Monday, November 7, 2011

Tied up and held for ransom

Betrayal of justice

By Mike Krauss
Bucks County Courier Times

There is a cancer in American government. It is aggressive and spreading.

The cancer was first diagnosed by the FBI in 2004, when it warned of “rampant” mortgage fraud. But the warning was ignored. No action was taken and the cancer spread.

Now, after a congressional investigation and the work of a few courageous journalists, we know the extent of the fraud. One of those journalists, Greg Hunter summarized it.

“There was real estate document fraud when the original Promissory Notes and loan documents were ‘lost.’ The Promissory Notes were required to create tens of thousands of mortgage-backed securities (MBS). No ‘note,’ no security. That is security fraud. No security means the special IRS tax treatments for the MBS’s were fraudulently obtained. That is IRS tax fraud. Because there were no documents, the rating agencies fraudulently made up triple ‘A’ ratings for the securities. When the whole mess blew up, big banks hired foreclosure mill law firms to create forged documents. That phony paperwork was and is being used to wrongfully remove homeowners from their property. That is foreclosure fraud.”

From the local loan originators and their managers up to the CEOs, rating agencies and foreclosure mill law firms — fraud as a business model.

Hunter and others point out that after the savings and loan scandal of the 1980s, which cost taxpayers more than $160 billion, there were more than 1,000 felony convictions, and even more prosecutions.

The cost of the mortgage fraud that brought on the collapse of the American economy, and has ruined the lives and destroyed the futures of tens of millions of Americans, is at least 40 times greater than the S&L fraud, according to William Black, now an economics and law professor who helped investigate and prosecute that earlier criminal wrongdoing.

Yet there has not been one criminal prosecution by the U.S. Justice Department related to the monstrous mortgage fraud; only a few fines and settlements that paper over the crimes. Why?

Gretchen Morgenstern, writing for the New York Times and recently Richard Cohen at the Washington Post have asked the question, but obliquely. Both can only go so far.

As documented by the independent public policy organization Global Research, the boards of directors of the Times, Post and Time Warner, which owns CNN and Time Magazine, are a virtual Who’s Who of the nation’s corporate and financial elite, and they do not want that question asked or answered.

The technical answer, provided by Black, is that the Office of Thrift Supervision, the regulator which in the S&L scandal referred more than 9,000 investigations to the FBI, has in this case referred none.

So the regulators are AWOL, the attorney general of the United States is missing in action and no one asks the president why that is, nor does anyone ask that question of the GOP front runner presidential wanabes, nor the members of Congress who have oversight of the Justice Department.

Because the honest answer would expose the extent of the cancer and the degree to which justice in the United States has been subverted.

It is difficult to get campaign contributions, donations to post-presidential foundations, lucrative sinecures on boards of directors or in academia, invitations to Davos or the regulators’ “round trip ticket” back to the big bucks on Wall Street from people you prosecute for criminal fraud.

The Sunlight Foundation tracks the maze of campaign contributions, and reported that executives of Goldman Sachs, the flagship of the pirate fleet that looted America, are splitting their campaign contributions 50-50 between Mr. Obama and Mr. Romney, the likely GOP presidential candidate.

The finance industry has spent nearly $4 billion lobbying Congress since 1998, apart from campaign contributions. The regulators have been silenced and the revolving door is fully greased.

There was a moment of hope, when the state attorneys general proposed to collectively take action on the fraud. But that moment may have passed. The cancer has metastasized.

With furious lobbying from Wall Street and under enormous pressure from the White House, as reported by Ms. Morgenstern and others, the effort of the state attorneys general was turned away from any investigation and prosecution and a deal has been proposed.

In exchange for paying some billions in fines, those who committed the fraud that has cost the middle class trillions of lost wealth and destroyed lives and futures, will get immunity from criminal prosecution and any future claims for damages.

Call it the first class action sell out.

But now six of the 50 state attorneys general are opposing this betrayal of justice: New York, Delaware, Kentucky, Minnesota, Nevada and California. They are demanding a full investigation and criminal prosecutions where warranted.

Profiles in courage. And in a hopeful sign, these courageous public servants are gaining more support daily.

If you want to fight the cancer eating at the American democracy, now is the time. There is a web site for a statement of support for these attorneys general.

Americans hope that justice is blind; but, tied up and held for ransom?

Mike Krauss, is chairman of The Pennsylvania Project, a non partisan public policy advocacy organization.

No comments:

Post a Comment