The federal government’s failure to prosecute high level Wall Street executives

July 5, 2012 | By | 2 Replies More

On Democracy Now, Juan Gonzalez asked Glenn Greenwald to comment on Barack Obama’s explanation for why high level Wall Street executives have not been criminally prosecuted. Here’s the exchange:

JUAN GONZÁLEZ: Well, I want to play a comment by President Obama on why his administration has not prosecuted any senior financial executives. He was speaking at a White House press conference in October of last year.

PRESIDENT BARACK OBAMA: Well, first, on the issue of—on the issue of prosecutions on Wall Street, one of the biggest problems about the collapse of Lehmans and the subsequent financial crisis and the whole subprime lending fiasco is that a lot of that stuff wasn’t necessarily illegal, it was just immoral or inappropriate or reckless. That’s exactly why we needed to pass Dodd-Frank, to prohibit some of these practices. You know, the financial sector is very creative, and they are always looking for ways to make money. That’s their job. And if there are loopholes and rules that can be bent and arbitrage to be had, they will take advantage of it. So, you know, without commenting on particular prosecutions—obviously, that’s not my job, that’s the attorney general’s job—you know, I think part of people’s frustrations, part of my frustration was a lot of practices that should not have been allowed weren’t necessarily against the law, but they had a huge destructive impact.

JUAN GONZÁLEZ: President Obama on why his administration has not prosecuted any senior financial executives. Your response?

GLENN GREENWALD: That answer is incredibly deceitful and misleading in several important respects. First of all, the massive orgy of deregulation that took place that let Wall Street do many things that for decades had been criminal, took place in the 1990s during the Clinton administration and under Democratic Party control and was led by people like Larry Summers and the whole acolytes of Robert Rubin, such as Timothy Geithner, who ended up being empowered by President Obama at the highest levels of his economic policy team. So this idea that he is somehow disturbed by or in opposition to the kind of deregulation that made a lot of this behavior un-criminal is incredibly misleading, given that those are the people who continue to run his administration.

Secondly, you notice that he said “some of this behavior” was not criminal. The unspoken implication of it, though, is that much of it was criminal. And, in fact, I just did an interview with Eliot Spitzer, who of course was probably the only elected official in the last two or three decades to put serious fear in the heart of Wall Street, when he was a prosecutor and attorney general and then governor. And I had said, as part of this interview, you know, I know that there’s this notion that prosecutions might be difficult of Wall Street executives, but that’s not a reason to refrain from doing them. And he actually objected and said, “You know what? Prosecutions would not be difficult.” And he’s right. We have emails from Wall Street executives where internally they’re mocking the assets that they’re representing to the public as being these sterling assets, and they’re mocking them as garbage and junk. They knew that they were committing fraud. Credit agencies were purposely shielding these assets, knowing that they were junk, as well.

And then a third issue that he said was, you know, “It’s not my job to comment on prosecutions.” That’s particularly ironic, given that President Obama expressly argued and instructed the Justice Department not to prosecute Bush officials for the crimes that were done as part of the war on terror. He’s made comments about Bradley Manning’s prosecution and decreed him guilty in public. And yet, suddenly, when it comes to Wall Street executives, who funded his 2008 campaign and are funding his 2012 campaign, he suddenly becomes very shy and reticent and says, “It’s not my job to comment on prosecutions.” He is the leader of the party. He’s the leader of the country. And the fact that we haven’t prosecuted Wall Street executives is one of the greatest national disgraces. You see in Spain, as we heard in that report, some effort to move away from that. That is his responsibility to demand that justice be applied equally. The vow that he made when he announced his presidency—run for the presidency, in the first paragraph of his announcement, he said the era of Scooter Libby justice would be over. Scooter Libby justice means, if you’re sufficiently powerful, you don’t pay a price for your crimes. That was the promise that he made when he ran, and that’s the promise that he’s so woefully failed to fulfill.


Category: Corporatocracy, Corruption

About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich lives in the Shaw Neighborhood of St. Louis, Missouri, where he lives half-time with his two extraordinary daughters.

Comments (2)

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  1. Adam Herman says:

    I think another factor that it’s less PC to discuss is that most of the actual criminal wrongdoing was done by people making upper middle class incomes, not the really big guys at the top. It’s not very satisfying either for the government or the public to see a few thousand Joe Briefcases do perp walks. Then there’s just the simple fact that in order to get a conviction you have to have a specific offense or offenses and then be able to prove those offenses. I’d challenge anyone who wants to see financial CEOs in jail to state what offenses they would be charged with for starters. And don’t say, “Well, the company did X, which was illegal”. Doesn’t work that way if you want a criminal conviction. You need to prove that the individual committed criminal acts or ordered others to do so.

  2. Tim Hogan says:

    I disagree. Under the RICO statute what needs to be proven is two overt acts of mail fraud, wire fraud or conspiracy to commit mail fraud or wire fraud over a five year period. Each of these CEOs did that or more when they all banded together as members of the NY Fed Board to divvy up the economy and our economic futures among themselves.

    Others have used less esoteric thieving techniques to bilk us out of trillions in equity such as outright stealing, forgery, criminal misrepresentations, perjury, making false statements on federally required disclosure forms, making false statements to federal officers, misprism of felonies, obstruction of justice, insider trading, etc. I only thought about this for five minutes but, I’m sure the DOJ has many people who could do better if they weren’t being dicked around by House Republicans.

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