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Matt Taibbi: The People Vs. Goldman Sachs

Flashback from Matt Taibbi

May 11, 2011

Rolling Stone

The People Vs. Goldman Sachs

A Senate committee has laid out the evidence.  

Now the Justice Department should bring criminal charges.

They weren't murderers or anything; they had merely stolen more money than most people can rationally conceive of, from their own customers, in a few blinks of an eye. But then they went one step further. They came to Washington, took an oath before Congress, and lied about it.

Thanks to an extraordinary investigative effort by a Senate subcommittee that unilaterally decided to take up the burden the criminal justice system has repeatedly refused to shoulder, we now know exactly what Goldman Sachs executives like Lloyd Blankfein and Daniel Sparks lied about. We know exactly how they and other top Goldman executives, including David Viniar and Thomas Montag, defrauded their clients. America has been waiting for a case to bring against Wall Street. Here it is, and the evidence has been gift-wrapped and left at the doorstep of federal prosecutors, evidence that doesn't leave much doubt: Goldman Sachs should stand trial.

The great and powerful Oz of Wall Street was not the only target of Wall Street and the Financial Crisis: Anatomy of a Financial Collapse, the 650-page report just released by the Senate Subcommittee on Investigations, chaired by Democrat Carl Levin of Michigan, alongside Republican Tom Coburn of Oklahoma. Their unusually scathing bipartisan report also includes case studies of Washington Mutual and Deutsche Bank, providing a panoramic portrait of a bubble era that produced the most destructive crime spree in our history — "a million fraud cases a year" is how one former regulator puts it. But the mountain of evidence collected against Goldman by Levin's small, 15-desk office of investigators — details of gross, baldfaced fraud delivered up in such quantities as to almost serve as a kind of sarcastic challenge to the curiously impassive Justice Department — stands as the most important symbol of Wall Street's aristocratic impunity and prosecutorial immunity produced since the crash of 2008.

To date, there has been only one successful prosecution of a financial big fish from the mortgage bubble, and that was Lee Farkas, a Florida lender who was just convicted on a smorgasbord of fraud charges and now faces life in prison. But Farkas, sadly, is just an exception proving the rule: Like Bernie Madoff, his comically excessive crime spree (which involved such lunacies as kiting checks to his own bank and selling loans that didn't exist) was almost completely unconnected to the systematic corruption that led to the crisis. What's more, many of the earlier criminals in the chain of corruption — from subprime lenders like Countrywide, who herded old ladies and ghetto families into bad loans, to rapacious banks like Washington Mutual, who pawned off fraudulent mortgages on investors — wound up going belly up, sunk by their own greed.

But Goldman, as the Levin report makes clear, remains an ascendant company precisely because it used its canny perception of an upcoming disaster (one which it helped create, incidentally) as an opportunity to enrich itself, not only at the expense of clients but ultimately, through the bailouts and the collateral damage of the wrecked economy, at the expense of society. The bank seemed to count on the unwillingness or inability of federal regulators to stop them — and when called to Washington last year to explain their behavior, Goldman executives brazenly misled Congress, apparently confident that their perjury would carry no serious consequences. Thus, while much of the Levin report describes past history, the Goldman section describes an ongoing? crime — a powerful, well-connected firm, with the ear of the president and the Treasury, that appears to have conquered the entire regulatory structure and stands now on the precipice of officially getting away with one of the biggest financial crimes in history.

Defenders of Goldman have been quick to insist that while the bank may have had a few ethical slips here and there, its only real offense was being too good at making money. We now know, unequivocally, that this is bullshit. Goldman isn't a pudgy housewife who broke her diet with a few Nilla Wafers between meals — it's an advanced-stage, 1,100-pound medical emergency who hasn't left his apartment in six years, and is found by paramedics buried up to his eyes in cupcake wrappers and pizza boxes. If the evidence in the Levin report is ignored, then Goldman will have achieved a kind of corrupt-enterprise nirvana. Caught, but still free: above the law.

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Reader Comments (8)

May 12, 2011 at 2:10 AM | Registered CommenterDailyBail
Are the wealthy fleeing? ‘It all collapsed,’ says businessman who lost millions

May 12, 2011 at 2:12 AM | Registered CommenterDailyBail
Dick Bove Cuts Goldman To Sell, Lowers Price Target From $163 To $120



It now appears that the pressure on the Justice Department to bring a criminal lawsuit against Goldman is building to a high pitch. The new Matt Taibbi article in Rolling Stone Magazine is another all-out attack on the company. However, this time the attack is backed by a 650 page Senate report signed by both a Democrat and a Republican.
May 12, 2011 at 9:44 AM | Unregistered Commenterjohn
How insidious to hide the murder, suicide, insurance fraud, mental collapse, revolts world wide, etc; under theft. You people are unreal. TELL THE PHUCKING TRUTH in numbers of innocent lives as well. Give people the number of deaths attributed as well or don't report a half story for viewers to leave uneducated with. Half the story usually leaves out the body count. The CEO's of Sachs of Goldman hollowcosted how many?
May 12, 2011 at 11:25 PM | Unregistered CommenterGhana
Someone just said the S.E.C.'s responsibility is prosecutions of these crimes. And since the S.E.C. has been manned by the Skull and Bones crew, with their 400 year history of bringing home the bacon to England, tis safe to say that the money is gone and there is nothing they can do. Off-shore accounts as in the Caiman islands or The Netherlands, especially the British Protectorates have been 'outside the jurisdictions' of American AND English investigations for at least 20 years, even more if you include investigations into dealings such as the offshoring of Jimi Hendrix's gross earnings and investments back in 1967 -1970. Hendrix's manager was a member of MI6 'retired' and the common knowledge was Hendrix Experience income was used to finance large scale drug transactions.
There is great need to realize the SEC has turned traitor against American financial interests as of some time ago. And these piglets banked on it. Turn up the heat in the right places and they will be legally sacrificed. Turn up the heat on them and they will be compensated for their trouble on release.
May 13, 2011 at 1:50 AM | Unregistered CommenterHoward T. Lewis III
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Nov 24, 2011 at 9:30 AM | Unregistered Commenterfhbtvr fhbtvr

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