Tuesday, June 28, 2016

U.S. and Foreign Banks Penalized $Billions (from the Corporate Research Project of Good Jobs First)

Washington, DC, June 28, 2016-- Since the beginning of 2010, two dozen major U.S. and foreign-based banks have paid more than $160 billion in U.S. penalties to resolve a wide range of cases brought against them by the Justice Department and federal regulatory agencies. Bank of America alone accounts for $56 billion of the total and JPMorgan Chase another $28 billion. Fourteen banks have each accumulated penalty amounts (both fines and settlements) in excess of $1 billion, and five of those are in excess of $10 billion.

Along with misconduct that helped bring about the financial meltdown of 2008, the cases have involved alleged offenses in ten other major categories ranging from manipulation of foreign exchange markets to violations of rules prohibiting business dealings with enemy countries.

These are some of the key findings of The $160 Billion Bank Fee, a report that analyzes the data contained in  Violation Tracker 2.0, an expanded version of a database on corporate misconduct. Both the database and the report are produced by the Corporate Research Project of Good Jobs First and are available to the public at no charge here

Violation Tracker, introduced last fall with environmental and safety cases, now also contains entries on 700 cases involving banks and other financial companies brought by the Justice Department and ten federal regulatory agencies. Also newly added are 600 cases filed against non-financial firms for offenses such as price-fixing, foreign bribery, and export-control violations. The database now covers cases from 27 federal agencies and the DOJ.

"Violation Tracker 2.0 is another step in our effort to create a comprehensive database on corporate misconduct," said Good Jobs First Research Director Philip Mattera, who heads the Corporate Research Project and leads the work on Violation Tracker. "We want this to be a valuable resource for groups promoting corporate accountability."

Using a proprietary system of parent-subsidiary matching developed by Good Jobs First for its Subsidy Tracker database, Violation Tracker links the companies named in the violations to their ultimate corporate parents. Users can see not only individual records but also aggregate penalty totals for more than 1,900 parents. "We are pleased to employ our matching system to enhance another dataset of vital public interest," said Good Jobs First Executive Director Greg LeRoy.

The $160 Billion Bank Fee report focuses on a subset of the new data: 144 mega-cases with penalties of $100 million or more (not including private litigation) involving major banks. They account for more than 80 percent of the total-dollar penalties of the 1,300 cases in the Violation Tracker expansion. Among the report's other findings:  
  • Along with Bank of America and JPMorgan Chase, the other banks with the most penalties are: Citigroup ($15.4 billion), Wells Fargo ($10.9 billion), the French bank BNP Paribas ($10.5 billion) and Goldman Sachs ($9.1 billion).
  • The largest categories of cases are: sale of toxic securities and mortgage abuses ($118 billion in penalties), violation of rules prohibiting business with enemy countries ($15 billion), manipulation of foreign exchange markets ($7 billion), manipulation of interest rate benchmarks ($5 billion), and assisting tax evasion ($2 billion).
  • Of the 144 mega-cases, 120 were brought solely as civil matters. The other 24 involved criminal charges, though in two-thirds of those cases the banks avoided prosecution. The latter include 10 settlements with deferred prosecution agreements and six with non-prosecution agreements. The banks that have pleaded guilty to criminal charges include: Citigroup, JPMorgan Chase, Barclays, BNP Paribas, Credit Suisse and Royal Bank of Scotland.
Good Jobs First is a Washington, DC-based resource center on economic development accountability. Its Corporate Research Project provides research resources for non-profit organizations. The initial version of Violation Tracker was supported by a grant from the Bauman Foundation.


Cases involving banks and financial companies: 
Justice Department
Commodity Futures Trading Commission (selected cases)
Consumer Financial Protection Bureau
Federal Deposit Insurance Corporation
Federal Energy Regulatory Commission (selected cases)
Federal Housing Finance Agency (settlements with investment banks)
Federal Reserve
National Credit Union Administration (settlements with investment banks)
Office of the Comptroller of the Currency
Securities and Exchange Commission (selected cases)
Treasury Department Financial Crimes Enforcement Network (money laundering cases)

Cases Involving Non-Financial Companies:

Justice Department Antitrust Division, Civil Rights Division, Criminal Division and Tax Division
Bureau of Industry and Security (export violations)
Federal Trade Commission (all cases involving monetary penalties)
Office of Foreign Assets Control (export-control violations)
Securities and Exchange Commission (Foreign Corrupt Practices Act cases)
Treasury Department Alcohol and Tobacco Tax and Trade Bureau

From Greg LeRoy of Good Jobs First: $160 Billion in Penalties: Violation Tracker 2.0 Documents Wide Variety of Misconduct by Major Banks

Monday, June 27, 2016

“The West’s establishment credibility is dying, and their influence is precipitously eroding — all deservedly so” —Glenn Greenwald

“The decision by U.K. voters to leave the EU is such a glaring repudiation of the wisdom and relevance of elite political and media institutions that — for once — their failures have become a prominent part of the storyline. Media reaction to the Brexit vote falls into two general categories: (1) earnest, candid attempts to understand what motivated voters to make this choice, even if that means indicting one’s own establishment circles, and (2) petulant, self-serving, simple-minded attacks on disobedient pro-leave voters for being primitive, xenophobic bigots (and stupid to boot), all to evade any reckoning with their own responsibility. Virtually every reaction that falls into the former category emphasizes the profound failures of Western establishment factions; these institutions have spawned pervasive misery and inequality, only to spew condescending scorn at their victims when they object…

“[T]he West’s establishment credibility is dying, and their influence is precipitously eroding — all deservedly so. The frenetic pace of online media makes even the most recent events feel distant, like ancient history. That, in turn, makes it easy to lose sight of how many catastrophic and devastating failures Western elites have produced in a remarkably short period of time. In 2003, U.S. and British elites joined together to advocate one of the most heinous and immoral aggressive wars in decades: the destruction of Iraq; that it turned out to be centrally based on falsehoods that were ratified by the most trusted institutions, as well as a complete policy failure even on its own terms, gutted public trust.

“In 2008, their economic worldview and unrestrained corruption precipitated a global economic crisis that literally caused, and is still causing, billions of people to suffer — in response, they quickly protected the plutocrats who caused the crisis while leaving the victimized masses to cope with the generational fallout. Even now, Western elites continue to proselytize markets and impose free trade and globalization without the slightest concern for the vast inequality and destruction of economic security those policies generate.

“In 2011, NATO bombed Libya by pretending it was motivated by humanitarianism, only to ignore that country once the fun military triumph was celebrated, thus leaving a vacuum of anarchy and militia rule for years that spread instability through the region and fueled the refugee crisis. The U.S. and its European allies continue to invade, occupy, and bomb predominantly Muslim countries while propping up their most brutal tyrants, then feign befuddlement about why anyone would want to attack them back, justifying erosions of basic liberties and more bombing campaigns and ratcheting up fear levels each time someone does. The rise of ISIS and the foothold it seized in Iraq and Libya were the direct byproducts of the West’s military actions (as even Tony Blair admitted regarding Iraq). Western societies continue to divert massive resources into military weaponry and prisons for their citizens, enriching the most powerful factions in the process, all while imposing harsh austerity on already suffering masses. In sum, Western elites thrive while everyone else loses hope.

“These are not random, isolated mistakes. They are the byproduct of fundamental cultural pathologies within Western elite circles — a deep rot. Why should institutions that have repeatedly authored such travesties, and spread such misery, continue to command respect and credibility? They shouldn’t, and they’re not. As Chris Hayes warned in his 2012 book Twilight of the Elites, ‘Given both the scope and depth of this distrust [in elite institutions], it’s clear that we’re in the midst of something far grander and more perilous than just a crisis of government or a crisis of capitalism. We are in the midst of a broad and devastating crisis of authority.’

“It’s natural — and inevitable — that malignant figures will try to exploit this vacuum of authority. All sorts of demagogues and extremists will try to re-direct mass anger for their own ends. Revolts against corrupt elite institutions can usher in reform and progress, but they can also create a space for the ugliest tribal impulses: xenophobia, authoritarianism, racism, fascism. One sees all of that, both good and bad, manifesting in the anti-establishment movements throughout the U.S., Europe, and the U.K. — including Brexit. All of this can be invigorating, or promising, or destabilizing, or dangerous: most likely a combination of all that.

“The solution is not to subserviently cling to corrupt elite institutions out of fear of the alternatives. It is, instead, to help bury those institutions and their elite mavens and then fight for superior replacements. As Hayes put it in his book, the challenge is ‘directing the frustration, anger, and alienation we all feel into building a trans-ideological coalition that can actually dislodge the power of the post-meritocratic elite. One that marshals insurrectionist sentiment without succumbing to nihilism and manic, paranoid distrust.’

“Corrupt elites always try to persuade people to continue to submit to their dominance in exchange for protection from forces that are even worse. That’s their game. But at some point, they themselves, and their prevailing order, become so destructive, so deceitful, so toxic, that their victims are willing to gamble that the alternatives will not be worse, or at least, they decide to embrace the satisfaction of spitting in the faces of those who have displayed nothing but contempt and condescension for them.

“There is no one, unifying explanation for Brexit, or Trumpism, or the growing extremism of various stripes throughout the West, but this sense of angry impotence — an inability to see any option other than smashing those responsible for their plight — is undoubtedly a major factor. As Bevins put it, supporters of Trump, Brexit, and other anti-establishment movements ‘are motivated not so much by whether they think the projects will actually work, but more by their desire to say FUCK YOU’ to those they believe (with very good reason) have failed them.

“Obviously, those who are the target of this anti-establishment rage — political, economic, and media elites — are desperate to exonerate themselves, to demonstrate that they bear no responsibility for the suffering masses that are now refusing to be compliant and silent. The easiest course to achieve that goal is simply to demonize those with little power, wealth, or possibility as stupid and racist: This is only happening because they are primitive and ignorant and hateful, not because they have any legitimate grievances or because I or my friends or my elite institutions have done anything wrong. As Vice’s Michael Tracey put it:

“Because that reaction is so self-protective and self-glorifying, many U.S. media elites — including those who knew almost nothing about Brexit until 48 hours ago — instantly adopted it as their preferred narrative for explaining what happened, just as they’ve done with Trump, Corbyn, Sanders, and any number of other instances where their entitlement to rule has been disregarded. They are so persuaded of their own natural superiority that any factions who refuse to see it and submit to it prove themselves, by definition, to be regressive, stunted, and amoral.

“Indeed, media reaction to the Brexit vote — filled with unreflective rage, condescension, and contempt toward those who voted wrong — perfectly illustrates the dynamics that caused all of this in the first place. Media elites, by virtue of their position, adore the status quo. It rewards them, vests them with prestige and position, welcomes them into exclusive circles, allows them to be close to (if not themselves wielding) great power while traveling their country and the world, provides them with a platform, fills them with esteem and purpose. The same is true of academic elites, financial elites, and political elites. Elites love the status quo that has given them, and then protected, their elite position. 

“Because of how generally satisfied they are with their lot, they regard with affection and respect the internationalist institutions that safeguard the West’s prevailing order: the World Bank and IMF, NATO and the West’s military forces, the Federal Reserve, Wall Street, the EU. While they express some piecemeal criticisms of each, they literally cannot comprehend how anyone would be fundamentally disillusioned by and angry with these institutions, let alone want to break from them. They are far removed from the suffering that causes those anti-establishment sentiments. So they search and search in vain for some rationale that could explain something like Brexit, or the establishment-condemning movements on the right and left, and can find only one way to process it: These people are not motivated by any legitimate grievances or economic suffering, but instead they are just broken, ungrateful, immoral, hateful, racist, and ignorant…”