Weekend Open Thread: Let’s Just Relax With a Nice Bottle of Matt Taibbi and Banking Industry Corruption

Matt Taibbi - green

What a journalist is supposed to be. Apparently viewed by the profession like he’s a Martian.

Well I don’t know about you, but I’m pretty exhausted from the election season — which, of course, isn’t quite yet over for those of us interested in close races.  So let’s see what we can do to achieve a return to normalcy.  Let’s see what’s come out in the news recently.  Hmmm, there’s something about Matt Taibbi leaving Rolling Stone, and then coming back a week later when it appeared that he had bought the start-up equivalent of some Florida swampland.  But that’s gossip; isn’t there anything of substance to review?

Oh, yes — there is.  Take a look at Taibbi’s latest (and happily not last) in Rolling StoneThe $9 Billion Witness: Meet JPMorgan Chase’s Worst Nightmare.  

Six years after the crisis that cratered the global economy, it’s not exactly news that the country’s biggest banks stole on a grand scale. That’s why the more important part of [securities lawyer and whistleblower Alayne] Fleischmann’s story is in the pains Chase and the Justice Department took to silence her.

She was blocked at every turn: by asleep-on-the-job regulators like the Securities and Exchange Commission, by a court system that allowed Chase to use its billions to bury her evidence, and, finally, by officials like outgoing Attorney General Eric Holder, the chief architect of the crazily elaborate government policy of surrender, secrecy and cover-up. “Every time I had a chance to talk, something always got in the way,” Fleischmann says.

This past year she watched as Holder’s Justice Department struck a series of historic settlement deals with Chase, Citigroup and Bank of America. The root bargain in these deals was cash for secrecy. The banks paid big fines, without trials or even judges – only secret negotiations that typically ended with the public shown nothing but vague, quasi-official papers called “statements of facts,” which were conveniently devoid of anything like actual facts.

And now, with Holder about to leave office and his Justice Department reportedly wrapping up its final settlements, the state is effectively putting the finishing touches on what will amount to a sweeping, industrywide effort to bury the facts of a whole generation of Wall Street corruption. “I could be sued into bankruptcy,” she says. “I could lose my license to practice law. I could lose everything. But if we don’t start speaking up, then this really is all we’re going to get: the biggest financial cover-up in history.”

So is Eric Holder just evil?  Reasonable people can disagree with me here, but I don’t think so.  No Attorney General prospect from the GOP, and few from the Democrati Party, would have done otherwise given the financial stakes for their benefactors.  I think that Holder has been resigned to the notion that the tools provided him — not simply legal ones, but also political support, and political support for the people who would need to give him political support, like the President — were simply inadequate to the task of regulating, let alone punishing, Wall Street.  Once you surrender to the inevitability of defeat, life gets simpler — you do only the best you can within your constrained circumstances, and you forgive yourself for not beating your head needlessly against a wall.  And there are entire industries with battalions of well-paid people out there to make your own personal reconciliation to reconciling with evil easier.

But then there are people like Alayne Fleischmann — and they screw everything up.  They make you look bad — and perhaps feel guilty.  And you’ll have to read the story to see what happens as a result.

Scratch at this story and you’ll see seeping out of it the lesson that was certainly posed for us this election season here in Orange County: big contributors can ruin those who don’t cooperate with them.  Connie Boardman and Joe Shaw in Huntington Beach are the paramount example this year: Brett Murdock getting kicked out of office in Brea because he messed with the city’s most powerful downtown developer is another.  Time and again, the message in politics is that if you don’t play along, you will likely be left to play alone.

That’s how, in some peculiar way, successful politicians think that the system is supposed to work.  In the domain of sexual peccadillos, both Bill Clinton and Newt Gingrich did far less than JFK and LBJ did, and they expected to get the same solicitous treatment from the media that their predecessors enjoyed — and were shocked when they didn’t receive it.  Back in the financial domain, that’s pretty clearly what the Curt Pringles and Kris Murrays of the world have expected: that public policy is, no matter what else it is, a way to get rich.  The fury that they show for Tom Tait and others in his camp is not merely political fighting — it derives from a view that he (and others of us) have been trying to take away from them what they were due, ill-gotten gains that they had earned — and if they had earned them, then can they really be called “ill-gotten”?

Well, read it for yourself, and see if you think it has lessons for us here at home.

This is your first Post-2014-General-Election Weekend Open Thread.  Talk about that, or whatever else you’d like, within reasonable bounds of discretion and decorum.


About Greg Diamond

Somewhat verbose attorney, semi-retired due to disability, residing in northwest Brea. Occasionally runs for office against bad people who would otherwise go unopposed. Got 45% of the vote against Bob Huff for State Senate in 2012; Josh Newman then won the seat in 2016. In 2014 became the first attorney to challenge OCDA Tony Rackauckas since 2002; Todd Spitzer then won that seat in 2018. Every time he's run against some rotten incumbent, the *next* person to challenge them wins! He's OK with that. Corrupt party hacks hate him. He's OK with that too. He does advise some local campaigns informally and (so far) without compensation. (If that last bit changes, he will declare the interest.)