William K. Black is an Associate Professor of Economics and Law at the University of Missouri – Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics.
In April 2009 Black alleged in an explosive interview with Bill Moyers that American banks and credit agencies had conspired to create a system in which so-called "liars loans" could receive AAA ratings and zero oversight, amounting to a massive "fraud" at the epicenter of US finance, equated the entire US financial system to a giant "ponzi scheme" and charged Treasury Secretary Timothy Geithner, like Secretary Henry Paulson before him, of "covering up" the "truth".
Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and General Counsel of the Federal Home Loan Bank of San Francisco, and Senior Deputy Chief Counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement.
Black's 2005 book, The Best Way to Rob a Bank is to Own One is a classic insider's account of how financial super predators brought down the S&L industry with massive accounting fraud. Paul Volcker praised its analysis of the critical role of Bank Board Chairman Gray’s leadership in reregulating and resupervising the industry:
Bill Black has detailed an alarming story about financial - and political - corruption. The specifics go back twenty years, but the lessons are as fresh as the morning newspaper. One of those lessons really sticks out: one brave man with a conscience could stand up for us all.
Robert Kuttner in his Business Week column proclaimed that:
Black's book is partly the definitive history of the savings-and-loan industry scandals of the early 1980s. More important, it is a general theory of how dishonest CEOs, crony directors, and corrupt middlemen can systematically defeat market discipline and conceal deliberate fraud for a long time -- enough to create massive damage.
Black developed the concept of “control fraud” – frauds in which the CEO or head of state uses the entity as a “weapon.” Control frauds cause greater financial losses than all other forms of property crime combined and kill and maim thousands. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae’s former senior management, and he now teaches White-Collar Crime, Public Finance, Antitrust, Law & Economics.
In the video interview below, published this morning, Black talks here with The Real News Network's Paul Jay about ways that President Obama can address and deal with the current bizarre republican arguments detaching the debt problem from the real economy that Obama raised in his speech Wednesday, saying today that:
The economy has stopped delivering for anybody other than the ultra-rich. That's what needs to be fixed. So what happened that the economy stopped delivering?
Because we bought into this thing... about we're a nation of can-do folks that don't believe in government intervention, you know, like it's not appropriate for the government to do anything, and if we just got it out of the way, private business would be so efficient that we would all get rich.
Well, we did that, we tried that for 20-plus years--actually, 30 years. And the answer is: yeah, the top 0.1 percent gets staggeringly rich; the bottom 90 percent get nothing.
That's what we've got to fix. And to fix that, you do need active government intervention. Where do you need it? You need it in regulation to prevent these waves of financial fraud. You need it in terms of antitrust, because now we have incredible accumulation of monopoly power throughout our economy. And guess what? It's completely inefficient.
You need it to protect the rights of working people. Instead of destroying union rights, you need more effective unions. You need to reevaluate the entire trade policies, where the government, after all, does act, acts on the behest of big business, and it--what our leading export is is we export American jobs abroad. So, yes, we need to act.
Real News Network - April 14, 2011
...full transcript here...
