One who intends to leave others better off for his having existed.


"Federal judge wonders who stole people’s money; No top executives in prison five years after the crisis"

"Millions of victims and no perps.

...You phone to report a fire, or a crime in progress, and maybe someone responds … or maybe they don’t.

The Federal Bureau of Investigation was just too busy chasing terrorists following 9/11 to bother with suspicions of systemic white-collar crime, Rakoff wrote.

The Department of Justice was so overwhelmed that it passed the task of mortgage and securities fraud onto prosecutors in its regional offices who likely did not have the experience to handle such complex cases, and did not produce results, he said.

The Securities and Exchange Commission, which was the primary agency that should have been investigating massive securities fraud, was too busy answering questions about why it missed a single crime perpetrated by Bernie Madoff.

...This is pretty much how it works in the Justice Department, according to Rakoff:

"Once the U.S. was fixated on an abstract war on terrorism — against no particular nation, or perhaps the wrong nation — banks, corporations and Wall Street players could loot the Treasury before our blinded eyes. It was a crime so large it spawned a growing class of Americans who now wonder if maybe socialism might be less corrupt."

Rakoff is one of the few federal judges to take a stand for justice in the financial crisis.

...Rakoff allows in his essay that it is, of course, possible no one committed a crime in the financial crisis. But he also notes that this is not the prevailing view in government. The Financial Crisis Inquiry Commission, for instance, found that “the signs of fraud were everywhere to be seen.”

“The Department of Justice has never taken the position that all the top executives involved in the events leading up to the financial crisis were innocent,” he wrote. “Rather it has offered one or another excuse for not criminally prosecuting them — excuses that, on inspection, appear unconvincing.”

...“Regulators made almost no effort to hold accountable the financial institutions they were bailing out, to wonder whether the government, having helped create the conditions that led to the seeming widespread fraud in the mortgage-backed securities market, was all too ready to forgive its alleged perpetrators.”

...At the top of the essay is an editorial cartoon from New York Times, from the last century, asking “Who stole the peoples’ money?” It portrays likely suspects all standing in a circle, each pointing to someone else.

When everyone does it, no one can be found guilty.

Al Lewis
"if, by contrast, the Great Recession was in material part the product of intentional fraud, the failure to prosecute those responsible must be judged one of the more egregious failures of the criminal justice system in many years.

...the widespread accounting frauds of the 1990s, most vividly represented by Enron and WorldCom, led directly to the successful prosecution of such previously respected CEOs as Jeffrey Skilling and Bernie Ebbers.

In striking contrast with these past prosecutions, not a single high-level executive has been successfully prosecuted in connection with the recent financial crisis, and given the fact that most of the relevant criminal provisions are governed by a five-year statute of limitations, it appears likely that none will be.

...the stated opinion of those government entities asked to examine the financial crisis overall is not that no fraud was committed.

...As that Court stated most recently in Global-Tech Appliances, Inc. v. SEB S.A. (2011):

"The doctrine of willful blindness is well established in criminal law. Many criminal statutes require proof that a defendant acted knowingly or willfully, and courts applying the doctrine of willful blindness hold that defendants cannot escape the reach of these statutes by deliberately shielding themselves from clear evidence of critical facts that are strongly suggested by the circumstances."

Eric Holder himself told Congress: "It does become difficult for us to prosecute them when we are hit with indications that if you do prosecute—if you do bring a criminal charge—it will have a negative impact on the national economy, perhaps even the world economy."

To a federal judge, who takes an oath to apply the law equally to rich and to poor, this excuse—sometimes labeled the “too big to jail” excuse—is disturbing, frankly, in what it says about the department’s apparent disregard for equality under the law.

...Holder ...was referring to the prosecution of financial institutions, rather than their CEOs. ...But if we are talking about prosecuting individuals, the excuse becomes entirely irrelevant; for no one that I know of has ever contended that a big financial institution would collapse if one or more of its high-level executives were prosecuted, as opposed to the institution itself.

...a ...less salutary reason for not bringing such cases is the government’s own involvement in the underlying circumstances that led to the financial crisis.

...the government was also deeply enmeshed in the aftermath of the financial crisis. It was the government that proposed the shotgun marriages of, among others, Bank of America with Merrill Lynch, and of J.P. Morgan with Bear Stearns. If, in the process, mistakes were made and liabilities not disclosed, was it not partly the government’s fault? One does not necessarily have to adopt the view of Neil Barofsky, former special inspector general in charge of oversight of TARP, that regulators made almost no effort to hold accountable the financial institutions they were bailing out, to wonder whether the government, having helped create the conditions that led to the seeming widespread fraud..., was all too ready to forgive its alleged perpetrators.

...the government was deeply involved, from beginning to end, in helping create the conditions that could lead to such fraud, and that this would give a prudent prosecutor pause in deciding whether to indict a CEO who might, with some justice, claim that he was only doing what he fairly believed the government wanted him to do.

...the Department of Justice’s position, until at least recently, is that going after the suspect institutions poses too great a risk to the nation’s economic recovery. So you don’t go after the companies, at least not criminally, because they are too big to jail; and you don’t go after the individuals, because that would involve the kind of years-long investigations that you no longer have the experience or the resources to pursue.

...I do not claim that the financial crisis that is still causing so many of us so much pain and despondency was the product, in whole or in part, of fraudulent misconduct. But if it was—as various governmental authorities have asserted it was—then the failure of the government to bring to justice those responsible for such colossal fraud bespeaks weaknesses in our prosecutorial system that need to be addressed."

Jed S. Rakoff

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