Category Archives: White Collar Crime
Holder
Attorney General Holder signed off on a warrant that allowed the FBI to spy on a reporter’s personal email, his phones, and his parents’ phones.
Now Holder says he feels just awful about the whole thing. The president must be upset too. He has ordered the A.G. to investigate himself.
Lied and Died
Federal judge Gladys Kessler last week ordered tobacco companies to admit, on every pack of cigarettes, that they deceived the public and caused death with their product.
Solar Nexus
The president hasn’t had much luck with his plan to raise taxes, increase stimulus, and direct the green economy. This week his problems seemed to converge on the Solyndra scandal.
Walk the Walk
Wall Street wasn’t an innocent bystander but Gretchen Morgenson and Joshua Rosner pin the blame for the financial meltdown on Fannie Mae in their book Reckless Endangerment. They say Fannie head, James Johnson figured out how to monetize the outfit’s government backing.
Under Johnson, an important Democratic operative, Fannie Mae became, Morgenson and Rosner say, “the largest and most powerful financial institution in the world.” Its power derived from the unstated certainty that the government would be ultimately liable for Fannie’s obligations. This assumption and other perquisites were subsidies to Fannie Mae and Freddie Mac worth an estimated $7 billion a year. They retained about a third of this.
Morgenson and Rosner report that in 1998, when Fannie Mae’s lending hit $1 trillion, its top officials began manipulating the company’s results to generate bonuses for themselves. That year Johnson’s $1.9 million bonus brought his compensation to $21 million. In nine years, Johnson received $100 million.
Fannie Mae’s political machine dispensed campaign contributions, gave jobs to friends and relatives of legislators, hired armies of lobbyists (even paying lobbyists not to lobby against it), paid academics who wrote papers validating the homeownership mania, and spread “charitable” contributions to housing advocates across the congressional map.
