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  It would be an interesting exercise to add up all the dollars spent by the Justice Department prosecuting Roger Clemens and John Edwards--it's got to be in eight figures easily--compared to the ZERO spent prosecuting Goldman Sachs CEO Lloyd Blankfein, or for that matter, a whole host of his co-horts.

I mention Blankfein, in particular, because of what Sen. Carl Levin found in his investigation of Goldman Sachs:


"Our investigation found a financial snake pit rife with greed, conflicts of interest, and wrongdoing," said Levin.
  Recall briefly the findings on Goldman from the Levin committee investigation:
     1. Securitizing High Risk Mortgages. From 2004 to 2007, in exchange for lucrative fees, Goldman Sachs helped lenders like Long Beach, Fremont, and New Century, securitize high risk, poor quality loans, obtain favorable credit ratings for the resulting residential mortgage backed securities (RMBS), and sell the RMBS securities to investors, pushing billions of dollars of risky mortgages into the financial system.

        2. Magnifying Risk. Goldman Sachs magnified the impact of toxic mortgages on financial markets by re-securitizing RMBS securities in collateralized debt obligations (CDOs), referencing them in synthetic CDOs, selling the CDO securities to investors, and using credit default swaps and index trading to profit from the failure of the same RMBS and CDO securities it sold.

        3. Shorting the Mortgage Market. As high risk mortgage delinquencies increased, and RMBS and CDO securities began to lose value, Goldman Sachs took a net short position on the mortgage market, remaining net short throughout 2007, and cashed in very large short positions, generating billions of dollars in gain.

        4. Conflict Between Client and Proprietary Trading. In 2007, Goldman Sachs went beyond its role as market maker for clients seeking to buy or sell mortgage related securities, traded billions of dollars in mortgage related assets for the benefit of the firm without disclosing its proprietary positions to clients, and instructed its sales force to sell mortgage related assets, including high risk RMBS and CDO securities that Goldman Sachs wanted to get off its books, creating a conflict between the firm’s proprietary interests and the interests of its clients.

        5. Abacus Transaction. Goldman Sachs structured, underwrote, and sold a synthetic CDO called Abacus 2007-AC1, did not disclose to the Moody’s analyst overseeing the rating of the CDO that a hedge fund client taking a short position in the CDO had helped to select the referenced assets, and also did not disclose that fact to other investors.

        6. Using Naked Credit Default Swaps. Goldman Sachs used credit default swaps (CDS) on assets it did not own to bet against the mortgage market through single name and index CDS transactions, generating substantial revenues in the process.

  And, indeed, the message coming from political leaders is not that the Wall Street people should be prosecuted and, at least shunned. No, it's that they need to be courted and seduced again:


Schumer in recent months has been on a fence-mending campaign with senior Wall Street executives, many of whom have grown furious with the Democratic Party. It’s a fence with a lot of holes: Leading Democrats have been bashing big banks for the better part of four years, and some magnates scoff at the idea of making up.

    So the senator who wants to be seen as a friend to Wall Street has been engaged in an intense effort to rebuild trust with the industry that financed the 2006 and 2008 Democratic Senate campaigns. Schumer has been holding private dinners, organizing high-end fundraisers for Democratic candidates and quietly pressing for super PAC donations.

  So, the real crooks get off with a slap on the wrist, while the government wastes time on petty liars, and politicians sell their souls again to the very people who robbed the country. So, Blankfein and his ilk love Clemens and Edwards because they are a distraction and a drain on prosecutorial resources that could, and should, put the Wall Street thieves on trial.
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Comment Preferences

  •  Tip Jar (3+ / 0-)

    Follow me on Twitter @jonathantasini

    Visit Working Life.

    by Tasini on Tue Jun 19, 2012 at 07:32:03 PM PDT

  •  You left out prosecuting the Cheney Administration (3+ / 0-)


    "For what profit a man, if he gain the world, but has to pay taxes on it?" -ontheleftcoast, The Book of Paul

    by MsGrin on Tue Jun 19, 2012 at 07:35:56 PM PDT

    •  But it was Democrats who decided not to prosecute (0+ / 0-)

      Bush / Cheney,  when it was needed to preserve and assure the integrity of the executive branch and our Constitution.  

      It is an outrage that Wall Street  hasn't been held accountable for their depression and it is an outrage too that no one was held accountable for 9-11 and the Iraq no WMDs.     It is an indication that no one at the top wants a can of worms opened, because they would not know how many worms would get out .  

      Victims of bigotry are the poorest, least influential members of society.......never the wealthiest, most educated, most overrepresented in high levels, and most influential. Bigotry hurts the least influential. To claim or say otherwise is absurd.

      by dailykozzer on Wed Jun 20, 2012 at 09:25:29 AM PDT

      [ Parent ]

  •  What would it cost to prosecute Blankfein? (0+ / 0-)

    If the DoJ spent eight figures prosecuting Edwards and Clemens how much would it take prosecute Blankfein? I think $100+ million and the DoJ would likely have the same success as these two high profile prosecutions that ended with no convictions. You know that Goldman Sachs would easily pay $250 million for the defense. Maybe the DoJ should indict Blankfein, it could be a stimulus plan for DC and NYC.

    "let's talk about that"

    by VClib on Tue Jun 19, 2012 at 09:04:25 PM PDT

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