Banks Still Acting Badly

The big banks are still mugging America. They do so because they can, and they can because they pour tens of millions of dollars into our Presidential and Congressional elections.

Their political contributions politically exempt them from our criminal laws and serious regulatory oversight. As William Grieder notes in The Nation, they are "too big to prosecute." Since the financial crisis began more than three years ago, not a single financial executive has gone to jail, despite massive evidence of criminal fraud.

When the evidence of criminal activity is so overwhelming that the Justice Department must act, the Administrations of George W. Bush and Barack Obama have chosen to defer prosecutions and impose civil fines that are rarely more than wrist slaps. The Bush Administration settled 108 such corporate cases through deferment and the Obama Administration did 53 in its first two years.

Grieder points out that the refusal of the Bush and Obama Administration's to hold corporate executives accountable, with no prospect of serious jail time or heavy personal fines merely continues the status quo... "so the corporate crooks will do it again."

In fact, the crooks never stopped "doing it."

Scott Pelley reported in a recent a 60 Minutes episode (4/1/2011) on how the same banks that got most of the TARP bailout monies were forging mortgage recall documents.

When the big banks engineered the devastating mortgaged back securities that created the Great Recession several years ago, they sped the processing by eliminating most of the paperwork. When the economy collapsed and millions of jobless workers were unable to pay their mortgages, the banks began unraveling these securities and quickly discovered they could not prove their ownership.

What did the banks do? They hired companies, such as one named Docx, that hired low-level unemployed workers off the street, paid them $10 per hour, sat them at a table, and handed them a pen which the workers used to sign phony mortgage documents as fast as they could. To speed up the signing, one of these processing mills used the short and easy to sign name of a worker named Linda Green. All the signers wrote her name again and again on these phony mortgage documents at a personal pace of 4,000 signatures per day. Among the papers they signed was the vital assignment of mortgage, which transferred the home ownership to the bank.

The phony documents identified these robo-signers as vice presidents and executives of various banks. Low wage notaries then validated the signatures. The owners of many homes seized with these fake documents were not in default. Some owners owed nothing. Yet, their homes were seized and they were thrown into the street.

The Attorney Generals in 50 states are investigating these big banks, with the prospect of major criminal and civil lawsuits forthcoming.

Once again, however, the banks are getting the Obama Administration and Congress to let them off the hook. The U.S. Treasury is negotiating a deal with the banks in which they neither admit nor deny guilt, agree to better train their workers and henceforth to obey the law. The banks' obvious goal is to preempt any state indictments. Federal indictments are not a worry to them.

There is more. Congressional friends of the banks have tucked another bailout into the American Invents Act (the patent bill) that zipped through the Senate in March with a 95-5 vote and now awaits action in the House. Billions of dollars are at stake.

Many of the major banks have been using patented business methods without permission of the patent owners or payment to them. The financial industry has persuaded the Obama Administration and the Senate and House Judiciary leaders to retroactively change Patent Office rules in a way that makes it impossible for these patent owners to enforce their Constitutional rights against the banks' infringement. In effect, the Congress is voiding issued patents on behalf of the big banks.

As all this suggests, America's big banks are still out of control.

In today's corrupt political environment, the only way for We the People to stop this predation is to vote out of office those in the banks' pay, whether it be a president, a senator or a representative. A slow and difficult process, for sure, but ultimately an effective one.