The first salvo of taking America back from the clutches of greed and corruption was launched by the SEC with fraud charges against Goldman Sachs but this is just the opening salvo of what could be a long, drawn out legal battle to bring morality where it is needed most, in the financial affairs of Wall Street.
The reason is because cleaning up the mess entails more than making a few scapegoats out of corporate executives and the multi-million dollar bonuses. What is really needed is to expand the legal actions to include all of those former Wall Street executives who went to work for the government and led America down the path of self-destruction.
Greed was as much a motivator for government employees as it was for Wall Street crooks and campaign contributions and kickbacks were the tools that bought off government protection from these master thieves.
Even former President Bill Clinton had a mea culpa of sorts this weekend when he said he was wrong in letting his former Treasury Secretaries, namely Robert Rubin and Larry Summers, create the regulatory laws that opened the floodgates to corruption, fraud, conflicts of interest and ethics violations that brought about the collapse of the economy.
Just before Clinton left office his economic advisors, with the help of Wall Street, changed the rules of the game and created layer after layer of unregulated opportunities on Wall Street. The sub-prime mortgage market was just one of many. But it took more than Wall Street to hoodwink the public, it took government insiders and congressmen that could be bought off.
Then there was the curious case of Rahm Emanuel, yet the same Emanuel serving as the most important advisor to Barack Obama, who was also Clinton's chief fund raiser all the way back in 1992, who was hired by Clinton to raise money while being paid $3,000a month by Goldman Sachs for consulting.
The Emanuel, Rubin and Summers trio remained with Clinton throughout his presidency and were the movers behind the NAFTA treaty and Mexican Peso crisis, both of which lined the pockets of Goldman. This was before the secret regulatory reform by the same trio that opened the floodgates to derivatives and swaps used to fuel the sub-prime fraud.
Then Emanuel was placed on Freddie Mac's Board by Clinton where he was paid $350,000 as the two government funded housing programs put up the funds for the housing scam. The SEC action against Goldman is just the tip of the iceberg.
Senator Chris Dodd, the indignant Senator who is retiring because of the mess in DC is another player and cohort of the insiders who steered the government into the hands of Wall Street. In his case he benefitted from illegal mortgage loans at highly favorable rates and millions in campaign contributions from these same firms destroying our economy.
Yet we have only begun the process of cleaning out the mess. All the players are still inside the Obama White House as paid staff or key advisors. Many details about Obama's own relationship to Goldman Sachs are yet to be revealed.
Did he know his key advisors spent almost two decades putting in place the regulations and deals to destroy the housing market? What role did Emanuel and Goldman play in buying off Obama's two major challengers in the US Senate race in Illinois when both the top Democrat in the primary and top Republican in the general election mysteriously withdrew for personal reasons opening the door for the unknown State Senator to explode on the national political scene. Remember that the unknown Obama was the featured speaker at the Democratic Presidential convention in 2004 while he was the underdog candidate for Senate.
What about the secret meetings between Obama and Goldman executives in Chicago early in his presidential campaign, or the secret practice debate Goldman arranged with Tom Brokaw of NBC in NYC during the presidential campaign?
With Obama still surrounded by Goldman people should he protect his own integrity by ordering them to stay out of the investigations, and many more are to come, and recluse themselves from any action that might benefit Goldman and other Wall Street firms? It would seem to be the only way to clear the record and protect the public from them influencing actions by federal agencies as well as policy, programs and regulatory initiatives that might unfairly benefit the institutions.
At the same time someone honest in Washington, if there are such people left, should demand that any congressmen or Obama administration officials receiving funds for special interest campaigns or political campaigns should also recluse themselves from participating in any actions impacting on these firms if the firms are being investigated for fraud.
Money runs deep in DC. There is a direct deposit line between Wall Street and the offices of president and congress. The surviving financial institutions like Citigroup, JPMorgan Chase, Goldman Sachs, Bank of America and Morgan Stanley spent more than $21 million lobbying Congress last year, according to the Center for Responsive Politics.
They also employed plenty of Washington's brand name lobbyists to work their influence, including: former House Democratic Leader Dick Gephardt; Steve Elmendorf, a former top Gephardt staffer; Chuck Brain, former President Bill Clinton's top lobbyist; Ken Duberstein, a chief of staff in the Reagan White House; and Tony Podesta, a prodigious fundraiser close to the Obama administration and much of the Senate Democratic caucus.
As more charges are released and attention moves from housing to oil futures to credit markets to debt financing for foreign governments there will be pressure on the investigative agencies to plea bargain the cases, a standard practice in the past. This will amount to no more than a reward to these firms as they can avoid responsibility for what they are charged by not admitting guilt, thus protecting themselves to some degree from civil actions by the investors who lost billions of dollars.
For example, the SEC action against Goldman, if plea bargained, will not recover the $1 billion in investor losses that resulted from the fraud. If Goldman can afford to pay $25 billion in bonuses they can certainly repay $1 billion in losses.
The media thinks the Wall Street mess will be used for political advantage. Of course it will, it is a case of the politicians being just as guilty as the Wall Street executives. The politicians share the guilt and must not be overlooked.
But if the Obama administration agrees to plea bargains they will still be guilty of aiding and abetting the crooks. Obama, in the interest of his much ballyhooed transparency, needs to get transparent real fast and explain his role with Goldman and other financial institutions dating back to his Senate race, he needs to get transparent and release all documents, memos and emails from the Goldman gang in the White House including Emanuel, Summers, Rubin, and the many other staff in the White House and Treasury who worked for Goldman and were still benefiting from stock and dividend payments from the behemoth, and he needs to denounce the plea bargain as a tool for settling cases involving billions of dollars of damages from fraud.
We have not even begun to scratch the surface of the depth of the moral bankruptcy in America and we need to move fast and furious to make sure it does not engulf our politicians in an ever growing web of deceit and deception. We can not let them forget the millions of lives hurt by the actions, the billions of dollars lost to them, and the pain and suffering from people around the world who were victims.
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