Will Barack Obama Confront Corporate-Criminal Complex?
By John F. Miglio
Five, ten years from now... they're gonna miss John Gotti.
-- John Gotti
Martin Scorsese captured the transition brilliantly in Casino when he showed the old Mafia-run casinos being torn down and replaced with the new corporate-controlled casinos, a striking metaphor for the death of “family business” in America and the rise of the white collar corporate-criminal complex, which, not coincidentally, supplanted the Mob during the years Ronald Reagan was president.
In fact, by the end of the 1980s, traditional gangsters like John Gotti (known as “The Dapper Don” and “The Teflon Don”-- no relation to Ronald Reagan, “The Teflon President”) were on their way out. Gotti himself was the last of a dying breed, a tough street guy who stood by his word, rewarded his friends, and murdered his enemies. And when he finally got caught and convicted, he received a life sentence at a maximum security prison where he eventually got cancer and died.
In contrast, the white collar corporate criminals of the 1980s had no sense of Old World honor and rarely served more than a few years in cushy minimum security federal prisons known as “Club Feds.” During the same era as Gotti, for example, Michael Milken and Ivan Boesky each served only about two years in minimum security prisons for insider trading.
Over the years, however, this has changed, and some of the white collar crooks in the new millennium have received much stiffer sentences. Jeff Skilling, the former CEO of Enron, received over 24 years in prison, and Dennis Kozlowski, the former CEO of Tyco, is currently serving 8-25 at a tough prison in upstate New York. Too bad Kenny Boy Lay died before he went to the slammer. The stories he could have told about his old pals Bush and Cheney!
This brings us to our current crop of top shelf criminals-- no longer street-smart wise guys carrying guns like Gotti, or even white collar crooks cooking their companies’ books like Skilling, but outright swindlers like Berni Madoff, who blithely cheat individuals out of their life savings.
Unfortunately, the Bernie Madoffs of the world are only the tip of the iceberg. The real problem is not with greedy crooks like Madoff who get caught, but all the rest of the greedy crooks in corporate America and Wall Street who don’t get caught because they use their well-connected lobbyists to pressure and bribe politicians to create laws and tax policies that legalize their fraud and deception. In other words, they don’t have to swindle people overtly like Bernie Madoff. They do it the old-fashioned way-- by greasing palms and negotiating back room deals with Congress.
For example, in 1999 the banking industry paid off the Congress to pass the Gramm-Leach-Blighly Act and repeal the Glass-Steagall Act, first enacted in 1933 to control speculation and prohibit banks from owning other financial institutions that would create conflicts of interest. In fact, the reason Glass-Steagall was signed into law to begin with was because of the trouble banks got into by taking excessive risks that contributed to the Depression of the 1930s.
By the way, the Gramm-Leach-Blighly bill received overwhelming support from both Democrats and Republicans, and of course Bill Clinton, the best friend Wall Street ever had, signed the bill into law and paved the way for the financial scams that precipitated last year’s economic meltdown of the banking system and the sharp decline in the stock market.
After Clinton, Bush Junior reduced government regulation and oversight even more and made things that much easier for his corporate criminal friends to game the system and cheat the American public out of billions with no-bid contracts, closed-door energy deals, and, worst of all, the subprime mortgage and derivatives scams that precipitated the home foreclosure crisis. But here’s the kicker-- the white collar criminals that masterminded these scams during the Bush years have not only gotten away with all the money they made at the expense of American taxpayers, but are the same individuals who are calling the shots today.
And who are these individuals? They’re the real gangsters of America, the ones who make John Gotti look like Sponge Bob Square Pants. They’re the ruthless CEOS in charge of our most powerful corporations, the well-connected Ivy League elitists who run the nation’s largest financial institutions, and the Gordon Gekko-style free market predators who put people out of work and drive them into bankruptcy while they enrich themselves and their friends to the tune of hundreds of billions of dollars. God knows how much loot they’ve already taken out of the country and stashed in bank accounts in Switzerland and the Cayman Island.It should be noted that a lot of the money that helped Obama get elected came from some of these same individuals, including executives at Citigroup, Lehman Brothers, Credit Suisse, and Goldman Sachs (his number one donor). Even worse, the individuals who are now running his recovery plan-- Summers, Geithner, Bernanke-- are all part of the same corporate-criminal complex, or what the Mafia used to call amici de amici (friends of friends).
No doubt President Obama is aware of this paradox. The question is, will he have the integrity and fortitude to stand up to these high-power individuals who helped get him elected? So far, he has called on Congress to pass tough new regulations on financial institutions and corporations, but will they go far enough? And will the penalties be stiff enough to make a difference?