Oh, hey. More bankster criminality:
A telephone call between a financial adviser in Beverly Hills and a trader in New York was all it took to fleece taxpayers on a water-and-sewer financing deal in West Virginia. The secret conversation was part of a conspiracy stretching across the U.S. by Wall Street banks in the $2.8 trillion municipal bond market.
The call came less than two hours before bids were due for contracts to manage $90 million raised with the sale of West Virginia bonds. On one end of the line was Steven Goldberg, a trader with Financial Security Assurance Holdings Ltd. On the other was Zevi Wolmark, of advisory firm CDR Financial Products Inc. Goldberg arranged to pay a kickback to CDR to land the deal, according to government records filed in connection with a U.S. Justice Department indictment of CDR and Wolmark.
West Virginia was just one stop in a nationwide conspiracy in which financial advisers to municipalities colluded with Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., Lehman Brothers Holdings Inc., Wachovia Corp. and 11 other banks.
They rigged bids on auctions for so-called guaranteed investment contracts, known as GICs, according to a Justice Department list that was filed in U.S. District Court in Manhattan on March 24 and then put under seal. Those contracts hold tens of billions of taxpayer money.
And yet our dysfunctional Senate still can not pass meaningful financial regulation. At least the Bloomberg piece says they are ready to name names and there will be prison terms.
I eagerly await the Reason magazine treatise on how this is the fault of too much regulation.
cleek
what we need now is a Senate Panel to question the CEOs of these companies ! that’ll learn ’em!
arguingwithsignposts
I think McMegan will be there first.
Hunter Gathers
If these municipalities had just cut taxes, they wouldn’t have to sell bonds to raise funds. It’s not the bank’s fault The Invisible Hand of the Free Market caused these municipalities to lose money. If only the people running these municipalities would read Atlas Shrugged, this would not have happened.
Bullsmith
In 2000, when the SCOTUS decision came down I thought to myself
“this is the moment to invest in oil.” I failed to follow through, of course, but I was dead right. So now I’m wondering how do I buy stock in anarchy? How do I short capitalism? Used to be you could invest in pitchforks.
c u n d gulag
No more comfy chairs!!!
I want pillors and posts just for the warm-up act!
Then, a nice sharp knife for disembowling
And then we have to come to a conclusion as to the method for drawing-and-quartering.
Do we chain the arms and legs of the Wall Street/Bank Exec to 4 horses- old school, or maybe 4 super-charged Mustang’s – new school.
Lower level exec’s will be made up to clean up the mess, until it’s their turn. My version of, ‘trickle down.’
We continue to work our way down until we reach normal, hourly employees. They will not be bothered.
Linda Featheringill
Our corporate overlords.
And some folks wonder why I yearn for a better world.
sparky
lining one’s pockets is job one.
screwing the taxpayers to frustrate any meaningful government is just the gravy dribbling down the chin.
James K Polk, Esq.
Ahem, ACORN. Also.
Joshua Norton
Of course, Wall Street is counting on Dodd to water down any sort of reform bill – and he seems only too happy to do it for them.
No wonder everyone wants to throw the bums out.
artem1s
srsly, what is up with these people and that stoopid book. I read the damn thing when I was a teenager and thought it was boring and idiotic.
And even I, who adore the Lord of the Rings, and have read it like a thousand time, don’t believe that Hobbits are REAL. Or that our entire culture should be based on the power of magical rings. Or that there is a savior/hero in hiding who will save us all from the forces of evil.
Orcs though, totally welfare queens. Talk about entitlements.
El Cid
If only there were fewer government regulations and oppressive bureaucracies, then consumers would eventually just choose to, um, something or other.
Scott
If you stop banksters from engaging in blatantly criminal activity, you’re infringing on their rights to free speech and oppressing Arizona.
Taiko
In that vein, the Wall Street Shuffle seems a perfectly appropriate take on the situation, and from 1974 no less.
Face
Seems like something tax cuts would fix, just like heartworm and popsicles that melt too fast.
TimO
@James K Polk, Esq. Yea, F’ing Acorn! Hate those whore loving basturds!
Oooo, my coffee’s ready!
Punchy
If you criminalize bid rigging, then only criminals will have bids.
Ed Drone
That’s easy — if it weren’t for the regulations, what they did wouldn’t be illegal!
SATSQ
And:
NO! A dull knife, maybe a plastic serrated-edge one. A sharp knife lessens the pain!
Ed
Tsulagi
Must look forward, not backward.
Sloegin
@artem1s:
It’s like the Bible; some people read it *and never get over it*. The rest of us shrug and go on with our lives.
Bill E Pilgrim
@artem1s:
I think I’m going to write a response book about what “Atlas Shrugged” has wrought in the world titled “Jesus Wept”.
c u n d gulag
@Ed Drone:
Silly me… You’re right, a dull knife is better. Maybe use a couple of dozen sporks to get the job done instead?
Comrade Dread
Let me put on my purist libertarian hat:
Ahem…
“If government wasn’t so big and massive, it wouldn’t be such a target for fraud, and it wouldn’t be so hard to track down the fraud that did occur. Therefore we need to cut government and the amount of money they spend/handle and the poor bastards in the banks will have less
temptationincentive tocommit felonieswork the system.Also, John Galt lives.”
That was painful. You’re welcome.
russell
Folks in the financial sector demonstrate no sense of responsibility toward the rest of the economy, the rest of the country, or the rest of the world.
Financial regulation at this point is purely a matter of self-defense.
I think somebody wrote that book already.
slippy
@russell:
Lord of the Flies comes to mind.
Kirk Spencer
@c u n d gulag:
No, not a dull knife. A jagged edged blade such as you might find on a hacksaw. Let it tear instead of cutting – or worse, not cutting.
kay
This may be a stupid question, but can cities and municipalities get out of the business of complicated financial transactions?
I know they have to issue bonds, and borrow money, and I understand that process only at the most basic level, but it seems to me when they put in with Wall Street they end up getting robbed. By everyone. “Their” (paid) advisers. Bankers. Traders.
Aren’t they always going to get fleeced on these deals? This was criminal, what happened here, but aren’t all of these outside people they’re hiring compromised or conflicted n one way or another? These advisers don’t have any duty to taxpayers.
daveNYC
Actually, if you’re hired as a financial advisor, you have a fiduciary responsibility to your client. Now if you have the option of fucking your client in order to get a six figure kickback, then guess how important that responsibility becomes.
Naked Capitalism has a good post up on the latest GS festivities.
kay
@daveNYC:
Wouldn’t it be a better idea to stick to basic (and perhaps less potentially profitable) transactions and actually hire your own expert? The City of Baltimore can hire a money manager, right? That way, the City of Baltimore has access to records, and someone on the payroll that actually works for them, and they wouldn’t have to rely on an after-the-fact criminal action by the DOJ. They could monitor their own employee.
I understand there’s a temptation to “do better” with taxpayer funds, and these pitches are probably appealing, but it just seems that if they’re relying on some individual code of ethics, and a private contractor re: transactions they don’t understand, they’re screwed.
Will
kay,
This is one of those areas where, in a saner economic system, the federal government could do a lot of good. Set up a system that provides loans for bonds at reasonable rates, directly or through intermediaries. No one gets rich, but towns and counties have the money to build sewer systems and libraries.
Barring that, the feds could do their job and send anyone who fucked a government entity to the kind of prison where you don’t play tennis and don’t drop the soap.
Will
I don’t see that working for the same reason that the Border Patrols and drug enforcement don’t work.
The public freaks when public employees make “too much” money. You can’t put a guy who makes $30K to $100K in direct contact with people who stand to make tens to hundreds of millions from the public employee’s decisions and expect the process not to get corrupted.
The sane solution would be to look at why their are people who are making tens to hundreds of millions out of transactions of other people’s money. Wall Street, in conjunction with paid for politicians, has essentially legalized mass embezzlement and called it capitalism.
kay
@Will:
The part that amazes me is there’s a broader interest that I would think people who are in the business of handling money would want to protect.
Not taxpayer money, and not the “public good” but their own reputations.
Do they know that the message the general (uninformed) public is getting, loud and clear, is “you can’t trust banks with your money”? I’m in that group. My attitude is “yeah, sure, Mr. Financial Man, so say you“.
I’ve adopted this adversarial posture. I think they’re out to get me.
I mean, Jesus. They’re BANKS. They’re experts IN FINANCE. It’s what they do.
They don’t worry that people won’t trust them to handle money?
robertdsc
That sign should read “We’re gonna push!”
Remember November
Here’s a game- count how many times you see Goldman Sachs in this article, and match that number up to a unique name….
truthout.org/americas-ten-most-corrupt-capitalists59473