AP reports: “European bank Credit Suisse AG pleaded guilty Monday to helping wealthy Americans avoid paying taxes through secret offshore accounts and agreed to pay about $2.6 billion to the U.S. government and regulators. …
“Attorney General Eric Holder, who was criticized last year after telling Congress that large banks had become hard to prosecute, appeared to foreshadow the guilty plea in a video message earlier this month in which he said no financial institution was ‘too big to jail.’”
JAMES HENRY, jamesshelburnehenry at mac.com
Available for a limited number of interviews, former chief economist at the international consultancy firm McKinsey & Co., Henry is senior adviser with the Tax Justice Network and senior fellow at the Columbia University Center for Sustainable International Investment. He said today: “In this case we have the second largest Swiss bank, a bank with … 1.26 trillion Swiss francs of client assets under management getting away with essentially a fine that amounts to three months of their net earnings. Contrary to Holder’s claim about it being an end to ‘too big to jail,’ no senior executives are going to jail. Brady Dougan, the CEO, is expected to stay on. The reason the Swiss stock market, in particular Credit Suisse, soared this morning is because they are delighted with this deal.
“We’ve missed the opportunity to really send a message here because the way they structured this plea bargain was to rule out any impact on Credit Suisse’s license to operate in the United States, which is the only impact a criminal prosecution could have had.
“This is worse than the UBS settlement in 2009 in which some names [of tax evaders] were given up. This is part of a negotiation: the Justice Department can say ‘no deal, you want your license, you give us information on Americans who are evading.’
“This raises the basic question about the rule of law, about justice being for sale. Eric Holder used to be an attorney at Covington and Burling after he left the Clinton administration, where he was handling UBS as a client. The chief IRS legal counsel, William Wilkins, used to be a registered representative for the Swiss banking association in Washington when he was a partner at WilmerHale. You have the U.S. Treasury Secretary in charge of Citibank’s global private banking department when he was at Citibank in 2006. … One of the key golfing partners of the President of the United States, Robert Wolf, used to run UBS-America. He was a big fundraiser for Obama in 2008. So this administration is permeated with people who are basically very sympathetic to Wall Street and to Swiss interests as well.” (See full interview on this morning’s “Democracy Now!”)
WILLIAM BLACK [not available until early evening], blackw at umkc.edu
Black is an associate professor of economics and law at the University of Missouri-Kansas City. A former bank regulator who led investigations of the savings and loan crisis of the 1980s, he is the author of the book The Best Way to Rob a Bank is to Own One. He said today, “Credit Suisse represents a small change from a policy that was indefensible to one that remains fatally flawed. The fundamental flaw in the entire process is the continuing refusal to prosecute the senior corporate officers who led, and were enriched by, the fraud epidemics that drove the financial crisis. That fatal flaw continues, indeed, reports are that the CEO — who controlled the key functions that should have prevented Credit Suisse’s massive frauds — was promised that he could continue in control with no ‘claw back’ of his (and his colleagues’ bonuses) or civil suits against him by the U.S. The supposed ‘dilemma’ involved in prosecuting elite banks does not exist because the superior deterrence would always come from prosecuting the officers. Given the continued ‘too big to fail’ mantra the corporate fines — by definition — must be so small relative to the size of the bank that they pose zero risk of ‘causing’ [sic] the bank to fail. (The entire discussion of ‘causation’ is bizarre and wrong — the frauds should cause the ‘failure’ and there is no need to allow the bank to ‘fail’ in the sense they are discussing because we could either bring an enforcement action and ‘remove and prohibit’ the senior officers that led the fraud or place the bank in conservatorship and replace the fraudulent officers with ones of integrity and competence. In either case, the bank would continue and be in far better shape with honest managers).
“Note that none of the leaked prosecutions (1) involve any of the frauds that drove the crisis, (2) are against U.S. banks (even in Citi’s case it is its Mexican affiliate that is at issue), (3) leads to the prosecution of any elite officer by the U.S., or (4) leads to the ‘claw back’ of the officers’ fraudulent proceeds. The basic facts and strategy remain the same: the bank regulators continue to caution against prosecutions rather than (as we did in the 1980s savings and loan debacle) demand that the Department of Justice prosecute, no elite officer who led the frauds that caused the crisis has been prosecuted, and no elite officer who led the frauds that caused the crisis has even had to give back more than a tiny share of his fraud proceeds. We continue to witness the greatest strategic prosecutorial failure in modern U.S. history.”
Meanwhile, the Guardian reports that “Occupy Activist Cecily McMillan Sentenced to Three Months in Jail.” Chris Hedges writes: “McMillan says Grantley Bovell, who was in plainclothes and did not identify himself as a police officer, grabbed her from behind during a March 17, 2012, gathering of several hundred Occupy activists in Manhattan’s Zuccotti Park. In a video of the incident she appears to have instinctively elbowed him in the face, but she says she has no memory of what happened. Video and photographs — mostly not permitted by the trial judge to be shown in the courtroom — buttressed her version of events. There is no dispute that she was severely beaten by police and taken from the park to a hospital where she was handcuffed to a bed. …
“McMillan’s case is emblematic of the nationwide judicial persecution of activists, a persecution familiar to poor people of color. Her case stands in contrast with the blanket impunity given to the criminals of Wall Street. Some 8,000 nonviolent Occupy protesters have been arrested. Not one banker or investor has gone to jail for causing the 2008 financial meltdown. The disparity of justice mirrors the disparity in incomes and the disparity in power.”
LUCY PARKS, lucyparks95 at gmail.com, STAN WILLIAMS, press at justiceforcecily.com
Parks and Williams are organizers with Justice for Cecily and can address her case.