Bipartisan Senate report blasts Goldman Sachs role in financial collapse


Written by | The Bellingham Herald | April 14, 2011

From Stark

Bipartisanship is much-discussed but seldom on display in the nation’s capital. Today, we see a significant exception. A U.S. Senate panel has issued a report that accuses Goldman Sachs and other major financial players of self-dealing in the runup to the financial crisis that shook the global economy. Sens. Tom Coburn, R-Okla, and Carl Levin, D-Mich., issued a joint press release on their findings.

The LA Times reports.

You can also get to the full report of more than 600 pages by following the links listed here, on the website of the Senate Permanent Subcommittee on Investigations.

While news accounts of this report tend to focus on Goldman, there is also a lot of unflattering post-mortem on Washington Mutual, the giant mortgage lender that became one of the biggest casualties of the real estate bust. The report underlines WaMu’s risky mortgage lending practices, and the failure of federal regulators to curb those practices, even though people within the bank itself were trying to warn top management about the danger.

Levin  also accused some financial executives of making misleading statements when they testified before the panel. Roger Clemens is awaiting trial on similar charges.

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  1. g.h.kirsch says:
    April 14, 2011 at 10:17 AM

    Hey, aren’t these the same upstanding folks that are helping Bellingham put in the scameras to juice city revenues and skim off a big share for themselves?

  2. AFY says:
    April 14, 2011 at 10:32 AM

    Wow our city council & mayor in bed with Goldman Sachs, who would have thought that possible?

    Will they (Goldman) do to them (our naive leaders) what they been doing to bankin? My advice is for them to be really careful when they roll over.

    AFY!!theheelotsheepdog!!!

  3. Todd2 says:
    April 14, 2011 at 11:45 AM

    Don’t expect law enforcement to come riding onto the scene of these crimes, like Tonto and the Lone Ranger. The New York Times published a scathing article today entitled, In Financial Crisis, No Prosecutions of Top Figures. Here are a few excerpts:

    Leading up to the financial crisis, many officials said in interviews, regulators failed in their crucial duty to compile the information that traditionally has helped build criminal cases. In effect, the same dynamic that helped enable the crisis — weak regulation — also made it harder to pursue fraud in its aftermath.

    “Policies have created an exceptional criminogenic environment. There were no criminal referrals from the regulators. No fraud working groups. No national task force. There has been no effective punishment of the elites here.”

    “When regulators don’t believe in regulation and don’t get what is going on at the companies they oversee, there can be no major white-collar crime prosecutions,” said Henry N. Pontell, professor of criminology, law and society in the School of Social Ecology at the University of California, Irvine. “If they don’t understand what we call collective embezzlement, where people are literally looting their own firms, then it’s impossible to bring cases.”

    Regulators have referred substantially fewer cases to criminal investigators than previously. In 1995, bank regulators referred 1,837 cases to the Justice Department. In 2006, that number had fallen to 75. In the four subsequent years, a period encompassing the worst of the crisis, an average of only 72 a year have been referred for criminal prosecution.

    It appears the Bush Administration gutted the SEC and other regulatory agencies and pulled cops off the beat on Wall Street. For example, the article goes on to highlight instances in which the government pulled investigators from bank fraud cases, directed FBI agents to other areas, or actively turned a blind eye to the wrongdoing and looked the other way.

    The bottom line? It’s almost impossible for the government to investigate bank and mortgage fraud, when the government itself seems complicit in that fraud.

    One might ask, why were these banks and mortgage companies allowed to engage in predatory lending in the first place? Why would our government allow brokers to market dangerous subprime home loans, which everyone knew were unsustainable? Oh that’s right. The free market will protect us from such abuses!

    http://www.nytimes.com/2011/04/14/business/14prosecute.html

  4. lookingforsunshine says:
    April 14, 2011 at 11:51 AM

    Unfortunitly our elected officals bailed some finacial institutions out while letting others fall into their hands making them even bigger. They now OWN US and th world, congress will do nothing about it.

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