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Richard (RJ) Eskow
Published: Sunday 13 January 2013
No more deals. No more negotiations. Not until we’re in the room. Not until we’re seated in the chair, at the table, in the chambers of justice, that have always rightfully belonged to us – and only us.

Two New Fraud Deals Show Wall Street’s Washington Insiders at Work

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It must’ve been like old home week when the old gang of Wall Street and Washington insiders finalized a couple more cushy settlements last week.

Everybody knew the drill: Ignore the potential criminal charges and agree on settlement figures they think the public will swallow – figures that are big enough to sound impressive but far smaller than the banks’ ill-gotten gains.  They’ve done this dozens of times before.

But there was an empty chair at the negotiating table.

Bank of America was there, as it has been so many times before. So were the other too-big-to-fail banks.  Representatives from the Attorney General’s office were undoubtedly there, too. The Attorney General was a high-priced Wall Street attorney.

The banks’ “independent” reviewers were there, too, or at least their reports were. Those reports said that there were very few problems with the banks’ transactions.  That should’ve have raised some red flags around the negotiating table: An audit in San Francisco found that 84 percent of foreclosures were performed illegally, while another in North Carolina found “singular irregularities”  in roughly three-quarters of the mortgages reviewed.

So i shouldn’t have been such a surprise when an as-yet unpublished GAO report showed that these rosy reviews were disastrously flawed.

But then, the insiders had it wired. The reviewers included Promontory Financial Group, whose CEO was Comptroller of the Currency under President Bill Clinton. Then he became a senior attorney at Wall Street defense firm Covington & Burling. Small world: The Attorney General of the United States worked at Covington & Burling too.

Promontory and the other reviewers have an underlying conflict of interest: they’re reviewing their own client base. That’s the same conflict of interest that corrupted the for-profit “ratings agencies,” leading them to rate their clients’ toxic mortgage-backed securities as “AAA.”

Promontory was also the firm that said “well over 99.9 percent” of the loans issued by Standard Chartered bank complied with the law and only $14 million of them were illegal. Then the bank admitted that $250 billion of its deals, not $14 million, were illegal. That’s 17,000 times as much illegality as Promontory found in its ‘review.’ (17857.142 as much, to be precise, but who’s counting?)

Promontory kept the foreclosure gig anyway, with no objection from Washington’s regulators or law enforcement officials.

But then, who around that table would question Promontory? We know them, they probably thought. We’ve always known them.

Promontory and the other “independent” reviewers collected $1.5 billion in fees for worthless work, from a settlement that was supposed to help the occupant of that empty chair.

But of course the chair was empty. The occupant’s invitation was never sent out.  It never is.

The Securities and Exchange Commission has attended many such meetings – meetings in which senior bankers bind their shareholders to billions in fines and restitution, sometimes as penalty for fraud against those very same shareholders.(The banks also have a knack for covering their obligations with money from investors they’ve already defrauded, including working people’s pension funds)  The SEC’s senior attorney always has a seat at the table,either  literally or figuratively, whenever a big bank settlement is negotiated.

A new person was appointed to that position just today. The SEC’s new chief counsel held a senior regulatory position under President Clinton, too. But if you think he went to work for Covington & Burling after leaving public service like his colleague did, you’re wrong.

He worked for Arnold & Porter.

After joining Covington’s biggest competitor the SEC’s new legal chief moved on to another law firm, still defending banks and bankers from the agency he now represents. He had one last high-profile case before rejoining the government: MF Global. That’s the firm that stole its investors’ money instead of investing it. He defended one of its’ executives.

One of this weekend’s settlements with Bank of America addressed the fraudulent sale of mortgages to Fannie Mae. (Fannie Mae: That’s the government agency that was “privatized,” ruined by privatized greed, and then rescued by the taxpayers who now own it.)  The agreement was undoubtedly hammered out between Bank of America and Fannie Mae’s CEO, who represented the people’s interests in this case.

Fannie Mae’s CEO hasn’t been there long. His last job was as General Counsel for … Bank of America. In fact, he was BofA’s top attorney in 2008, at the height of its foreclosure misdeeds. Now he’s settling those misdeeds as part of a wave of deals that will allow the bank’s executives to escape criminal prosecution. So he had a seat at both sides of the table.

That happens a lot in these deals. Get used to it.

Bank of America’s agreed-upon payment to Fannie Mae sounds big – $3.6 billion. But that comes to exactly one percent of the outstanding debt on those loans – debt that’s still owed by the occupant of that empty chair.  The bank’s total settlement costs are roughly 0.75 percent of the total loan value.

BofA also agreed to sell the servicing rights to these mortgages … undoubtedly to another one of the banks sitting around that frequently-used table.  The buyer will need to recoup their investment, of course — and loan servicers boost their income by overcharging the occupant of that empty chair.

So whose chair is it?  You already know. That chair belongs to the borrower whose home value was artificially inflated by a bank-hired appraiser. It belongs to the homeowner who paid her mortgage on time every month, but was still hit with unjustified ‘servicing charges’ that caused her to fall behind … and lose her home.

That empty chair belongs to the minority communities targeted for predatory lending, then left to wither and die. It belongs to the bedroom communities whose residents invested their life’s savings in real estate whose value had been artificially pumped up by by bank speculation.   It belongs to millions of families – in Hendersonville, in West Garfield Park, in Baltimore and Jacksonville and Bakersfield and thousands of other communities across the country.

That chair belongs to the family who lost $50,000 or $75,000 or $100,000 when they lost their homes, and then got $1,200 back in that “big” $25 billion deal -  and only then if they were “lucky.” It belongs to all the Americans who lost trillions of dollars in housing value when the bank-created bubble finally burst, and who were then left holding the debt.

That chair belongs to all the people who can’t find work because nobody’s hiring. Nobody’s hiring because nobody’s buying. And nobody’s buying because so many people are struggling to pay their overpriced loans.

That chair belongs to you, and it belongs to me. And as long as it’s empty these deals will all turn out the same. A small circle of friends will keep cutting the same cushy deals over and over again until we go to Washington and demand a change, this change:

No more deals.  No more negotiations. Not until we’re in the room. Not until we’re  seated in the chair, at the table, in the chambers of justice, that have always rightfully belonged to us – and only us.



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ABOUT Richard (RJ) Eskow

Richard (RJ) Eskow is a well-known blogger and writer, a former Wall Street executive, an experienced consultant, and a former musician. He has experience in health insurance and economics, occupational health, benefits, risk management, finance, and information technology.

Well it's about high time the

Well it's about high time the language got as dirty as the players have been... for a LOOONG time now.

There may be quite a few who

There may be quite a few who are leaving the economic system, mortgage market, and mass consumerism altogether. The counter culture ideas of the 60's are even more relevant today. The warfare state is immoral and it is best to stay as far out of it as possible. Buying into the system as if Nixon's impeachment was a victory it was not... what the war machine did was a bloodless sacrifice just in order to begin destroying all vestiges of a counter culture and anti-war ferver in favor of the new Love of War and the S&M of torturing anyone we want, guilty or not. That is just like the witch hunting, if you drowned you were innocent. If you weren't innocent then you were slow-charred at the stake so the devil was driven out of you befoe you actually died.

What? Elizabeth Warren didn't

What? Elizabeth Warren didn't ride to the rescue? Again?

This snarkiness makes exactly

This snarkiness makes exactly ZERO impression on us, because we know just how stacked the system is, against just that happening.

Read the article, and LEARN SOMETHING.

I'm mad and angry and really,

I'm mad and angry and really, really pissed off! These liars, Theives and scoundrels should be rotting in the Penitentary instead of people who had a joint on them.

But how do we make that happen?

. . THIS ISN'T NEWS.... We

. . THIS ISN'T NEWS.... We the People voted for President Obama to do away with the BUSH tax cuts. . . So the Republicans and the TEA PARTY re-wrote the tax cuts and made them permanent. YES they dropped them from 1 million to 1/2 a million but made them permanent .......... The fraud that comes into play is the fact that they approved increased military spending - their own raises
but no aid for storm sandy ( keeping that bargaining chip for later )
. . . . BEFORE JOHN BOEHNER GOT UP AND WALKED OUT OF THE FISCAL CLIFF TALKS - social security C.O.L.A. cuts were approved along with raising the age of medicare to 67......
. . .the only talk you willl hear around washington is how they have to cut social security and medicare the two biggest entitlements - WHICH AREN'T ENTITLEMENTS. FOREIGN AID IS NOT ON THE TABLE - - MILITARY SPENDING JUST APPROVED ISN'T ON THE TABLE - - THE WAR ON DRUGS. ISN'T ON THE TABLE......THE SPACE PROGRAM ISN'T ON THE TABLE
BUT PRESIDENT OBAMA APPROVED SOCIAL SECURITY AND MEDICARE CUTS WITH THE FISCAL CLIFF DEAL. (to be used with the debt ceiling ???)...... HE SIGNED INTO LAW THE TAX CUTS - THEIR RIASES......
by approving secret service protection to george bush for life relieves the risk of a war crimes tribunal for the torutre he authorized at GITMO....and the rest of the dirty deals
.As they now talk of cuts why weren't there any discussions with george bush as he spent freely - - - the here's your cut, mentality - keep your mouth shut
the only cuts talked about are cut that directly affect the people - - that drive down their living standards - - making it harder and harder to get ahead - enslaving their children's future selling how they are doing the opposite..........
increased military spending ??????? increased foreign aid ?????????
ENDURING (permanent) PRESENCE ??????
WHERE DOES THE MONEY THEY ARE STEALING COME FROM ???
>>>>> WHERE DOES THE MONEY COME FROM
( the tea party has its hand out - - as it talks smaller government ???? - - did any of them turn down that raise last month ??????)
JUDAS.... SOLD OUT JESUS.....
. . . FOR HOW MANY PIECES OF SILVER ????

When are we going to say that

When are we going to say that the banks cant loanto americans for car loans and mortgages who says that we are their sheep!!! Why cant we raffle off our houses raising more money for the home and raising more tax money for our underfunded state and county goverment. Do the same for used cars it benifits all of us to raise taxes that will benefit all of us not just a few. This system canalso raise enough money to have a tv station only for political races and outlaw news stations from interviews and also add campaigns. We are not their sheep and thay need to understand that before the next election of govenors and congress. The money needs to be handled without the banks interference.
Real estate is the only industry that we can manage to get out of our debt to china and save ssi. What other industry is there that the chinese cant do for cheaper. Wild wild west real estate lets get them back I dont want to do business
with the bank anymore nobody likes them its time to get rid of them we can do better without them.

Isn't there at least ONE

Isn't there at least ONE other person in this country that believes as I do?

Why were these thieves allowed to get off 'Scott free', with only small fines in relation to what they 'really stole' and the extreme harm that they caused to millions of Americans? Millions who lost their job, their home, their health insurance and their pensions?? WHY??

These bastards should go to prison. Not just a Bernie Madoff or two. There should have been hundreds of these financial scoundrels and quite literally, thugs, sent away.

During the S & L debacle in the 80's, over 100 of these were sent to prison. Does the name 'Michael Milken' ring a bell to anyone?

So why are these s.o.b.'s getting off with inconsequential fines? That also includes Gov. Rick Scott of Florida. His companies stole billions from the government by way of Medicaid fraud. They paid a fine of some $180 million, and these sun baked idiots here in Florida elected him as governor. The election, by the way, for anyone not familiar with this case, was AFTER his companies agreed to pay the 'fine'.

Well, I'll tell you what. I am going to send invoices to Scott, GW Bush, and dozens of others for what they did (cost) to me.

In the 70's, there was a movie named "Network". It starred Jack Lemmon as a TV news anchor. He went on the air about this kind of corporate & govt. BS, and got people to open their windows and shout, "we're fed up, and we're not going to take it anymore.

This is not a Democrat vs. Republican thing (well somewhat).

It is a matter of making big business in America treat 'us', their customers fairly. I could go on and on with examples, but I am certain, have plenty of your own.

The "Sherman Anti-Trust Act" has been relegated to the trash can, and all of us have had to suffer the consequences.

Would anyone care to explain to all of us, why, after breaking up "Ma Bell" in the 70's, the govt. reversed course and allowed them to buy each other up again.
In Europe, you can buy any cell phone that you want, and then get service from any wireless carrier you prefer. And then, if you are not satisfied with that carrier, walk away and try another, without ridiculous penalties like we have.

Banks, insurance companies, that cell carrier, all have clauses in their 'must sign' contracts that say that you CANNOT sue them, for anything. If you have a dispute, you are forced to go to arbitration, controlled by, guess who?

Well I'm FED UP with their crap, and I'm NOT GOING TO TAKE IT ANYMORE.

Anyone else who feels the same way, please contact me through this website. It is long past time to set these corporate thieves on their collective butts and force change - PEACEFULLY of course.

The actor in "Network" was

The actor in "Network" was Peter Finch, and the quote was, "I'm mad as hell, and I'm not going to take this anymore!"

After the initial corporate

After the initial corporate media hype of AG Schneidermann appearing to take on Wall street with enthusiastic zeal the AG has settled into the safe position of slapping the criminal and fraudsters on the wrist with inconsequential fines that can be easily paid but leave victims and the public to be victimized again. No one has gone to jail as a result.

This is standard treatment of Wall street criminals taken from the playbook of former AG Cuomo who rose to governor following this script.This script insures that AG Schneidermann will be looked on favorably from wealthy donors if he chooses to run again or run for higher office. The purse of the rich will be open to him.

His kick in the teeth to the rest of us is calculated on the premise that by election time we will either forget or forgive him. When will Americans raise up against such treacherous politicians who see us as cannon fodder to be used for their next political advancement instead of We the people forcing them to do the job of representing us as they are paid and took a pledge to do.

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