Barney Frank: “As Well as To Financial Regulators”

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When I first read about this letter from retiring Financial Services Committee Ranking Member Barney Frank to Eric Holder, I thought it akin to what retiring Homeland Security Chair Joe Lieberman did on the Sunday shows when he aggressively called for gun control: a PR stunt by an outgoing top Committee member, addressing a problem in all-but retirement that he didn’t address while he had the authority to do so in Congress.

Dear Mr. Attorney General:

I note several instances recently in which Administration officials have proceeded civilly against blatant violations of our important financial laws, in part because of the difficulty of proving cases beyond a reasonable doubt, especially where the law may have been somewhat uncertain, but also because of a concern that the criminal conviction—and even indictment—of a major financial institution could have a destabilizing effect. This latter consideration does not apply, similarly, to individuals. It is, of course, the case that no corporation can have engaged in wrongdoing without the active decision of individual officers of that entity. I believe it is also the case that prosecuting individuals has more of a deterrent effect than prosecuting corporations.

I am writing to you as well as to financial regulators, understanding that the decision to pursue criminal proceedings rests with the Justice Department, so I ask that there be a series of consultations involving law enforcement officials and regulators with the goal of increasing prosecution of culpable individuals as an important step in seeing that the laws that protect the stability and integrity of our financial system are better observed.

BARNEY FRANK

And that may well be what this is: an effort to pile on all the calls for prosecuting the banksters.

But I am fascinated by that second paragraph, the mention of the financial regulators. Consider this NYT account of HSBC’s wrist-slap that Bill Black highlighted.

Despite the Justice Department’s proposed compromise, Treasury Department officials and bank regulators at the Federal Reserve and the Office of the Comptroller of the Currency pointed to potential issues with the aggressive stance, according to the officials briefed on the matter. When approached by the Justice Department for their thoughts, the regulators cautioned about the effect on the broader economy.

“The Justice Department asked Treasury for our view about the potential implications of prosecuting a large financial institution,” David S. Cohen, the Treasury’s under secretary for terrorism and financial intelligence, said in a statement. “We did not believe we were in a position to offer any meaningful assessment. The decision of how the Justice Department exercises its prosecutorial discretion is solely theirs and Treasury had no role.”

Still, some prosecutors proposed that Attorney General Eric H. Holder Jr. meet with Treasury Secretary Timothy F. Geithner, people briefed on the matter said. The meeting never took place. [my emphasis]

DOJ went to Treasury and the Fed and OCC and asked for permission to get HSBC to plead guilty to Bank Secrecy Act violations. According to Cohen, Treasury said they had no meaningful assessment. According to NYT, the regulators–the Fed and OCC–raised concerns about the broader economy.

And Barney Frank says he is writing financial regulators (in addition to Holder himself) about bank immunity, but this appears not to be the letter to financial regulators, because they are not CC’ed on the letter. Yet he has not released a separate letter to regulators to the press (though if my attempts to get this letter this morning are any indication, Frank’s staffers have already moved onto look for new jobs).

This suggests there’s another letter to the people who told DOJ to let HSBC skate.

It’s worth noting that one of these regulators–OCC–was broadly implicated by the Permanent Subcommittee Investigation of HSBC.

In any case, there seems to be more to what Frank is doing. It may be he’s just trying to push Holder to meet with TurboTax Timmeh and the financial regulators, as Holder’s prosecutors attempted to make happen. Or he may be doing something else here, potentially even coaxing regulators to embrace individual indictments to stave off the larger anger about the HSBC wrist-slap.

It may well be this is a show. But it appears that we’re only seeing half the show.

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Government Teat-Sucking Bankster, Steven Rattner, Calls Auto Bailout “Un-American”

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I’m sure someone thought it was a good idea to trot out Steven Rattner to spin the government’s announced plan to sell its GM stake.

But I don’t know how anyone thought a bankster–and particularly this bankster–could say this and still wield any credibility.

From Washington’s point of view, divesting its remaining shares will end an uncomfortable and distinctly un-American period of government ownership in a major industrial company.

Sure. Rattner places this sentiment in “Washington’s point of view.” Still, consider the messenger.

After all, he barely mentions here–as he did in his book–that this was not just a bailout of some industrial companies. It was also a bailout of two finance companies, Chrysler Finance and GMAC (he mentions that the government still owns Ally/GMAC, but still calls the scorecard, “nearly complete”). As such, it was also the bailout of the Private Equity firm, Cerberus, that had spent the previous years stripping Chrysler in the hopes of retaining just the finance arms.

He also neglects to mention that the government still pursues the un-American policy of treating banks according to a different set of rules, not only providing them free money, but seemingly exempting them from all laws.

Finally, he shows no self-awareness of his own history, including paying kickbacks so his firm could make big money off of New York State (for which he, like all banksters, got a mere wrist-slap).

I’m not saying the government should hold onto its GM stake forever (though unlike Rattner, executive compensation is the last reason I’d cite to applaud this sale). But having someone like Rattner call government intervention in purportedly capitalist companies un-American only perpetuates the idea that industrial companies should have to abide by so-called rules of capitalism that the titans of capitalism, the banksters, have all but discarded.

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Democratic and Republican Agreement: Prosecute HSBC

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Apparently, Matt Taibbi and Glenn Greenwald and Matt Stoller and Howie Klein and I aren’t the only hippies who believe HSBC should be treated like any other legal person who helped drug gangs and terrorists launder money.

Both Chuck Grassley and Jeff Merkley have written Eric Holder letters complaining about this treatment.

Here’s Grassley (who, as he notes elsewhere in the letter, is the Ranking Member on the Senate Judiciary Committee and has demanded a briefing):

I write today to express my continuing disappointment with the enforcement policies of the Department of Justice (Department). On December 12, 2012, the Department entered into a Deferred Prosecution Agreement (DPA) with HSBC, a global bank that has now admitted to violating federal laws designed to prevent drug lords and terrorists from laundering money in the United States. While the Department has publicly congratulated itself for this settlement, the truth is that the Department has refused to prosecute any individual employees or the bank responsible for these crimes. This troubling lack of real enforcement will have consequences for the health of our economy and the safety and prosperity of the American people.

[snip]

In spite of this egregious criminal conduct, the DPA fails in finding the proper punishment for the bank or its employees.  Under its terms, the DPA obligates HSBC to pay $1.92 billion to the federal government, improve its internal AML controls, and submit to the oversight of an outside monitor for five years.   Despite the fact that this is a “record” settlement,  for a bank as gigantic as HSBC this is hardly even a slap on the wrist.  It only amounts to between 9 and 11% of HBSC’s profits last year alone,  and is a bare fraction of the sums left unmonitored.

[snip]

Even more concerning is the fact that the individuals responsible for these failures are not being held accountable.  The Department has not prosecuted a single employee of HSBC—no executives, no directors, no AML compliance staff members, no one.  By allowing these individuals to walk away without any real punishment, the Department is declaring that crime actually does pay.  Functionally, HSBC has quite literally purchased a get-out-of-jail-free card for its employees for the price of $1.92 billion dollars.

[snip]

Past settlements with large banks prove that they do nothing to change what appears to be a culture of noncompliance for some businesses.According to the U.S. Sentencing Commission, jail time is served by over 96 percent of persons that plead or are found guilty of drug trafficking, 80 percent of those that plead or are found guilty of money laundering, and 63 percent of those caught in possession of drugs.[6]  As the deferred prosecution agreement appears now to be the corporate equivalent of acknowledging guilt, the best way for a guilty party to avoid jail time may be to ensure that the party is or is employed by a globally significant bank  In March 2010, the Department arranged a then-record $160 million deferred prosecution agreement with Wachovia based on its laundering of more than $110 million from Colombian and Mexican drug cartels.   Officials at the time stated that “blatant disregard for our banking laws gave international cocaine cartels a virtual carte blanche to finance their operations.”   In this case, a bank escaped with a record monetary settlement and a conspicuous absence of individuals behind bars.  If the story sounds eerily similar, that’s because it is.  It happened again with HSBC. [my emphasis]

And here’s Merkley (who is on the Senate Banking Committee):

I do not take a position on the merits of this or any other individual case, but I am deeply concerned that four years after the financial crisis, the Department appears to have firmly set the precedent that no bank, bank employee, or bank executive can be prosecuted even for serious criminal actions if that bank is a large, systemically important financial institution. This “too big to jail” approach to law enforcement, which deeply offends the public’s sense of justice, effectively vitiates the law as written by Congress. Had Congress wished to declare that violations of money laundering, terrorist financing, fraud, and a number of other illicit financial actions would only constitute civil violations, it could have done so. It did not.

[snip]

According to the U.S. Sentencing Commission, jail time is served by over 96 percent of persons that plead or are found guilty of drug trafficking, 80 percent of those that plead or are found guilty of money laundering, and 63 percent of those caught in possession of drugs.[6] As the deferred prosecution agreement appears now to be the corporate equivalent of acknowledging guilt, the best way for a guilty party to avoid jail time may be to ensure that the party is or is employed by a globally significant bank. [my emphasis]

Note, unlike Lanny Breuer, both Senators mention terrorism (though Merkley seems unaware how serious HSBC’s ties to Islamic terrorist financing are).

More importantly, they sound like the rest of us dirty hippies, making the audacious argument that banks ought to be subject to laws.

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Lanny Breuer Covers Up Material Support for Terrorism

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I noted last week how prosecutors were claiming they were being extra tough on HSBC for all its money laundering because of the seriousness of the charge they were going to defer: money laundering. Yesterday, with great fanfare, DOJ rolled out their deferred prosecution for money laundering, as if it were a good thing to ratchet up the charges you excuse.

But I was struck even more by how DOJ treated HSBC’s crimes they chose not to indict. Here’s how Assistant Attorney General Lanny Breuer described HSBC’s crimes:

HSBC is being held accountable for stunning failures of oversight – and worse – that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries, and to facilitate hundreds of millions more in transactions with sanctioned countries.

From 2006 to 2010, the Sinaloa Cartel in Mexico, the Norte del Valle Cartel in Colombia, and other drug traffickers laundered at least $881 million in illegal narcotics trafficking proceeds through HSBC Bank USA.  These traffickers didn’t have to try very hard.  They would sometimes deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows in HSBC Mexico’s branches.

In total, HSBC Bank USA failed to monitor over $670 billion in wire transfers from HSBC Mexico between 2006 and 2009, and failed to monitor over $9.4 billion in purchases of physical U.S. dollars from HSBC Mexico over that same period.

In addition to this egregious lack of oversight, from the mid-1990s through at least September 2006, HSBC knowingly allowed hundreds of millions of dollars to move through the U.S. financial system on behalf of banks located in countries subject to U.S. sanctions, including Cuba, Iran and Sudan.  On at least one occasion, HSBC instructed a bank in Iran on how to format payment messages so that the transactions would not be blocked or rejected by the United States.

That is, Breuer says HSBC 1) helped Mexican drug cartels launder money and 2) helped Cuban, Iranian, and Sudanese banks avoid US sanctions.

But that’s not all, according to the Permanent Subcommittee on Investigations, that HSBC did. The four main sections of the PSI report on HSBC’s Bank Secrecy Act and money laundering violations pertain to:

  1. Money laundering for Mexican cartels
  2. Helping banks evade sanctions
  3. Processing masses of travelers checks from Hokoriku bank in Japan which had suspicious ties to Russian “businessmen”
  4. Maintaining correspondent accounts with banks that had ties to terrorism, most notably the Al Rajhi bank

One of the things, according to Carl Levin, that HSBC did was help banks involved in terrorist financing get US dollars (that section takes up 53 pages of a 340 page report). And yet, Breuer’s speech did not once mention the word terrorism. The US Attorney’s release used the word “terror” once, though not in conjunction with HSBC. And the Statement of Facts mentions terrorism in conjunction with a description of the laws HSBC violated and in this one paragraph.

In addition to the cooperative steps listed above, HSBC Bank USA has assisted the Government in investigations of certain individuals suspected of money laundering and terrorist financing.

In short, Lanny Breuer and his prosecutors did not mention that this bank they were letting off without prosecution provided a terrorist-connected bank with US dollars for years.

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How Treasury Justified a $13 Million Smaller SCB Settlement than NYS

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Back in August, Standard Chartered Bank settled with New York’s Superintendent of Financial Services for laundering Iran and other sanctioned countries’ money; that settlement was for $340 million.

Today, Treasury announced its settlement for the same fraud. Today’s settlement–which includes “U.S. Attorney’s Office for the District of Columbia, the Department of Justice’s National Security Division, the Department of Justice’s Asset Forfeiture and Money Laundering Section and the New York County District Attorney’s Office; as well as orders involving the Board of Governors with the cooperation of the UK’s Financial Services Authority,”–is for $327 million, of which Treasury’s take is $132 million.

When SCB settled with SFS, it admitted that its fraud had covered $250 billion in transactions (thus refuting the dubious work done by Promotory Financial).

The New York State Department of Financial Services (“DFS”) and Standard Chartered Bank (“Bank”) have reached an agreement to settle the matters raised in the DFS Order dated August 6, 2012. The parties have agreed that the conduct at issue involved transactions of at least $250 billion. [my emphasis]

But today’s Treasury settlement shrinks that claim this way:

While SCB’s omission of information affected approximately 60,000 transactions related to Iran totaling $250 billion, the vast majority of these transactions do not appear to have been violations of the Iranian Transaction Regulations, 31 C.F.R. Part 560 due to authorizations and exemptions which were in place at the time.

Treasury would have us believe that SCB engaged in fraud to hide Iran’s involvement of money transfers even with legitimate transfers.

Maybe that’s right. Without a lot more transparency, we’ll just have to take Treasury’s word for the claim that the vast majority of money Iran was transferring up to 2008 didn’t fall under sanctions in place at the time, as dubious as that is.

Now, none of this addresses the scope of the violations involving other sanctioned countries, such as the $96 million transfered to Sudan described in the Treasury settlement but not the SFS one. Nor does it address the $243,500 it transfered for a designated drug kingpin, Connect Telecom, in 2011, after SCB had already started discussing these issues with “certain law enforcement agencies” and NYS.

It also relies on this claim:

OFAC had not issued a penalty notice of Finding of Violation against SCB in the five years preceding the apparent violations.

To make SCB look compliant, even though the Fed had been in discussions with SCB about these violations starting in 2004.

And of course, it includes this language:

Without this Agreement constituting an admission or denial by SCB of any allegation made or implied by OFAC in connection with this matter…

In spite of SCB’s earlier admissions to SFS.

Again, SCB has already admitted to some of this fraud. But Treasury has gone out of its way to not only not require an admission, but to retroactively label hundreds of billions of dollars in fraudulent transactions kosher.

It’s really time to start asking why that is.

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The New Measure of DOJ Seriousness: The Charges It Defers

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In an article on the upcoming HSBC settlement, Reuters seems impressed with the fine the bank may pay for the assistance it gave to drug gangs and terrorists and other crooks by  laundering their money: $1.8 billion. It goes on to talk about “how big a signal” DOJ wants to send with this settlement.

The emphasis, of course, should be on that word “settlement.” One that will likely result in a Deferred Prosecution Agreement, in which no one gets charged, not even for the egregious conduct HSBC engaged in.

Because ultimately, Reuters is measuring this big signal by the seriousness of the criminal charges DOJ doesn’t file.

In regulatory filings, HSBC has said it could face criminal charges. But similar U.S. investigations have culminated in deferred prosecution deals, where law-enforcement agencies delay or forgo prosecuting a company if it admits wrongdoing, pays a fine and agrees to clean up its compliance systems. If the company missteps again, the Justice Department could prosecute.

[snip]

The agreements “have become a mainstay of white collar criminal law enforcement,” U.S. Assistant Attorney General Lanny Breuer said in September during an appearance at the New York City Bar Association.

“I’ve heard people criticize them and I’ve heard people praise them. DPAs have had a truly transformative effect on particular companies and, more generally, on corporate culture across the globe.”

If U.S. prosecutors agree to a deferred agreement, they still could wield a powerful legal tool by accusing the bank of laundering money.

That would be a much more serious charge than if prosecutors, in a deferred agreement, charged HSBC with criminal violations of the Bank Secrecy Act, a law that requires banks to maintain programs that root out suspicious transactions.

[snip]

A charge of money laundering would be a rare move by the Justice Department and would send a signal to other big banks that the agency is intent on cracking down on dirty money moving through the U.S. financial system. [my emphasis]

No, seriously. A legitimate report just said that DOJ will send “a signal” based on ratcheting up the seriousness of the crimes it makes disappear with one of Lanny Breuer’s flaccid DPAs. It will send “a signal” with the seriousness of the charges it will effectively excuse.

Heck. If we’re not going to really charge these banksters, why not add on murder or drug trafficking or terrorism charges, or any of the other crimes they abetted? That would really send “a signal” now, wouldn’t it, deferring even more serious charges that real people would do hard time for?

The Senate has already accused HSBC of money laundering. But mere accusations–even with promises to do better–do nothing.

No matter how serious a charge those accusations involve excusing.

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The War on Drugs Other Countries’ Ruthless Vicious Capitalists

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This long Benjamin Wallace-Wells piece on the lost war on drugs is worth reading in any case. But I’d like to pose his description of the fizzling war between drug gangs against the US response to such fizzling violence.

First, Wallace-Wells offers a description of the truce between two Salvadoran gangs earlier this year.

Early this year, a former Salvadorean guerrilla fighter named Raul Mijango began meeting secretly with the leaders of the nation’s two largest gangs, Mara Salvatrucha 13 and Barrio 18, in prison, in an effort to negotiate a form of truce. The Salvadorean street gangs (each of which was founded in Los Angeles) are not major international movers of drugs, but they are known for an almost tribal violence, and in recent years, the conflicts between the two groups has threatened to overrun the state.

Mijango would not say who authorized his mission, though it was widely assumed that the government had sent him. The gang leaders in prison did not consult their allies in Los Angeles. But Mijango, a former guerrilla fighter, knew what exhaustion looked like. “I sensed from the beginning that they felt that maybe this was the opportunity they were looking for,” he says. In February, he asked the leaders to meet in the same room in a prison that had been set aside for that purpose, and though “the idea did not please them,” Mijango says, he felt some trust had been brokered when they saw one another face-to-face. Soon he had the framework of an agreement—in which the gangs would call off their feud with one another, would stop recruiting children. In return, the leaders wanted to be sent to other, more congenial prisons, where they could be closer to their families. That was all right with the authorities, and so, in May, the leaders were transferred.

The truce was not formally announced. The way that it reached the outside world was that the killing simply stopped.

This truce is just one of the reasons I’m so puzzled by Treasury’s decision to list MS-13 as a Transnational Criminal Organization earlier this year is so puzzling. Just after the US has made a slew of MS-13 arrests and MS-13 in El Salvador has backed off the killing, the US has decided to wield terrorist-like legal means against it.

As if we had to invent a reason to keep them illegal.

Then there’s Wallace-Wells’ explanation why–in spite of US based examples where you can target violence while leaving the drug sales intact–some top diplomats believe you can’t end the war on “drugs.”

Another reason legalization may not do much to diminish the violence is that some of the largest Mexican cartels, as they have moved more deeply into extortion and kidnapping, may be evolving out of the reach of drug policy. The problem is that some of the largest Mexican groups have moved deeper into extortion and kidnapping and have become less dependent on narcotics. “My fear is that if you legalize drugs tomorrow, I don’t think you’re going to reduce the number of cartels or the amount of homicide or the flow of illicit goods,” says Adam Blackwell, a Canadian diplomat who is the secretary for multi­dimensional security at the Organization for American States. “Focusing too much on drugs takes us away from the real issues, which are”—he searches for the right word. “Structures. Cartel structures. Gang structures.”

Blackwell’s formulation almost exactly parallels what Hillary said yesterday about the drug war.

“I respect those in the region who believe strongly that [U.S. legalization] would end the problem,” Clinton said Thursday at a Washington D.C. forum hosted by Foreign Policy magazine. “I am not convinced of that, speaking personally.”

[snip]

“I think when you’ve got ruthless vicious people who have made money one way and it’s somehow blocked, they’ll figure out another way,” she said. “They’ll do kidnapping they’ll do extortion.”

But both Blackwell and Hillary suffer from a definitional problem. As a commenter here recently noted, drug cartels are actually not cartels; that’s part of why the competition between various gangs is so violent. So it can’t be the “cartel structures” that distinguishes gangs from other capitalist enterprises (many of which are much closer to cartels than drug gangs) that operate ruthlessly.

And while most purportedly legitimate businesses don’t kidnap (they leave that to the US government!), they do extort, though that usually takes the form of threats to take away market access.

At some point, when you take the violence away, the drug networks look like a significant group of very respectable American capitalist enterprises that use vicious techniques–that at least should and probably are illegal–to make money. At some point in this stage of the war on drug capitalists, we’re going to have to get a lot more specific about what makes these capitalists bad even though they use many of the same approaches the capitalists running our own country use.

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How Obama’s DOJ Sold Out American Citizens In the Robo-Signing Criminal Plea

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Yesterday afternoon there was a critical guilty plea entered in the ongoing robo-signing mess that lies beneath the festering mortgage crisis.

The former executive of a company that provided documentation used by banks in the foreclosure process pleaded guilty to participating in a six-year mortgage-forgery scheme.

The deal announced Tuesday by the Department of Justice represents one of the only successful criminal prosecutions resulting from the “robo-signing” scandal that surfaced two years ago.

Lorraine Brown, 56 years old, of Alpharetta, Ga., who is a former executive of Lender Processing Services Inc., LPS of Jacksonville, Fla., pleaded guilty to a scheme to prepare and file more than one million fraudulently signed and notarized mortgage-related documents.

A criminal guilty plea to straight on systemic fraud like this (here are the pleas documents) ought to have far ranging consequences for home and mortgage holders, not to mention local county recorders, whose quiet title and fee income, respectively, were damaged by the fraud, or at least so you would think.

A long time attorney involved in the field of mortgage fraud, Cynthia Kouril, writing at Firedoglake, laid out well the paths to recourse plaintiffs damaged by this fraud should have:

At the end, I said that this could be a game changer. In the comments, folks thought that was a reference to the fact that for once we have a Read more →

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Is Chinese Elite Looting More Newsworthy than Middle Eastern–or US–Looting?

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NYT has a really good article today on how the family of Chinese Prime Minister Wen Jiabao has gotten enormously wealthy while he’s been in power. The Chinese government has already started censoring the story itself and discussions of it.

And while I applaud NYT’s coverage of the corruption of the Chinese elite, I was left wondering whether NYT would print the equivalent story on Middle Eastern dictators or–even more unlikely–American elites.

While there has been some coverage of how Hosni Mubarak, Moammar Qaddafi, Ali Abdullah Saleh, or Zine El Abindine Ben Ali looted their countries of billions now that they’ve fallen, one of the only times we’ve heard about Saudi looting came after Riggs Bank got busted.

And while we’ve had reports on Countrywide’s VIP program and the general process by which members of Congress get enormously wealthy on our dime as well as stories focused on those (like Maxine Waters), we rarely see maps like the one NYT drew of the business connections involved.

Partly, I wonder whether the US is just better at hiding these connections. Some of this kind of work would stumble on America’s shell corporations, for example.

In the case of Mr. Wen’s mother, The Times calculated her stake in Ping An — valued at $120 million in 2007 — by examining public records and government-issued identity cards, and by following the ownership trail to three Chinese investment entities. The name recorded on his mother’s shares was Taihong, a holding company registered in Tianjin, the prime minister’s hometown.

The apparent efforts to conceal the wealth reflect the highly charged politics surrounding the country’s ruling elite, many of whom are also enormously wealthy but reluctant to draw attention to their riches. When Bloomberg News reported in June that the extended family of Vice President Xi Jinping, set to become China’s next president, had amassed hundreds of millions of dollars in assets, the Chinese government blocked access inside the country to the Bloomberg Web site.

“In the senior leadership, there’s no family that doesn’t have these problems,” said a former government colleague of Wen Jiabao who has known him for more than 20 years and who spoke on the condition of anonymity. “His enemies are intentionally trying to smear him by letting this leak out.”

And partly it may be lack of self-awareness. NYT complains, for example, that Chinese disclosure laws don’t apply to extended relatives.

In the winter of 2007, just before he began his second term as prime minister, Wen Jiabao called for new measures to fight corruption, particularly among high-ranking officials.

“Leaders at all levels of government should take the lead in the antigraft drive,” he told a gathering of high-level party members in Beijing. “They should strictly ensure that their family members, friends and close subordinates do not abuse government influence.”

The speech was consistent with the prime minister’s earlier drive to toughen disclosure rules for public servants, and to require senior officials to reveal their family assets.

Whether Mr. Wen has made such disclosures for his own family is unclear, since the Communist Party does not release such information. Even so, many of the holdings found by The Times would not need to be disclosed under the rules since they are not held in the name of the prime minister’s immediate family — his wife, son and daughter.

Eighty percent of the $2.7 billion in assets identified in The Times’s investigation and verified by the outside auditors were held by, among others, the prime minister’s mother, his younger brother, two brothers-in-law, a sister-in-law, daughter-in-law and the parents of his son’s wife, none of whom is subject to party disclosure rules.

But when Congress finally passed a bill cracking down on insider trading this year, it didn’t even cover the spouses of members of Congress and we’re exempting some Executive Branch members on national security grounds.

Maybe I’m being churlish. But I really wonder if such a superb article would come out to expose graft of our allies that got deposited into American banks. And I wish we saw more of this kind of reporting about our own corrupt elite.

In somewhat related news, Silvio Berlusconi got sentenced to four years for tax fraud today (though appeals will probably save him from jail time). And we still haven’t seen Mitt Romney’s tax returns.

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Eric Holder Rewards the Teams that Gave Torturers and Mortgage Fraudsters Immunity

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As TPM’s Ryan Reilly noted yesterday, among the awards Attorney General Eric Holder gave out at yesterday’s Attorney General’s Award Ceremony was a Distinguished Service Award to John Durham’s investigative team that chose not to prosecute Jose Rodriguez or the torturers who killed their victims.

The 13th Distinguished Service Award is presented to team members for their involvement in two sensitive investigations ordered by two different Attorneys General. In January 2007, Attorney General Michael Mukasey asked Assistant U.S. Attorney John Durham to lead a team that would investigate the destruction of interrogation videotapes by the CIA. Assistant U.S. Attorney Durham assembled the team and began the investigation. Then, in August 2009, Attorney General Holder expanded Assistant U.S. Attorney Durham’s mandate to include a preliminary review of the treatment of detainees held at overseas locations. This second request resulted in the review of 101 detainee matters that led to two full criminal investigations. In order to conduct the investigations, the team had to review significant amounts of information, much of which was classified, and conduct many interviews in the United States and at overseas locations.

The timing on this award–coming even as DOJ aggressively prosecutes John Kiriakou for talking about this torture–is particularly cynical.

Holder also presented a Distinguished Service Award to the team that crafted a $25 billion settlement effectively immunizing the banksters for engaging in systemic mortgage fraud.

The third Distinguished Service Award is presented to the individuals involved in procuring a $25 billion mortgage servicing settlement between the United States, 49 state attorneys general and the five largest mortgage servicers, representing the largest federal-state settlement in history.   The settlement includes comprehensive new mortgage loan servicing standards, $5 billion to state and federal treasuries and borrowers who lost their homes to foreclosure, $20 billion in consumer relief and a $1 billion resolution of False Claims Act recoveries by the Eastern District of New York.

As DDay has documented relentlessly, the settlement is little more than kabuki, with most of the “consumer relief” consisting of actions the banks were already taking.

To get an idea of how outrageous it is to give an award to the torture non-prosecution team and the kabuki settlement team, compare what those teams did with the rest of the Distinguished Service recipients.

  1. The team that successfully prosecuted United States v. AU Optronics et al.,an international cartel that fixed the price of liquid crystal display (LCD) panels sold in the United States and around the world
  2. The team that implemented national standards aimed at eliminating sexual abuse in our nation’s confinement facilities
  3. The kabuki mortgage settlement team
  4. The team that investigated and dismantled the Coreflood Botnet, also known as Operation Adeona [this was a controversial expansion of Federal power to combat hacking, though since the team worked with a court order, better at least than what the government did to WikiLeaks]
  5. The team that investigated and convicted 37 members of the La Mara Salvatrucha (MS-13) gang in the San Francisco area
  6. The Tribal Trust Negotiation Team, which negotiated settlements with more than 40 Tribes in complex and long-running Tribal Trust cases [I’m not sure, but I believe this is the Cobell settlement, which is in many ways another kabuki settlement, but at least the tribes finally get some compensation]
  7. The Raj Rajaratnam investigation and prosecution team
  8. “The team whose extraordinary service led to the prosecution of Ahmed Warsame” [I quoted this because Warsame has not been convicted yet; the second-to-last item in his docket was a sealed January 5, 2012 document following a continuance, suggesting he may be cooperating in some way; this award should be considered recognition for the further twisting of our legal system to allow for novel war on terror uses]
  9. The Rod Blagojevich investigation and prosecution team
  10. INTERPOL Senior Inspector Joseph J. DeLuca for his outstanding leadership and law enforcement coordination in the apprehension and extradition of international fugitives
  11. Assistant Inspector General Thomas F. McLaughlin for 22 years of service in OIG and certain initiatives he conducted while there, including prosecuting department employees
  12. The CrimeSolutions.gov Development Team for its leadership in creating and launching the premier online resource for information about evidence-based programs and practices in criminal justice, juvenile justice and crime victim services
  13. The torture non-prosecution team
  14. The Congressman William Jefferson investigation and prosecution team

Five of these are for successful prosecutions–AU Optronics, MS-13 gang members, Raj Rajaratnam, Rod Blagojevich, William Jefferson. Another two–the Coreflood Botnet and Warsame actions–neutralized a threat, albeit through novel and controversial means. And then there are the teams that worked to make the criminal justice system more humane.

But rather than holding criminals accountable–punishing those that degraded our nation and created new reasons for people to join terrorists, punishing those who crashed our economy and stole the wealth of millions of families–the Durham and Mortgage Settlement teams made us less safe. They immunized crime, rather than punishing it.

“No one is above the law,” Eric Holder has said on other occasions. Not surprisingly, he didn’t say that yesterday, because it’s clear that some people–the torturers and the banksters–are indeed above the law.

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