Lambert here: I couldn’t make up my mind whether there was any redundancy in the headline or not.
By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Originally published at New Economic Perspectives
The FCPA Blog, an invaluable aid to anyone involved in the effort against corruption, has just run a story that epitomizes the neo-liberal approach to “liberty.” There is a massive movement, well-funded by political contributions, to privatize our prison systems. The private jailors overwhelmingly want to deal with the lowest risk jail populations – and then claim that they are “less expensive” than other prisons owned by the State.
The “Cash for Kids” Scheme
In Pennsylvania, in a fitting illustration of the dark side of von Hayek’s praise of “spontaneous order,” this privatization movement reached its neo-liberal peak when the owner of two privatized juvenile detention facilities bribed two Pennsylvania judges to send more kids to jail and maximize the owners’ profits. The huge size of the bribes demonstrates the scale of the miscarriage of justice and the enormous profits that injustice produced for the owner of the privatized juvenile detention facility. The FCPA Blog tells the sickening tale.
“The First National Community Bank of Dunmore, Pennsylvania (FNCB) admitted that it failed to file suspicious activity reports on transactions linked to the judicial corruption scheme known as ‘cash for kids’ that spanned more than five years.
Only after one of the judges involved in the bribery and kickback scheme pleaded guilty did the bank file a report.
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) fined the bank $1.5 million for willfully violating the Bank Secrecy Act.
Two former judges in Pennsylvania — Michael Conahan and Mark Ciavarella — were ultimately convicted. Conahan was sentenced to 17.5 years in prison. Ciavarella was jailed for 28 years.
Conahan was on FNCB’s board of directors. He controlled accounts at the bank through which he processed the bribes and kickbacks, FinCEN said.
Judges Conahan and Ciavarella took more than $2.2 million from the operator of two private, for-profit youth detention centers. In return, the judges sentenced thousands of juveniles to increase the number of residents in the centers.
‘Despite several red flags indicating suspicious activity, FNCB did not file a single suspicious activity report related to these accounts until after Conahan’s first guilty plea in 2009,’ FinCEN said.
Judge Conahan tried to disguise the bribes using his FNCB accounts. There were red flags that should have caused the bank to respond, FinCEN said.”
“Have you no sense of decency sir, at long last?”
That was the question that effectively ended Senator Joseph McCarthy’s career as a drunken liar eager to achieve fame through lies, power, and abuse. Joseph N. Welch, Special Counsel for the Army, asked McCarthy the question when McCarthy tried to smear a junior lawyer on Welch’s legal team. McCarthy, like most drunken bullies, was prepared for everything except someone standing up to him. He melted like a snowman in August in Washington, D.C.
The world’s top banks and bankers (i.e., HSBC) have knowingly helped fund the Sinaloa drug cartel, which is in the same league as ISIS in terms of beheading. Benjamin Lawsky, the estimable NY Superintendent of Financial Services, despite ridicule and obstruction from President Obama’s badly misnamed Department of Justice and faux financial regulators, has tried to stop Standard Chartered’s efforts to aid Iran in developing nukes. BNP Paribas officers knowingly helped fund Sudan’s genocidal regime by aiding it to escape international sanctions.
Each of these acts is more depraved and destructive than bankers helping the CEO of a private company to bribe judges to send juveniles to prison in order to enrich the CEO. But helping to fund mass murder that takes place hundreds or many thousands of miles away is easier for bankers to ignore. FNCB’s bankers were aiding bribery designed to destroy the integrity of the juvenile “justice” system – for the purpose of sending their neighbors’ kids to prison via kangaroo court trials.
So I have to ask our class of criminal bankers: “Have you no sense of decency sir, at long last?” Is there any crime so depraved that you would refuse to commit it or aid and abet its commission if it would increase your bonus?
I have two questions for our “Justice” Department. Which of FNCB’s top bankers are you going to prosecute? Just kidding – we know you will not prosecute them. You do realize, however, that my two questions are related. If you continue to refuse to prosecute senior bankers’ crimes and civil wrongs and refuse to “claw back” their compensation they will continue to see those crimes as profitable “sure things.” They care nothing about fines against the bank.
How despicable a crime do the bankers have to commit before you will prosecute them? Your kids were at far less risk of being railroaded into prison by corrupt judges because of your greater wealth and class status. We all know that you would be demanding prosecutions of the bankers if it were your kids who were railroaded into prison. Your job is to treat crimes against everybody’s kids with all the vigor you would bring to demanding prosecutions for crimes against your kids.