Donald Trump, a classic case of affirmative action for the wealthy, wants to take it away from the disadvantaged

THURSDAY, AUG 3, 2017 02:00 AM PDT

President often claims he’s “like, a smart person” — but he didn’t get into Wharton on his academic merits

PETER DREIER

Of all the issues facing higher education today — skyrocketing student debt, for-profit colleges ripping off its students and government subsidies, declining college enrollment – President Trump has chosen to make it harder for black and Latino students to get into college.

The Trump administration is preparing to sue universities over affirmative action admissions policies deemed to discriminate against white applicants, according to a document obtained by The New York Times.

Apparently Trump objects to affirmative action for African-Americans and Latinos, but not to affirmative action for the super-rich and the well-connected. That’s how Trump got into the University of Pennsylvania in 1966.

Over the years, Trump has frequently referred to his Ivy League credentials as evidence of his intelligence. In a 2004 interview with CNN, Trump said, “I went to the Wharton School of Finance. I got very good marks. I was a good student. It’s the best business school in the world, as far as I’m concerned.”

In 2011, Trump told ABC News, “Let me tell you, I’m a really smart guy. I was a really good student at the best school in the country,” referring once again to Wharton, the University of Pennsylvania’s business school, where he earned a bachelor’s degree in 1968.

“I went to the Wharton School of Finance,” he said during a campaign speech in Phoenix in July 2015. “I’m, like, a really smart person.”

In an interview on NBC’s “Meet the Press” in August 2015, Trump described Whartonas “probably the hardest [school] there is to get into.” He added, “Some of the great business minds in the world have gone to Wharton.” He also observed: “Look, if I were a liberal Democrat, people would say I’m the super genius of all time. The super genius of all time.”

During a CNN-sponsored Republican town hall in Columbia, South Carolina in February 2016, Trump reminded the audience that he had gone to Wharton and then repeated his boast: “Look, I went to the best school, I was a good student and all of this stuff. I mean, I’m a smart person.”

Last December, in an interview with Fox News’ Chris Wallace, Trump repeated those same words to explain why he didn’t need daily updates from intelligence professionals about national security threats, a tradition that goes back to President Harry Truman. “I’m, like, a smart person,” he told Wallace.

He did it again on Jan. 21 of this year, the day after his inauguration, during a visit to CIA headquarters. Trump’s scripted remarks turned into a rambling rant that included attacks on the media and his insistence that as many as 1.5 million people attended his inauguration. In the middle of his tirade, Trump felt the need to tell the nation’s top spies that he is a bright guy. “Trust me,” Trump said, “I’m, like, a smart person.”

Trump has repeated that claim many times. Each time, it isn’t clear if he’s trying to convince his interviewer or himself. Indeed, anyone who feels compelled to boast about his academic pedigree and how smart he is clearly suffers from profound insecurity about his intelligence and accomplishments. In Trump’s case, he has good reason to have doubts.

Trump surely knows he didn’t get into Wharton on his own merits. He transferred into its undergraduate program after spending two years at Fordham University in New York, where he had no significant achievements.

“No one I know of has said ‘I remember Donald Trump,’” Paul F. Gerken, a 1968 Fordham graduate and president of the Fordham College Alumni Association, told the Chronicle of Higher Education. “Whatever he did at Fordham, he didn’t leave footprints.”

In her 2001 biography, “The Trumps,” Gwenda Blair reported that Trump’s grades at Fordham were not good enough to qualify him to transfer to Wharton. According to Blair, Trump got into Wharton as a special favor from a “friendly” admissions officer who was a high school classmate of Trump’s older brother, Freddy. The college’s admissions staff was surely aware that Trump’s father was a wealthy real estate developer and a potential donor.

Other than his father’s money and his family’s connections, Trump had no qualifications that would have otherwise gotten him into Wharton. (Most people who mention Wharton refer to its prestigious MBA program, but Trump was an economics major in the undergraduate program.)

In high school at the New York Military Academy, Trump was not an outstanding student. He didn’t organize his fellow students to tutor underprivileged kids or raise money for cancer research. In his senior year, he was removed from his post as captain and transferred to a job on the school staff, with no command responsibilities. According to his fellow students, Trump wasn’t able to control the cadets under his command.

Moreover, for years Trump exaggerated his academic accomplishments at Wharton. On at least two occasions in the 1970s, the New York Times reported that Trump “graduated first in his class” at Wharton in 1968. That’s not true. The dean’s list for his graduation year, published in the Daily Pennsylvanian, the campus newspaper, doesn’t include Trump’s name. He has refused to release his grade transcripts from his college days.

The fabrication that Trump was first in his class has been repeated in many other articles and books about Trump, but he has never bothered to correct it.

Upon graduating from college, Trump didn’t have to apply for jobs or go through interviews with potential employers who would judge him on his merits. Instead, his father Fred Trump handed young Donald the keys to his real estate empire.

Despite this, Trump often tries to portray himself as a self-made entrepreneur. “It has not been easy for me,” Trump said at a town hall meeting on Oct. 26, 2015, acknowledging, “My father gave me a small loan of a million dollars.”

But an investigation by The Washington Post last year demolished Trump’s claim that he made it on his own. Not only did Trump’s father provide Donald with a huge inheritance and set up big-bucks trust accounts to provide his son with a steady income, Fred was also a silent partner in Trump’s first real estate projects. According to the Post:

Trump’s father — whose name had been besmirched in New York real estate circles after investigations into windfall profits and other abuses in his real estate projects — was an essential silent partner in Trump’s initiative. In effect, the son was the front man, relying on his father’s connections and wealth, while his father stood silently in the background to avoid drawing attention to himself.

Born into privilege, Trump got into Wharton through family connections and then inherited a fortune. Now his administration is preparing to thwart efforts by colleges and universities to recruit students of color who had to overcome obstacles that Trump can’t even imagine. The Justice Department memo uncovered by The New York Times described its plan as challenging “intentional race-based discrimination,” referring to programs designed to bring more minority students to college campuses.

Affirmative action programs were designed to help qualified students who lack the sorts of connections that Trump used to get into Wharton. The purpose is to level the playing field by helping students who have had to cope with considerable economic and social disadvantages, including racism.

No selective university or college simply uses grades and test scores in deciding which students to accept. Colleges accept students whose high-school grades and SAT scores meet a basic threshold, and then give extra points to students with various characteristics, based on such factors as athletic or artistic ability; urban, suburban or rural background; demonstrated commitment to public service; attendance at public, private or religious high schools; and ethnic and racial backgrounds. All of this is done to create a diverse student body.

The Justice Department memo noted that the anti-affirmative action project will be run out of the Civil Rights Division’s front office, comprised of Trump administration political appointees, rather than its Educational Opportunities Section, which is staffed by career civil servants who normally deal with issues involving schools and universities. This suggests that the entire scheme is designed as a political gesture to Trump’s base of conservative white supporters who view affirmative action as a form of reverse discrimination.

Candice Jackson, acting head of the Department of Education’s Office for Civil Rights (who would certainly play a key role in the administration’s attack on affirmative action), once complained that she was discriminated against for being white while she was a student at Stanford.

But an even more egregious form of discrimination is the kind of class privilege that allowed a second-rate student like Trump to get into Wharton, depriving a more deserving but less well-connected student a spot in that elite institution. Now, as president, he wants to deprive tens of thousands of truly worthy students the opportunity to overcome disadvantages and become our nation’s future leaders.

Peter Dreier is professor of politics and chair of the Urban & Environmental Policy Department at Occidental College. His most recent book is “The 100 Greatest Americans of the 20th Century: A Social Justice Hall of Fame” (Nation Books).

http://www.salon.com/2017/08/03/donald-trump-a-classic-case-of-affirmative-action-for-the-wealthy-wants-to-take-it-away-from-the-disadvantaged/

Embattled Trump plays homophobia card to strengthen his fascistic base

REUTERS/Karen Pulfer Focht

29 July 2017

The Trump administration’s attack on the democratic rights of lesbian, gay, bisexual and transgender (LGBT) people is the implementation of a reactionary political strategy. It seeks to combine appeals to homophobic hysteria, religious bigotry, the glorification of police and xenophobic American nationalism to encourage the growth of a fascist movement.

Embroiled in perpetual crisis, the Trump administration is attempting to establish a base of political operations centered around the demagogic president and outside the existing structure of the two-party system. By firing former Republican Party Chairman Reince Priebus as chief of staff and replacing him with Department of Homeland Security Secretary John Kelly, Trump has taken another step toward his goal of establishing a personalist executive comprised of a close group of fascists, generals, family relations and billionaire oligarchs.

The pattern of Trump’s maneuvers this week proves the attack on LGBT rights is central to this strategy.

On Wednesday, the Department of Justice filed an advisory “friend of the court” brief in a private New York lawsuit arguing that corporations can fire LGBT people because of their sexual orientation on the pseudo-legal grounds that Title VII of the Civil Rights Act of 1964 does not protect LGBT people. After half a century marked by growing social acceptance and advances in the legal rights of LGBT people, millions of LGBT workers are again at risk of immediate firing because of their second-class legal status.

Earlier on Wednesday, Donald Trump tweeted an announcement that his administration would bar transgender people from military service “in any capacity” on the reactionary grounds that transgender people cost the military too much and because of the “disruption that transgender in the military would entail.”

The same day, Trump announced the nomination of Kansas Governor Sam Brownback as the State Department’s ambassador at large for international religious freedom. This move is aimed at bringing the evangelical and Catholic organizations that bankrolled Brownbank’s short-lived 2008 presidential campaign into a bloc with Trump. After the Supreme Court legalized same-sex marriage in 2015, Brownback issued an executive order prohibiting the state government from suing or punishing churches that refuse to provide marriages and other social services for LGBT people.

White House sources told the Daily Beast that Trump and Bannon are working closely with Vice President Mike Pence, who has the closest ties to the evangelical establishment and who personally orchestrated the transgender ban tweets. According to the unnamed sources, Trump, Pence and Bannon thought that the move would be popular “with his base.” The fact that military advisors said they were not consulted about the tweets confirms the fact that Wednesday’s policy announcements were conceived within the West Wing.

Wednesday’s policy announcements were bookended by two major speeches, the first on Tuesday night in Youngstown, Ohio, which set the political tone for the moves. Paying tribute to “our values, our culture, our borders, our civilization and our great American way of life,” Trump told a raucous crowd that “family and faith, not government and bureaucracy, are the foundation of our society.” He continued: “In America, we don’t worship government, we worship god.” This out of the mouth of a man who has never worshiped anything but money and himself.

Speaking yesterday in Long Island, New York, Trump addressed another of his key constituencies: police and immigration officers. He announced a major escalation of immigration raids to be carried out under the pretext of fighting the El Salvadoran gang MS-13.

“We have blood-stained killing fields,” Trump said, describing in gruesome detail the violent tactics of the gang. Police and immigration officials “are liberating our American towns,” he added, and told officers he loved watching criminal suspects “get thrown into the back of a paddy wagon.” He appealed to the country’s over 1.1 million full-time police officers in the United States, 50,000 border patrol agents, and 20,000 ICE officials: “Please don’t be too nice.”

The official response of the Democratic Party has been remarkably restrained, with criticism limited to arguing that Trump’s transgender ban would weaken the military.

Given the significance of Trump’s attacks, the muted character of the Democratic Party’s response contains a real warning. None of the democratic rights gained over the last century are secure so long as their enforcement is left in the hands of one or another faction of the ruling class, and are therefore vulnerable to shifts in the political winds.

The Democratic Party has dropped all references to democratic questions such as immigration, LGBT rights and abortion in its new “Better Deal” agenda, announced last week. Defending the new program, Democratic Minority Whip Steny Hoyer told reporters that social issues such as the rights of LGBT people and immigrants “won’t be the focus” of the new agenda. “Essentially,” he added, “what we don’t want to do is distract people… we don’t want to distract ourselves.” In other words, the Democratic Party leadership is appealing to social reaction and religious bigotry to win votes in the 2018 midterm elections.

Several Democratic leaders have expressed concerns over the “Better Deal” program’s failure to mention any democratic or social questions, and many will oppose the Trump administration’s attack on LGBT rights. But the decision to promote a policy based on a pledge to “aggressively crack down on unfair foreign trade” (as the program states) will only fan the flames of nationalist chauvinism and further strengthen Trump’s maneuvers.

The fight to defend democratic rights is urgent: Trump’s efforts to establish a fascistic movement based on nationalism and religious bigotry threaten the social rights of hundreds of millions of people, not only immigrants and LGBT people. But to fight political reaction, one must understand its objective roots.

Political reaction draws its strength from a set of economic and social relations that have arisen on the basis of the dramatic expansion of social inequality and wealth concentration under capitalism. After more than 15 years of permanent war fought for the profits of American corporations, the military and intelligence agencies control the elected officials and dictate the policies of the government. Faced with growing social polarization, the police are armed with military weapons left over from the wars waged in the name of the “war on terror.” They have been granted a license to kill by the courts.

Since the growth in the power of the military, the police, the churches and the deportation agencies is the product of the growth of inequality, the fight for democratic rights must be based on the struggle for social equality. Such a struggle must involve the political activation of the working class, the powerful social force that produces all of society’s wealth under capitalism, but which is exploited by the capitalists regardless of race, ethnicity, sexual orientation or gender identity.

Genuine democracy can be achieved only by abolishing capitalism, the system of economic relations that gives rise to political reaction in all its interrelated manifestations. Only on the basis of the unity of the working class in the struggle for socialism can democratic rights be won and preserved.

Eric London

http://www.wsws.org/en/articles/2017/07/29/pers-j29.html

Why Hillary Clinton Should be Prosecuted for Reckless Abuses of National Security

JULY 6, 2016

by JILL STEIN

Yesterday FBI Director James Comey described Hillary Clinton’s email communications as Secretary of State as “extremely careless.” His statement undermined the defenses Clinton put forward, stating the FBI found 110 emails on Clinton’s server that were classified at the time they were sent or received; eight contained information classified at the highest level, “top secret,” at the time they were sent. That stands in direct contradiction to Clinton’s repeated insistence she never sent or received any classified emails.

All the elements necessary to prove a felony violation were found by the FBI investigation, specifically of Title 18 Section 793(f) of the federal penal code, a law ensuring proper protection of highly classified information. Director Comey said that Clinton was “extremely careless” and “reckless” in handling such information. Contrary to the implications of the FBI statement, the law does not require showing that Clinton intended to harm the United States, but that she acted with gross negligence.

The recent State Department Inspector General (IG) report was clear that Clinton blithely disregarded safeguards to protect the most highly classified national security information and that she included on her unprotected email server the names of covert CIA officers. The disclosure of such information is a felony under the Intelligence Identities Protection Act.

While the FBI is giving Clinton a pass for not “intending” to betray state secrets, her staff has said Secretary Clinton stated she used her private email system because she did not want her personal emails to become accessible under FOI laws. This is damning on two counts – that she intended to disregard the protection of security information, and that she had personal business to conceal.

This is not the end of the Clinton email issues. Department of Justice officials filed a motion in federal court on June 29th requesting a 27-month delay in producing correspondence between former Secretary of State Hillary Clinton’s four top aides and officials with the Clinton Foundation and Teneo Holdings, a public relations firm that Bill Clinton helped launch.

Hillary Clinton deleted 30,000 emails claiming they were ‘personal’. This is equal to the volume of her emails designated as department business. If half of an employee’s email volume is for their personal business, they are not using their time for their job.

If Secretary Clinton was conducting personal business for her family Foundation through the Secretary of State’s Office, this is a matter the American public deserves to know about. As Secretary of State Hillary Clinton routinely granted lucrative special contracts, weapons deals and government partnerships to Clinton Foundation donors. The Secretary of State’s office should not be a place to conduct private back room business deals.

The blurring of the lines between Clinton family private business and national security matters in the Secretary of State Office underscores evidence on many other fronts that Hillary Clinton is serving the 1%, not we the people.

Hillary Clinton’s failure to protect critical security information is not the only thing in her tenure as Secretary that deserves the term reckless, including her decision to pursue catastrophic regime change in Libya, and to support the overthrow of democratically elected governments in Ukraine and Honduras.

More articles by:JILL STEIN

http://www.counterpunch.org/2016/07/06/why-hillary-clinton-should-be-prosecuted-for-reckless-abuse-of-national-security/

Why Is It So Hard for the Federal Govt to Tell Us How Many People Police Are Killing?

CIVIL LIBERTIES

One year and a 116 page report later, and law enforcement still won’t hand over the real data.

ByKanya Bennett / ACLU

May 19, 2016

policeman
Photo Credit: Fresnel

One year ago today, the White House released The Final Report of the President’s Task Force on 21st Century Policing—116 pages of recommendations meant to address the epidemic of killings of unarmed Black and brown people by the police officers sworn to protect them. The report was supposed to be a blueprint for reforms in policing this country has needed for decades. Yet 12 months after its publication, our government still can’t even come up with the number of people who have been killed by U.S. police.

“[E]mbarrassing and ridiculous”—that’s how the director of the FBI characterized our government’s lack of data on killings by police. He also said it’s “unacceptable” that we have to rely on two newspapers—The Guardian and The Washington Post—to get national estimates for these statistics.

The federal government is the official record keeper of shark attacks and farm animals. Certainly police shootings are of national significance, too, and should be documented by the very entity that provides dollars and resources to local police. How can we start to address a national crisis if our own government can’t measure it?

This year’s tallies by the Guardian and the Post are roughly the same as they were at this point last year—the problems with our police departments’ use of force aren’t going away.

Think of David Joseph, who was unarmed and naked when an Austin, Texas, police officer shot him three times and killed him. Reports indicate that the 17-year-old African-American may have been experiencing a mental health crisis when he was shot in February. Almost a year ago, similar circumstances surrounded the fatal police shooting of Anthony Hill in DeKalb County, Georgia.

A police officer in Winslow, Arizona, shot Loreal Tsingine five times, killing her after she allegedly threatened him with scissors. Police said the 27-year-old Native American woman was a shoplifting suspect from a nearby convenience store.

Mental illness plays a role in 25 percent of fatal police shootings. People of color make up 47 percent of those killed by police. Just as troubling as these statistics is that we have to piece them together from two newspapers’ databases whose totals don’t match up. Why isn’t our government doing the job?

Because the recommendation in The Final Report of the President’s Task Force on 21st Century Policing on data collection is a “should,” not a “must”: “policies on use of force should also require agencies to collect, maintain, and report data to the federal government on all officer-involved shootings, whether fatal or nonfatal, as well as any in-custody death.”

“Should” means that providing data on police shootings to the federal government remains voluntary, which is why the FBI’s Unified Crime Reporting data—the most comprehensive government database on crimes in the nation—can’t produce any national statistics. A grand total of 224 police departments out of the more than 18,000 across the country reported fatal police shootings to the federal government in 2014.

For too long, the Department of Justice has allowed police departments to opt out of sharing their data with the federal government, even when these departments receive federal funds. As we and 81 other organizations urged the Department of Justice in March, it’s time to require any department that gets a piece of the annual $4 billion in criminal justice grants it gives to state and local agencies to collect and report data on police-community encounters. The Justice Department should also issue regulations for the Deaths in Custody Reporting Act, so we know what “custody” means and what happens when departments don’t comply.

Since the task force report, the White House, FBI, and Bureau of Justice Statistics have each begun new police data programs. But these initiatives all rely on voluntary participation just like their failed predecessors. The numbers say it all:  A mere 53 police departments nationwide have signed up for the White House Police Data Initiative. That’s a participation rate of less than 1 percent.

The FBI says it is making significant improvements to its database. But even with the best data system in the world, what good is it without data? The federal government needs to take more than modest steps to collect information on police-community encounters. And law enforcement has a responsibility to provide the data we need to advance necessary reforms.

If the federal government is giving out federal dollars, law enforcement has to hand over the data.

 

Kanya Bennett serves as a Legislative Counsel in the ACLU’s Washington Legislative Office. 

 

http://www.alternet.org/civil-liberties/why-it-so-hard-federal-govt-tell-us-how-many-people-police-are-killing?akid=14290.265072.3q2hDN&rd=1&src=newsletter1057112&t=12

Financial crisis panel urged Obama administration to prosecute top bankers

By Gabriel Black
16 April 2016

Newly released documents show that the Financial Crisis Inquiry Commission (FCIC), a government panel set up in 2009 to investigate the 2008 Wall Street meltdown, referred top bankers, CEOs and ex-government officials to the Department of Justice for possible criminal prosecution. Not a single one of those named by the panel, however, has been criminally prosecuted by the Obama administration.

These referrals were not included in the report released to the public by the commission.

The FCIC was formed as part of the 2009 Fraud Enforcement and Recovery Act to investigate the causes of the 2008 financial crash. The act tasked a bi-partisan group of senators and congressmen with creating a 10-member commission composed of members outside of Congress. The FCIC reported its findings to the Senate Banking Committee and House Financial Services Committee.

In the course of its investigation, the commission interviewed hundreds of key players in the financial and regulatory system, held public hearings, and investigated reams of documents from major banks and regulatory institutions. In January 2011, the FCIC issued its final 633-page report.

The WSWS wrote at the time that the report “implicates corporate executives, regulators, and politicians in the conversion of the US economy into a Wall Street casino. It ties the unethical, irresponsible, and often blatantly illegal practices of the financiers to the impoverishment and suffering of millions.”

The National Archives of the United States released the internal FCIC documents last month. The archive contains roughly 500,000 pages of interviews, emails, correspondence and internal FCIC minutes, only a portion of which is screened and digitally accessible. These documents underscore the role of the Obama administration in shielding the banks and their leading officials from any accountability for reckless forms of speculation, fraud and lawlessness that led to the deepest economic crisis since the Great Depression of the 1930s.

Despite voluminous evidence assembled by the panel implicating in criminal behavior leading figures, including the then-CEO of Citigroup Charles Prince and former top Citigroup executive and US treasury secretary Robert Rubin, the Department of Justice refused to prosecute.

In its report, the FCIC blamed not only bankers but also regulators who “abysmally failed.” It highlighted the political dimensions of the crisis, noting, “From 1999 to 2008, the financial sector expended $2.7 billion in reported federal lobbying expenses; individuals and political action committees in the sector made more than $1 billion in campaign contributions.” This inflow of bank cash to campaign coffers deprived regulators of “the necessary strength and independence of oversight necessary to safeguard financial stability.”

The FCIC proceedings paralleled an investigation by the Senate Permanent Subcommittee on Investigations into the financial crisis. The Senate committee’s chairman, Senator Carl Levin, declared after releasing the committee’s 650-page report in April of 2011 that its investigation had found “a financial snake pit rife with greed, conflicts of interests and wrongdoing.” He told the New York Times: “The overwhelming evidence is that those institutions deceived their clients and deceived the public, and they were aided and abetted by deferential regulators and credit ratings agencies who had conflicts of interest.”

One significant part of the FCIC archive released last month that has come to light is minutes from a commission telephone conference on October 12, 2010, in which the commission voted to send 8 different referrals to the Department of Justice for criminal investigation. In the minutes, details are provided for each referral, showing that the FCIC singled out top-level executives from American International Group (AIG), Goldman Sachs, Citigroup and UBS.

In one referral, entitled “Potential Fraud and False Certifications: Citigroup,” former Citigroup chairman and treasury secretary in the Clinton administration, Robert Rubin, is cited for potential criminal prosecution. The FCIC urges that Rubin and then-Citigroup CEO Prince be investigated for knowingly defrauding the bank’s investors by lying to them about the extent of Citigroup’s exposure to the subprime mortgage crisis in 2007. The minutes also implicate other members of the board of directors, all of whom allegedly knew that the bank understated its exposure by $42 billion.

This case had been taken up by the Security and Exchange Commission in July 2010, which let the bank and its top officials off the hook, imposing only a minimal civil penalty of $75 million. The FCIC takes issue with the SEC settlement in its October 2010 referral to the Justice Department, noting, “The SEC’s civil settlement ignores the executives running the company and Board members responsible for overseeing it… By naming only the CFO and the head of investor relations, the SEC appears to pin blame on those who speak a company’s line, rather than those responsible for writing it.”

In another matter, entitled “Potential Fraud by Goldman Sachs in Connection with Collateral Calls on AIG,” several Goldman Sachs employees are referred to the Justice Department for criminal prosecution for selling securities to investors while simultaneously betting that these same securities would fail. The FCIC’s minutes document the fact that the company’s top executives were deliberately and knowingly shorting Collateralized Debt Obligations (CDOs) exposed to the subprime mortgage bust while selling them to investors. This is a criminal offense.

Specifically, it names Goldman Sachs Vice-Chairman Michael Sherwood, Chief Risk Officer Craig Broderick, and Daniel Sparks, who was head of Goldman Sachs’ mortgage department.

In another item involving Goldman Sachs, “Potential Fraud by Goldman Sachs in Connection with Abacus 2007-18 CDO,” the panel names David Lehman, a managing director at Goldman, and Jonathan Egol, the then-head of the bank’s CDO operations. Both of these figures are implicated in deliberately misleading rating agencies as part of a larger scheme to sell securities to investors against which Goldman itself was betting.

In a fourth item, “Potential Fraud in AIG Investor Calls,” the FCIC minutes condemn the president and chief executive of AIG, the world’s largest insurance firm at the time, Martin Sullivan. Additionally, it targets the firm’s chief financial officer, Steven Bensinger, and the chief executive of AIG financial products, Joe Cassano, for lying to investors about losses in the company’s portfolios.

In regard to UBS, the minutes include an item, “Potential Fraud: False and Misleading Representations about Loan Underwriting Standards by UBS and Other Issuers,” which blames UBS for misleading investors about its mortgage underwriting standards.

In an item blaming the rating agency Moody’s for selectively revealing downgrades in its ratings to top Wall Street Banks, the FCIC singles out Danya Corlito, the global business manager for mortgage-backed and asset-backed securities at UBS, as well as David Oman, who was in charge of UBS’s European risk division.

Rather than criminally prosecuting the leading financial players who engineered and profited from the subprime mortgage meltdown, Obama’s Justice Department has protected them by signing sweetheart settlements with JPMorgan Chase, Bank of America, Citigroup, Deutsche Bank and other major banks, protecting their executives.

In March of 2013, Attorney General Eric Holder responded to questioning from Republican Senator Chuck Grassley, who noted that there had been no criminal prosecutions of financial institutions or leading executives by the Obama administration. In response, Holder stated, “I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them, when we are hit with indications that if we do prosecute—if we do bring a criminal charge—it will have a negative impact on the national economy, perhaps even the world economy…”

Holder’s testimony before Congress amounted to an admission that the US government considers big US banks and their top executives to be above the law and deliberately avoids prosecuting them for illegal activities. These new documents, which have only begun to be analyzed, further substantiate this fact.

 

http://www.wsws.org/en/articles/2016/04/16/fcic-a16.html

Justice for Mike Brown

Mike Brown’s killer may not be held accountable unless President Obama and Attorney General Eric Holder take steps for a federal case. The Department of Justice must take action!

Help ensure justice for Mike Brown. http://justiceformikebrown.org/

White House sued for covering up crimes of JPMorgan

By Gabriel Black
15 February 2014

Better Markets, a non-profit Wall Street watchdog, filed a lawsuit Monday against the US Department of Justice (DOJ) alleging that its $13 billion settlement with JPMorgan Chase over the bank’s sale of toxic mortgage-backed securities in the run-up to the financial crisis was an illegal cover-up.

Better Markets said the deal, worked out in November 2013, “gave JP Morgan Chase… blanket civil immunity for years of alleged pervasive, egregious and knowing fraudulent and illegal conduct that contributed to the 2008 financial crash and the worst economy since the Great Depression.”

The lawsuit argues that the Department of Justice sought to use the deal—the largest settlement with a single entity in US history (by more than 300 percent)—to protect JPMorgan and its executives from prosecution. Under the terms of the settlement, the bank was not required to admit to any wrongdoing.

Better Markets alleges that, “the DOJ violated the Constitution and laws of the United States by using a mere contractual agreement to resolve claims of historic importance without subjecting the Agreement to independent judicial review.”

In November, the Obama administration and JPMorgan concluded a series of confidential, off-the-record, negotiations—including discussions between JPMorgan CEO Jamie Dimon and Attorney General Eric Holder—with the announcement that the bank would pay $13 billion to settle charges that it knowingly sold worthless mortgage-backed securities on false pretences.

In reality, JPMorgan will pay much less than the stated amount. Only $9 billion of the total is in cash, the rest taking the form of relief to homeowners behind on their payments. It is likely that the bank was already planning to offer much of this $4 billion in relief for business reasons.

Most of the remaining $9 billion will be tax-deductible, meaning the bank will end up paying only part of it. JPMorgan’s fine amounts to a sliver of the trillions of dollars of damage wrought by the global financial crisis and only a fraction of its annual profit.

The complaint alleges that the Obama administration illegally sought to bypass judicial review to ensure a favorable deal for the bank. It states: “[T]he executive branch, through DOJ, acted as investigator, prosecutor, judge, jury, sentencer and collector, without any review or approval of its unilateral and largely secret actions.” It continues: “The Executive Branch simply does not have the unilateral power or authority to do so by entering a mere contract with the private entity without any constitutional checks and balances.”

At a press conference, Dennis Kelleher, head of Better Markets, said, “The Justice Department has a self-interest, if not a motive, for making sure that their conduct cannot be independently evaluated.”

Attorney General Holder previously worked for Covington & Burling, a Washington law firm that represented top banks responsible for the 2008 financial crash. He made a point of meeting one-on-one with JPMorgan CEO Jamie Dimon. Better Markets notes that only “a few years ago” Dimon was “considered a possible Treasury secretary.”

During Obama’s first term, Dimon was a frequent guest at the White House. He was known in Washington as Obama’s “favorite banker.” When Dimon was caught concealing billions of dollars in derivatives losses in 2012, Obama rushed to his defense, calling him “one of the smartest bankers we’ve got.”

Better Markets notes that the deal was worked out entirely at the discretion of JPMorgan. The “cellphone of DOJ’s third-highest ranking official rang with the ‘familiar’ phone number of [Dimon], who called to offer billions of dollars [in fines] to stop DOJ from holding a press conference and filing a lawsuit in just a few hours.” Dimon’s offer was taken and the press conference was called off.

Better Markets accuses the Justice Department of being excessively “vague” in order to avoid any question of culpability. The DOJ, it charges, “did not disclose the identity of a single JPMorgan Chase executive, officer or employee, no matter how involved in or responsible for the illegal conduct.”

The complaint asks many important questions: “How much did JPMorgan Chase’s clients, customers… and others lose as a result of its fraudulent conduct?… How much revenue, profits, and other benefits did JPMorgan Chase receive?… Who received what amount of bonuses for the illegal conduct?”

The complaint asks, “Why did the contract fail to impose on JPMorgan Chase any obligation to change any of its business compliance practices… how can the sanctions effectively punish and deter JPMorgan Chase, given its wealth and its extensive history of lawless conduct?”

The criminal activities of JPMorgan are not the exception on Wall Street, but the rule. In 2011, Senator Carl Levin, chairman on the Senate Permanent Subcommittee on Investigations, oversaw a 630-page report on the financial crash detailing illegal activities by Washington Mutual, Deutsche Bank and Goldman Sachs that contributed to the global crisis. He said the investigation had uncovered “a financial snake pit rife with greed, conflicts of interest and wrongdoing.”

Over the past year, JPMorgan has agreed to pay over $20 billion in settlements to cover a dizzying array of charges. Less than a month ago, the bank agreed to pay $2.05 billion in fines and penalties to settle charges that it was an accomplice in the multi-billion-dollar Ponzi scheme operated by Bernie Madoff, who is currently serving a 150-year prison term.

All of the government’s settlements with JPMorgan are designed to create the appearance of oversight, while allowing the bank to continue the same practices that led to the 2008 crash. Dimon just received a 74 percent pay raise for 2013, bringing his total compensation to $20 million.