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July 23, 2014

When I was a state prosecutor, we had no reluctance in charging criminals with crime. Whether it would hurt their pocketbooks or reputations or put them out of business were items missing from our arrest and charging reports. Fiercely independent, we ignored occasional political suggestion and “the wonderful things he or she has done for this community” in phone calls to our bosses, considering all such accolades to be nice but immaterial to the issue. We pressed on.
Not so with the banks, and I think there is a giant disconnect with the concept of justice when the prosecution spends the bulk of its time in seeking out how the penalty to be affixed will affect the criminal defendant first and foremost. How about considering America’s heroin problem, the thousands of raped Sumerian women, facilitating finance around known sanctions to Iran (read support of terrorism)? Has money and those who handle it at a profit supplanted right and wrong? How about the constitutional provision of Equal Protection of the Law? Has that no application where money reigns? Are money and its pursuit to be favored obliviously over the terror, rape and drug horrors it buys for the rest of us? The answer, from all appearances, is yes. When does this “Golden Calf” insanity end?
When confronted with arguments such as the above, both regulators and prosecutors point to Arthur Andersen, the national accounting firm which went out of business in 2002. After that, we are told, prosecutors adopted a more cautious outlook when dealing with big companies, employing “deferred prosecution agreements” (whatever those are) along with other concessions to the criminal corporation in order to keep them in business. As most everyone knows by now, Andersen was the criminal accomplice of Enron Corporation (which also went out of business), which helped Enron design the many frauds in electric power transmission, fleecing millions from unwary electric customers.
I think the Andersen citation is not an apt argument for lack of prosecution in any event. First, Andersen was not a banking corporation. Second, with the massive damage done to millions of electric power consumers and Enron’s employees, vendors and shareholders, both Andersen and Enron richly deserved to be out of business. Losses to vendors and shareholders are regrettable, but the greater good over time is served by vigorous prosecution of all criminal wrong-doers, rich or poor, individual or corporate.
So where are we? We have an AG (Holder) who at a congressional hearing last year voiced his concern “that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them.” In other words, the big Wall Street banks have graduated from “too big to fail” to “too big to indict.” That amounts to a proclamation that banks may operate as though this country were the lawless west while some of the rest of us “go out of business” (so to speak) doing 90 days in stir for a DUI while they walk. If that is the gist of the message we are sending to these banks, then I suggest a drastic rewording with the plainly-stated preamble reading “You are neither too big to fail nor indict,” and take it from there with language ending deferred prosecution, coerced board resolutions etc.
So there will be a run on a bank if indicted and the economy will be imperiled? Baloney! There are other banks, and the Fed can handle any money crunches which could result. If the fix isn’t in and we still have a choice to make between what is beginning to look like a lawless “Money 1984” and pipe rack law for the rest of us, I’ll take law – plain, unadorned and equally applicable to all, including banking corporations, wherever their home offices may be. I do not fear the consequences, as our regulators either do or pretend to do; I rather welcome them, and for this reason: That when the banksters find that their playhouse is no more and that they go to jail just like the rest of us for crimes committed both as individuals and in their capacities as representatives of the banks, then and only then can we expect to see changes in banking behavior for the better – a consequence for which I yearn.
It is plain to me that we have enough people and resources backing terror, rape and drug proliferation without adding banks to the list and sitting around twiddling our thumbs about which department is in charge of what, an opening that banks are sure to exploit in their greed for profit. Let’s give some agency (the Comptroller, AG, SEC or some such) a new division and the people and resources to go after these banks WITH ONE VOICE with a view toward enforcement of banking rules and regulations armed with cease and desist authority and other temporary weapons to stop illicit banking practices in their tracks instead of waiting for months and years for a bunch of regulators who are at cross purposes get together to disagree on who does what while the illicit practices roll merrily along (though perhaps newly disguised in view of the heat).
We don’t have to be stuck with regulatory apparatus in Washington that doesn’t work anymore. That’s why even almost prehistoric people abandoned square wheels for round ones. We can change not only government but the way we do government to meet new challenges such as that posed by the greatest challenge to our democracy – the supremacy of money in the hands of corporate charlatans. Let’s change our apparatus and get to work. GERALD E

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