted to police forces are bullies and sociopaths.

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Will US States declare bankruptcy?

Will even more US lawyers suck up the blood of others, when it was probably lawyers who caused most of the financial problems in the first place?

Text with below video:
RTAmerica | February 03, 2011 | likes, 28 dislikes

Overdrawn American cities could face financial collapse in 2011, defaulting on billions of dollars borrowed and derailing the US economic recovery. Municipal bonds were once a very secure form of investment and are now defaulting, a trend that is on the rise. UMass economics professor Richard Wolff says this is going to translate into a diminished quality of life, we need more governmental services not fewer and it is going to affect everyone.

US cities face financial collapse

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Sunday, February 06, 2011

Sarah Palin tries to Trademark her name

Imagine what a hit to Free Speech, Reporting, Blogging, and Comedy, it would be if Sarah Palin got paid everytime her name was mentioned or her likeness shown.

Sarah Palin Trademark Rejected -- For Lack Of Signature

Sarah Palin's apparent attempt to trademark her name has just run into a legal obstacle -- specifically, she didn't sign the papers.

Reuters reports:

Applications to trademark the names Sarah Palin and Bristol Palin, both for "motivational speaking services," were filed on November 5 by the Palins' longtime family attorney, Thomas Van Flein, but were quickly slapped down by a trademark examiner.

"Registration is refused because the applied-for mark, SARAH PALIN, consists of a name identifying a particular living individual whose consent to register the mark is not of record," the patent agency said in an office action.

"Please note this refusal will be withdrawn if applicant provides written consent from the individual identified in the applied-for mark," the patent office said.

You mean her ghost-writer couldn't have signed it for her?

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