Murder of a Rebel Nation, Episode 02: “Most Ludicrous DOJ Lies - Cui Bono?”
In retrospect, the outcome of the cops-and-robbers drama that played out in the wake of the global financial crisis looks so manifestly predictable now: on the one hand, you had clear-cut criminal fraud perpetrated by Wall Street banks on a colossal scale (a fact freely admitted to by Alan Greenspan in Episode 01 and ratified in this episode by Senator Ted Kaufman), while on the other (and far heavier) hand you had a Department of Justice headed by a team from… Wall Street’s go-to law firm from Washington, D.C. From the point of view of someone in 2022, the only thing more obvious than the rigged outcome here—the robbers won because the “cops” at the DOJ were the robbers’ attorneys, DUH—was the fact that the deck at the DOJ was stacked to produce exactly that result.
That much is obvious these days, so massively has graft and corruption not only grown, but come to be openly celebrated by the thoroughly mediocre public figures who pollute seemingly every political scene (at least in the west), notable only for their mindlessly unflinching obedience to corporate interests. Looking back to the wake of the GFC, it’s like, OF COURSE no big Wall Street banks or bankers were prosecuted—how could we have been so foolish to think otherwise?
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But if you go back just a few years, things weren’t so clear.
Even as late December 2012, near the end of Obama’s first term, the prosecutorial outcome at least seemed like it was still up for grabs. Many people including myself clung to the belief that that the rule of law still had a pulse in the U.S., and that even if it was unlikely, there still existed at least the chance that the DOJ would indict at least one bank executive from Wall Street.
The media’s inevitable query—“why doesn’t the DOJ prosecute Wall Street?”—greatly advanced the illusion that the DOJ might yet prosecute Wall Street.
That all changed in January 2013, for good, when an actual journalist (not an overpaid shill) showed up on TV one night with a flamethrower and in 53 minutes absolutely torched every single element of (and assumption bundled up into) the media’s cops-and-robbers narrative that had prevailed up until that point, torched it all down into a tidy little pile of fine ashen dust.
That night, day two of Obama’s second term, revealed the horrifying truth about what had been going on inside the United States Justice Department: it had spent the last four years telling enormous lies about why it wasn’t prosecuting Wall Street. The simple truth was breathtakingly ugly….
THE FRONTLINE EPISODE THAT CHANGED EVERYTHING
“The Untouchables,” January 22, 2013, written and produced by Martin Smith
It was amazing to watch the DOJ’s lies unravel so quickly. PBS writer and producer Martin Smith had gotten access to Lanny Breuer, head of the DOJ’s Criminal Division, and had done his homework. I watched his “The Untouchables” episode for PBS Frontline the night it aired. It blew me away. So much so, in fact, that it’s clear from the notes I took right after the show ended that I hadn’t really comprehended either how deeply Smith had taken his craft, either in unmasking the Department of Justice or in surpassing the efforts of his colleagues in the media.
Martin Smith vs. The DOJ
As far as Smith and the DOJ were concerned, it had been like watching Samurai swordsman Ogami Itto in the Lone Wolf & Cub films from the early 1970s. A lot of times watching just the sword action itself wasn’t enough to really comprehend what had happened in a fight scene; the action was too fast for the human eye to take in completely. All you knew was that someone had met up with the business side of Itto’s impossibly fast blade, but you wouldn’t know how serious the damage was until after that signature pause during which gravity finished the job that the sword-wielding ronin had started on his victims. After that telltale pause, the evidence would manifest itself all at once. The upper half of a severed body, for instance, might just casually slide across its lower counterpart and thud onto the ground behind Itto as he blankly stared forward and sheathed his weapon, concluding the scene.
With Smith and the DOJ, the political gravity in Washington, D.C. needed less than 24 hours for everyone to learn exactly what had happened the night PBS televised the feature encounter. But the next day it was right there for all to see. The head of the DOJ’s Criminal Division, who’d appeared throughout the episode sitting across from Smith’s steely glare, hit the floor with the ponderous thud of a Washington Post headline: “Lanny Breuer, Justice Department criminal division chief, is stepping down”
That’s quite the Japanese way of putting it, now that I look at that headline again. A more candid way of putting would have been, “Lanny Breuer was gutted as he told lies on national TV last night, and his high office in the DOJ is now an intolerable stain on the institution so he’s gotta go.” But even the actual, understated WaPo headline came as a shock.
Martin Smith vs. Shill Media
It took me a lot longer to see how far Martin Smith had outclassed his media colleagues, however. I’ve re-watched the episode at least a dozen times over the years, studying its structure. It’s a beautifully crafted piece, the elaborate but sturdy groundwork laid by Smith and his team. Breuer doesn’t even appear until after the 30-minute mark. By then the viewer has been educated by countless witnesses as to the disturbing extent of Wall Street’s fraud in the mortgage space. The evidence is presented so effectively and efficiently that it comes across as a highlight reel of high-level white collar crime. It leaves the firm impression that the Frontline team has pored through a mountain of evidence; and if that’s what a team of journalists has found, God only knows what team of DOJ lawyers and FBI agents can turn up, right?
That’s when Lanny Breuer shows up. He’s a dead man walking but doesn’t even know it. But we the viewers don’t know it either. The groundwork Smith and his team have done enables him to end Breuer’s high-profile public service career with just two questions.
Q. We spoke to a couple of sources from within the Criminal Division, and they reported that when it came to Wall Street, there were no investigations going on. There were no subpoenas, no document reviews, no wiretaps.
A. Well, I don't know who you spoke with because we have looked hard at the very types of matters that you're talking about.
Q. These sources said that at the weekly indictment approval meetings that there was no case ever mentioned that was even close to indicting Wall Street for financial crimes.
A. Well, Martin, if you look at what we and the U.S. attorney community did, I think you have to take a step back....
That was it for Breuer. It was lights out. And a damn good riddance it was, too.
The Ugly Truth About the DOJ, Finally Revealed
So the reason that the DOJ hadn’t prosecuted Wall Street had nothing to do with any of the excuses the DOJ had given over the preceding four years—whether to journalists or to congress. That had all been a pack of lies.
The video covers several of those lies. You can watch the video with the audio muted and see that Lanny Breuer is lying every time he opens his mouth.
The real reason the DOJ hadn’t prosecuted had nothing to do with the lies told by the DOJ and Breuer, and is as simple as it is horrifying: the DOJ never investigated Wall Street.
No one had even asked that question before Martin Smith did—did the DOJ even investigate Wall Street? (Actually, the question is asked during the episode, which Smith wrote, by Jeff Connaughton, Senator Ted Kaufman’s chief of staff.) And Smith proved the unbelievable through Breuer’s own mouth—the DOJ never investigated any of the Wall Street banks. By not investigating, I mean, and the Untouchables proves, this: the DOJ issued no subpoenas, it undertook no document reviews, it obtained no wiretaps, it obtained no witnesses, it sought no whistleblowers. In other words, the DOJ went out of its way not to investigate the “rampant fraud” on Wall Street that both Alan Greenspan and Senator Ted Kaufman saw.
Every reason supplied by anyone other than this one—there were no investigations—about why the DOJ hadn’t prosecuted Wall Street is a lie. It’s just that simple.
The implications of this revelation in the Untouchables are staggering. I plan to cover as many of them as I can in future episodes. For one thing, just try to name one crime that a person can’t commit if he’s guaranteed that there won’t be any investigation in advance? You see how that might be a problem of the lethal variety?
The Disgusting Cowardice of the Media
The reason I’m doing this series is that the media simply refuses to build on the history-altering factual foundation laid by Martin Smith. Even today, 10 years after the shocking truth came out, the media still pretends that the problem is merely that the DOJ refused to prosecute Wall Street. No no no no no and no. While it’s true that the DOJ didn’t prosecute, we already knew that before The Untouchables aired. So what the media has really been doing for the last decade is pretending that Martin Smith never existed and that all is well in the DOJ except for the no-prosecution thing.
The media won’t touch Smith’s jaw-dropping revelation about the DOJ. Nor will it touch the fact that the DOJ undertook a deliberate, concerted campaign that went on for several years to lie to and deceive the public and congress about why it wasn’t prosecuting Wall Street.
And it’s not just news media, either. It’s print media as well. A small cottage industry has grown up in the publishing world in an apparent effort to whitewash the DOJ and Lanny Breuer and the bald-faced lies he told congress. I take a poke at a few of those books in the video, a least ones written by Ivy League law professors and a Pulitzer prizewinner. Not one of these authors even bothers to ask, hey, why did the DOJ tell so many lies about prosecuting Wall Street—what was it hiding? That’s the first thing anyone interested in discovering the truth would ask; a beat cop would be all over those lies like stink on shit, because he knows that the jackpot is whatever the lies are hiding.
But not America’s leading luminaries, nope. Their job isn’t to find the truth, it’s to use only as much of the truth as is absolutely necessary to assuage the drugged-up public—there there, everything is hunky dory over there at the Department of Justice, just a few glitches and a bit of funny history, really; here are some clever-sounding anecdotes that you can parrot at your next party to impress your like-minded brainwashed friends.
Those books and their 5-star reviews are all total bullshit, just like everything else in the media now. It’s all propaganda. Every. Single. Thing. Why would anyone in the media publish anything that’s true when they can sell copy space to liars and criminals and have the good life? What’s amazing is the legion of morons who still put stock in credentials and “experts.” Actually it’s not amazing. It’s a boring combination of denial and cowardice when it comes to facing the ugly truth. The truth is that there was a coup d’etat in the U.S., which has been run as the biggest criminal enterprise in the history of the world.
To do that you need liars in positions of power. Which is exactly what we have now.
This won’t end well. I’m trying to lay a record before it gets here.
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They protected banksters and they go after protesters, that says it all. It seems the alphabet agencies are all looking at protecting the very people they should be prosecuting. Justice in reverse.
-New York Times September 28, 2016
‘I Am Aladdin’
Over the last 10 years, Mr. Fink has transformed BlackRock from a bond shop catering to pension funds and insurance companies into an asset-gathering machine that uses advanced technology to reimagine how investors buy, sell and assess the risks of a wide variety of securities. Via its $1 trillion-plus in exchange-traded funds, BlackRock has been instrumental in creating newly liquid markets in high-yield and corporate bonds — a direct attack on the business model of banks like Deutsche Bank.
And through its big data-mining risk platform, Aladdin, or Asset Liability and Debt and Derivatives Investment Network, BlackRock says it has developed the market’s most highly evolved framework for stress-testing how securities will respond to certain situations — such as a sudden rise in interest rates or what happens in the event of a political surprise, like Donald J. Trump being elected president.
Staffed by 2,300 of BlackRock’s 13,000 employees, Aladdin promises to help firms trade, analyze and keep a compliant eye on the assets they manage. In an era of severe regulatory scrutiny, the service has become quite popular. Seventy-five firms — including Deutsche Bank’s asset management unit and Freddie Mac — managing a total of $10 trillion, now use it.
Fink’s Upward Trajectory
In over two decades at BlackRock, Laurence D. Fink has watched the firm grow to manage $5 trillion.
1983Laurence D. Fink presides over one of the first collateralized mortgage obligation deals on Wall Street — a $1 billion offering by Freddie Mac.
1986Mr. Fink loses $100 million in a mortgage bet gone bad.
1988Mr. Fink and seven other executives start an investment group focused on buying bonds under the umbrella of the private equity firm Blackstone.
1992The firm adopts the name BlackRock and oversees $17 billion.
1994General Electric contracts BlackRock’s Aladdin risk platform to wind down the brokerage firm Kidder, Peabody & Company.
1999BlackRock goes public with $165 billion in assets under management.
2003Mr. Fink, a New York Stock Exchange board member, is embroiled in a dispute over the pay of Richard A. Grasso, the exchange’s chief.
2006BlackRock acquires Merrill Lynch’s investment management division, gaining a large equity business. Assets under management are $1.1 trillion.
2007Mr. Fink is nearly named chief executive of Merrill Lynch.
2009Treasury hires BlackRock to analyze toxic securities.
BlackRock acquires Barclays Global Investors and its exchange-traded funds. BlackRock manages E.T.F.s with $495 billion of the E.T.F. market’s overall $777 billion. BlackRock’s total assets under management swell to $3.3 trillion.
2013BlackRock’s E.T.F.s reach $752 billion. The overall E.T.F. market is $1.6 trillion. BlackRock’s total assets under management are $4 trillion.
2016In August, BlackRock stock hits a new high. Its E.T.F.s are worth $1.1 trillion, while the overall E.T.F. market grows to $2.3 trillion. BlackRock’s total assets under management reach $5 trillion.