|By Eric Zuesse
On November 12th, Britain’s Financial Times headlined, “Top judge criticises DoJ for not holding individuals accountable,” and reported that U.S. District Judge Jed Rakoff accused the Obama Administration (“the Department of Justice’) of “excuses” for not prosecuting banksters. In his speech (linked to in the FT article), Rakoff said that the “Department of Justice … has offered one or another excuse for not criminally prosecuting them — excuses that, on inspection, appear unconvincing.”
Rakoff noted that, “the stated opinion of those government entities asked to examine the financial crisis overall is … fraud was committed.” And Judge Rakoff also noted “the increased success that federal prosecutors have had over the past 50 years or so in bringing to justice even the highest level figures who orchestrated mammoth frauds. Thus, in the 1970’s, in the aftermath of the “junk bond’ bubble, … the progenitors of the fraud were all successfully prosecuted, right up to Michael Milken. … In the 1980’s, the so-called savings-and-loan crisis … resulted in the successful criminal prosecution of more than 800 individuals … In striking contrast with these past prosecutions, not a single high level executive has been successfully prosecuted in connection with the recent financial crisis, and given the fact that most of the relevant criminal provisions are governed by a five-year statute of limitations, it appears very likely that none will be.” Rakoff then explained how the Obama Administration systematically blocked the types of investigations and prosecutions that, in previous decades, had held banksters personally liable and placed them into prison.
Basically, Rakoff set forth an indictment of Barack Obama. Rakoff’s reason given for doing this now was that the 5-year statute of limitations is running out; his speech is thus a call for alarm, and possibly even a call for prosecution of the President, if that ever becomes possible. Rakoff is essentially laying out a case for prosecution of Obama as an accessory after-the-fact in aiding and abetting, if not masterminding, a cover-up of the crimes that had caused the 2008 collapse.
What is especially interesting about Rakoff’s speech is his description of the tactics that the Obama Administration used in order to achieve this result. Rakoff, who knows very well the laws and precedents in regards to prosecution of executive financial crimes, lays out the methods of diversion from that system that were applied throughout the Obama Administration. He doesn’t do this in detail – for example, he doesn’t at all mention the role that the Administration’s vigorous and successful effort to stop the state attorneys general from moving forward separately to investigate and possibly criminally prosecute these crimes under state laws and to divert those efforts into the omnibus 49-state “settlement” – but the outline he provides is quite clear, and does accurately describe the way the Administration dealt with accountability for the 2008 collapse, which was by blocking accountability for it and by transferring that onto civil penalties against the banks that had carried out these frauds, which is to say: wrist-slap fines against those banks’ innocent current stockholders, fines so small anyway as to be inconsequential in comparison to the profits that were gained from these frauds (and from the taxpayers’ bailouts sopping up the “toxic assets”).
As to the reason why congressional and other Republicans, who rail so vociferously against Obama for “death panels,” “fake birth certificate,” etc., have not pursued him on this, the reasons go beyond anything that’s touched upon in Rakoff’s speech, but the George W. Bush Administration had actually begun the system that President Obama has merely continued; and so, any prosecution of Obama would also expose the previous President, who was, of course, a Republican. Consequently, if there is to be any action taken against Obama, it would need to be initiated by Democrats. The Republican Party is complicit in any crimes that the Obama Administration might have perpetrated, because those were conservative crimes – such as protecting from prosecution the criminal elite who brought on and profited from the MBS bubble.
Thus, we have a Republican Party that cannot afford to criticize this President on the basis of the truth, but that is instead constantly coming at him because he isn’t sufficiently right-wing to suit their inclinations, and this means that they always need to attack him on the basis of right-wing lies, rather than on the basis of the real truths that stick in their own political craws and that would condemn themselves as well. (This, too, is the reason why Obamacare, which the Heritage Foundation concocted in 1989, and which Romney instituted in Massachussetts, is now a curse to both Parties, neither of which can admit that expanding Medicare to cover all Americans would have been the right thing to do.)
Rakoff’s speech presents in outline a strong case against this President, but this is a case that’s apparently impossible politically to bring, given that the Republican Party is far right-wing, and that the man who would need to be pursued stands atop the less right-wing of the two existing conservative Parties. Consequently, both of the existing political parties cooperate with this corruption at the very top of the government, which covers up crimes at the very top of the nation’s private economy.
Rakoff makes clear that prosecuting corporations for crimes that are masterminded by their top executives is just a ruse in order to protect a criminal elite. Unfortunately, our nation seems to consider this situation to be acceptable.
Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010 , and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity .
Judge Rakoff Virtually Indicts Obama on Non-Prosecution of Banksters