Obama: ‘We had to Change the Laws’ Because Unethical Wall St. Execs Didn’t Actually Do Anything Illegal
- Posted on December 12, 2011 at 1:30pm by
Becket Adams
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One of the biggest gripes of both the Tea Party and the ragtag Occupy movement is the fact that crony capitalism seems to go unchecked in this country.
Since 2007, not a single player in the financial collapse has been prosecuted or put behind bars. At most, they’ve undergone halfhearted investigations that have ended in “slaps on the wrist.” In the meantime, many Americans have lost their homes and/or their jobs while top executives and their political cronies live the high life.
How does that work?
There must have been somebody at the top engaging in illegal activity. Are we to believe that the entire collapse was just one big, inexplicable mistake?
As it turns out, much like Congressional insider trading, some of the behavior engaged in by top Wall Street executives, though unethical, was not actually illegal, according to the President of the united States.
In a television interview this weekend, “60 Minutes” host Steve Kroft asked President Barack Obama why there haven’t been more criminal cases made against Wall Street.
“One of the things that surprised me the most about this poll [of the president’s popularity] is that when asked who your policies favor the most, 42 percent said Wall Street. Only 35 percent said average Americans,” said CBS News’ Steve Kroft. “My suspicion is, some of that may have to do with the fact that there’s not been any prosecutions, criminal prosecutions, of people on Wall Street. And that the civil charges that have been brought have often resulted in what many people think have been a slap on the wrist, fines. Are you disappointed by that?”
“You know, I can’t, as President of the United States, comment on the decisions about particular prosecutions. That’s the job of the Justice Department. And we keep those things separate, so that there’s no political influence on decisions made by professional prosecutors,” the president responded. “I can tell you, just from 40,000 feet, that some of the most damaging behavior on Wall Street, in some cases, some of the least ethical behavior on Wall Street, wasn’t illegal. That’s exactly why we had to change the laws. And that’s why we put in place the toughest financial reform package since F.D.R. and the Great Depression [emphasis added].”
“The implementation of those reforms is still being fought over, with the banking industry and the Republican leadership trying to limit their scope. Just another symptom of the political standoff that has paralyzed Congress since the negotiations to raise the debt ceiling and reduce the deficit began last summer.”
[Author’s note: As a quick aside, it might do the president some good if one of his cabinet members reminded him that he held a supermajority from 2008 until the Midterm elections of 2010. The "they're-stonewalling-me" argument doesn't really work for the first two years of his presidency.]
Although there might be some truth to President Obama’s assertion that some of the “most damaging” behavior on Wall Street wasn’t illegal, that claim may not be 100 percent accurate.
As reported earlier by The Blaze, it was pointed out that several prominent figures involved in the 2008 bailouts may have actually acted in a manner that was not only unethical, but perhaps illegal.
The Blaze reports (via The Washington Examiner):
. . . the Government Accountability Office (GAO) . . . claims that, “multiple directors or former directors of the Federal Reserve banks who played a key role in the 2008 bailouts had an apparent conflict of interest…”
What’s the “conflict of interest?”
Several of these Fed reserve directors were connected to the companies and banks that received large sums of government money:
The office of Sen. Bernie Sanders, I-Vt., who caucuses with the Democrats, noted that the [GAO] report did not name any names, “but unambiguously described several individual cases involving Fed directors that created the appearance of a conflict of interest.”
The group of 18 people connected to both the Federal Reserve and a bailed out company included: the CEO of General Electric, Jeffrey Immelt (who is now President Obama’s jobs czar); Stephen Friedman of Goldman Sachs Group Inc.; and Jamie Dimon, the CEO of JP Morgan Chase [emphasis added].
Friedman chaired the Federal Reserve Bank of New York in 2008, when the New York Federal Reserve approved Goldman Sachs as a bank holding company, which Sanders’ office explains “[gave] it access to cheap Fed loans.”
Friedman received a waiver from the Federal Reserve to keep his chairmanship, even though he was “a current board member and shareholder of Goldman Sachs Group Inc.”
When Friedman received this waiver, “the Federal Reserve Board was unaware that the then-FRBNY chairman had purchased additional shares in Goldman Sachs via an automatic stock purchase program,” according to the full report.
It gets worse.
The Federal Reserve Bank of New York consulted with GE about creating an “emergency program to assist with the commercial paper market” while Jeffery Immelt served as a New York Fed director, according to the Examiner report.
“The Fed later provided $16 billion in financing for GE under the emergency lending program,” even while Immelt held his position with the Federal Reserve Bank of New York and GE, according to the Sanders report.
But it doesn’t stop there.
Jamie Dimon was the director for the Federal Reserve Bank of New York when JP Morgan received $29 billion through the Federal Reserve to purchase Bear Stearns, according to the report.
“Dimon also convinced the Fed to take risky mortgage-related assets off of Bear Stearns balance sheet before JP Morgan Chase acquired this troubled investment bank,” writes the Sanders report.
Stephen Friedman (left), Jeffrey Immelt (center), and Jamie Dimon (right)
And then there was another article on The Blaze wherein it was reported that Countrywide, along with the government sponsored entities Fannie Mae and Freddie Mac, may have knowingly engaged in actions that helped bring about the housing market crash.
Eileen Foster, a former executive vice president in charge of fraud investigations at mortgage lender Countrywide Financial, told CBS 60 Minutes reporter Steve Kroft that mortgage fraud was a common occurrence at the firm.
She claims that she faced illegal retaliation for filing reports investigating the fraud, alleging Countrywide fired her when she refused to lie to federal regulators on Countrywide’s behalf, reports the Huffington Post.
“From what I saw, the types of things I saw, it was, it appeared systemic,” Foster said on 60 Minutes Sunday. “It wasn’t just one individual or two or three individuals, it was branches of individuals, it was regions of individuals.”
A separate recently-released government report also claims that government lending agencies Fannie Mae and Freddie Mac “illegally foreclosed on homeowners by failing to hold banks properly accountable for subprime loans,” reports the HuffPo.
So here’s the question: could we say that knowingly crashing the housing market and bailing out the major banks with explicit conflicts of interest both qualify as “damaging behavior”? Of course.
Then why does the president claim that it was simply “unethical” and not illegal?
This question has led many analysts to believe that the president, rather than pursue legal action against the guilty for breaking already existing laws, is using this opportunity to enact and enforce new laws that a favorable to his agenda. It would certainly explain how someone could look at what went on at the major banks and Fannie Mae and Freddie Mac and conclude that it wasn’t “illegal.”
Read the full Sanders report here
(h/t Business Insider)
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pmjr-jones
Posted on December 14, 2011 at 11:10pmcorp. america in charge not the political arena
Report Post »gordonknapp
Posted on December 13, 2011 at 3:54pmGuess you didn‘t like my reply to SGTSTUBBS sent in half an hour ago since it wasn’t posted, huh? Made too much sense? Or too pro Obama? I am apolitical, just would like to see more positive ideas instead of all this negativity.
Report Post »sgtstubbs
Posted on December 13, 2011 at 2:03pmWhat a bunch of bull. It is still against the law to take someones elses property, ig, money. Fraud use to be against the law until…obbbama changed it.
Report Post »rickroland
Posted on December 13, 2011 at 3:28amAre you kidding me? Nothing illegal was done, but because YOU had a problem with what happened YOU decided to change the law and make it illegal? This, plus the NDAA detention fiasco means one thing — this this type of crapola isn’t stopped in its tracks, pronto-like, this country is truly doomed. We are being *cough* governed *cough* by craven despicable treasonous bastages!
Report Post »kalayaan
Posted on December 13, 2011 at 2:14amOh yeah?…hey Obama why only now that you are calling for a change in the the laws?…because the government has already no money?…your cronies has already gotten all the taxpayers money…Pelosi and Reid had already made millions from inside trading…George Soros, your boss, has already made billions of dollars….your call is already very very late…YOU ARE A BIG TIME HYPOCRITE!!!! Shame on you!!!
Report Post »rltnspd
Posted on December 13, 2011 at 1:27amObama is speaking out of the other side of his mouth! He is pulling a Kerry, Obama needs to be impeached! His own comments out of his mouth are nothing more that notorious double talk! My gosh! What is he going to say or do next! This is almost the worst “movie” that I have ever seen! The worst president in history!
Report Post »Principlex
Posted on December 13, 2011 at 12:03amThe one thing I know is that when Obama says the word “ethical,” I expect the world to be upside down. Obama guilt trips people in order to shake them down and then justifies what he does as ethical. Being the puppet at the end of Soros’ strings, he may be the second most evil man on earth – Soros holding the title, of course.
Report Post »Kima
Posted on December 12, 2011 at 11:15pmYou know, there is alot about the bankers and the Fed, and yeah, they should have been prosecuted. The reason they were not, has nothing to do with whether it was illegal or not, it is because so many members of Congress would have been pulled down with them.
Report Post »From Pelosi and Boehner and their inside trading. to Dodd and Frank, Waters and Rangel, refusing to admit what was happening at Fannie, Freddie and Countrywide because they were getting sweetheart deals themselves, to politicians taking donations to look the other way to Chuckie Schumer, the one senator who did more between 2001-2008 to shove through deregulation on Wall St than the rest of them togeth and who was rewarded with the most in campaign donations from Wall st.
pamela kay
Posted on December 13, 2011 at 2:37amKIMA, you ar correct, I agree. Obama is covering the butts of politicians in general. This is one of their perks of being in Washington. Is there a way to actually track down which politicians have financially benefited from these deals? We need an outside investigation of Congress and the Senate. The people deserve the facts.
Report Post »Docroxall
Posted on December 12, 2011 at 10:06pmHaving been the Chief Enterprise Architect in a mortgage bank, I can tell you, that the CRA and AHA caused the bubble, winked at brokers and banks with liar loans, and encouraged banks to lower their loan underwriting policies limits. I saw it happen, and my own bank, refused to lower their standards…they ONLY got away from it, because they didn’t use ANY geographic info to underwrite the loans…it was PURE equations…calculated by a computer. We couldn‘t even make changes to approve a CEO’s friend. We got a “pass” from the fed regulators, because we could show we made no exceptions…otherwise, they would have fined us for not following their CRA and AHA guidelines. Our default rate was less than 1%, while the industry’s was over 4%.
Report Post »thegreatcarnac
Posted on December 12, 2011 at 8:33pmhey obama…..STFU
Report Post »barber2
Posted on December 12, 2011 at 6:56pmI think the Democrats do not want to examine this issue because it highlights the basic errors within The Affordable Housing Act which they created. The basic errors of playing the Race Card to give homes/ loans to minorities who had neither the credit history nor the employment history to guarantee less risk on the repayment these loans was a terrible decision but the Democrats forced it by playing the Race Card. The fallacy of this would come to the surface if this topic were examined in a committee.
Report Post »sensible99
Posted on December 12, 2011 at 5:41pmIt was Washington that was pushing the housing bubble and Washington that gave the OK on default swaps and derivatives. You can’t blame a kid for taking free candy from Grandpa.
Report Post »65Mustang
Posted on December 12, 2011 at 5:10pmWe are now seeing the results of a segment of society that was taught there were no consequences to cheating on test, lying or taking (stealing) things that did not belong to them…here was no shame. Now we have people in all segments of society who thinks it’s okay. Our government is full of their crap.
Report Post »historyforgotten
Posted on December 12, 2011 at 4:15pmRecord amouts of Filabusters, by Conservatives(Both D and R) Blocked any WallStreet Fraud Charges, brought on by this Administration.
Report Post »No Matter who is in the Majority of Congress, a Minority trying to Protect WallStreet Fraud, can Filabuster any Laws Protecting the Consumers.
thegreatcarnac
Posted on December 12, 2011 at 4:12pmThere is a lot of room for correction in the Wall Street universe. We, of course, cannot expect obama to make those corrections. As much as obama rails against the rich and against Wall Street, he is one of them. His policies directed billions of tax payer dollars to fund Wall Street and their banks. He stole from the poor and gave to the rich in a reverse robin-hood maneuver. I would probably agree with some changes in the way Wall Street does business but we cannot trust obama to do these changes nor trust any changes he would insist on.
Report Post »BurntHills
Posted on December 12, 2011 at 4:02pmread Germany’s History. everything Hitler did in the 1930s is being smoothly pushed thru by obama in less than 4 years. those of us who close our eyes and do not want to know this are destined to become ashes under obama’s feet.
Report Post »BurntHills
Posted on December 12, 2011 at 4:03pmHistory repeats itself. simple as that. the world has seen this all before.
Report Post »historyforgotten
Posted on December 12, 2011 at 4:19pmHitler had the Backing of the Roman Catholic Church, and the Big Oil, Pharma, and Weapons Manufacturing in Germany.
Report Post »Hitler Ran Germany more like a CEO, than an Elected Leader.
Nazi Germany was a Corporate Run Country. Facism can be Found in ANY Corporate Building.
BetterDays
Posted on December 12, 2011 at 5:44pm1873, the “United States ” corporation begins, constitutional government exists but is not practiced under the new corporation of the United States. Now you know why Lincoln got such a nice eddfice on the Mall in DC, it wasn’t because he Saved the constitutional government, or the nation.
Report Post »Just a suggestion, live at peace with all men, let GOD do the avenging. Oh, and be not like those of the world, do not steal from them because they steal from you, do not defraud them because they do so to you, do not do anything to mimic their ways. They have their reward, in whom do you trust?
vinnymac46
Posted on December 12, 2011 at 3:55pmAll these financial wizards were licking their chops when dufus got elected (Obama), they knew he was too stupid and would go along with anything they told him…..
Report Post »sonomine
Posted on December 12, 2011 at 8:30pmAmazing how Obama has honed talking out both sides of his mouth to a sharp point.
Report Post »mred33
Posted on December 12, 2011 at 10:38pm” All these financial wizards were licking their chops when dufus got elected (Obama), they knew he was too stupid and would go along with anything they told him….. ”
It isn’t that he is stupid, he is not. He is just doing what he is told to do and say. Obama is nothing but a puppet in Soro’s hands and others like him that are pulling his strings. He may not be the best speaker in the world and he is not, but he is great at doing what he is told to do. Do you REALLY think he and a few of his close friends are doing all of this all by themselves? No way. He is doing what his masters tell him to do and is being richly rewarded for this by making him and his wife not only richer, but protecting from any harm that may come his way, like impeachment. Do you think anyone that is a complete slime ball could stay in office this long and not one charge being brought against him for all the laws he is breaking and is going to break if he doesn’t get re-elected again? If you think things are bad now, just wait and see what happens to this country if he is not re-elected. Instead of a slow 4 year plan, there will be instant destruction of this country. This country found out with Clinton that Impeachment does NOTHING about removing him from office. He was such a jerk that he made them impeach him and then thumbed his nose at everyone and went on his marry way. Now this country knows that impeachment does nothing to help or even slow him down.
Ed
Report Post »objectivetruth
Posted on December 12, 2011 at 3:46pmIts criminal alright.When you use morgages you know are shaky to backstop financial packages that are them selves on shaky ground[both financially and legally]this shows collusion.It shows intent.
Report Post »SmallGovBigGuns
Posted on December 12, 2011 at 4:10pmselling short positions on MBS‘s to hedge funds as quickly as they packaged the MBS’s to investors is the truly unethical and illegal part. These banks can fall back on the fact that the tranched MBS’s were rated investment grade based on the payment cycle and were rated by independent companies. That in itself is not unethical. They were playing both sides of the investment and getting paid for both sides. that was the big problem
Report Post »smithclar3nc3
Posted on December 12, 2011 at 4:21pmThe real point is where did all those shaky mortgages come from and why would companies knowingly write shaky mortgages in the first place…the answer is the Government.
Report Post »Think of it like this the government gave the financial system AIDS and even if it died from some other disease it’s still AIDS that killed. If the government hadn‘t given AIDS to the financial system it’s immunities(common sense loan practices that have ben in place for decades) would have stopped the infection(NO INCOME NO JOB REQUIRED LOANS). Point is simple bundling bad mortgage securities in packages with good mortgages wasn’t ethical. But there would not have been the shear amount bad mortgages without government intervention(Bill Clinton’s CRA regulation).