We know that if someone walked into a Citibank or Chase establishment with a face mask or a gun, pulled out a note stating that the teller should fork over, say, $547,000 and walked out of the place in broad daylight, he'd get 36 years in a federal prison. Apparently, Chicago's own Joseph Banks, who during his trial reported that he was a "humble, anti-gun" bank robber, should have said that he was a FOREX trader. That would have entitled him to keep 1/2 the money he stole just so long as he agreed to go three years without trying to do any other criminal activity. Mr. Banks robbed a Chase Bank, a Citibank, and the First Commercial Bank in a string of robberies dating from August 2007 to August 2008. He's a menace to society according to U.S. District Judge Rebecca Pallmeyer. Maybe he should have dropped the humble bit and gone for the, "I'm a bank CEO," defense. Then, his death-defying escape from the Metropolitan Correctional Center would have given him the opportunity to add "performance acrobatics" to his Linked-In executive profile.
Barclays CEO Anthony Jenkins and Citi's CEO Michael Corbat "deeply regret" behavior that did not represent the banks' values. UBS CEO Sergio Ermotti, JPMorgan Chase's illustrious Jamie Dimon and RBS Chairman Philip Hampton threw rogue employees under the bus while stating their commitment to controls and compliance. FOREX traders brazenly used terms like "Bandits", "Mafia", and "Cartel" to fix foreign exchange rates to rob their clients of billions of dollars. JPMorgan's Dimon went as far as to say that the bank's felony was "principally attributable to a single trader," in a refrain echoing his derivatives buck-passing in 2012 with the London Whale. According to the headline grabbing U.S. Attorney General Loretta Lynch, Citi's $925 million fine will be, "the largest single fine ever imposed for a violation of the Sherman Act."
She'd barely completed crooning over the record setting fines levied against the banks when she went on to state the following hollow warning:
"the Department of Justice, under my watch, will not hesitate to file criminal charges for financial institutions that reoffend."
Oooohhh! I can see the bank executives shaking in their boots with such an ominous warning. "If you break the law," she is saying, "you'll have to share about 1/2 of the revenue from your illegal activity with the same institution that you manipulate on a regular basis and which uses public funds to bail you out in your wanton mismanagement." Oh and before you get all emotional about the "record" fines that the banks are paying (a jaw-dropping $5.7 billion), let's remember that Citi received $45 billion in equity, $300 billion in government guarantees, and nearly $2 trillion in loans from the Federal Reserve as a reward for bringing the global markets to their knees in 2008. So, Loretta, forgive me for being entirely unimpressed with your crowning inaugural achievement - and confirming that your justice department, just like Eric's, is for sale. But the public shouldn't fear. Both felon banks in the U.S. were put on a 3-year probation during which they are to "cease all criminal activity" for the period. Whew! That's a relief. Right? Not so fast! They've not been able to stay clean for half that period since December 2007 so a three year non-criminal run would be unprecedented.
I'm not sure which disappointed me more: the corporate felony admission or the fact that the media was impressed (along with the pseudo-activist public) with the penalty without ever reporting on the magnitude of the crime. If the Federal Justice system used Mr. Bank's crime as a sentencing guideline, the 5 bank CEOs would be looking at a 355,393 year prison term. Heck, I'm a merciful guy - let's let them all serve a cumulative concurrent sentence and have them go away for 71,078 years apiece. Obviously, this would be ludicrous, right? No one could serve a 71,000 year sentence. But it used to be the case that you couldn't commit a crime when the numbers you were stealing were measured in the billions either.
But in the longer view, what is most troubling is what both the banks' leaders anemic contrition and the faux justice charade mask. The concept of a bank represented an innovation in society in which a trusted agent would hold assets for safe-keeping and, based on the public trust, play a vital role in the circulation of money so that it served a utilitarian function in the economy. When we see the current state of affairs, what we see is not the behavior of a bank. Rather, we see organized crime which seeks to rob the public of its money under a government sanctioned racket in which the government is fully complicit. And why would the government be willing to go along with this? For the simple reason that they are a part of the bank's business beholden to the felons for their own public delusion. Take away the complicity of the banks and the manipulated markets and we'd find out that none of the foundation of our current economic system works on its own. It requires criminal acts to prop up the illusion.
And as long as We The People decide that the ultimate scorecard in life is the dollars we think we control (now, all of which are merely digital records which could be expunged by anyone in an instant), we'll feign disgust and go on using the exact same system that we know is parasitically extracting from us that which we think we own. Capital One had a successful ad campaign, "What's in your wallet?", which cost them a reported $285 million to turn into an iconic message. It's time this question takes on a whole new meaning. Look at your credit cards, your car payments, your mortgage, your student loans and see if you're doing business with a felon. And if you are, ask yourself if that's the kind of world in which you want to live. If not: Change IT!