The Lessons Richard Bowen’s FCIC Testimony Should Have Taught the Nation 1

William K. Black has written another astounding piece on the New Economic Perspectives web site.  The piece is titled The Lessons Richard Bowen’s FCIC Testimony Should Have Taught the Nation.

The financial crisis was driven by history’s three most destructive epidemics of financial fraud:  appraisal fraud, liar’s loans, and the sale of fraudulently originated mortgages to the secondary market through fraudulent reps and warranties.  One cannot understand, effectively investigate, or prosecute the senior financial officers who led these fraud epidemics without a detailed technical understanding of the fraud schemes and the financial markets. This first column is intended as a resource for those willing and able to make the investment towards achieving that understanding.  Because people like me and Bowen no longer train FBI agents and prosecutors, and because the Obama administration’s most senior officials have been unremittingly opposed to prosecuting the financial officers that led the three fraud epidemics, no FBI agent or prosecutor has the necessary technical understanding.  My second column explains why this makes the FBI, the SEC, and the Department of Justice’s (DOJ) failure to draw on Bowen’s expertise all the more harmful and indefensible.

No spoiler alert is required either about Holder’s reaction to Bowen providing the Department of Justice (DOJ) with a criminal case against Citi’s controlling officers on a platinum platter.  Holder, as always, refused to prosecute the banksters whose frauds drove the financial crisis.  He eventually brought a civil action to get some useless fines from Citi rather than from the Citi officers who looted Citi, Fannie and Freddie, and Treasury.  Holder also failed to thank Bowen when Holder announced the civil settlement with Citigroup and refused to use the golden opportunity of the press conference announcing the settlement to ask other whistleblowers to come forward.  All of this, of course, is SOP for Holder and Loretta Lynch, President Obama’s choice to be his successor.  Lynch failed to prosecute HSBC or its responsible officers for its extraordinary crimes on behalf of genocidal regimes, terrorism sanction busters, and massive money laundering for the Sinaloa drug cartel.  You can only read it in right wing publications, but she is also accused of not speaking to either of the two key whistleblowers about HSBC.  Lynch’s nomination is being held hostage by the Republicans for all the wrong reasons.

The piece is long, and I must admit I had to stop before the end and before I vomited.  However, the piece is not that technical.  I understood it fully and I am no accountant nor an economist.  Why even a Nobel Prize winning economist could understand this article if they would only deign to read it.  The trouble is that these prize winning economists make their theories about how an honest market would work, while having no appreciation that massive fraud is actually how many markets work.  It never occurs to them to listen to the law enforcement people who understand fraud when they see it.  They also don’t listen to banks’ own experienced bank enforcement executives who shout out about the fraud, and are summarily crushed by their fraudulent bosses.

I included in my excerpt the paragraph that mentions Loretta Lynch so that I can refer back to it anytime I need to explain why I am dead set against her nomination for Attorney General.

You’ll have to read at least enough of the article to understand why I categorized this article under Greenberg’s Law of Counterproductive Behavior. You won’t have to read much to be hit over the head by the figurative 2 by 4 of the reasons.

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One thought on “The Lessons Richard Bowen’s FCIC Testimony Should Have Taught the Nation

  • SteveG Post author

    I just started to digest this article some more. It started with the thought that Hillary Clinton, having been duped in the infamous Whitewater Real Estate scheme, she should have learned her lesson. Then I began to think that maybe the lesson she learned was how to carry out such frauds on ever grander scales. No wonder she is such pals with crooks like Jamie Dimon, head of CitiBank.

    It had never occurred to me before that the whole Whitewater affair ought to be looked at again through the lens of what Bill Black wrote in this article. Either Kenneth Starr couldn’t figure out how to get the Clintons because he was too naive about this kind of fraud, or he decided to keep quiet about it once he saw what a sure thing it could be. I am not so sure anymore that the Clintons actually lost money on that deal. Maybe they did in the visible accounting, but now I suspect that there is an invisible part that needs accounting exposure.

    All of us, except Bill Black and his peers, have been far too naive about the level of fraud that has been rampant in our financial institutions and in our connected politicians.

    The frightening thing is that there is a very good chance we could install Hillary Clinton as the next President. Her supporters just refuse to see what is becoming so obvious to those of us, like Elizabeth Warren, who pay some attention to the fraudsters on Wall Street.

    Even Robert Reich and Paul Krugman are starting to open their eyes to what has been going on right under their noses.