11/12/2014 archive

I’ve said many times that one of the true dividing lines in this country, and it’s becoming ever more evident is our teeth. I broke part of one of my back teeth over the weekend and I spent the next couple days alternately contemplating financing an extraction and praying for death. I haven’t had dental insurance in years.

President Barack Obama has nominated Loretta Lynch, US Attorney for the Southern District of New York, to replace Attorney General Eric Holder who announced his retirement just before the mid-term election. Her credentials and qualifications for the post are excellent and her record in her current position. She is viewed as a strong civil rights defender, did pro-bono work prosecuting Rwandan war crimes, and has come down hard on public corruption. That said, she will likely follow Holder’s stance on Wall Street and the banking industry that they are too big to prosecute.

Lynch, who joined Holder in Washington over the summer to announce a $16 billion settlement with Bank of America over its conduct leading up to the meltdown, has similarly suggested the federal government is doing everything it can to hold companies accountable.

“[People] want the head of this bank or that investment bank to go to jail, and the types of cases that we actually have been developing tend to be a little bit smaller,” she told a New York civic association last year. “They tend to involve mortgage companies themselves who issued fraudulent mortgages” and may have made misleading statements or received “a kickback.”

“There in fact have been a number of prosecutions like that all over the country,” she said. “But those are smaller cases and they don’t get the kind of attention that people are looking for. So people often don’t think that anything has happened.”

She said it all comes down to “what you can prove.”

“We have to prove to a jury beyond a reasonable doubt their intent was to defraud the public, and sometimes jurors just think they were bad at what they did,” she said.

And there is ample reason in her background to believe that she’ll be no better than Holder in holding the mega-banks accountable. David Dayen at Salon has the evidence:

Lynch’s first job was as a litigation associate at Cahill Gordon & Reindel in the mid-1980s. Their litigation department includes the legendary First Amendment lawyer Floyd Abrams, who defended the New York Times in the Pentagon Papers case (Abrams subsequently argued the Citizens United case, on “campaign money is speech” grounds). But it also does a great deal of white-collar defense in securities and antitrust law, representing companies like AIG, HSBC, Credit Suisse, Bank of America and more. It’s a corporate law firm.

Lynch then served at the U.S. attorney’s office in Brooklyn for 11 years, rising to run the office during the end of the Clinton administration, from 1999 to 2001. When she left, she became a partner at Hogan & Hartson (it has since merged to become Hogan Lovells). It’s a giant D.C. law firm specializing in government regulatory, corporate and financial law. Like Cahill Gordon & Reindel, it advises all sorts of corporations, and it even has a separate lobbying firm, one of the top five in the United States. We know that Lynch worked on white-collar criminal defense and corporate compliance while in private practice at Hogan & Hartson. [..]

Now, she was just a litigation associate at Cahill Gordon & Reindel. And at Hogan & Hartson she did admirable pro bono work with prosecutors in the Rwandan war crimes tribunal. But what this says is that she has a long history interacting with a certain class of corporate lawyers and executives, understanding their perspective in critical ways.

That’s further buttressed by a strange detour in her legal career – serving as a director of the New York Federal Reserve Board from 2003 to 2005. Here she worked with people like former Citigroup chairman Sandy Weill, ex-Lehman Brothers CEO Richard Fuld and ex-Blackstone chairman Pete Peterson.

The directors of the New York Fed don’t play a huge role in supervising Wall Street banks or conducting monetary policy. But their biggest job is to select the president of the organization. And in 2003, Loretta Lynch had one of six votes in the appointment process that eventually put someone named Timothy Geithner in charge.

Ms. Lynch’s association with bankers and the Fed won’t be a reasons not to confirm her. However, her appointment has been stalled by the lame duck Senate Majority Leader Harry Reid (D-NV) who said there are more important issues to be resolved before the Republicans take control in January. Also, needless to say, her nomination has come under attack from the Tea Party faction of the Senate and news media, some of it, of course gets it dead wrong:

The conservative news site Breitbart.com suffered a rather awkward pants-down moment when a media watchdog site pointed out Breitbart had confused its Loretta Lynches when publishing an attack on the woman President Obama has nominated to be the next attorney general. The site said the 55-year-old nominee served as one of President Bill Clinton’s defense attorneys during the Whitewater investigation of 1994.

She didn’t. That was a different Loretta Lynch. [..]

The Loretta Lynch Breitbart was referring to – the Whitewater attorney – was also a former California public utilities commissioner. She worked as the director of policy and research for California Gov. Gray Davis (D) and obtained her undergraduate degree from the University of Southern California. Her law degree is from Yale.

California Lynch is 52.

And white.

And blonde.

With blue eyes.

This is nothing new for the right wing, as Rachel Maddow says they create their own parralel unvierse and stick with it.

No, this is not the Loretta they’re looking for either.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Wednesday is Ladies’ Day.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

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Katrina vanden Heuvel: Republicans will now taste their bitter harvest

In the early 3rd century B.C., after King Pyrrhus of Epirus again took brutal casualties in defeating the Romans, he told one person who offered congratulations, “If we are victorious in one more battle with the Romans, we shall be utterly ruined.” In his more sober moments, Mitch McConnell (R-Ky.), about to achieve his lifelong ambition of becoming Senate majority leader, may wonder whether he, too, has achieved a pyrrhic victory.

Republicans are still crowing about the sweeping victories in 2014 that give them control of both houses of Congress. They will set the agenda, deciding what gets considered, investigated and voted on. Their ideas will drive the debate.

But Republicans have no mandate because they offered no agenda. Republicans reaped the rewards of McConnell’s scorched-earth strategy, obstructing President Obama relentlessly, helping to create the failure that voters would pin on the party in power. But the collateral damage is that the “party of ‘no’ ” has no agreement on what is yes. Instead of using the years in the wilderness to develop new ideas and a clear vision, Republicans have used them only to sharpen their tongues, grow their claws and practice their backhands.

Sarah Jaffe: The secret to raising the minimum wage may be to stop trusting Democrats

Voters said yes to wage increases at the ballot box – even in the most conservative places. What now?

In too many places, elected Democrats have failed – with or without Republican obstruction – to stand up for working people, especially when it comes to raising the minimum wage.

But if you think it’s weird that voters turned out last week to support liberal ballot initiatives like minimum-wage increases and paid sick-time laws – even in red states like Arkansas and Alaska – while simultaneously casting their ballots for all those Republican legislators and governors, think again: the devil is really in the details – and the GOP just pulled a fast one on worker’s rights. [..]

The “minimum wage economy” is all too real for far too many people, many of whom long ago lost hope that the politicians for whom they’re supposed to take time off work (and, in many cases, forfeit pay) to elect will do anything for them – and turnout was the lowest since World War II. But a minimum-wage ballot initiative seems like a relatively easy sell for Americans, and this year’s election results indicate that many people don’t even think of it as much of a partisan issue anymore.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

November 12 is the 316th day of the year (317th in leap years) in the Gregorian calendar. There are 49 days remaining until the end of the year.

On this day in 1775, upon hearing of England’s rejection of the so-called Olive Branch Petition, Abigail Adams writes to her husband, John:

The intelegance you will receive before this reaches you, will I should think make a plain path, tho a dangerous one for you. I could not join to day in the petitions of our worthy parson, for a reconciliation between our, no longer parent State, but tyrant State, and these Colonies. — Let us seperate, they are unworthy to be our Breathren. Let us renounce them and instead of suplications as formorly for their prosperity and happiness, Let us beseach the almighty to blast their counsels and bring to Nought all their devices.

The previous July, Congress had adopted the Olive Branch Petition, written by John Dickinson, which appealed directly to King George III and expressed hope for reconciliation between the colonies and Great Britain. Dickinson, who hoped desperately to avoid a final break with Britain, phrased colonial opposition to British policy as follows:

“Your Majesty’s Ministers, persevering in their measures, and proceeding to open hostilities for enforcing them, have compelled us to arm in our own defence, and have engaged us in a controversy so peculiarly abhorrent to the affections of your still faithful Colonists, that when we consider whom we must oppose in this contest, and if it continues, what may be the consequences, our own particular misfortunes are accounted by us only as parts of our distress.”

Abigail Adams’ response was a particularly articulate expression of many colonists’ thoughts: Patriots had hoped that Parliament had curtailed colonial rights without the king’s full knowledge, and that the petition would cause him to come to his subjects’ defense. When George III refused to read the petition, Patriots like Adams realized that Parliament was acting with royal knowledge and support. Americans’ patriotic rage was intensified with the January 1776 publication by English-born radical Thomas Paine of Common Sense, an influential pamphlet that attacked the monarchy, which Paine claimed had allowed “crowned ruffians” to “impoverish the nation and set it together by the ears.”

Attorney General Eric Holder claimed that the banks were too big and too hard to prosecute for the “massive criminal securities fraud” behind the high risk mortgage securities that led up to the 2008 financial collapse. Instead the Justice Department opted for civil settlements with large fines with no admission of any wrong doing.

Actually, it wasn’t. It appears that the Obama administration’s chief law enforcement officer chose not to prosecute despite all the evidence at his disposal. In his return to Rolling Stones, investigative journalist Matt Taibbi introduces Alayne Fleischmann, JPMorgan Chase’s $9 billion nightmare:

She tried to stay quiet, she really did. But after eight years of keeping a heavy secret, the day came when Alayne Fleischmann couldn’t take it anymore.

“It was like watching an old lady get mugged on the street,” she says. “I thought, ‘I can’t sit by any longer.'” [..]

Fleischmann is the central witness in one of the biggest cases of white-collar crime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion (not $13 billion as regularly reported – more on that later) to keep the public from hearing.

Back in 2006, as a deal manager at the gigantic bank, Fleischmann first witnessed, then tried to stop, what she describes as “massive criminal securities fraud” in the bank’s mortgage operations.

Thanks to a confidentiality agreement, she’s kept her mouth shut since then. “My closest family and friends don’t know what I’ve been living with,” she says. “Even my brother will only find out for the first time when he sees this interview.”

Six years after the crisis that cratered the global economy, it’s not exactly news that the country’s biggest banks stole on a grand scale. That’s why the more important part of Fleischmann’s story is in the pains Chase and the Justice Department took to silence her.

She was blocked at every turn: by asleep-on-the-job regulators like the Securities and Exchange Commission, by a court system that allowed Chase to use its billions to bury her evidence, and, finally, by officials like outgoing Attorney General Eric Holder, the chief architect of the crazily elaborate government policy of surrender, secrecy and cover-up. “Every time I had a chance to talk, something always got in the way,” Fleischmann says.

This past year she watched as Holder’s Justice Department struck a series of historic settlement deals with Chase, Citigroup and Bank of America. The root bargain in these deals was cash for secrecy. The banks paid big fines, without trials or even judges – only secret negotiations that typically ended with the public shown nothing but vague, quasi-official papers called “statements of facts,” which were conveniently devoid of anything like actual facts.

Matt and Ms. Fleischmann joined Democracy Now‘s hosts Amy Goodman and Juan González to discuss ow JPMorgan wrecked the economy and avoided prosecution.

Die Like A Dog

The real news and this week’s guests below.