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According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

Saturday, July 9, 2011

Why Goldman Sachs Executives Will Never Be Brought to Justice for Securities Fraud

President George W. Bush was a deregulator of Brobdingnagian proportions. He wished to make sure that regulations would not impinge upon the businesses, banks and corporations that government normally tries to regulate in order to keep them from preying on the public. We are now learning how successful Bush's deregulatory efforts were and continue to be. Even the Justice system has been affected; for example, both the SEC and the DOJ have (seemingly) decided not to hold Goldman Sachs executives responsible for the fraudulent part they played in the financial crisis, a part which is admirably explained in the Levin/Coburn Report.

Fraud will not be prosecuted and here's why.

It seems that every part of the government has been affected by deregulation--the executive, the legislative and the judiciary. All branches are now showing the results of the deregulation binge of Bush's government which, in the justice department, extends from state's attorneys to the appointments of Supreme Court Justices. No wonder that the Goldman Sachs executives were not afraid of justice--Justice itself has been compromised, nay corrupted. Justice, too, is now suffering from the results of deregulation, which cannot soon be reversed.

The courts are no longer in pursuit of "blind justice" but "ultra-conservative deregulatory" justice.

Two documents, which may help us to understand the changes that have taken place in the justice system, are given below:

As Wall St. Polices Itself, Prosecutors Use Softer Approach
By Gretchen Morgenson and Louise Story -Herald-Tribune


The Courthouse Crusade Against Government
By Douglas J. Amy - Government is Good website

The first article shows how deregulation is playing out in the present environment where no prosecutions seem to be arising from the financial crisis of 2008. The second document traces the efforts by Bush to limit the power of Congress and the Justice System, with some examples.

The excerpt below is from Douglas J. Amy - Government is Good website and shows how insidious the process of deregulation was and is. It is entitled The Courthouse Crusade Against Government
. . . .

The Rise of Activist Conservative Judges

The federal courts have now become a major battleground in the effort to weaken government and reduce its powers. The courts are arguably the most powerful branch of government; they are the final decision-makers in many policy areas – abortion, the death penalty, environmental protection, civil rights, gun control, and gay rights, to name just a few. There is virtually no way to overturn their decisions. And unlike with our elected officials, the public has no way to get rid of these policymakers. So this is the high ground in American politics and well worth fighting for.

Some history is useful here. For decades, conservatives have railed about the abuses of liberal “activist” judges and justices. They have complained that these jurists have stretched their interpretations of the Constitution to support wrong-headed liberal policies like abortion, school busing, and affirmative action. So from the Reagan administration onward, conservatives have been appointing so-called “strict constructionists” to the federal courts – judges pledged to stick to very narrow and limited interpretations of the Constitution.

But all the attention being paid to the notion of strict constructivism and to hot-button issues like abortion has obscured something else that has been going on in the courts. In recent years, a new conservative legal philosophy has emerged – one that few Americans are aware of. Conservatives are no longer content with strict constructionism but have moved on to promote an intentionally activist orientation. But now it is a right-wing activism. Now it is many right-wing judges who are striving to stretch and radically reinterpret the Constitution to promote their own political agenda. Supreme Court Justice Antonin Scalia once stated candidly that “I am not a strict constructionist, and no one ought to be.”4 One of the main goals of these judicial activists is to limit the scope and power of the federal government. They want to both rein in the power of the federal courts and also to launch an attack against the power of Congress and its ability to pass regulatory laws. This new conservative, anti-government judicial activism, if successful, could have profound and widespread political implications. (page 2)

. . . .

On the Supreme Court, Justice Clarence Thomas has often expressed sympathy with this revisionist attempt to severely restrict the powers of the federal government. In three separate cases he has argued that the federal government's attempts at regulation are "at odds" with the Constitution. If his views were to become common on the court, this would put in jeopardy a wide range of current laws, including the Americans with Disabilities Act, the federal minimum wage, bans on child labor, and anti-discrimination legislation.

Many legal scholars and political commentators find this a very disturbing trend. Adam Cohen, for example, has criticized what he has called “the campaign to undo the New Deal.”

… conservatives are making progress in their drive to restore the narrow view of federal powers that predated the New Deal – and render Congress too weak to protect Americans on many fronts. … In pre-1937 America, workers were exploited, factories were free to pollute, and old people were generally poor when they retired. This is not an agenda the public would be likely to sign onto today if it were debated in an election. But conservatives, who like to complain about activist liberal judges, could achieve their anti-New Deal agenda through judicial activism on the right. Judges could … declare laws on workplace safety, environmental protection and civil rights unconstitutional.17 (page 3)

. . . .

Irreversible Decisions What we are witnessing today is nothing less than a conservative campaign to radically change the law and the legal system of the United States in a way that greatly reduces the power of government and citizens. The right has engaged in a relentless effort to appoint libertarian-leaning judges and justices that adhere to a minimal-government philosophy. Fortunately, these appointments have come to an end with the election of President Obama. But the damage has already been done. These “radicals in robes” have been appointed for life, and many are in their fifties and likely to stay on the job for several more decades. The public is powerless to replace them or to overturn their decisions. There is no democratic accountability here. We will have to live with their legal rulings – and their assaults on government – for the many years to come. (page 5)

Read the entire document here
Then read As Wall St. Polices Itself, Prosecutors Use Softer Approach here


Anonymous said...

Finance performs looting function..politicians, judges, financiers all in bed can see it being played out everyday in the papers.

listen to @ 14 minutes… to Neofeudalism and the stealing of assets via fire sales-IMF the Hangman

Michael Hudson

mentions treasury and goldman

Anonymous said...

Review of Hot Coffee

You see, it turns out corporations like candidates who will push for laws which limit their liability. Corporations give those candidates tons of money. And politicians like money. Money gets them into office. Plus, as the Supreme Court has held: money is speech. Throw in 2010’s Citizen’s United decision, which held that corporate funding of independent political broadcasts cannot be limited, and that money-speech has no boundaries. So who has a bigger megaphone, you and I, or those with corporate backing?

One of the scary parts is the corporations aren’t satisfied with electing Representatives, Senators, Governors, and Presidents. Oh no. Those people only create and enact the laws. But the laws can be overturned by courts. So the corporations help fund the elections of judges too. Now that’s REALLY scary. Get enough judges on a state supreme court, and those laws will be upheld. And the corporations will save money. It’s a sound investment for the corporations, with a solid rate of return.

Joyce said...

What I conclude from the two links above is that we are living in a very frightening world but instead of being afraid of war, we have to fear the financialization of EVERYTHING! Everyone seems to have a price and money talks louder than anyone.

Anonymous said...

Charles D. Ellis wrote “The Partnership” about Goldman Sachs and admitted that its trading expertise came from J. Aron Co. so those who rush to always defend Goldman and are given “awards” for other writings and are sent out to defend them, should read his book. This trading expertise acquired from the commodity world made Goldman a lean-mean-trading-machine. But there was always the risk of government intervention and after the Salomon incident, Goldman turned to organize a takeover of government. In just four years, there was the Mexican bailout of 1995. Goldman planted Robert Rubin now as Secretary of the Treasury. Rubin drew serious criticism from Congress for using a Treasury Department account under his personal control to distribute $20 billion to bail out Mexican bonds, of which Goldman was a key holder. This was Goldman’s first guaranteed trade using government as the bailout. On November 22, 1994, the Mexican Bolsa stock market admitted Goldman Sachs and another firm to operate on that market. The 1994 economic crisis in Mexico threatened to wipe out the value of Mexico's bonds held by Goldman Sachs ending the firm right then and there. Rubin saved the day.

page 10

Anonymous said...

Why Didn’t Prosecutors Go After Wall Street?

Anonymous said...

How's this observation?

Sam E. Antar (Former Crazy Eddie CFO, former CPA, and a convicted felon) calls out harvey the pitts(1st comment)

Harvey Pitt, Regulatory Expert
“Over the course of two terms, Bush appointed three SEC Chairmen, each ill-suited for the position. It was a veritable parade of poor choices for the role of regulating stock markets. His first appointment, Harvey Pitt, was a securities industry defense attorney and was wholly unsuited to the position. Instead of representing the interests of investors, Pitt was an industry lapdog.

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