“Armed Robbery Is No Petty Crime “: The $13 Billion JPMorgan Settlement Is A Good Start, Now Someone Should Go To Jail
JPMorgan Chase, the star of mega-banks, is up against the wall at the Justice Department, trying to settle its myriad crimes for $13 billion. That’s real money, even for a trillion-dollar bank. So this is progress. After years of scandalous indifference, the Obama administration appears to have found its backbone.
Better late than never, grumpy citizens can say. But that doesn’t settle the matter. Four years ago, Senator Ted Kaufman of Delaware crisply described the more fundamental problem posed by the wantonly reckless behemoths of Wall Street.
“People know that if they rob a bank they will go to jail,” Kaufman said. “Bankers should know that if they rob people they will go to jail too.” Can we hear an amen on that? Not yet. But the complaint Kaufman voiced repeatedly is now on the table. “At the end of the day,” the senator warned, “This is a test of whether we have one justice system in this country or two. If we do not treat a Wall Street firm that defrauded investors of millions of dollars the same way we treat someone who stole $500 from a cash register, then how can we expect our citizens to have any faith in the rule of law?” (See my piece from April 2011, “How Wall Street Crooks Get Out of Jail Free.”)
Attorney General Eric Holder was stung, his reputation severely damaged. His lieutenants in the criminal division explained repeatedly that while the megacrimes seemed obvious, it is fiendishly difficult to locate the people in a huge, complex financial organization who can be successfully prosecuted as criminals. The popular anger did not go away, however, because in JPMorgan’s case the outrages only got larger and more obvious.
So here we are four years later and leading newspapers report that Justice is on the brink of a record-setting settlement—$13 billion. Jamie Dimon, JPMorgan CEO and formerly the president’s favorite banker, has personally negotiated the terms with the attorney general. The Morgan bank started with an offer of $1 billion and quickly raised it to $4 billion. Holder’s office kept saying, no, not enough. According to The New York Times, seven federal agencies are investigating the bank, plus state banking regulators and a couple of foreign governments.
The offenses include an all-star list of duped victims—of mortgage fraud against home-buyers, investor fraud against people and pension funds that purchased the rotten mortgage securities and defrauded the federal agencies (Fannie Mae and Freddie Mac) that bought the mortgage bonds and applied federal guarantees to them. Nevertheless, if there is no identifiable “criminal” who can be sent to jail, the case could be treated as merely another bureaucratic crime and adjudicated with lots of cash, a very familiar exercise in this era of high-flying capitalist buccaneers and bandits.
But here is the exciting and suspenseful element in this story. Eric Holder and his prosecutors have so far refused to settle on such amicable terms. Federal prosecutors in Sacramento believe they have established the personal linkage—who ordered the dirty deals, who carried them out—that could support criminal indictments of individuals or against the corporate “person” known as JPMorgan Chase. That would be truly unprecedented—a “game changer” in Wall Street/Washington parlance—and with threatening potential for the defendant bank.
In the negotiations, Holder has refused to give Dimon what he seems to want most—an agreement to drop the criminal charge and settle for bigger money instead. That might weaken the storm of private lawsuits already filed by the victims of JPMorgan’s fraudulent profiteering. The star banker kept raising his bid. The AG kept saying no way. Americans should stay tuned and maybe send fan mail to the Justice Department, urging the prosecutors to hang tough.
But you can’t send a bank to jail, can you? No, but you could place it under court supervision and empower a federal judge to order and supervise internal reforms in the megabank, perhaps even downsizing. Does that sound too harsh? If the feds can do this to a corrupt labor union like the Teamsters, why not to an outlaw bank like JPMorgan?
By: William Greider, The Nation, October 21, 2013
“Not In This Lifetime”: Republican Jim Sensenbrenner Asks Attorney General Holder To Back Off In Texas
As we discussed yesterday, Attorney General Eric Holder is challenging new voting restrictions imposed by Texas Republicans, hoping to use the remaining provisions of the Voting Rights Act to protect Texans’ access to the ballot box. GOP officials, not surprisingly, weren’t pleased with the move, but there was one reaction in particular that I found interesting.
But Mr. Holder’s moves this week could endanger that effort, said Rep. F. James Sensenbrenner Jr., Wisconsin Republican, who led the latest reauthorization of the Voting Rights Act in 2006.
“The lawsuit would make it much more difficult to pass a bipartisan fix to restore the heart of the VRA that the Supreme Court struck down earlier this year,” Mr. Sensenbrenner said.
He said he had spoken with Mr. Holder and asked him to withdraw the lawsuit.
It’s worth noting for context that Sensenbrenner may be a conservative Republican, but he’s also earned a reputation as a long-time supporter of the Voting Rights Act. Indeed, among GOP lawmakers, it’s probably fair to say the Wisconsin Republican is the VRA’s most reliable ally. When Sensenbrenner says he’s working on a legislative fix in the wake of the Supreme Court’s ruling, I’m inclined to believe him.
That said, for Holder to back off now would be crazy.
Look, I don’t blame Sensenbrenner for this, but literally every indication suggests congressional Republicans intend to block efforts to pass a new-and-improved Voting Rights Act. The Attorney General has a simple calculation to make: protect Americans against discriminatory voter-suppression tactics or wait for the House GOP to work in a bipartisan fashion on voting rights.
Can anyone seriously blame Holder for preferring the former to the latter? It seems far more realistic for the A.G. to turn Sensenbrenner’s request around and say, “When Congress passes the Voting Rights Act, I’ll stop filing these lawsuits, not the other way around.”
Remember this story from July?
If House Republicans are interested in patching the Voting Rights Act, they aren’t showing it.
“Historically I fully understand why they addressed the situations they did,” Republican Rep. Trent Franks of Arizona, who chairs the House judiciary subcommittee that would handle new voting rights legislation, said to reporters after the hearing. “I am just of the opinion today that we should do as the court said and that is to not focus on punishing the past but on building a better future.”
As we talked about at the time, most of the Republican members of the panel apparently didn’t think the hearing was especially important — which is to say, they didn’t show up — and the witnesses GOP lawmakers called reinforced fears that the party simply isn’t interested in a constructive debate.
The Heritage Foundation’s Hans von Spakovsky, for example, was called by Republicans to offer his “expert” testimony on voting rights, despite the fact that von Spakovsky is best known for the loathsome voter-suppression tactics he championed during his tenure in the Bush/Cheney Justice Department. If this is the guy GOP lawmakers are turning to for guidance, the future of the Voting Rights Act is bleak.
Indeed, von Spakovsky assured the Judiciary Committee panel that the “the systematic, widespread discrimination against blacks has long since disappeared” — a claim we know to be ridiculously untrue.
Sensenbrenner’s worthwhile efforts notwithstanding, those waiting for House Republicans to do the right thing on voting rights are going to be waiting a very, very long time.
By: Steve Benen, The Maddow Blog, August 23, 2013
“A Shameful State Of Affairs”: Defendants’ Legal Rights Undermined By Budget Cuts
Fifty years ago, the U.S. Supreme Court unanimously held that everyone who is charged with a serious crime has the right to an attorney. In Gideon v. Wainwright, Justice Hugo Black observed for the court that “in our adversary system, any person haled into court, who is too poor to hire a lawyer, cannot be assured of a fair trial unless counsel is provided to him.” As a prosecutor, as a judge and as our nation’s attorney general, I have seen this reality firsthand.
Despite the promise of the court’s ruling in Gideon, however, the U.S. indigent defense systems — which provide representation to those who cannot afford it — are in financial crisis, plagued by crushing caseloads and insufficient resources. And this year’s forced budget reductions, due largely to sequestration, are further undermining this critical work.
In stark contrast to many state defender programs, the federal public defender system has consistently served as a model for efficiency and success. According to court statistics, as many as 90 percent of federal defendants qualify for court-appointed counsel, and the majority of criminal cases prosecuted by the Justice Department involve defendants represented by well-qualified, hardworking attorneys from federal defender offices. Yet draconian cuts have forced layoffs, furloughs (averaging 15 days per staff member) and personnel reductions through attrition. Across the country, these cuts threaten the integrity of our criminal justice system and impede the ability of our dedicated professionals to ensure due process, provide fair outcomes and guarantee the constitutionally protected rights of every criminal defendant.
I join with those judges, public defenders, legal scholars and countless other criminal justice professionals who have urged Congress to restore these resources, to provide needed funding for the federal public defender program and to fulfill the fundamental promise of our criminal justice system.
The Justice Department is strongly committed to supporting indigent defense efforts through an office known as the Access to Justice Initiative, which I launched in 2010, and a range of grant programs. The department took this commitment to a new level on Aug. 14 by filing a statement of interest in the case of Wilbur v. City of Mt. Vernon — asserting that the federal government has a strong interest in ensuring that all jurisdictions are fulfilling their obligations under Gideon and endorsing limits on the caseloads of public defenders so they can provide quality representation to each client.
Unfortunately the federal public defender program is in dire straits. As I write, federal defenders representing the Boston Marathon bombing suspect are facing about three weeks of unpaid leave. In Ohio, the director of one federal defender office who had served there for nearly two decades has laid himself off rather than terminate several more junior attorneys.
This shameful state of affairs is unworthy of our great nation, its proud history and our finest legal traditions. In purely fiscal terms, the cuts imposed by sequestration defy common sense because they will end up costing taxpayers much more than they save. The right to counsel is guaranteed under the Constitution. On the federal level, this means that every defendant who is unable to afford a lawyer must be represented by either a federal public defender or an appointed attorney from a panel of private lawyers. While federal defender offices are staffed by experienced, dedicated professionals operating in a framework that has proved both effective and efficient, panel attorneys often possess less experience and incur significantly higher fees. An increased reliance on panel attorneys may result in less desirable outcomes as well as significantly higher costs.
Five decades after the Supreme Court affirmed that adequate legal representation is a basic right, sequestration is undermining our ability to realize this fundamental promise. The moral and societal costs of inadequate representation are too great to measure. Only Congress has the ability to restore the funding that federal defenders need to ensure that justice can be done. It is past time for our elected representatives to act.
By: Eric Holder, Jr., Attorney General Of The United States, The Washington Post, August 22, 2013
“Motivated By Discriminatory Intent”: Justice Department Tells Texas It’s Voter Suppression Will Not Stand
In one week last August, federal courts found that Texas’ voter ID law and redistricting maps were discriminatory and violated the Voting Rights Act. The Supreme Court’s recent decision invalidating Section 4 of the VRA, which previously covered Texas, tragically wiped away those rulings. Now the Department of Justice is once again stepping in to fight for voting rights in the Lone Star State.
The DOJ announced today that it is objecting to Texas’ voter ID law under Section 2 of the VRA and will also seek to join a similar lawsuit against the state’s redistricting maps. Last month, DOJ asked a court in Texas to force the state to approve its voting changes with the federal government for a period of time under another provision of the VRA, Section 3, based on a finding of intentional discrimination in the restricting case. The federal courts found last year that Texas’ new maps for Congress and the state house were “enacted with discriminatory purpose.”
A federal court blocked Texas’ voter ID law last year for very good reason. As I wrote last August, here are the facts of the case:
The state admitted that between 603,892 to 795,955 registered in voters in Texas lacked government-issued photo ID, with Hispanic voters between 46.5 percent to 120 percent more likely than whites to not have the new voter ID; to obtain one of the five government-issued IDs now needed to vote, voters must first pay for underlying documents to confirm their identity, the cheapest option being a birth certificate for $22 (otherwise known as a “poll tax”); Texas has DMV offices in only eighty-one of 254 counties in the state, with some voters needing to travel up to 250 miles to obtain a new voter ID. Counties with a significant Hispanic population are less likely to have a DMV office, while Hispanic residents in such counties are twice as likely as whites to not have the new voter ID (Hispanics in Texas are also twice as likely as whites to not have a car).
The court objected to the law specifically because “(1) a substantial subgroup of Texas voters, many of whom are African American or Hispanic, lack photo ID; (2) the burdens associated with obtaining ID will weigh most heavily on the poor; and (3) racial minorities in Texas are disproportionately likely to live in poverty.” Along with North Carolina, Texas has the harshest and most absurd voter ID law in the nation. Case in point: you can use a gun permit to vote but not a student ID. The state is also doing nothing to encourage people to get the supposedly “free” ID; a month after the Supreme Court’s ruling, only six people in Texas had obtained one, even though 600,000 to 800,000 registered voters lack the government-issued ID.
In its new court filing, DOJ contends that the voter ID law “will disproportionately impact Hispanic and African-American voters in the State of Texas, resulting in their being disenfranchised at a greater rate than Anglo voters.” The department says the law, known as SB 14, was “motivated by discriminatory intent” and “will have a discriminatory result.”
From the brief:
While the stated purpose of SB 14 was to ensure the integrity of elections, voter ID proponents cited virtually no evidence during or after enactment of SB 14 that in-person voter impersonation—the only form of election fraud addressed by the identification requirements of SB 14—was a serious problem or that the State’s then-existing identification procedures had failed to prevent in-person voter impersonation.
The State knew or should have known that Hispanic and African-American Texans disproportionately lack the forms of photo ID required by SB 14, as compared to their Anglo counterparts.
Nevertheless, supporters of voter ID in the Texas legislature made little to no effort to analyze the potential effect of photo ID requirements on minority voters and rejected amendments requiring investigation of the effect of SB 14.
The long history of voting discrimination in Texas makes the new law all-the-more worrisome. DOJ writes: “The State of Texas’s history of official racial discrimination against its African-American and Hispanic citizens is longstanding and well-documented. Federal intervention has been necessary to eliminate numerous devices intentionally used to restrict minority voting in Texas.” Texas has lost more Section 5 enforcement suits than any other state.
It will be much harder for the Department of Justice to block Texas’ voting changes under Section 2 of the VRA than it would have been under Section 5, but they’re smart to try. (See my piece on why Section 2 is no replacement for Section 5.) “We will not allow the Supreme Court’s recent decision to be interpreted as open season for states to pursue measures that suppress voting rights,” Attorney General Eric Holder said today. “This represents the Department’s latest action to protect voting rights, but it will not be our last.”
Since the Court’s decision, seven Southern states have rushed to pass or implement onerous new voting restrictions. North Carolina recently adopted the country’s worst voter suppression law (which voting rights groups are also challenging under Section 2), with local election boards escalating attacks on student voting hours after its passage by shutting down polling places at college campuses and preventing students from running for office. Since Holder has vowed more action to protect voting rights, there’s a very good chance that the Tarheel State will be next on his list.
By: Ari Berman, The Nation, August 22, 2013
“Orange Is The New Black”: It’s Time To End The Needless Social Harm Our Justice System Inflicts
America is facing up to one of its greatest failures: our grossly unfair criminal justice system.
In and out of the public eye, corrections officials, legislatures and law enforcement authorities have been inching toward reforming it.
Attorney General Eric Holder announced a historic about-face on how low-level, nonviolent drug crimes will be prosecuted; in particular, he instructed U.S. attorneys to avoid bringing charges against certain offenders that would trigger severe federal mandatory sentencing. If allowed to go forward, Holder’s gambit could lead to significant reductions in the number of people locked up in America.
The U.S. holds the distinction of the world’s highest incarceration rate. One in every 100 adults — 2.3 million people — was behind bars in 2010, according to the Pew Center on the States.
Holder’s announcement is the obvious follow-up to the 2010 Fair Sentencing Act. The legislation sought to correct the inequities between the sentencing of people caught with crack cocaine and those convicted of crimes related to powdered coke. Five grams of crack, the form of cocaine more likely to be in the possession of African-Americans, carried the same obligatory sentence as that triggered by 500 grams of powder, the preference for many white people.
An ongoing issue is whether the legislation will apply retroactively, something that both Congress and the courts are weighing.
A July report by the Pew Charitable Trusts found that about half the states have taken significant steps in recent years to reduce the size of their prison populations, thereby cutting costs to taxpayers. Reforms such as alternative sentencing and lower mandatory sentences for some crimes all played a role.
Also this summer, the Federal Communications Commission voted to lower interstate prison phone rates. This change helps the families of more than 2 million inmates who often paid predatory rates when their incarcerated loved ones called them. The decision was more than 10 years in the making and will greatly affect the ability of families to stay in touch, crucial for reducing recidivism.
While these changes are encouraging, reshaping America’s prisons and our punitive mentality will not be easy. What is the human cost of our penchant for revenge, our emphasis on punishment without much attention to the equal need for rehabilitation? Just consider the newest Muppet introduced by the Sesame Workshop. “Alex,” whose story appears online only, is a character whose father is serving time.
Alex was introduced for a good reason. One in 28 children has a parent who is imprisoned. More than half of America’s prisoners are mothers and fathers with a child under the age of 18. And two-thirds of those parents are incarcerated for nonviolent offenses.
Consider that deeply. It’s the equivalent of nearly one child from every elementary school classroom in America. Twenty-five years ago, the number was 1 in 125.
Are people really that much more criminally minded than in the past? Or did America decide that locking people up would be more expedient than providing addiction treatment and mental health care and increasing the supervision of those on parole?
It’s not a tough question. And after years of policy that financed the war on drugs, more thoughtful considerations are finally gaining traction.
The fact that violent crime rates are at near generational lows helps. Cutting some sentences, providing more support for low-level offenders, can save on the high cost of prisons for taxpayers, without compromising public safety.
And don’t tell me that this is being “soft on crime.” Those involved in violent and repeat offenses will still have the book thrown at them.
The more the public learns about how mandatory sentencing needlessly degrades nonviolent drug offenders and harms their families, the sooner our legislators will restore sanity and mercy to the criminal justice system. So bravo to Netflix for creating the new series Orange is the New Black. Yes, it’s another “insider’s view” of life behind bars, a genre we can’t get enough of. It conveys the experiences of an educated, well-to-do woman used as a pawn in the drug trade, based on a memoir.
Kudos also to Piper Kerman, the memoir’s author and the one who experienced 11 months in a low-security women’s prison for a drug crime, who is also speaking out about the children of inmates.
She’s using her newfound celebrity to promote alternative, in-home sentencing for some mothers with small children. As she wrote in The New York Times, this program would not only save money but also “rehabilitate women … (and) keep families together — which we know is an effective way to reduce crime and to stop a cycle that can condemn entire families to the penal system.”
And that, more than ever, needs to be our priority.
By: Mary Sanchez, The National Memo, August 20, 2013
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