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Archive for February 4th, 2016

Elizabeth Warren is a rarity nowadays. She is a US senator, unlike most senators, such as Ron Wyden, who is clearly a tool and senator of Wall Street and of perhaps even Phil Knight, the founder of Nike. In a new report prepared for Warren, called Rigged Justice, several not so shocking things are clearly illuminated which prove how corrupt the US government has become, and let’s face it, this government is one of the most corrupt in the world, at least among the so-called Democratic nations.

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“The Obama Administration,” the reports says, “has made repeated promises to strengthen enforcement and hold corporate criminals accountable, and the Department of Justice (DOJ) announced in September that it would place greater emphasis on charging individuals responsible for corporate crimes. Nonetheless, both before and after this DOJ announcement, accountability for corporate crimes is shockingly weak.”

This is because both the Democratic and Republican establishments are completely reliant on money from the CEOs and corporations that commit these crimes. Most of the penalties faced by these CEOs and their corporations were so paltry that the report stated, “The examples (from this report) raise the disturbing possibility that some giant corporations—and their executives—have decided that following the law is merely optional. For these companies, punishment for breaking the law is little more than a cost of doing business.

There is a simple set of rules governing how US laws are applied. If you are rich, and you have used your money to corrupt the political system, the DOJ doesn’t look at you after it has caught you. The report goes on.

“When government regulators and prosecutors fail to pursue big corporations or their executives who violate the law, or when the government lets them off with a slap on the wrist, corporate criminals have free rein to operate outside the law. They can game the system, cheat families, rip off taxpayers, and even take actions that result in the death of innocent victims—all with no serious consequences.”

According to Warren, in an editorial in the New York Times, in 2015, “in case after case, federal agencies caught big companies breaking the law, defrauding tax payers, covering up deadly safety hazards, even precipitating the financial collapse of 2008, and let them off the hook with barely a slap on the wrist.” And to think that financially ordinary people go to prison for far less crimes than ripping off billions of dollars from taxpayers and investors, or knowingly selling products that kill.

“The failure to punish big corporations, the report went on, “or their executives when they break the law undermines the foundations of this great country: If justice means a prison sentence for a teenager who steals a car, but it means nothing more than a sideways glance at a CEO who quietly engineers the theft of billions of dollars, (not to mention the theft of the government and their regulatory agencies) then the promise of equal justice under the law has turned into a lie.” That promise died decades ago. “The failure to prosecute big, visible crimes has a corrosive effect on the fabric of democracy and our shared belief that we are all equal in the eyes of the law.

Some of the crimes committed included:

1 “The Cartel”: Citigroup, JPMorgan Chase & Co, Barclays, UBS AG, and Royal Bank of Scotland. In May 2015, Citigroup, JP Morgan Chase & Co, Barclays, UBS AG, and Royal Bank of Scotland (RBS) agreed to pay a combined $5.6 billion settlement to the DOJ. Bank traders from Citicorp, JP Morgan, Barclays, and RBS created a secret group known as “The Cartel,” which for more than five years manipulated exchange rates in a way that made the banks billions of dollars at the expense of clients and investors. And, the fifth bank, UBS, separately agreed to plead guilty to wire fraud charges in connection with interest rate manipulation. Although DOJ required admissions of guilt as part of the settlement – a reflection of the severity of the charges – not one single individual faced any criminal prosecution. Moreover, the SEC granted waivers to each bank so that the banks could avoid the collateral consequences that were supposed to accompany a guilty plea. Those waivers meant that the banks’ much-hyped guilty pleas were ultimately “likely to carry more symbolic shame than practical problems.”

2. Novartis. In November 2015, DOJ announced a $390 million settlement of a civil fraud lawsuit with Novartis Pharmaceuticals over allegations that the company engaged in a kickback scheme with pharmacists to increase sales of their drugs to Medicare and Medicaid patients. These kickbacks allegedly were paid even as Novaris was already under a corporate integrity agreement for previous violations of the law. This $390 million represented just over 10% of the damages sought by the government. It placed no further restrictions on Novartis’ participation in federal government healthcare programs, included no admission of wrongdoing, and did not include an indictment of any individual responsible for the kickbacks. The settlement was so paltry that after it was announced, Novartis’s CEO candidly noted that “whether we change our behavior …[in response to the settlement] remains to be seen.”

3. Education Management Corporation (EDMC). In November 2015, DOJ settled a civil case with EDMC, the second-largest for-profit education company in the country. EDMC illegally paid high-pressure recruiters to enroll students and violated the False Claims Act by falsely certifying that it complied with Title IV of the Higher Education Act. EDMC received $11 billion in payments (90% of it via federal student grants and loans) from 2003-2011 as a result of these efforts. But the settlement recovered only $95 million –less than one percent of this total. The DOJ settlement did nothing to resolve federal student loan debts owed by those who were victims of the illegal recruitment, held no individual executives at EDMC accountable, required no admission of wrongdoing, and did nothing to prevent EDMC from receiving federal funds in the future.

What the report doesn’t mention is that US banks have been caught openly laundering money for Mexican drug cartels. They’ve been fined, and then were caught again, and not a soul has been charged with a crime.

For the complete report click the link below. http://www.warren.senate.gov/files/documents/Rigged_Justice_2016.pdf

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