Blog on the Run: Reloaded

Tuesday, June 7, 2011 7:47 pm

This is not difficult


Goldman Sachs CEO Lloyd Blankfein has broken the law and should go to prison for five years.

I don’t mean in terms of conspiring to commit fraud or other complicated areas, although I personally believe he has broken the law there, too. I mean he has done the same simple, stupid thing that got former baseball star Roger Clemens indicted: He lied to Congress.

Matt Taibbi helpfully explains:

Though many legal experts agree there is a powerful argument that the Levin report [a report stemming from an investigation led by Sen. Carl Levin — Lex] supports a criminal charge of fraud, this stuff can keep the lawyers tied up for years. So let’s move on to something much simpler. In the spring of 2010, about a year into his investigation, Sen. Levin hauled all of the principals from these rotten Goldman deals to Washington, made them put their hands on the Bible and take oaths just like normal people, and demanded that they explain themselves. The legal definition of financial fraud may be murky and complex, but everybody knows you can’t lie to Congress.

“Article 18 of the United States Code, Section 1001,” says Loyola University law professor Michael Kaufman. “There are statutes that prohibit perjury and obstruction of justice, but this is the federal statute that explicitly prohibits lying to Congress.”

The law is simple: You’re guilty if you “knowingly and willfully” make a “materially false, fictitious or fraudulent statement or representation.” The punishment is up to five years in federal prison.

When Roger Clemens went to Washington and denied taking a shot of steroids in his ass, the feds indicted him — relying not on a year’s worth of graphically self-incriminating e-mails, but chiefly on the testimony of a single individual who had been given a deal by the government. Yet the Justice Department has shown no such prosecutorial zeal since April 27th of last year, when the Goldman executives who oversaw the Timberwolf, Hudson and Abacus deals arrived on the Hill and one by one — each seemingly wearing the same mask of faint boredom and irritated condescension — sat before Levin’s committee and dodged volleys of questions. …

Lloyd Blankfein went to Washington and testified under oath that Goldman Sachs didn’t make a massive short bet and didn’t bet against its clients. The Levin report proves that Goldman spent the whole summer of 2007 riding a “big short” and took a multibillion-dollar bet against its clients, a bet that incidentally made them enormous profits. Are we all missing something? Is there some different and higher standard of triple- and quadruple-lying that applies to bank CEOs but not to baseball players?

In fairness to both Taibbi and Sen. Levin and his investigators, there appears to be ample proof on the record that Goldman as a corporation and its individual officers committed a multitude of crimes — enough that any sane state would give Goldman the death penalty and lock the officers up for the rest of their natural lives. But those are, to a greater or lesser degree, complicated charges, challenging to prove. Lying to Congress? No-brainer.

They got Al Capone not for murder but for tax evasion. Lloyd Blankfein doing five years for lying to Congress wouldn’t be justice, but it would be a start.

One other question, perhaps more difficult: Why is it that you, I, Carl Levin and some scruffy reporter for Rolling Stone can see this but the Attorney General of the United States cannot? Are we just smarter, or what?

UPDATE: Apparently we’re smarter than the Attorney General on the John Ensign case, too.

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