The $9 Billion Witness: Meet JPMorgan Chase's Worst Nightmare

Rolling Stone ^ | 06 November 2014 | Matt Taibbi

[Lorianne]

Fleischmann is the central witness in one of the biggest cases of white-collar crime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion (not $13 billion as regularly reported – more on that later) to keep the public from hearing.

Back in 2006, as a deal manager at the gigantic bank, Fleischmann first witnessed, then tried to stop, what she describes as "massive criminal securities fraud" in the bank's mortgage operations.

Six years after the crisis that cratered the global economy, it's not exactly news that the country's biggest banks stole on a grand scale. That's why the more important part of Fleischmann's story is in the pains Chase and the Justice Department took to silence her.

She was blocked at every turn: by asleep-on-the-job regulators like the Securities and Exchange Commission, by a court system that allowed Chase to use its billions to bury her evidence, and, finally, by officials like outgoing Attorney General Eric Holder, the chief architect of the crazily elaborate government policy of surrender, secrecy and cover-up. "Every time I had a chance to talk, something always got in the way," Fleischmann says.

This past year she watched as Holder's Justice Department struck a series of historic settlement deals with Chase, Citigroup and Bank of America. The root bargain in these deals was cash for secrecy. The banks paid big fines, without trials or even judges – only secret negotiations that typically ended with the public shown nothing but vague, quasi-official papers called "statements of facts," which were conveniently devoid of anything like actual facts.

[antidisestablishment]

Let's not forget Warren Buffet's involvement in getting AAA ratings for securities and his golden boy status as a financial genius. He is now buying up properties across the country after having converted thousands of homeowners to renters.

These criminals knew what they were doing and most of both Bush's and Obama's administration were filled with the same folks.

[stephenjohnbanker]

Buffett is one of the sleasiest men in history. He also rates as America’s #1 hypocrite. I detest him.

[antidisestablishment]

I agree except for the “one of.” He is the sleasist bastard in the industry. He tops my lamppost list.

[stephenjohnbanker]

Buffett is scum, no doubt about it.

[Carry_Okie]

Lets face it. It’s the Kryptonite in a Leftist’s lunch-box. We all know that. The Left hates banks, corporations, Wall Street, small businesses, they just know that these entities never created a job and are vile entities.

It's an act. The writing of the Communist Manifesto was financed by European bankers. Through the early 20th Century, they were known as the Popular Front. When they were chased out of Germany, guess where they wound up?

[DoughtyOne]

In Katharine Graham’s parlor?

[Carry_Okie]

In Katharine Graham’s parlor?

A few. Most wound up in American universities.

[Carry_Okie]

D1, you are ignoring an important feedback loop by which the industry wields effluents over the government: it's what happens at the bond auction. If you think for one minute there aren't phone calls from buyers and brokers to politicians when the time for bond auctions comes, you are quite mistaken. This is why they are perfectly happy buying securities without interest, and remember: QE is a creature of the banks, not the government.

You state that Goldman Sachs was the biggest crook, but what else did folks expect? Someone was going to buy that paper, move it along, and reap profits from it.

At that point, this moves from opportunism to influence and depredation. The whole CRA loop you are citing was created to pressure small banks for purposes of consolidation by big banks at fire-sale prices, which certainly happened when the meltdown hit. It is simply not legitimate to equate companies just trying to survive with players who wield that kind of influence.

[stephenjohnbanker]

Exactly.

[Carry_Okie]

For instance, prior to 2001, it was against the law for banks to allow illegal aliens to obtain any type of credit in the US.

The Bush family has a very long history of Central American intrigue, in this case financing drug trafficking. After all, if you're going to print money, it must have a place to go! No wonder we went after both ends of the dope pipeline into Europe: Afghanistan and Kosovo. It was doom for the Euro.

[Carry_Okie]

LOL, I like being exacting.

[DoughtyOne]

I’m not surprised by this. I think it’s easy to forget also, that my comments were focused on the lending industry and the government blaming them for everything that happened. And when our folks jump in on that too, it bothers me.

I realize there are crooks out there. I also realize there are folks who do shady things.

If someone is staying within the law, I may not like it, but I won’t get angry over what they are doing. I place the blame squarely on the government characters that set up the situation.

Here we are doing exactly what Barney Frank and company want us to. We’re sitting here discussing the bad banks, the bad lending institutions, the bad players on Wall Street, and good old Barney Frank isn’t even mentioned.

He and his minions, along with most Democrats and more than a few Republicans set this situation up.

Then when the industry took advantage of it, and went way overboard, the pols quietly changed hats, feigned outrage, and pontificated.

How many of Washington’s power elites will go to prison here? Zip! And here we are not even mentioning them as we talk.

I’m not against the crooks going to prison. Let’s just get all the crooks for once.

[Neidermeyer]

If there were no documents, then it would have been a crime sub-prime or not. I don’t support criminality.
************************************
The docs exist (or existed and were shredded) ,, the problem is that they do not reflect reality... the named parties on the lender side are wrong as the loans were table funded (illegal , assumed to be predatory by the TILA) ,, in my case the named lender had nothing to do with the actual funding or with the underwriting... therefore my loan docs show the wrong lender. This is common. The wall streeters pre-sold their bundled products and needed loans no matter how crappy... in fact the crappier the better as they bought insurance on them...

[DoughtyOne]

Thanks for the additional information and comments.

[Carry_Okie]

He (Frank) and his minions, along with most Democrats and more than a few Republicans set this situation up.

There's a reason he was appointed to head the House Banking Committee. If it hadn't been him it would have been somebody else. Further, do you really think he writes these bills and talking points? They come straight out of K-Street. Frank's job was simply bullying, bashing, and pushing. He was hired because he was good at it. So were the rest of the "dealmakers." It's the whispers at cocktail parties at which the first appearances of these points are sold. The pols know enough to look the other way, feeling more than self-justified in pushing appearances. "Details, details" be damned.

Just look at Ol' Dan Tucker's point about the PATRIOT Act. What was all that banking and ID stuff doing in a bill about national security if this hadn't all been assembled LONG before just looking for the opportunity of a "national emergency"? Do you really think the Republican co-sponsors of that bill knew everything that was in it? My point here is: I don't know anybody that smart.

We all have the need to point at a nexus, just like people need to point at "a conspiracy." There isn't one; there are bunches. This is the kind of feeding frenzy attendant to unlimited government, a government the people demanded when they could not afford the legal infrastructure to go after the big players. This is the nature of the concentration of either capital or power without moral compunction to disperse it (for which the Jubilee and Sabbath Years were to be a big part). Its antithesis is why Washington was such a cultural hero. When the 14th Amendment made corporations equivalent to people, capital accrued to these collectives because of their natural advantages of immortality and limited liability. When the people wailed about that and instituted the income tax, the wealthy shrouded their influence buying in the veil of a false altruism dedicated to the destruction of the American middle class culture. We once had a culture among the wealthy of religious aspiration to nobility that the culture war they financed has since destroyed. When family and future are no longer as important as self-indulgence, that culture is doomed.

Thus, these are but symptoms in search of "a" cause, the only cure for which is true education of the entire people. As long as we have public schools, good luck with that. What I want to understand is more about how these provisions are drafted and positioned and who does that.

BTW to all, I've really enjoyed this thread as a read. It reminds me of the old FR.

[GladesGuru]

“Thus, these are but symptoms in search of “a” cause, the only cure for which is true education of the entire people. As long as we have public schools, good luck with that.”

Free public education is a good concept. Now that the Internet makes possible education at the speed of the speed of the individual student, the question comes: How do we determine who has learned what?

Carry_Okie care to post “We Test and How” again on this thread?

[PieterCasparzen]

All this effort to help the illegals, and we can’t get jack out of them.

Some "conservatives" push pro-amnesty to other conservatives. Even here on FR. As if a person can't see the job market continuing to deteriorate.

It's like someone peeing on your leg telling you it's raining.

[DoughtyOne]

The Clinton Chronicles touched on this. I still don’t know how much of that thing to believe, to be honest.

There was the requisite deaths in the Mena region of Arkansas though, as if there was some illegal activity someone wanted kept quiet.

[Carry_Okie]

The Clinton Chronicles touched on this. I still don’t know how much of that thing to believe, to be honest.

I do understand. Check out this old thread, the whole thing. Interestingly, it starts with an article by Matt Taibbi, the same author as wrote the piece that began this thread.

[DoughtyOne]

 He (Frank) and his minions, along with most Democrats and more than a few Republicans set this situation up.

There's a reason he was appointed to head the House Banking Committee. If it hadn't been him it would have been somebody else. Further, do you really think he writes these bills and talking points? They come straight out of K-Street. Frank's job was simply bullying, bashing, and pushing. He was hired because he was good at it. So were the rest of the "dealmakers." It's the whispers at cocktail parties at which the first appearances of these points are sold. The pols know enough to look the other way, feeling more than self-justified in pushing appearances. "Details, details" be damned.

I'm willing to accept that some of it comes right from K-Street (read that White Businessmen and the insider's think thank), but lets be frank here.  We can attribute some of it to business interest lobbiests.  We should also not forget that this serves someone else's interests too.  It serves the Left/Marxists/Commuists et al.  If it plants seeds that will hobble, defeat, or destroy Capitalist interests, who gains?  I will also submit that it isn't only free enterprise capitalists in the business evironment.  There are many socialists at heart out there too.  The idea that busienss interests are by far the worst at submitting bad legislation plays right into this group's hands.  I think we need to think long and hard before we just level both barrels at the evil men in the business community.  There are Marxist work groups across this nation seeking to implement bad policy.  They went to the courts to get the sub-prime lending enforced.  Barry Soweto wasn't out there working for the business community in court.  There are some to be sure, but Capitalism is the best system, and helping to destroy respect for it doesn't serve us well.  The United Nations develops countless grand ideas and submits them to the political system in the United States.  The leftist in our nation scoop them up, and the next thing you know, they're voting on it on Capital Hill..  

Just look at Ol' Dan Tucker's point about the PATRIOT Act. What was all that banking and ID stuff doing in a bill about national security if this hadn't all been assembled LONG before just looking for the opportunity of a "national emergency"? Do you really think the Republican co-sponsors of that bill knew everything that was in it? My point here is: I don't know anybody that smart.

I don't either, but don't jump to conclusions that it was all submitted by some evil corporation.  Some yes.  Much of it no.  I realize you don't jump to conslusions often, but it seems to me you're somewhat absolving Frank of blame here.  In one sentence you state that he doesn't come up with that legislation.  In another you state he was hired because he can push it through.  He was the driving force on Capital Hill.

We all have the need to point at a nexus, just like people need to point at "a conspiracy." There isn't one; there are bunches. This is the kind of feeding frenzy attendant to unlimited government, a government the people demanded when they could not afford the legal infrastructure to go after the big players. This is the nature of the concentration of either capital or power without moral compunction to disperse it (for which the Jubilee and Sabbath Years were to be a big part). Its antithesis is why Washington was such a cultural hero. When the 14th Amendment made corporations equivalent to people, capital accrued to these collectives because of their natural advantages of immortality and limited liability. When the people wailed about that and instituted the income tax, the wealthy shrouded their influence buying in the veil of a false altruism dedicated to the destruction of the American middle class culture. We once had a culture among the wealthy of religious aspiration to nobility that the culture war they financed has since destroyed. When family and future are no longer as important as self-indulgence, that culture is doomed.

I agree that there are bunches.  I'm not entirely comfortable with corporations being equivelant to people either.  I try not to be definitive on this one, because there might be an instance where there could be a decemt reason.  I can't think of one right now, but sometimes one rule doesn't work across the board, and for me this is a complex issue.

Thus, these are but symptoms in search of "a" cause, the only cure for which is true education of the entire people. As long as we have public schools, good luck with that. What I want to understand is more about how these provisions are drafted and positioned and who does that.

If you're talking about the drafting of legislation, I agree.  You can follow some of it online at Thomas.com  You can see different versions of the bills as they move along.  You might get some hints where the intial language came from too.  The problem for me is wading across volumes of information, and making sense of it..

BTW to all, I've really enjoyed this thread as a read. It reminds me of the old FR.

I like the discussion of major issues.  In fact, I enjoy the differences of opinion too.  I haven't learned anything from folks who slap me on the back and tell me they agree.  I lean from those you point out an error.

I am willing to accept my errors.  It does occur to me one can be too quick to accept an error and leave it at that though.  I almost did that here across the board.  And then I realized tha big business wasn't the only game in town.  We clearly have Leftist gaming the system in thousands of venues in this nation.  So big business is part of the problem.  I agree.  None the less, Barney Frank was Chairman of the House Banking Committee, and he was a very evil influence there.  He was as much responsible for this mess as any other one man.  I have no problem singling him out for scorn.