Blog on the Run: Reloaded

Wednesday, March 26, 2014 8:17 pm

There is a club. You and I are not in it.

Filed under: Evil,Hold! Them! Accountable!,I want my money back. — Lex @ 8:17 pm

So, Charlotte Mayor Patrick Cannon has been arrested and indicted on corruption charges, including theft and bribery concerning programs receiving federal funds, honest services wire fraud and extortion under color of official right. For selling his office — before becoming mayor, Cannon had been mayor pro tem and a City Council member — received a total of $68,000 in cash, plus airline tickets, a hotel room, and use of a luxury apartment.

The three charges, which came after a 3 1/2-year undercover sting operation in which FBI agents posed as real-estate developers and allegedly bribed Cannon to use his office to do them favors, carry a combined maximum of 50 years in prison. Assuming Cannon is guilty on all counts, he still won’t do anything like 50, but he’ll do quite a number of years. And it won’t be in Alcatraz, but it won’t be in Club Fed, either. He also could be fined up to $1.5 million, which, for him, is years’ and years’ worth of income.

Meanwhile, retired Bank of America CEO Ken Lewis and the bank itself settled a civil lawsuit today with the New York attorney general’s office that had alleged securities fraud. Specifically, Lewis and the bank were accused of deceiving BoA stockholders about what crappy shape Merrill Lynch was in when the bank asked stockholders to approve a takeover of Merrill in December 2008. This transaction played a nontrivial role in blowing up the economy, although that demolition was well under way when the sale closed on Jan. 1, 2009.

Neither Lewis nor the bank is required by the settlement to admit any wrongdoing. The bank will have to pay $15 million. Lewis himself will have to pay $10 million, although that’s the equivalent of zero days’ worth of income for him because the bank will pay it for him. Given the bank’s net earnings of $4.2 billion in 2012 (the 2013 annual report is due out any day), those fines amount to about two days’ profits, give or take. That’ll certainly warn all the other banks not to screw their shareholders, I think.

Oh, and Lewis is personally barred for three years from serving as an officer or director for any publicly traded company. Which is really going to cramp his style because he’s, you know, retired.

So:

  • Criminal charges vs. civil.
  • Prison and a significant fine vs. no prison and a trivial fine.
  • A guilty verdict or guilty plea vs. no admission of guilt.
  • Prison (again) vs. an order not to do something he probably wasn’t going to do anyway.

What have we learned from this experience?

We’ve got one set of rules for banksters, and another set for everybody else, including mayors of major cities, you, and me.

There is a club. You and I are not in it.

4 Comments »

  1. Yup. It most certainly makes life a bowl of cherries if you are a FOBO. But you obsess about Ken Lewis. Can you say Jon Corzine ? Your lips are sealed ?

    Eric Holder Gives Pass to Banking Criminals at Credit Suisse.

    “When it comes to the Tea Party, Obama’s IRS probes private citizens beyond the legal limits. But when it comes to Swiss banks engaged in widespread criminal conduct, Eric Holder’s Justice Department turns a blind eye.

    Swiss bank Credit Suisse has perpetrated a criminal enterprise on American soil by intentionally fleecing the federal government of billions of dollars in taxes, yet top political leaders at the U.S. Department of Justice refuse to pursue criminal charges against all of the bank officials engaged in the scheme.

    Credit Suisse is based in Zurich. It repeatedly sent officers to the United States and engaged employees in the United States to aggressively market schemes to American citizens to avoid the payment of taxes to the IRS.

    These marketing pitches were made in the United States to American citizens. Credit Suisse promised anonymous movement of cash away from the reach of the IRS.

    The conduct is criminal, yet the Department of Justice refuses to prosecute all of the bank officials committing the crimes”

    RTWT

    Comment by Fred Gregory — Wednesday, March 26, 2014 8:38 pm @ 8:38 pm | Reply

  2. And until you figure out how to rob banks with briefcases you won’t be in it no matter how much money you steal or how many people you kill.

    Comment by Billy Jones — Wednesday, March 26, 2014 9:05 pm @ 9:05 pm | Reply

  3. I haven’t followed the Corzine case as closely because Corzine’s organization played nowhere near the role in blowing up the economy that the too-big-to-fail banks like Bank of America did. But neither have my lips been sealed.

    Yes, Credit Suisse and its officers should be prosecuted. Yes, so should the banks, other lenders, their corporate officers, security ratings agencies and their corporate officers, and everyone else who helped blow up the U.S. economy and helped manipulate LIBOR rates and the foreign-exchange markets. But we’ve already established that Holder is, by and large, one of the most inept AGs in history. (I won’t say “worst” because we’ll always have John Mitchell. But you get the point.)

    One of the financial bloggers I read pointed out yesterday that on the two occasions in which President Obama announced his intention to break up too-big-to-fail banks, the entire stock market tanked HARD the very next day. The blogger believes this was not just the rational response of shareholders to news, but was in fact engineered by the financial industry as a shot across Obama’s bow — and that the reason that bank breakups, which were expected to be called for in the most recent State of the Union, were not mentioned.

    I have no idea if it’s true, but the hypothesis certainly explains a lot. I’ll see if I can find the link and post it.

    Comment by Lex — Thursday, March 27, 2014 11:18 am @ 11:18 am | Reply

  4. Good recall, Lex. . I had completly forgotten that you had blogged about MF Global Holdings or that I had a left a comment pointing out that Jon Corzine gave $500,000.00 to Obama. Oh well, he was almost Secretary of Treasury..

    Comment by Fred Gregory — Thursday, March 27, 2014 6:58 pm @ 6:58 pm | Reply


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