Is the rule of law in America a myth? Are certain people or entities above the law?
Justice statue, Law
That justice is blind and the scales always balance is an ideal at best. I would be nice to think in our judicial system the players do their best to see that justice is served. Yet, Americans have become with good reason rather jaded in their view of America’s judicial system. It often seems that the party that can afford the best lawyers often win whether that results in justice or not. Many believe that too many criminals get off on technicalities because the rights of the accused are greater than the rights of the victims. And then, of course, we have our congress critters exempting themselves from the laws for which the rest of us must comply.
When did paying a fine become the penalty for criminal acts?
It is probably save to say the most Americans are unaware how they get ripped off by big banks and financial institutions and the worst that happens is that they pay a fine and nobody goes to jail. For those that do pay attention it is maddening.
After the Housing Bubble-Financial collapse in 2008, the Security and Exchange Commission (SEC) brought criminal charges against several big Wall Street banks. Some of them had been bailed out with taxpayer money. To my knowledge, every case was settled out of court with no wrong doing being admitted and the institution paid a fine. One of the best known cases had to go with Goldman Sachs. Now, Goldman Sachs di not recieve any TARP bailout money directly. However, they were holding $30 billion of credit-default-swaps issued by the huge insurance underwriter AIG, which was bailed out. So, AIG turned around and handed over #20 billion of that TARP miney to Goldman Sachs. The case against Goldman Sachs was eventually settled out of court and they paid the biggest fine ever, at the time, of $500 million. That sounds like a lot of money but to Goldman Sachs it was chump change. Their partners all got multi-million dollar bonuses that year and there stock price soured on the newa.
What about the case of Jon Corzine? His company, M F Global rip off a billion dollars from their investor’s account to try to shore up a failing entity they had in England. No charges have been brought. Corzine is still a campaign funds bundler for Barack Obama.
The latest case of criminal bankers has to do with HSBC. This case has nothing to do with the financial collapse of 2008. Who is HSBC? It is only the third largest bank in the world. HSBC is a British bank that has branches or subsidiaries all over the world, including the United States. What crimes has HSBC been accused of committing? They are accused of laundering money for Mexican drug cartels and doing business with Iran and other countries, for which the United States had made it illegal to do. Does HSBC deny the charges? Apparently not. So what happened?
At first glance, the British bank HSBC’s agreement to pay $1.9 billion to settle a money-laundering probe seems like very good news. It is the largest penalty ever imposed on a bank; the U.S. government accused HSBC of transferring funds “through the U.S. from Mexican drug cartels and on behalf of nations such as Iran that are under international sanctions.” Furthermore, the settlement is a “deferred-prosecution agreement,” which means that U.S. authorities can resume the case if HSBC does not strengthen internal oversight and avoid similar violations for the next five years. (Most settlements between big Wall Street firms and the U.S. government remove the threat of charges for the violations; the firms then make the same violations again a few years later.)
Well, $1.9 billion is a lot of money, right? Is it a lot to HSBC? Well, I don’t know that we could call it chump change, but they did report profits for the last quarter of $2.5 billion, so it is not going to cripple them. Clearly the company’s lawyers made the pitch that as a corporation, the officers are protected by corporate limited liability laws. But, those laws are not intended to protect employees of corporations when they knowingly break the law. All of the illegal actions that HSNC is accused of had to be approved by someone withh a first and last name, didn’t they? So, why was no action taken agais those people?
Despite the impressive fine, the settlement still leaves much to worry about as regards Wall Street’s disproportionate power over the government. To begin with, while smaller companies’ executives are (justly) heading to prison for money-laundering for the brutal cartels, no HSBC executives have been arrested. Worse, though, is that “too big to fail” seems to have become “too big to indict.”
Ain’t that a kick in the rump? It is one thing to make the To Big To Fail case when there is an “apparent” chance of systematic failure of all or mist of the biggest banks in the country, which could cause a complete collapse of the country’s financial system. But, when it only involves one big bank? How does that work? So what if the investors in one bank take a bath? Isn’t that the way the cookie crumbles in the risky business of investing? And, if the bank goes out of business, won’t the investor just move their money to a different bank?
When the rule of law is optional, there is no rule of law.