Tom Ferguson on SOTU: New Financial Fraud Commision Could Actually Slow Down Investigations « naked capitalism

Wednesday, January 25, 2012

Tom Ferguson on SOTU: New Financial Fraud Commision Could Actually Slow Down Investigations

Political scientist Tom Ferguson agreed with our dim take of the news reports last night on the formation of a “new” financial fraud commission on mortgage abuses (which is actually just part of an existing fraud commission that has done squat). He also saw the apparent co-optoins of New York’s Eric Schneiderman as an effort to rein in the attorneys general that oppose the mortgage settlement.

If you are concerned and skeptical as I am, PLEASE write or call Schneiderman’s office. While it is unlikely to derail this particular train, it does not hurt Schneiderman know that you recognize this as a likely Faustian bargain.

Reader DS sent this note as an example:

Dear Atty General Schneiderman,

Having admired the integrity with which you have supported the rule of law
related to Wall St shenanigans and the mortgage crisis, I find it deeply distressing to read the following:

http://www.nakedcapitalism.com/2012/01/is-schneiderman-selling-out-signs-up-to-co-chair-committee-designed-to-undermine-defectors-to-mortgage-settlement-deal.html

I hope/trust that you will not ‘sell out’.

You can call Schneiderman’s office at 800-771-7755 or send a message via this page.

To the Ferguson interview:

33 Comments:

Susan the other says:

January 25, 2012 at 2:17 pm

We need good paying jobs that require industrial production of new equipment of all sorts. There is no better delivery mechanism that the military. Set the military to cleaning up the environment and there will be a zillion good jobs.

L Goodmang says:

January 25, 2012 at 3:49 pm

repost from earlier: OBAMA / SCHNIEDERMAN MEETING IN THE WHITEHOUSE

http://www.youtube.com/watch?v=siipB-1Zoac

timotheus says:

January 25, 2012 at 2:38 pm

One can also comment on Schneiderman’s Facebook page, where he is already celebrating the greatness and wonderfulness of his new gig. Most respondents seem to think it’s a triumph, too, so contrarian views would be most timely.

indio007 says:

January 25, 2012 at 2:59 pm

Hooray another Commission!
What a farce. County District Attorney’s should be prosecuting this crap. They have been the most injured by the fraud and they have the most to lose by it being ignored. We don’t need top down solutions here.

Blurtman says:

January 25, 2012 at 3:04 pm

Wait a minute, Mr. President, I thought you said that no crimes had been committed. Why not wait a few more years, to ensure that the statute of limitations has expired? WTF has Holder been doing for the last three years?

“And tonight, I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.”

JamesW says:

January 25, 2012 at 6:05 pm

Wonderful comments, Blurtman, and most cogent!

President Obama is so two-faced he is now tripping over his most recent public remarks, publicly proclaiming the banksters broke no laws, then in the SOTU, stating the obvious.

He’s either mixed up because he bothered to read the FCIC report (Financial Crisis Inquiry Commission) or because he has refused to!
- Procopius says:
  
  January 26, 2012 at 7:14 am
  
  Wait a minute, I remember the weaseling clearly, even if I don’t remember the exact words. He said “most of what they did wasn’t illegal” or maybe it was “much of what they did wasn’t illegal” but he hedged. I’m to lazy to google it right now, but he definitely did not say that none of what they did was illegal. I always keep a sharp eye out for that sly escape they usually slip in.
Up the Ante says:

January 26, 2012 at 10:25 am

“And tonight I am empowering my federal prosecutors to directly spy upon the states’ attorneys general, effectively ripping their playing cards from their hands, required as a display of party unity.”

fixed it for ‘ya
- Up the Ante says:
  
  January 26, 2012 at 6:19 pm
  
  For them it is only a war of nerves. They want to know what cards the AGs are holding, and who they can hunt.

brian says:

January 25, 2012 at 3:12 pm

slowing down results?
Obama to quote his predecesor
Mission Accomplished

Can't Make an Omelette says:

January 25, 2012 at 3:13 pm

FYI. I called Schneiderman’s office and reached someone who told me that they can’t take comments over the phone. “We don’t document it.” I guess filling out the email form is better.

ex-PFC Chuck says:

January 25, 2012 at 3:36 pm

When I called the Minnesota AG last week in response to Yves’ call to action I was told to send either a fax or snail mail letter. I did the former.
EH says:

January 25, 2012 at 3:48 pm

Well then, you can describe in detail surgical procedures or emotional crises instead. You know, something they can remember.
Ms G says:

January 25, 2012 at 5:40 pm

That is odd. When I called to last week to support his stand against the national settlement I spoke to an assistant who took down my message word by word and asked for my contact information. Maybe part of his deal with Obama is to stop “documenting” support for what is now the “other” side.

Sigh.
Nathan Tankus says:

January 25, 2012 at 7:20 pm

I called under the public integrity option. it worked fine for me.

to be cynical says:

January 25, 2012 at 4:04 pm

Should Schneiderman want to get a higher office in NYS (eg the gov. office should Cuomo head for a Senate or White House run), Schneiderman is going to need the blessings of the Dem. establishment/access to Obama’s/Clinton’s donor lists.

So to be cynical, me thinks Schneiderman’s going to look out for #1 (himself and his future) and go along with whatever the West Wing requests.

jyoung says:

January 25, 2012 at 4:22 pm

VERY interesting interview with Beau Biden on Ratigan’s show a few minutes ago… he extolled the efforts of numerous AG’s including Massachusetts and California and pledged to continue his current investigations. He wanted to know how many FBI Agents and investigators would be provided to the task force and most notably it appeared that he failed to mention the name Eric Schneiderman at all.

ajax says:

January 25, 2012 at 9:42 pm

What do you figure are the chances that
Biden the Vice-President will be on the
Democrat ticket, if as seems almost sure
Obama is the Democrat nominee?

spacecabooie says:

January 25, 2012 at 5:33 pm

The Committee was telegraphed a week ago, it appears, judging from some specifics in this lengthy, well structured – as ranting editorials go, and uncharacteristically articulate Jan 16 NYTimes Editorial.

http://www.nytimes.com/2012/01/16/opinion/on-the-trail-of-mortgage-fraud.html?_r=3&ref=todayspaper

The article was linked to by a possible stranger to NK but who is in the same business it seems, Randall G. Shelden, proprietor at Center on Juvenile and Criminal Justice. His post containing the link is titled “Wall Street is without a doubt a gang”, wherein he refers to his own four part article called “Is Wall Street a Gang?”, as well as to Bill Blacks new scholarly article “White Collar Criminology and the Occupy Wall Street Movement” appearing in teh Jan/Feb 2012 edition of “The Criminologist”.

It seems that the FBI is hot on the trail in Queens, reported to be the hardest hit in NY for foreclosures, and purportedly because of one guy, who is suggested to be roll-over prone.

“Queens has been harder hit by foreclosures than any other New York borough, and the Federal Bureau of Investigation believes it has found a culprit. Last July, the F.B.I. accused Edul Ahmad, a local broker, of a $50 million mortgage fraud, saying he lured fellow immigrants into subprime mortgages, inflated the values of their properties and concealed his involvement in deals that were ruinous for scores, if not hundreds, of borrowers. Mr. Ahmad pleaded not guilty, and posted $2.5 million bail. Now, according to court papers, as reported in The Times, he is plea-bargaining with federal prosecutors.”

spacecabooie says:

January 25, 2012 at 5:44 pm

Fact checking first – learningteh hard way:

Randall G. Shelden is an author at the Center on Juvenile and Criminal Justice’s web site. And the Center appears to be California based, as is the (lead scooper) Huff Post, of course. How well read, and of such good memory, Mr. Sheldon seems to be. A stretch to think of this as a CA insurgency intent on encircling Kamala Harris, next ?
- spacecabooie says:
  
  January 25, 2012 at 5:51 pm
  
  Another CA connection, but from the pro-prosecution side: Bill Black’s co-author is Henry N. Pontell of UC Irvine; or should it be stated as “Henry N. Pontell’s co-author is Bill Black”. Is Bill Black back in business ? On behalf of Kamala Harris ? or E. Schneiderman ? or both ?
Walter Wit Man says:

January 25, 2012 at 7:19 pm

Good catch on the NYTimes leading the PR campaign.

Note the the way they try to sell this swindle:

They identify a sacrificial bad guy (big fish, small pond) and hint that the bigger fish are in danger, and then immediately switch to the sob stories about the guppies and how we need to help these poor people now (“we need to look forward!”). The editorial then kind of slides in there this whole concept of yet another panel to talk about starting to maybe do some investigating . . . at some point.

How about a grand jury?

If the NYTimes is hinting that this small fish can turn the bigger fish in, then why do we need a new panel or commission? Shouldn’t AGs treat these perps the same way they treat poor black men or MegaUpload or marijuana dispensary owners or environmental activists or whoever the Justice Dept. is going after? Why don’t they investigate and charge and subpoena the perps in these apparent crimes?

As pointed out above, Obama is trying to have it both ways–it isn’t a crime, it is a crime that he will fight . . . blah blah blah . . .more lies from the serial liars . ..
- spacecabooie says:
  
  January 25, 2012 at 8:02 pm
  
  Damn that’s a perfect analysis … seems to me that you nailed it. Editor yourself … or just ghost writer ?
  
  Identifying the little pond, chosen exclusively for its ability to make a small fry appear as a whopper – a fish tale masquerading as an editorial if there ever was one..
  
  Seeing such an elaborate effort made within such a small space might make one wonder if the tale is being spun now with CIA involvement (bankster owned, also ?), using tales to (almost) perfectly mask the actual plan. Somebody the other day, re Apple, diminutized American propaganda vis a vis Chinese, but it seems that something this clever would not be in the NY Times repertoire. What else could the motivation be for an overt CIA assisted cover-up, how many CIA plants in the banks were there in 2008, and/versus how many now ? Makes me wonder also if the just unmasked “Goldman Sachs” plant into OWS was actually CIA using Goldman Sachs as her cover.
  - Can't Make an Omelette says:
    
    January 25, 2012 at 8:22 pm
    
    Damned if Yves’ comments sections don’t have so many great writers, you could spend all day here!
  - John says:
    
    January 26, 2012 at 11:34 am
    
    Could you like to something that about the Goldman Sacks plant? Can’t find anything when I google. Thanks.
- sleeper says:
  
  January 26, 2012 at 6:18 am
  
  Interestingly the culprit has a foreign sounding name, and seems in quite a hurry to plead guilty.
  
  This seems to happen on a regular basis – the Maddoff prosecution etc
  
  Is the DOJ threatening folks with draconian punishments to gain a quick guilty plea ? This makes for good theater and deflects interest and criticism from failure to prosecute the big money.
Walter Wit Man says:

January 25, 2012 at 7:38 pm

This is from that NYTimes editorial:

“What is needed is leadership by President Obama on this issue. He should form an interagency task force to investigate and pursue potential civil and criminal wrongdoing by institutions and people whose conduct in the mortgage chain had the greatest economic impact.

That would mean focusing on the large banks and their top echelons. The investigators would need to include the departments of Justice and Housing and Urban Development, the S.E.C. and the Internal Revenue Service, as well as bank regulators, with the formal co-operation of the most aggressive state attorneys general. The task force would need a leader with the impulses of a crusading prosecutor.”

I don’t accept this.

Sure, it’s preferable to have an inter agency approach with a righteous and noble leader. But it’s not necessary. Each agency could do its own investigations and prosecutions and I fail to see how independent prosecutions can hurt each other. How? Isn’t it better to throw everything you’ve got at them?

Especially at the federal level, they are more than equipped to make a go of it.

Also, is it really that complicated? I understand that maybe a state like Nevada would only have limited resources to prosecute. But prosecuting would probably help them in their civil case as well, so it may be a wise *investment*. And can’t they just go up the chain? Just to see where they go? That’s the downside of these masters of the universe buying up houses from all over the world. Hey, I’m sure the Nevada AG can start forcing NY bankers to testify at a grand jury and see where it goes. What’s the harm? From the point of view of a prosecutor?

Maybe these theories of criminal liability are too hard to prove. But they aren’t even trying.

And how hilarious is that propaganda at the end about a knight on a white horse showing up to head this panel. . .

Eric L. Prentis says:

January 25, 2012 at 7:23 pm

President Obama, the trust is gone. I am skeptical of your bait-and-switch tactics. Your State of the Union speech falls on deaf ears.

paul tioxon says:

January 25, 2012 at 8:26 pm

Five-Year Investigation

Rubin’s conviction is a victory for federal antitrust prosecutors in their five-year investigation of the $3.7 trillion municipal bond market.

Bank of America Corp., (BAC) JPMorgan Chase & Co. (JPM), UBS AG, (UBSN) Wells Fargo & Co. (WFC) and General Electric Co. (GE) previously acknowledged that former employees engaged in illegal activity. The companies have paid $743 million in restitution and penalties.

So far, the Justice Department has filed charges against 18 former executives of financial-services firms. With Rubin, 10 have pleaded guilty.

http://www.bloomberg.com/news/2012-01-09/two-cdr-financial-executives-said-to-plan-guilty-pleas-today-in-new-york.html

It seems the DoJ knows how to prosecute and convict complex cases, once they get started in earnest. Now may be the time to get the government to start in earnest, maybe using some of these guys who spent the past 5 years crushing the banks?

Morons Won says:

January 25, 2012 at 10:21 pm

Why should Obama be in a hurry to do anything? I spent the past 11 years calling Republican liars. George W Bush and Elaine Chao lost jobs every month for 8 years. I NEVER understood how anyone in New York City could be dumb enough to expect that mortgage payments could reset to a higher value. NEVER.

Republicans all want deregulation. Whatf Republicans are too dumb to figure out is that deregulation in financial markets leads to increased risk. IF Rush Limbaug doesn’t state Republican ideology in one syllable words, most Republicans, especially the ones in New York, are constituents too dumb to figure it out on their own. The real estate bubble inflats until the last dumb bunny buys in, then the bubble bursts.

Maybe Obama is letting the Republicans and the deregulation morons stew in their own juice. The more bankers, hedge fund managers and day traders destitute, broke, and on food stamps, the better off the world will be.

Peter T says:

January 26, 2012 at 1:10 am

I don’t trust Obama on this. Schneiderman? We’ll see. I sent him my letter:
Dear Attorney General Eric Schneiderman, Congratulations from Minnesota to your new function as co-chair of the federal mortgage investigations. I am, however, concerned about pressure from the Obama administration to not find anything bad about the bankers whom Obama needs to finance his campaign. I would welcome it as a sign of your integrity if you rejected any settlement with the mortgage industry before real investigations have been completed.

PaulArt says:

January 26, 2012 at 5:30 am

You listen to Ferguson and you understand why Progressives have been losing the battle all the time and why they will continue to lose the battle if they use people like Ferguson to get the message out. Don’t get me wrong, I respect Ferguson a lot but bumbling, incoherent, ambiguous, are apt adjectives to describe his first few sentences about the faux Obama task force on Mortgage fraud. Jay stops him in the middle to give an intro to the topic but he should not have to do this. An experienced guy like Ferguson does not understand the concept of succinctness and clarity? This sort of rambling gaseous approach is all too common on the academic Left. So frustrating.

LAS says:

January 26, 2012 at 6:23 am

“Punting” was the phrase used by Tom Fergusan about what Obama did in his speech and that certainly seems apt.

Within the past 7 days Obama was in NYC to raise money for his campaign (probably among rich leaders of financial services companies). If you lived in Manhattan the event was noticeable because so many streets were closed to accomodate his arcade.

There is no sign that Obama is going to roll up his shirt sleeves for anything but campaign photo ops.

Subscribe to: Post Comments