November 2014 archive

Is anyone surprised that the Obama administration is trying as hard as it can to stop the Senate CIA torture report from being released? It blatantly obvious that they do not want this report made public and are hoping that the incoming chair of the Senate Intelligence Committee, Sen. Richard Burr (R-SC), who is best buds with the intelligence community, will bury the report. The current stall is over the redaction of pseudonyms. The White House wants the aliases redacted arguing that it would expose the people they wish to protect. It is quite possible that if known, there people would face arrest and prosecution.

The fight between the White House and the Committee came to a head on Tuesday during the weekly briefing with the Senate Democrats and White House Chief of Staff and CIA Director John Brennan’s best bud, Denis McDonough:

“It was a vigorous, vigorous and open debate — one of the best and most thorough discussions I’ve been a part of while here,” said Sen. Chris Coons (D-Del.).

Sen. Jay Rockefeller (D-W.Va.), who served as intelligence committee chair before Feinstein, was furious after the meeting, and accused the administration of deliberately stalling the report.

“It’s being slow-walked to death. They’re doing everything they can not to release it,” Rockefeller told HuffPost.

“It makes a lot of people who did really bad things look really bad, which is the only way not to repeat those mistakes in the future,” he continued. “The public has to know about it. They don’t want the public to know about it.”

As negotiations continue, Rockefeller said Democrats were thinking creatively about how to resolve the dispute. “We have ideas,” he said, adding that reading the report’s executive summary into the record on the Senate floor would probably meet with only limited success. “The question would be how much you could read before they grabbed you and hauled you off.” [..]

Rockefeller said the administration’s unwillingness to use aliases reflects a broader contempt for congressional oversight.

“The White House doesn’t want to release this. They don’t have to. And all we do is oversight, and they’ve never taken our oversight seriously,” he said. (He then added that he did allow for one exception, the Church Committee.) “Under Bush there was no oversight at all. Remember the phrase, ‘Congress has been briefed’? What that meant was that I and our chairman […] and two comparable people in the House had met with [former Vice President Dick] Cheney in his office for 45 minutes and given a little whirley birdie and a couple charts.”

“They had a specialty for being unforthcoming in our efforts at oversight,” he added, “and therefore there is no incentive for them to change their behavior.”

Time is running out. It’s clear that one or more of the senators will need to take some drastic action. Sen. Mark Udall (D-CO), who was defeated in the midterm elections, has said that he is considering reading the unredacted report into the Congressional Record on the Senate floor, a move that is protected by the Constitution’s “speech or debate” clause.

It is time to release the torture report. Please sign the Act Blue petition to urge Sen. Udall to read the report into the congressional record.

Sign the petition: Enter the CIA torture report into the Congressional Record

The Senate Intelligence Committee’s “torture report” is expected to detail shocking abuse of prisoners at the hands of the CIA during the Bush administration, and even possible CIA lying to Congress.

But seven months after the Senate Intelligence Committee voted overwhelmingly to release the report to the American people, the White House is stonewalling Congress and demanding “redactions”-blacked-out sections and information-before making its contents public.

But there’s a way around that-and before the end of the year, we have a rare chance to make it happen.

Members of Congress have an absolute right to free speech, and a member could enter the report into the Congressional Record in its entirety-just as the Pentagon Papers were in 1971-without fear of prosecution.

That’s exactly what transparency advocates are calling on outgoing, staunchly anti-torture and pro-transparency Sen. Mark Udall to do.

Sign the petition to Sen. Mark Udall: If you enter the torture report into the Congressional Record, we’ll have your back.

Our Message to Sen. Mark Udall:

Before leaving office, please submit the Senate Intelligence Committee’s torture report to the Congressional Record. We know that you are considering undertaking this heroic and courageous act, and we and countless others will support you if you choose to do so.

We will deliver a copy of this petition and a list of signers to Sen. Mark Udall, Senate Intelligence Committee Chair Dianne Feinstein and President Obama to make sure our message is heard.

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“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.

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

Follow us on Twitter @StarsHollowGzt

New York Times Editorial Board: Attorneys General for Sale

Every state has laws regulating lobbying, but almost all of those laws apply to lobbying members of state legislatures, not attorneys general. For the most part, states never anticipated that their chief legal officers would be the subject of aggressive pressure from big businesses and special interests.

But that’s all changed now. Politics at all levels has become dominated by those with enough money to spend lavishly on electing public officials and then pushing them for favors. In a recent investigative report, Eric Lipton of The Times revealed that an entire industry has sprung up to lobby state attorneys general on behalf of companies that are under scrutiny, or that need special legal benefits from a state. [..]

For state lawmakers, fixing this mess will have to go beyond investigating individual cases. State lobbying laws will have to be expanded to cover attorneys general; already, many states barely police gifts to legislators. (Ten states allow officeholders to take gifts of unlimited.) States also need to put lower limits on how much a donor can give to an attorney general’s campaign, or even consider making the job an appointed position, as it is in seven states. Big-money politics should not mix with state legal power.

Andrew A. Rosenberg: Congress Must Block These Attacks on Independent Science

House leaders have decided that one of the most important things they can do during the lame duck session is to vote on two bills that would cripple good, science-based policy.

The bills’ backers are pitching the legislation as an effort to create transparency at the Environmental Protection Agency. But the science the EPA and other agencies base their rules on is already an open book. These bills are about trying to stop the EPA from doing its job.

Ultimately, these two bills would set unreachable goals and create unnecessary bureaucratic hoops for the agency to jump through, leading to costly delays in agency rule making. Together, they would prevent the EPA from enforcing environmental laws and protecting America’s public health. If members care about the air we breathe, the water we drink, and scientifically-informed public policy, they should oppose these misguided bills.

Sponsored by Rep. David Schweikert, R-Ariz., HR 4012 – the so-called “Secret Science” Reform Act – would create a Catch-22 for the EPA.

Welcome to The Breakfast Club! We’re a disorganized group of rebel lefties who hang out and chat if and when we’re not too hungover  we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Join us every weekday morning at 9am (ET) and weekend morning at 10:30am (ET) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.

This Day in History

Thomas Edison says he’s invented the phonograph; Gap revealed on Nixon White House tape; Final victim dies in America’s anthrax scare; Jonathan Pollard arrested; ‘Anything Goes’ opens on Broadway.

Breakfast Tunes

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 21 is the 325th day of the year (326th in leap years) in the Gregorian calendar. There are 40 days remaining until the end of the year.

On this day in 1934, Ella Fitzgerald wins Amateur Night at Harlem’s Apollo Theater. A young and gangly would-be dancer took to the stage of Harlem’s Apollo Theater to participate in a harrowing tradition known as Amateur Night. Finding herself onstage as a result of pure chance after her name was drawn out of a hat, the aspiring dancer spontaneously decided to turn singer instead-a change of heart that would prove momentous not only for herself personally, but also for the future course of American popular music. The performer in question was a teenaged Ella Fitzgerald, whose decision to sing rather than dance on this day in 1934 set her on a course toward becoming a musical legend. It also led her to victory at Amateur Night at the Apollo, a weekly event that was then just a little more than a year old but still thrives today

Ella Jane Fitzgerald (April 25, 1917 – June 15, 1996), also known as the “First Lady of Song” and “Lady Ella,” was an American jazz and song vocalist. With a vocal range spanning three octaves (Db3 to Db6), she was noted for her purity of tone, impeccable diction, phrasing and intonation, and a “horn-like” improvisational ability, particularly in her scat singing.

She is considered to be a notable interpreter of the Great American Songbook. Over a recording career that lasted 59 years, she was the winner of 14 Grammy Awards and was awarded the National Medal of Art by Ronald Reagan and the Presidential Medal of Freedom by George H. W. Bush.

The Senate was briefly in session this week where it took cloture votes on two note worthy bills. One to approve the Keystone XL pipeline and the second called the USA Freedom Act, would vaguely reform the NSA by limiting their ability to spy on Americans. Both bill failed.

Regardless of the denials by the Democratic leadership, the Keystone bill was brought to a vote in a vain attempt to save Louisiana’s Senator Mary Landrieu’s seat. While the Republicans would have bee gleeful of it had passed, the bill failed to reach cloture by one vote. The incoming leadership has vowed to bring it to the floor one more time.

The USA Freedom Act was another deal. Since the the likelihood this bill would never see the light of day in the next session, it was thought there were enough votes for cloture. There weren’t. It was roundly shouted down by Republicans because the Islamic state is coming to kill us.

NSA Reform Bill Dies As Republicans Hype Threats From Islamic State

Dan Froomkin, The Intercept

Supporters of the USA Freedom Act, including privacy groups and technology companies, had considered it an essential first step toward ending the NSA’s overreach. But Senate Minority Leader Mitch McConnell set the tone for the day in the morning, actively encouraging his caucus to block the measure, citing concerns that it would hurt the fight against such groups as the Islamic State. Republicans also took their cues from an op-ed in the Wall Street Journal, in which former CIA and NSA director Michael Hayden and former attorney general Michael Mukasey described the bill as NSA Reform That Only ISIS Could Love.

With Republicans taking control of the Senate in January, a vote during the current lame-duck session was widely considered the bill’s last, best shot.

The USA Freedom Act would have ended the government’s bulk collection of domestic phone records, forcing officials to make specific requests to phone companies. It would also have ended the law-enforcement monopoly on arguments before the secretive surveillance court by creating a role for a special advocate. And it would have required that significant court opinions be made public.

Writing for The Guardian, Trevor Timm thinks that the Republican may have shot themselves in the foot by opposing the bill:

But the Republicans – and NSA supporters everywhere – may have made a mistake that will come back to haunt them. They killed a measure that many reformers were holding their nose while supporting, and six month from now – by the middle of 2015 – they may have several even bigger fights on their hands. [..]

(T)he legislation Republicans just blocked also would have effectively shut down several promising lawsuits against the NSA in federal court and another case where National Security Letters were already ruled unconstitutional.

Now many of those cases, already in the appeals stage, may be decided within the next six months, and if the oral arguments are any indication, the US government may be in trouble. Indeed, the conservative justices may be willing to do more for your privacy than conservative lawmakers, as Judge Richard Leon proved last year when he ruled that the NSA’s phone surveillance program is likely unconstitutional.

But here’s the real reason the the USA Freedom Act’s failure could backfire on its biggest supporters: As I’ve mentioned before, Section 215 of the USA Patriot Act – the law that was re-interpreted in secret to allow for mass phone metadata surveillance in the first place – comes up for renewal next summer. It has to be reauthorized before June, or it will disappear completely.

And even though the Republicans will be in control next year, they won’t be able to pull the same stunts they did on Tuesday. Everyone knows getting “no” votes is a lot easier than getting a “yes”. And this time they’ll need 60 “yes” votes, plus the support of the House of Representatives, where we know already there are likely enough votes to kill an extension of the Patriot Act.

At the New York Times, Charles Savage found a little noticed provision in the Patriot Act that grandfathered on going investigations even if section 215 sunsets:

   The law says that Section 215, along with another section of the Patriot Act, expires on “June 1, 2015, except that former provisions continue in effect with respect to any particular foreign intelligence investigation that began before June 1, 2015, or with respect to any particular offense or potential offense that began or occurred before June 1, 2015.”

   Michael Davidson, who until his retirement in 2011 was the Senate Intelligence Committee’s top staff lawyer, said this meant that as long as there was an older counterterrorism investigation still open, the court could keep issuing Section 215 orders to phone companies indefinitely for that investigation.

   “It was always understood that no investigation should be different the day after the sunset than it was the day before,” Mr. Davidson said, adding: “There are important reasons for Congress to legislate on what, if any, program is now warranted. But considering the actual language of the sunset provision, no one should believe the present program will disappear solely because of the sunset.”

   Mr. Davidson said the widespread assumption by lawmakers and executive branch officials, as well as in news articles in The New York Times and elsewhere, that the program must lapse next summer without new legislation was incorrect.

   The exception is obscure because it was recorded as note accompanying Section 215; while still law, it does not receive its own listing in the United States Code. It was created by the original Patriot Act and was explicitly restated in a 2006 reauthorization bill, and then quietly carried forward in 2010 and in 2011.

While over at The Intercept, journalist and author, Glenn Greenwald found watching the Senate debate was “like watching a repeat of some hideously shallow TV show”. As he noted, congress is irrelevant on mass surveillance and points out what really matters:

The entire system in D.C. is designed at its core to prevent real reform. This Congress is not going to enact anything resembling fundamental limits on the NSA’s powers of mass surveillance. Even if it somehow did, this White House would never sign it. Even if all that miraculously happened, the fact that the U.S. intelligence community and National Security State operates with no limits and no oversight means they’d easily co-opt the entire reform process. That’s what happened after the eavesdropping scandals of the mid-1970s led to the establishment of congressional intelligence committees and a special FISA “oversight” court-the committees were instantly captured by putting in charge supreme servants of the intelligence community like Senators Dianne Feinstein and Chambliss, and Congressmen Mike Rogers and “Dutch” Ruppersberger, while the court quickly became a rubber stamp with subservient judges who operate in total secrecy. [..]

In pretty much every interview I’ve done over the last year, I’ve been asked why there haven’t been significant changes from all the disclosures. I vehemently disagree with the premise of the question, which equates “U.S. legislative changes” with “meaningful changes.” But it has been clear from the start that U.S. legislation is not going to impose meaningful limitations on the NSA’s powers of mass surveillance, at least not fundamentally. Those limitations are going to come from-are now coming from -very different places:

1) Individuals refusing to use internet services that compromise their privacy. The FBI and other U.S. government agencies, as well as the U.K. Government, are apoplectic over new products from Google and Apple that are embedded with strong encryption, precisely because they know that such protections, while far from perfect, are serious impediments to their power of mass surveillance. To make this observation does not mean, as some deeply confused people try to suggest, that one believes that Silicon Valley companies care in the slightest about people’s privacy rights and civil liberties. [..]

2) Other countries taking action against U.S. hegemony over the internet. Most people who claim nothing has changed from the Snowden disclosures are viewing the world jingoistically, with the U.S. the only venue that matters. But the real action has long been in other countries, acting individually and jointly to prevent U.S. domination of the internet. [..]

3) U.S. court proceedings. A U.S. federal judge already ruled that the NSA’s domestic bulk collection program likely violates the 4th Amendment, and in doing so, obliterated many of the government’s underlying justifications. Multiple cases are now on appeal, almost certainly headed to the Supreme Court. None of this was possible in the absence of Snowden disclosures. [..]

4) Greater individual demand for, and use of, encryption. In the immediate aftermath of the first Snowden reports, I was contacted by countless leading national security reporters in the U.S., who work with the largest media outlets, seeking an interview with Snowden. But there was a critical problem: despite working every day on highly sensitive matters, none of them knew anything about basic encryption methods, nor did their IT departments. Just a few short months later, well over 50 percent of the journalists who emailed me did so under the protection of PGP encryption. Today, if any journalist emails me without encryption, they do so apologetically and with embarrassment. [..]

The changes from the Snowden disclosures are found far from the Kabuki theater of the D.C. political class, and they are unquestionably significant. That does not mean the battle is inevitably won: The U.S. remains the most powerful government on earth, has all sorts of ways to continue to induce the complicity of big Silicon Valley firms, and is not going to cede dominion over the internet easily. But the battle is underway and the forces of reform are formidable-not because of anything the U.S. congress is doing, but despite it.

The USA Freedom Act would have made little difference to the unlawful NSA. What matters now is what the courts and we do to preserve our rights.

Gobble, Gobble.  Is it that time of year again?  Well, I could probably use the rest anyway though I’m happiest when I’m in my routine.  Comedy Central will have repeats.  Me?  I hate to repeat myself though I might, or I could do something else, or maybe nap (though vampire-like at this time of year I have a tendency to sleep in the daytime, work in the night time, I might not ever get home, which is incredibly dysfunctional if you have to work with people but does wonders for my solitary creativity).

For the sites we will be continuing as best we can in the usual fashion because of my firm belief that nobody needs you quite as much as they do during those periods when everything else is closed.  This weekend will see the conclusion of the 2014 Formula One season in Abu Dhabi and we will start putting up our Thanksgiving specials culminating in the Big Balloon Parade a week from today, and then whatever we can scrounge to see us through the Black Friday weekend when our dozens of readers are presumably greasing the gears of Amurrican ‘Free’ Market capitalism with their life blood and money.  Let’s not forget the money.

And that’s one thing I am thankful for.  Because of our low financial overhead I’m not perpetually in the position of coming to you as a mendicant, especially when you are sentimental and vulnerable and need that money your own damn self thank you very much.

Yeah, we’ll run ads if you want them and accept donations if that’s the kind of thing you feel you need to do to register your satisfaction with the product, but that’s not why I write.

I do it for art.

The one thing that never fails to gratify me is when you use our platform to express yourselves.  What I do is mostly structure, a wall you can hang your own canvas on.  The gift I would most like during this holiday period, the contribution that would have the greatest impact, is for you to decide that your voice is important; or at least important enough to be included here where the natives are mostly friendly (mostly) and I have set the bar so low you can hardly help but trip on it (have a nice fall).  Exceeding expectations is not optional, it’s hard to avoid.

Over the river and through the guilt a la casa de ek vamos.

Oh, you came here for the waters?  You were sadly misinformed.

Back in Black Friday

Live Free or DIE!

The Lake House is close enough to Keene that I know they’re not only famous for Pumpkin throwing riots.

The real news below.

“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.

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

Follow us on Twitter @StarsHollowGzt

Sen. Elizabeth Warren: Enough Is Enough: The President’s Latest Wall Street Nominee

I believe President Obama deserves deference in picking his team, and I’ve generally tried to give him that. But enough is enough.

Last Wednesday, President Obama announced his nomination of Antonio Weiss to serve as Under Secretary for Domestic Finance at the Treasury Department. This is a position that oversees Dodd-Frank implementation and a wide range of banking and economic policymaking issues, including consumer protection.

So who is Antonio Weiss? He’s the head of global investment banking for the financial giant Lazard. He has spent the last 20 years of his career at Lazard — most of it advising on international mergers and acquisitions. [..]

I have voted against only one of President Obama’s nominees: Michael Froman, a Citigroup alumnus who is currently storming the halls of Congress as U.S. Trade Representative pushing trade deals that threaten to undermine financial regulation, workers’ rights, and environmental protections. Enough is enough.

It’s time for the Obama administration to loosen the hold that Wall Street banks have over economic policy making. Sure, big banks are important, but running this economy for American families is a lot more important.

Trevor Timm: The good news about the ‘death’ of NSA reform: surveillance supporters may have dug their own grave

Snowden haters may have blocked the USA Freedom Act, but the clock is ticking before the law that justifies vacuuming your phone records blows up in the face of newly conservative Washington

Late Tuesday, after a brief debate marked by shameless fearmongering that reeked of some of even George W Bush’s worst moments, the US Congress failed at its most promising chance to pass at least some surveillance reform sparked by Edward Snowden’s revelations. The Senate Republicans, for the month they’re still in the minority, managed to block a vote on the USA Freedom Act, the modest National Security Agency oversight bill that’s been in the works for over a year.

But the Republicans – and NSA supporters everywhere – may have made a mistake that will come back to haunt them. They killed a measure that many reformers were holding their nose while supporting, and six month from now – by the middle of 2015 – they may have several even bigger fights on their hands. [..]

The failure of the USA Freedom Act, no matter how incomplete the bill was, certainly isn’t something to celebrate. But now we will see multiple courts potentially ruling NSA surveillance unconstitutional. Now we will have a chance to force the government into potentially gutting key provisions of the Bush-era Patriot Act, all while ubiquitous encryption becomes ever more prevalent in the communications devices we use – so maybe soon we don’t have to rely on Congress and the courts to be the masters of our own privacy.

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 20 is the 324th day of the year (325th in leap years) in the Gregorian calendar. There are 41 days remaining until the end of the year.

On this day in 1945, Twenty-four high-ranking Nazis go on trial in Nuremberg, Germany, for atrocities committed during World War II.

The Nuremberg Trials were conducted by an international tribunal made up of representatives from the United States, the Soviet Union, France, and Great Britain. It was the first trial of its kind in history, and the defendants faced charges ranging from crimes against peace, to crimes of war, to crimes against humanity. Lord Justice Geoffrey Lawrence, the British member, presided over the proceedings, which lasted 10 months and consisted of 216 court sessions.

Origin

British War Cabinet documents, released on 2 January 2006, have shown that as early as December 1944, the Cabinet had discussed their policy for the punishment of the leading Nazis if captured. British Prime Minister Winston Churchill had then advocated a policy of summary execution in some circumstances, with the use of an Act of Attainder to circumvent legal obstacles, being dissuaded from this only by talks with US leaders later in the war. In late 1943, during the Tripartite Dinner Meeting at the Tehran Conference, the Soviet leader, Joseph Stalin, proposed executing 50,000-100,000 German staff officers. US President Franklin D. Roosevelt, joked that perhaps 49,000 would do. Churchill denounced the idea of “the cold blooded execution of soldiers who fought for their country.” However, he also stated that war criminals must pay for their crimes and that in accordance with the Moscow Document which he himself had written, they should be tried at the places where the crimes were committed. Churchill was vigorously opposed to executions “for political purposes.” According to the minutes of a Roosevelt-Stalin meeting during the Yalta Conference, on February 4, 1945, at the Livadia Palace, President Roosevelt “said that he had been very much struck by the extent of German destruction in the Crimea and therefore he was more bloodthirsty in regard to the Germans than he had been a year ago, and he hoped that Marshal Stalin would again propose a toast to the execution of 50,000 officers of the German Army.”

US Treasury Secretary, Henry Morgenthau, Jr., suggested a plan for the total denazification of Germany; this was known as the Morgenthau Plan. The plan advocated the forced de-industrialisation of Germany. Roosevelt initially supported this plan, and managed to convince Churchill to support it in a less drastic form. Later, details were leaked to the public, generating widespread protest. Roosevelt, aware of strong public disapproval, abandoned the plan, but did not adopt an alternate position on the matter. The demise of the Morgenthau Plan created the need for an alternative method of dealing with the Nazi leadership. The plan for the “Trial of European War Criminals” was drafted by Secretary of War Henry L. Stimson and the War Department. Following Roosevelt’s death in April 1945, the new president, Harry S. Truman, gave strong approval for a judicial process. After a series of negotiations between Britain, the US, Soviet Union and France, details of the trial were worked out. The trials were set to commence on 20 November 1945, in the Bavarian city of Nuremberg.

Institute for New Economic Thinking

The Real News

Transcript

Zero Prosecutions Aren’t Few Enough – Wall Street Wants SEC Sanctions Reduced to DMV Points

by William Black, New Economic Perspectives

Posted on November 10, 2014

Let’s begin by reviewing the bidding. We have just suffered through the third economic crisis driven by epidemics of control fraud. In two of the crises the financial industry led the fraud epidemics. In the Enron-era fraud epidemic they eagerly aided and abetted Enron’s frauds. In the current crisis we know that U.S. government investigators have found that 16 of the largest banks in the world conspired to falsify Libor, which is used to price $350 trillion in assets. This is the largest cartel in world history by at least three orders of magnitude. Note that all 16 of the banks that participate in creating Libor falsified their statements for the express purpose of falsifying the Libor “fix.” There were no honest banks and there is no reason to believe that if 25 banks participated in setting Libor the results would have differed. The conspirators are not known to have blackballed any bank from participating in “fixing” Libor because of fears that the blackballed bank was led by an honest CEO who would expose and end the conspiracy.

Government investigators have found that over 20 of the largest banks defrauded Fannie and Freddie by selling them vast amount of toxic mortgages through fraudulent “reps and warranties.” Government investigators have found that over 20 of the largest banks defrauded a series of credit unions by selling them toxic mortgages and toxic mortgage derivatives through fraudulent reps and warranties. Government investigators have found other wide ranging frauds by the large banks to (1) rig bids for issuing municipal securities, (2) to foreclose on people through fraudulent affidavits, and (3) by conspiring to falsify foreign exchange (FX) rates. In sum, the leaders of the largest banks in the world are overwhelmingly leading criminal enterprises that commit financial frauds of unprecedented scope and damage. The resulting financial crisis caused by the three most destructive fraud epidemics in history caused over a $21 trillion loss in U.S. GDP and the loss of over 10 million American jobs. Each of those figures is much larger in Europe.

Worse, no senior banker who led the three fraud epidemics has been prosecuted in the U.S. for those crimes. Virtually no senior bankers who led the three fraud epidemics has even been the subject of a civil suit by the U.S. Virtually no senior banker in the U.S. has had his fraud proceeds “clawed back” by the government or the bank. The senior bankers were made wealthy through the “sure thing” of accounting control fraud – with nearly perfect impunity from the criminal and civil law.

This is the setting in which Fichera writes. As a sometimes good guy, one would expect his column to call for the Department of Justice (DOJ) and the SEC to end this impunity and immediately act vigorously to hold the senior bankers personally accountable for leading the frauds that blew up the global economy. Instead, Fichera wrote to urge (1) that the largest banks be treated as “too big to jail,” (2) to decry the “tendency to vilify all Wall Street firms as unscrupulous,” (3) to urge SEC sanctions to be reduced to the level of “DMV” “points,” and (4) to provide that no matter how egregious the fraud the SEC would have no power to remove a Wall Street firm’s license until it committed “multiple” cases of the equivalent of deliberate homicide in which each case could involve deliberately running over millions of investors. Under Fichera’s plan, every dog would get at least one bite – of every investor – which would mean hundreds of thousands of bites. Fichera wants banks to be – officially – entitled to commit securities fraud without effective sanction from the SEC.

…

This is a great system. I can’t wait for it to be applied to muggers who prey on Wall Street traders. A mugger will have to wait six years after getting caught battering and robbing a Wall Street trader (which will be a small percentage of the times they mug) for their “slate [to be] wiped clean.” I’m sure that if the muggers who specialize in attacking Wall Street traders only get caught every six years “the tendency [of bankers] to vilify all [muggers] as unscrupulous would fade.” But this doesn’t capture the true spirit of Fichera’s DMV plan. His plan proposes that the SEC “forgive points” if the mugger “takes a remedial class” that teaches that it is not appropriate to mug. And if you like a DMV point system for muggers you’ll love one for sex offenders that target your children, girlfriends, and spouses.

I can hear some of you saying – “but mugging and sexual molestation are real crimes” while defrauding people that trust you of tens of billions of dollars is just like driving without buckling your seatbelt. Accounting and securities fraud are really close to being victimless crimes, if one ignores a few million fraud victims who foolishly believed you when you said you were a fiduciary representing them as your principal.

…

Fichera could not be more wrong – and more revealing of why the “sometimes good” elements of Wall Street cannot be relied upon to clean up its intensely criminogenic environment. First, no banker is ever “too big to jail” or “too big to bar from securities or banking. Second, no “bank” can be “jail[ed].” Third, no matter how big the bank it can be placed in receivership or have its senior managers “removed and prohibited” when they are leading frauds or unsafe and unsound practices. Fourth, the “principles of regulation and justice” do not conflict when we hold elite frauds accountable for their frauds through prosecutions, receiverships, and removals and prohibition orders. Indeed, “the principles of regulation” are: (1) create incentive systems and controls that minimize fraud and unsafe and unsound practices, (2) to remove from any position in which they can endanger the bank, customers, or the public, and (3) to prosecute the most elite criminals to increase deterrence and use enforcement and civil actions to ensure that no senior officer gains a penny from leading the frauds and unsafe and unsound practices. Vigorously pursuing justice not only does not “conflict” with “the principles of regulation” – it is essential to achieving “the principles of regulation.”

What is clear is that when Fichera uses the word “principles” he means “unprincipled.” Fichera has forgotten the most fundamental principle of justice expressed in the famous Latin maxim:. Fiat Justitia Ruat Caelum (Let Justice be done, though the Heavens Fall).

Fichera considers the ancient Latin principle hopelessly naïve, and the fact that he does so demonstrates further that he does not understand that there is nothing more practical than consistently seeking justice through the legal and regulatory systems. Financial crises occur when we abandon the maxim, betray justice, and decide that some elite banks and bankers are so big or so politically powerful that they must be de facto immune from effective regulation and prosecution. A society that deliberately abandons justice and the principles of regulation in order to protect large banks and powerful bankers is a Nation that will see the heavens fall. A Nation that abandons justice encourages massive fraud by the wealthy and powerful and guarantees recurrent, intensifying economic crises and a descent into crony capitalism. There is nothing more practical for a person or a Nation than leading a principled life.

Only elite financial sector officers believe that they and their banks are entitled to being exempted from the rule of law. Normal human beings are nauseated when they read such claims. The reason that Fichera’s ode to the unprincipled life is so distressing is that he was believed to be in the top 10% of the distribution of financial sector CEOs when it came to integrity. That indicates how depressingly deep the rot runs among Wall Street’s CEOs.