Bankster Prosecutions Plunged After Bush’s Presidency

Eric Zuesse

U.S. President Barack Obama has followed through on the secret promise he made in the White House, on 27 March 2009, to Wall Street’s CEOs, and that was finally made public in full only when Ron Suskind’s Confidence Men was issued in 2011. The phrase “My administration is the only thing between you and the pitchforks” had earlier leaked out from the private meeting, but Obama’s promise to them had not been: “I’m not out there to go after you. I’m protecting you.” Suskind also revealed (on page 234) that Obama said on that occasion, “I’m going to shield you.” Obama asked the CEOs, in return, for cuts in their bonuses, but he didn’t press the matter, and they didn’t do that. Suskind wrote: “The bankers realized he was talking about voluntary limits on compensation until the storm of public anger passed. It would be for show.” And, it was. Their bonuses soared again. But Obama continued protecting them.

When future taxpayers pay off the exploding federal debt that was generated by the bail-outs of the inside investors in Wall Street (the “counter-parties”) — the mega-financial institutions, the controlling interests in which are owned by the global aristocracy, basically the world’s billionaires — some of that debt will have been money those CEOs scooped up from the Federal Government (some indirectly via the Federal Reserve) as a result of the Wall Street bailouts.

On 29 July 2015, Syracuse University’s TRAC Reports headlined “Federal White Collar Prosecutions At 20-Year Low,” and linked to their full study, which showed that, whereas in fiscal year 2004-2005, under George W. Bush, “Bank Fraud” had been the #1 most-prosecuted of all ”white collar crime matters,” it is, in the latest fiscal year, 2014-2015, only #3.

The Obama Administration, including his FBI and Justice Department, and his Treasury Department and IRS, have focused instead on “Fraud by wire, radio, or television,” a category that the banksters use little if at all (though some of the people who help them and whom they pay off, use it a lot). The second-most prosecuted “white collar crime” by Obama is the category, “Public money, property or records,” and this one isn’t used by the banksters in any way.

Similarly, none of the other categories of “white collar crime” is at all useful to banksters.

Though Obama’s promise to the banksters was not made public at the time, his promise to the public was entirely public immediately. The details, with the links to the published sources, are here. In a nutshell: He announced on 20 May 2009 doubling “the FBI’s mortgage and financial fraud program, allowing it to better target fraud.” Then, nearly two years later, in his State of the Union Address on 24 January 2012, he announced, “Tonight, I’m asking by Attorney General to create a special unit … to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis.” But the Inspector General of the Department of Justice reported in March 2014 that, though “DOJ and its components have repeatedly stated publicly that mortgage fraud is a high priority, … we found mortgage fraud to be a low priority, or not listed as a priority, for the FBI Field Offices we visited,” and, “the number of FBI agents investigating mortgage fraud as well as the number of pending investigations decreased.”

And, of course, that also explains the reason why TRAC Reports finds that “Bank fraud” declined from #1 to #3 in the Obama Administration’s prosecutions of “white collar crimes.”

So: while Obama’s promise made in secret to the people who benefited from the corruption that produced the 2008 crash was honored by him, his promises made in public to the people who (along with their children and grandchildren and beyond) will be paying for those crimes via higher taxes and reduced government services (except services to the federal and state debts — the bondholders) have not.

NOTE: This isn’t to say that George W. Bush wasn’t as horrendous (or maybe even worse) a President than is Barack Obama. But it’s to say that regarding enforcement of the laws against elite financial crimes, Obama is worse than Bush. As I earlier noted:

On 15 November 2011, Syracuse University’s TRAC Reports had headlined “Criminal Prosecutions for Financial Institution Fraud Continue to Fall,” and provided a chart showing that whereas such prosecutions had been running at a fairly steady rate until George W. Bush came into office in 2001, they immediately plunged during his term and were continuing that decline under Obama, even after the biggest boom in alleged financial fraud cases since right before the Great Depression. And, then, on 24 September 2013, TRAC Reports bannered “Slump in FBI White Collar Crime Prosecutions,” and said that “prosecutions of white collar criminals recommended by the FBI are substantially down during the first ten months of Fiscal Year 2013.” This was especially so in the Wall Street area: “In the last year, the judicial District Court recording the largest projected drop in the rate of white collar crime prosecutions — 27.8 percent — was the Southern District of New York (Manhattan).”

In other words: Not only has Obama refocused away from bankster-crime, but he has refocused away from the entire broader category of “white collar crime.” (That includes not only the banksters, and of course virtually all crimes by billionaires, but also the crimes by the people they hire, including their accountants and other contractors and sub-contractors.) He’s the aristocracy’s representative, not the public’s. This is a perfect example confirming what was found in the only broad scientific study that has been done of the data regarding whether the U.S. is a democracy. That showed the U.S. is no longer a democracy; it’s ruled by its aristocracy. Obama represents them. The rest from him is essentially lies. However, this study showed that the phenomenon didn’t start with him, nor even with George W. Bush. It started with Reagan, if not perhaps even earlier than that. However, as Jimmy Carter has noted, it’s getting worse.

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Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

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  • diogenes

    You mean to tell us that Barak Obama, the great populist progressive, gives criminal bankers a free pass? No, say it ain’t so! (Fooled again, huh?) Who’s the great progressive on tap this time? Ms. Clinton? Bernie the Zionist? Atilla the Hun?