Is Equal Justice Ever Possible With Such Gigantic Income Inequality As We Have In The U.S.?

Remember that horrific story-- about a decade back-- about cops in New Orleans shooting unarmed civilians running for their lives from the Hurricane Katrina flood waters? In 2007 5 white police officers were indicted for opening up with shotguns and AK-47s on two families of black people on the Danziger Bridge looking for shelter from the deadly storm. Four people were severely wounded and 2, included a handicapped man, were murdered. The New Orleans Police Department worked to cover up the criminal behavior of their officers but eventually the murderous cops were found guilty and faced as much as 65 years in prison. The case was thrown out and a deal was made in which the officers admitted guilt but were given short sentences. I heard the story on the radio today and it made me think about how the establishment protects itself from equal treatment under the law--and protects its tools of enforcement as well. Obviously the white washing on the Flint lead poisoning catastrophe comes right to mind and how low level civil servants are being scapegoated while Gov. Snyder is still walking around a free man.

Thursday, writing for ProPublica and the New Yorker, Jesse Eisinger took at closer look into why the banksters haven't been punished for their criminal behavior that cost so many families their homes and life savings. My friend Brad put a political spin on Eisinger's point:

Sanders: the system is broken and we need to change it.
Clinton: the system is good and we need to protect it from a few bad apples

Eisinger discovered that the SEC was about to charge Goldman Sachs executives with a serious mortgage fraud case in 2009. But the lawyer whose job was to take the case to trial, James Kidney, sensed that "the SEC staff was more worried about the effect the case would have on Wall Street executives, a fear that deepened when he read an email from Reid Muoio, the head of the SEC’s team looking into complex mortgage securities. Muoio, who had worked at the agency for years, told colleagues that he had seen the 'devasting [sic] impact our little ol’ civil actions reap on real people more often than I care to remember. It is the least favorite part of the job. Most of our civil defendants are good people who have done one bad thing.' This attitude agitated Kidney, and he felt that it held his agency back from pursuing the people who made the decisions that led to the financial collapse."

Kidney became disillusioned. Upon retiring, in 2014, he gave an impassioned going-away speech, in which he called the SEC “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors.”

In our conversations, Kidney reflected on why that might be. The oft-cited explanations — campaign contributions and the allure of private-sector jobs to low-paid government lawyers-- have certainly played a role. But to Kidney, the driving force was something subtler. Over the course of three decades, the concept of the government as an active player had been tarnished in the minds of the public and the civil servants inside working inside the agency. In his view, regulatory capture is a psychological process in which officials become increasingly gun shy in the face of criticism from their bosses, Congress, and the industry the agency is supposed to oversee. Leads aren’t pursued. Cases are never opened. Wall Street executives are not forced to explain their actions.

Kidney still rues the Goldman case as a missed chance to learn the lessons of the financial crisis. “The answers to unasked questions are now lost to history as well as to law enforcement,“ he said. ”It is a shame.”

There were fines but none of the greed-obsessed "good people who have done one bad thing" were ever charged. It's like the entity Goldman Sachs defrauded their customers out of billions of dollars with no humans ever making any decisions about the criminal patterns. While Eisinger was researching a book on the subject for a year, he discovered"case after case in which regulators were reluctant to use the laws and resources available to them. Members of the public don’t have a full sense of the issue because they rarely get to see how such decisions are made inside government agencies." Kidney helped him with his research and showed him how "the big banks had 'captured' his agency-- that is, that the SEC, which is charged with keeping financial institutions in line, had become overly cautious to the point of cowardice."

The Abacus investigation traces to a moment in late 2006 when the hedge fund Paulson & Co. asked Goldman to create an investment that would pay off if U.S. housing prices fell. Paulson was hoping to place a bet on what we now know as “the big short”: the notion that the real-estate market was inflated by an epic bubble and would soon collapse. To facilitate Paulson’s short position, Goldman created Abacus, an investment composed of what amounted to side bets on mortgage bonds. Abacus would pay off big if people began defaulting on their mortgages. Goldman marketed the investment to a bank in Germany that was willing to take the opposite side of the bet — that housing prices would remain stable. The bank, IKB, was cautious enough to ask that Goldman hire an independent manager to assemble the deal and look out for its interests.

This is where things got dodgy. Unbeknownst to IKB, the hedge fund Paulson & Co. improved its odds of success by inducing the manager, a company called ACA Capital, to include the diciest possible housing bonds in the deal. Paulson wasn’t just betting on the horse race. The fund was secretly slipping Quaaludes to the favorite. ACA did not understand that Paulson was betting against the security. Goldman knew, but didn’t give either ACA or IKB the full picture. (For its part, Paulson & Co. contended that ACA was free to reject its suggestions and said that it never misled anyone in the deal.)

When SEC officials discovered this in 2009, they decided that Goldman Sachs had misled both the German bank and ACA by making false statements and omitting what the law terms “material details” — and that these actions constituted a violation of securities law. (The SEC oversees civil enforcement of U.S. securities law and can charge both companies and individuals with violations. Its work can often be a precursor to criminal cases, which are handled by prosecutors at the Justice Department.)

Kidney was a trial attorney with two decades of experience at the SEC, and had won his share of courtroom battles. But the stakes in this case were particularly high. Politically, it was a delicate moment. The global financial system was only just recovering, millions of Americans had lost their jobs, and there was growing public anger about the bailout of the banks and car companies in Detroit. When Kidney looked at the work that had been done on the case, he found what he saw as serious shortcomings. For one, SEC investigators had not interviewed enough executives. For another, the staff decided to charge only the lowest man on the totem pole, a midlevel Goldman trader named Fabrice Tourre, a French citizen who lived in London, and who was in his late twenties when the deal came together. Tourre had joked about selling the doomed deal to “widows and orphans,” and had referred to himself as “Fabulous Fab,’’ a sobriquet that probably would not endear him to a jury. He was an easy target, but charging him was not likely to send a signal that Washington was serious about cracking down on Wall Street’s excesses.

Kidney could not understand why SEC staffers were reluctant to investigate Tourre’s bosses at Goldman or anyone at Paulson & Co. Charging only Goldman, he said, would send exactly the wrong message to Wall Street. “This appears to be an unbelievable fraud,” he wrote to his boss, Luis Mejia. “I don’t think we should bring it without naming all those we believe to be liable.”

Does anyone care? Sure, even if Bernie isn't getting more votes than she is, he's getting plenty of votes and those are the people who do care. People who vote for Hillary... they either can't comprehend, are complicit or don't care enough to be motivated by it. These people care; that's how they got on this list: