The Trump Regime Is All About Law And Order-- Unless You're Wealthy

Bankster by Nancy Ohanian

It's great when is reasonable and understanding when they ensnare someone for bending the rules, especially if-- the classic example-- it's a man who steals some milk to feed his staving baby or a loaf of bread for a starving family. Leniency may well be in order. But not from a tough conservative law-and-order regime. At least not for individuals. For corporate managers on a criminal rampage, though, conservative regimes can be very... understanding. Obama's administration was lenient on Wall Street criminals... very very lenient. Even in a deep blue state the California, the former Attorney General, now Senator Kamala Harris, bent over backwards to avoid being too rough on law-breaking corporate managers. Over the weekend, Ben Protess, Robert Gebeloff and Danielle Ivory, in a blockbuster report for the New York Times, exposed something anyone could have guessed: Trump Administration Spares Wrongdoers Billions In Penalties. They let Walmart off the hook for a billion in a bribery case, Barclay's off the book for $7 billion for selling toxic mortgage investments that helped fuel the 2008 financial crisis, and Royal Bank of Scotland for a criminal investigation also involving the 2008 financial crisis. The Obama administration had all three corporations by the short hairs... and then along came Trumpy-the-Clown. The 3 criminal entities "looked to his administration for a more sympathetic ear-- and got one." Walmart remains uncharged, Barclays was let off with a $2 billion fine (a $5 billion saving) and R.B.S. paid a civil penalty, escaping criminal charges altogether, let alone any of the higher ups facing a firing squad (if I was president) or some public shaming and a stern reproach if Obama was still in office.

Across the corporate landscape, the Trump administration has presided over a sharp decline in financial penalties against banks and big companies accused of malfeasance, according to analyses of government data and interviews with more than 60 former and current federal officials. The approach mirrors the administration’s aggressive deregulatory agenda throughout the federal government.

The New York Times and outside experts tallied enforcement activity at the S.E.C. and the Justice Department, the two most powerful agencies policing the corporate and financial sectors. Comparing cases filed during the first 20 months of the Trump presidency with the final 20 months of the Obama administration, the review found:

• A 62 percent drop in penalties imposed and illicit profits ordered returned by the S.E.C., to $1.9 billion under the Trump administration from $5 billion under the Obama administration.
• A 72 percent decline in corporate penalties from the Justice Department’s criminal prosecutions, to $3.93 billion from $14.15 billion, and a similar percent drop in civil penalties against financial institutions, to $7.4 billion;
• A lighter touch toward the banking industry, with the S.E.C. ordering banks to pay $1.7 billion during the Obama period, nearly four times as much as in the Trump era, and Mr. Trump’s Justice Department bringing 17 such cases, compared with 71.

While career officials in the federal government have continued to investigate wrongdoing at companies large and small, some of the top political appointees under Mr. Trump have led a philosophical shift in governing that favors big business and prioritizes the interests of individual investors.

I don't know her IQ, but there's no question it's substantially higher than Trump's

See, and you thought Trump has singled out Maxine Waters for such vicious treatment because he hates women and hates African Americans so much. Of course he does hate women and he does hate African Americans, but that's just part of the story for his attacks on Rep. Waters. She's the Ranking Member of the House Financial Services Committee Likely to become chair of the committee in January, Trump is already discrediting her in advance for the confrontations sure to come between a committee willing to do it's job-- instead of the disgrace Jeb Hensarling (along with crooked subcommittee chairs Bill Huizenga, Blaine Luetkemeyer, Sean Duffy, Andy Barr, Ann Wagner and Stevan Pearce-- are leading now-- and a kleptocracy Trump is leading.

It's worth mentioning the bribes the top leaders of the committee have solicited and used to build their power:

• Hensarling (R-TX)- $1,536,111
• Huizenga (R-MI)- $601,238
• Luetkemeyer (R-MO)- $624,732
• Duffy (R-WI)- $764,762
• Barr (R-KY)- $907,016
• Wagner (R-MO)- $867,050
• Pearce (R-NM)- $161,675

Now, compare that to the $338,642 that Waters has taken from Wall Street since she ws first elected in 1990. By the way, someone might say, but there are Democrats on the committee who have taken as more or more than the Republicans-- like New Dems Jim Himes (CT), John Delaney (MD) and Kyrsten Sinema (AZ)-- and if the Republicans should be in prison so should those crooked Democrats. I couldn't agree more. In fact, it should be strictly illegal to take any money at all from any business that a committee you serve on has jurisdiction over.

Rats by Nancy Ohanian

Protess, Gebeloff and Ivory wrote that "Many Republicans in regulatory and law enforcement roles have resisted corporate penalties, suggesting that they unfairly punish a company’s shareholders for the misconduct of employees" while "Democratic appointees have more often maintained that shareholders wrongly benefit from ill-gotten gains, no matter who was responsible for them, and that tough penalties could deter future lawbreaking." OK, how about if we just throw the corporate criminals in prison instead? I mean real prison-- not Club Fed-- and for long periods of time? Then we won't have to worry nearly as much about fines-- because most of the criminal behavior will likely cease.

If the balance tilted toward a heavier hand in corporate penalties under former President Barack Obama-- even as critics argued that his administration did not do enough to punish top bankers after the crisis-- it began to swing in the opposite direction under Mr. Trump, the data show.

With the exception of the Commodity Futures Trading Commission, a small agency where a new enforcement director has presided over an uptick in penalties and a Trump-appointed chairman vowed “no pause” in enforcement, the new approach extends across the federal financial enforcement regime.

Mr. Trump’s pick to lead the Office of the Comptroller of the Currency, a federal banking regulator, is a former executive whose bank once faced an enforcement action, while Mr. Trump’s leader of the Consumer Financial Protection Bureau, created by Congress during the Obama administration, initially instituted an informal freeze on new enforcement actions.

The S.E.C., an independent agency composed of a bipartisan group of presidentially appointed commissioners, is less subject to political considerations. The leaders of the agency’s enforcement division act in a nonpartisan capacity.

Still, Robert J. Jackson Jr., a Democratic commissioner at the S.E.C. who is a former law professor and corporate lawyer, said the philosophy of Republican commissioners sent the wrong message. “We should be trying to deter management from committing fraud, not rewarding corporations when their lawyers cleverly mask bad deeds,” he said.

Former Republican officials have largely welcomed the change, though some are concerned that the Trump administration’s softer approach toward banks could open the door to the sort of reckless Wall Street behavior that spurred the financial crisis, particularly as federal regulators ease some Obama-era rules adopted after the crisis.

“The goal is really to instill in those who are regulated the illusion that the government is everywhere and looking over your shoulder,” said Harvey L. Pitt, a Republican who was chairman of the S.E.C. under President George W. Bush. “If you take away that threat, that could embolden some to keep breaking the law.”

...The decline in corporate penalties from the Justice Department may partly reflect the Trump administration’s heavier emphasis on immigration, violent crime and drugs. For two years in a row, the department has announced record-breaking prosecutions of health care fraud, much of which is related to the opioid crisis.

“Attorney General Sessions has set clear goals for this department: reducing violent crime, homicides, opioid prescriptions and drug overdose deaths,” said Steven Stafford, a department spokesman. “Under his leadership, we have begun to achieve all four of these goals by increasing violent crime and firearm prosecutions to all-time highs.”

He added, “There can be no doubt that this is a pro-law enforcement administration and Department of Justice.”

...Andrew J. Ceresney, the enforcement director [for the SEC] in the final years of Mr. Obama‘s presidency, that hit a brick wall under Mr. Trump.

In an investigation involving Morgan Stanley and Barclays, the banks had helped assemble the prospectus for a 2014 Puerto Rican bond deal. Although Puerto Rico’s dire financial health was well known to investors, the S.E.C. under Mr. Obama investigated whether the document accurately warned that the territory was on the brink of bankruptcy.

The investigation continued into the early months of the Trump presidency, when S.E.C. investigators told the bank they planned to bring charges. After higher-ranking S.E.C. enforcement officials reviewed the evidence, the agency dropped the investigation, people briefed on the matter said.

Morgan Stanley and Barclays declined to comment. Legal experts said that the agency had occasionally reversed itself and ended investigations during the Obama era as well.

Separately, an investigation into whether Carlyle, the private equity firm, misled investors about certain fees sputtered. The S.E.C. filed and settled similar cases against Carlyle’s main competitors during both administrations, but the Trump administration did not do the same against Carlyle, people briefed on the matter said. Carlyle declined to comment.

A Supreme Court ruling last year, Kokesh v. S.E.C., may have influenced the agency’s approach to the investigation. The ruling held that the S.E.C. has only five years to collect ill-gotten profits; private equity firms like Carlyle typically have investment funds with a life span of 10 years or more.

The S.E.C. has also said that a separate legal challenge to the constitutionality of its administrative court, where it typically filed many of its cases, reduced enforcement. A Supreme Court ruling this year forced the agency to reboot its administrative court process.

...The decline in criminal penalties has unfolded against a backdrop of broader regulatory rollbacks in the civil arena.

Under the Obama administration, the Justice Department’s civil rights division poured resources into lending-discrimination cases, some involving the nation’s biggest banks. In the last full year of the Obama administration, the department filed seven lawsuits alleging lending violations. The next year, the Trump administration filed one such lawsuit.

And like Walmart on the criminal side, some targets of civil prosecutions welcomed the more business-friendly approach of the Trump administration.

Barclays, under investigation by the Obama administration for selling the soured mortgage investments, had rejected the Justice Department’s demands to pay almost $7 billion, according to people with knowledge of the negotiations. The Obama administration had, in turn, filed a lawsuit against the company using the Financial Institutions Reform, Recovery and Enforcement Act, a law that Republicans in Congress had tried to curtail.

In March, Barclays settled for a much reduced penalty of $2 billion, which the bank argued was in line with what other financial institutions had paid for similar conduct.

R.B.S., similarly suspected of defrauding investors in mortgage-backed securities, was facing a criminal investigation from federal prosecutors in Boston, who had obtained records of bank employees discussing “garbage” loans and “rampant” fraud.

Toward the end of the Obama administration, Boston prosecutors declined to take a potential criminal prosecution off the table, according to people familiar with the matter. But under the Trump administration, Mr. Rosenstein decided that the case should not involve criminal charges in part because it was unfair to single out one of the many banks caught up in the mortgage investigations, two of the people said. Ultimately, R.B.S. reached a $4.9 billion civil settlement. The bank declined to comment.

The Barclays and R.B.S. outcomes reflected the broader trend in cases brought against financial firms under the Financial Institutions Reform, Recovery and Enforcement law and the False Claims Act, which targets fraud of government programs.

The Justice Department obtained $7.4 billion in such cases filed in the first 20 months of the Trump administration-- about 28 percent of the amount collected in the final 20 months of the Obama administration, according to an analysis of public disclosures by the agency compiled by Buckley Sandler, a law firm. (In October, the agency filed two large cases that would bring the Trump administration’s total to $8.6 billion.) The decline, in part, stems from a new policy Mr. Sessions issued last year requiring settlement money to go to victims or the Treasury Department, a change that effectively prevented prosecutors from forcing banks to spend billions of dollars addressing neighborhood blight and other issues tied to the mortgage crisis.

Andrew Schilling, a partner with Buckley Sandler who previously led the civil division at the United States attorney’s office in Manhattan, said there had also been a marked decline in new financial fraud investigations being opened.

“Certainly, 10 years out of the financial crisis you’re not going see quite the same activity,” he said, “but I never thought I would see financial fraud enforcement fall off as sharply as it has.”

I suppose the law school that Mr. Schilling went to didn't spend any serious time on a study of kleptocracies. Had they, perhaps Schilling might not have been in for such a shock. As the Washington Post noted Saturday evening, "Two years of political volatility will culminate Tuesday when voters for the first time since the stunning 2016 election render a nationwide judgment on whether Trumpism is a historic anomaly or a reflection of modern-day America. As the midterms roared into their final weekend-- with the biggest names in both parties exhorting their followers to vote-- uncertainty enveloped the contest amid signs that tightening races appeared headed toward dramatic finishes." [See R+11 Or Bust, Baby.

Conservative ex-Republican, Max Boot, wrote on Saturday that "Trump’s more sophisticated supporters in places such as Washington and New York claim that his presidency is a raging success because he has appointed conservative judges, cut taxes and turbocharged the economy. Trump himself evidently disagrees, because he is not running the midterm campaign based on his supposed achievements. Instead, Trump and his fellow Republicans are closing the election with the most naked appeal to racial prejudice since the dark days of Jim Crow when Democrats in the South would compete to display their fervor for segregation… It is not shocking that Trump would stoop so low. With him, there is no bottom. What is shocking, if no longer entirely surprising, is that the Republican Party would so readily follow him into the gutter. The prominent Republicans denouncing his hate-mongering are mostly those such as Sen. Jeff Flake (R-AZ), Sen. Bob Corker (R-TN) and Gov. John Kasich (R-OH) who are not seeking reelection. The rest of the GOP is complicit in this disgraceful demagoguery. Republicans who do not denounce Trump’s racist tactics-- and even imitate them-- will never escape the stench of this year’s campaign as long as they live."