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Today's Top News
California Refuses to Accept Obama’s Banking Sellout
There is no three-strikes law for crooked bankers, not even a law for a fifth strike, as The New York Times reported in the case of Citigroup, cited last month in a $1 billion fraud case. Unlike the California third-striker I once wrote about whom a district attorney wanted banished forever to state prison for stealing a piece of pizza from the plate of a person dining outdoors, Citigroup executives get off with a fine and by offering a promise not to do it again, and again and again.
As the Times reported when Citigroup agreed to settle SEC charges last month: “Citigroup’s main brokerage subsidiary, its predecessors or its parent company agreed to not violate the very same antifraud statue in July 2010. And in May 2006. Also as far back as March 2005 and April 2000.”
Not that the bankers face prison time, since the Justice Department has refused to act in these cases, and the Securities and Exchange Commission is bringing only civil charges, which the banks find quite tolerable. This time, the fine against Citigroup was $285 million, which may sound like a lot except that the bank raked off as much as $700 million on this particular toxic securities deal. As the Bloomberg news service editorialized, “... there should be only one answer from Jed S. Rakoff, the federal judge in New York assigned to weigh the merits of the agreement: You’ve got to be kidding.”
Not to pick on Citigroup, the too-big-to-fail bank that Clinton administration Treasury Secretary Robert Rubin helped make legal before he was paid off with a $126 million job on Wall Street; that corporation was not the only serial offender. “Citigroup has a lot of company in this regard on Wall Street,” the Times noted, “nearly all of the biggest financial companies—Goldman Sachs, Morgan Stanley, J.P. Morgan Chase and Bank of America among them—have settled fraud cases by promising that they would never again violate an antifraud law, only to have the SEC conclude they did it again a few years later.”
So forget relying on the federal government to hold the Wall Street swindlers accountable. Indeed, the Obama administration has been involved in negotiating a deal with state attorneys general to settle their complaints with the banks for a pittance of compensation for the victims. In return, the states would promise not to institute further legal proceedings against the banks.
The fix was in for what a New York Times editorial on Tuesday headlined “Letting the Banks Off Easy” described as “paltry” mortgage relief, reducing by less than $20 billion the balances of 14.5 million underwater homeowners who are “drowning in some $700 billion of negative equity.” The deal has been stalled by the refusal of California Attorney General Kamala Harris to accept this sellout. Among its other disastrous concessions would be ending further investigation by the states into financial skullduggery connected with the housing meltdown.
In September, Harris, elected in a Democratic sweep of the state’s top offices in 2010, went against the dictates of the Democrat in the White House, stating that she refused to release the banks from legal liability for the mortgage crisis. That is the nub of the pending White House-brokered deal with the banks. As the Times summarized it: “The proposed settlement reportedly would prevent the states from pursuing claims against banks relating to fraud or abuse in the origination of the bubble. It would also prevent states from pursuing claims for foreclosure abuses, like improper denial of loan modifications.”
Traditionally the states provided the essential regulation of mortgage origination, ownership and sales as a transparent process duly recorded and subject to public examination at the county level. But in order to facilitate the gathering of those mortgages into the sort of collateralized debt obligations that the banks could then bet on and trade worldwide, homeownership became a murky matter. Many of the mortgages now in question, including the ones that Citigroup’s “synthetic” derivative was based on, are no longer owned by the banks that originated them. They are instead part of the Mortgage Electronic Registration Systems (MERS) database, owned by a consortium of banks and residing in computers in Reston, Va.
The MERS system is described by the Times as “a land registry system implicated in bubble-era violations of tax, trust and property law.” The Obama-supported settlement would make it very difficult if not impossible to investigate at long last the workings of MERS and other systemic sources of what is now a full-blown international economic crisis. As the Times editorial put it, “In effect, the legal waivers being contemplated would let the banks pay up to sweep wrongdoing under the rug.”
Thankfully, we have a few state attorneys general, most prominently California’s Harris, standing up for the American people, but it is outrageous that a president who avowedly committed to defending the public interest would now be subverting that effort rather than leading it.
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39 Comments so far
Show AllAt last something I can be proud of my native home state for. Gone are the days of the "Governator". I just wish Governor Brown would come out against the unreasonable use of force by police in Oakland.
Yes, and both Harris and Brown need to join the lawsuit against Obamacare's "individual mandate" in order to stop this precedent setting atrocity that will result in the government mandating that you buy even more defective products from the corporations that own the US Government.
I love how you described the individual mandate!
raydelcamino,
As a Californian, sorry to say Brown is no difference from the rest of the Repug and democrats fat cats.
California is a lovely state full of people stupid enough to elect, to multiple terms, the likes of Gropenator, Raygun, and Moonbeam. In other words, Californians are quintessential Americans.
Obama is the lesser of two evils. Romney is the lesser of eight evils. All We get is evil. "Surprise, Surprise, Surprise" I have hope today because of OWS. The people will have their say in the streets.
Evil doesn't really come in degrees. Evil is evil and both parties have made deals with the devil and sold their souls.
Watching millions of people in the country they swore to protect starve or die from lack of health insurance, housing, food, while giving corporations millions in subsidize that they don't need.
Watching as their vote to use military force on countries that are no threat to us, and kills, maims and destroys whole countries, again for the corporations who use our taxes to their dirty work.
They sold out, and if there is any justice, they will pay for it in hell. If there is such a thing of God and the Devil. I have my doubts, since what kind of loving God could sit back and watch these things happen? Mostly to children?
She is refusing to release the banks from legal liability for the mortgage crisis. To disallow any settlement that would absolve banks of accountability for mismanagement or misuse of funds. That is more than many are doing and one of the few times California has shown a lick of sense.
As the greatest damage has been done in the mortgage area, you probably should start your fight of corrupt practices there as she has, don't you think?
"The use of MERS as a generic placeholder for the real owner of a mortgage was a crucial component of the entire securitization machine." ............Make no mistake, it was set up by many of the "too-big-to-fail" so no one could keep track of the $hit they were selling and re-selling in the mortgage securitization (scheme) market. ........... If you don't know who owns it, you can sell it, re-package it and sell it again to someone else; that is, if you're too-big-to-fail! .............If I'm not mistaken, MERS collected a Registry assignment fee from everyone who bought or re-mortgaged and never actually recorded an assignment because MERS was assigned as "trustee" in the mortgage itself. .............Multiply the average assignment recording fee ($75.) that these banks collected by the number of times MERS was on the mortgage as trustee and it would probably be in the hundreds of $millions if not $billions that went directly into their pockets. In my book, that is embezzlement. Not to mention that counties across the country got screwed out of assignment recording fees. ..........Bravo to California for doing the right thing!
attorney general's Sneiderman of New York and Biden of Delaware are doing the same in their states...New York and California are as about as good as it gets when you'r talking about making A statement...
These are all very brave and ethical people which is so very rare in politics these days...I hope they know how much the people are counting on them....
I wish the article would have mentioned Matt Tahibbi's information of how all of the SEC records and documents pertaining to shady dealings were destroyed...
A question arises. What the hell else does this Tea Party president have to do before some "progressives" wake up to the fact that he's not one of us and never has been?
A question arises. What the hell else does this Tea Party president have to do before some "progressives" wake up to the fact that he's not one of us and never has been?
This is just one more illustration of how closely Obama is tied to the big banks and Wall St., and another perfectly good reason to vote against him.
Obama is confident that a sizable percentage of the money he saves the criminal banks now will end up in his campaign coffers later.
Quid pro quo.
I won't be voting for Obama-- or any of the Republican sociopaths -- under any circumstances. I will probably vote for the Green Party candidate. Jill Stein looks like she has an excellent program although I would like some clarification of her position on the Israeli occupation of Palestine.
She supports OWS, wants a single payer health care system, opposes the endless colonial wars, has a major green jobs program, etc.
http://www.jillstein.org/bio
http://www.boston.com/Boston/politicalintelligence/2011/10/jill-stein-launches-bid-for-green-party-presidential-nomination/OpdxKAo0I7PVj9NcPj8pqI/index.html
If somehow Ron Paul emerged as the Republican candidate, I would consider voting for him just to throw a 'monkey wrench' into the banking cabal and the U.S. military empire.
Cannot imagine either the big bankers or the Pentagon (and more importantly the corporate profiteers behind the Pentagon) allowing Paul the keys to the White House, however.
They're pleased with Obama although they will be happy with Romney, too.
The Government Accouuntability Office (GAO) on page 131 of GAO Report # 11-696 confirmed that the US Government has handed out $16 trillion dollars to the banks, most of it since Obama's 1/20/09 inauguration.
Today Obama's singular focus is to be the first politician to amass a corporate funded billion dollar war chest for his 2012 campaign. If the banks give Obama one sixteen thousanth of what he has given them, Obama will meet his goal. A billion dollars is chump change for the banks.
One could just imagine the conversations going on in fancy offices...
"You gotta do something about this bank mess... " (Bank Rep)
"Don't worry, it'll never see a day in court, we'll see to that." (US "Justice" depatment)
The details of a conversation of this nature likely would make the MAFIA blush...
Meanwhile, the typical right wing (and/or libertarians) want to go after the fat lady's welfare check while they give the banks and MIC carte blanche to keep on keeping on with graft and corruption that trump "welfare" at astronomical proportions.
"It's just business," you know.
Though California Attorney General Kamala Harris had to be publicly forced to do the right thing in this case, she has followed through so far. Considering California was a prime scene of the Bankster's crimes, and is the largest economy in the United States, a meaningful prosecution has tremendous power. If Harris is able to put Banksters in handcuffs and have them do a perp walk, followed by another handcuffing immediately after conviction (a la Conrad Murray), then her political future is assured.
Nate: I have boat-loads of respect for these courageous few willing to bring prosecutions forward. However, my comment was based on how the White House and Justice Department are likely viewing these matters.
The low ball offers remind me of the lawsuit that made Ralph Nader famous. He proved that the big automaker would rather pay fines based on the low probability of actual accidents resulting from their hastily designed part, as opposed to doing the right thing from the get-go. Many U.S. corporations see these fines as a normal part of business, and prefer to pay them, or tie up injured parties in long-lasting lawsuits instead of designing their products to accord with safety provisions. A subtle form of homicide is what's operating, along with a rabid disdain for the safety of citizens. It's a naked tribute to Mammon.
Cheers to California Attorney General Kamala Harris. Now let's see if she follows through. It is time the 'personhood' of corporations is put to a real test. I anxiously await the perp walk.
Rob a man, or store, with a gun, you'll go to jail for how many years?
Rob millions with a pen and you'll get a better job???
WTF?
Steal a piece of pizza or smoke a plant, go to jail. Steal BILLIONS/TRILLIONS, get a better job-with the Fed or Treasury!.............. OCCUPY EDUCATION, protest at California State University East Bay, thurs Nov.17, talk of possible teachers' strike.
As I wrote yesterday about Obama's willingness to shield the banksters from legal liability:
"I swear, [he] would relegalize slavery if someone paid him enough to do it. Calling him a whore is an insult to honest whores everywhere."
And yes, I know what color Obama is.
Obama has legalized defacto slavery if you consider the ever shrinking number of employment opportunities available to young Americans as a result of Obama's regressive actions.
One example is the millions of older US workers who have cancelled retirement solely to keep employer sponsored medical insurance, thereby eliminating millions of job opportunities for young Americans and forcing them into jobs that are as close to slavery as jobs get. Obamacare (in 2014) and Obama's super secret catfood committee's upcoming cuts to Social Security, Medicare, Medicaid and other domestic programs will further increase the number of older workers cancelling retirement and further decrease the number of jobs available for young Americans.
To borrow from the 60s he an oreo!! only black on the outside!! lol >^^<
The very idea of the "Corporation" as a legal entity is a contradiction. One can not on the one hand spout nonsense about the Marketplace while on the other allow an entity that by design is intended to MINIMIZE liability.
The Corporation was designed to that shareholders could maximize profits and limit liability and in essence shovel costs onto some other. They are designed to shield the investor from the consequences of actions that would otherwise be harmful thereby ensuring such harm is done. This contradicts "Natural law".
They are not natural. They should be dismantled along with Capitalism.
Reminds me of something my father used to like to recite.
"It's the small fry that society scorns, not the big boys who play the big time.
If you must be a thief, be a banker, the larger the score the lesser the crime."
Wise father you have, and his quote reminds me of one I remember reading in my fourth grade history textbook:
It's the rich that get the glory.
And the poor that get the blame.
It's the same the whole world over.
Now ain't that a dirty, rotten shame.
"...it is outrageous that a president who avowedly committed to defending the public interest would now be subverting that effort rather than leading it."
Obomber is Bush reincarnated, and then some: if I see his lips movin', I know he's lyin'. So sad.
Occupy!
So a Californian manages to score a moral victory amid all of the golden state's moral mediocrity, ambiguity, hypocrisy. There is the Hippocratic Oath doctors take to "do no harm", so when liberalism encourages each to cultivate his/her own unique moral blind spots, I think back to that oath doctors take, and the absolute moral/logical foundation it stands on. And then I conclude that liberalism, Merkan style, is evil. When the better alternative is in plain view, it's evil. Mind-boggling that 3/4 of Merkans are passionately sold on liberalism. Even many doctors, because they never connected the dots. This is WHY we need enlightenment more than anything else. Target the school curriculum and the mass media. Take your kids to the school board meeting and encourage them to climb the walls, get comfortable with their OWN authority OVER the school board. Don't wait for California to lead. It has way too much baggage.
Obama's policy of letting Banksters off scot-free will become a campaign issue atop so many others that ought to cost him re-election. Note how no nationaly recognized elected Democrat has called-out Obama on this atrocity. Obama and his people make me sick as they are worse than BushCo, except when it comes to the number of people they've murdered. And if the succeed in escalating the war against Iran, then they will likely kill more than BushCo.
What's a guy to do? Obama has to choose between us and his billion dollar war chest. He only promised hope and change (well, he lied about the hope part), he never promised integrity. At least I don't recall that word ever passing across his lips. I do remember things like protecting whistleblowers, transparency, and a bunch of other lies.
And karlof1, Obama doesn't have to invade Iran, Iarael will do it for him. What are friends for?
Israel might bomb, but it won't invade. And Israeli murders can't be claimed by ObamaInc as theirs, and it will still trail BushCo's and ClintonLtd's bodycounts, which both top one million.
". . . but it is outrageous that a president who avowedly committed to defending the public interest would now be subverting that effort rather than leading it."
consistent mode of operation. He did the same with health care reform. The same with the Bush Tax Cut extension. He does the same thing everyday with allowing drone attacks in Pakistan. I could go on and on but I am tired. I never expect anything less of him these days. He will always respond as he is told by the 1%.
Good comments on this thread, and I could add my two cents' worth; but I'll just limit my contribution to appreciating Robert Scheer for his blog, and Common Dreams for carrying it.
An educated public makes government of, by, and for The People work. And vice versa.
So the banks own BO? How disgusting that he grants them immunity from the states purposeful and helpful prosecution.
Many thanks to this brave woman in CA. Now in Michigan, is AG Schuette as strong for the people in going after these white collar looters? NO. (R) Schuette Files Suit to Dissolve Improperly Incorporated Abortion Clinics in Eaton, Saginaw Counties. Schuette is a waste of resources.
No vote for BO. No vote for Schuette.
Read Chris Hedges "Death of the Liberal Class" We're in this one on our own as Obama is nothing more than a paid mouth-piece for the corporate sluts who run the country. Dig-in because this is going to be a very-long struggle with very few friends in high places...
Okay, so the AG of California, New York, and Delaware are not signing on to this program. Lets see one of them indict anyone and lets have a trial. Otherwise it's all theatrics.