President Frankenstein

Christmas is just days away. It’s a time for relaxing with family, enjoying some time away from work, and focusing on what’s positive in our lives. There’s no better time of year to look for the good inside any and everyone.

I’ve purposely avoided writing about the presidential race so far, preferring to let it settle a bit. Candidates come and go, rise and fall. It takes some time to get to know them and see them for who and what they really are. I think I’ve watched enough debates, read enough news articles, and listened to enough opinions, both “expert” and layman, to have a pretty good feel for those politicians still standing as we approach the first major milestone in the race, the January 3 Iowa Caucus. As usual, I’m not crazy about any of them. They are politicians after all. Each and every one of them has some flaws, both personal and issue-related, that I don’t like. But as I said, it’s Christmas time. A time to focus on the positive, not the negative. So with that in mind, I give you my own light-hearted look at the perfect candidate – a combination of the best qualities in each of the men and women vying for your vote.

Barack Obama – Always cool, always well spoken and calm under pressure. If words always equaled action, this guy wouldn’t still be under 50% approval ratings. As it stands of course, actions speak a lot louder than words. You’ve got to give him bonus points for knocking off Bin Laden though. I only wish he’d get us out of that God-forsaken land now that the deed is done.

Mitt Romney – Sure, he follows a religion only slightly less kooky than Scientology and he’s done so much political flip-flopping no one is sure what he really stands for, but when was the last time we had a legitimate presidential candidate that looked so… presidential? The height, the hair, the teeth, the physique. At least the man looks the part.

Ron Paul – OK, he’s 76 years old and doesn’t support the banking regulations I believe are one of this country’s biggest needs, but for anyone that wants a straight talking leader that’s serious about reducing our debt, reducing the size of our government, increasing personal liberties, and stopping the massive flow of American money into foreign lands, Ron is your guy.

Newt Gingrich – Yes, Newt is only a half-step up the personal integrity ladder from John Edwards, but there’s something to be said for experience and Newt has more of it than any other person in the race. We’re all aware of how little gets accomplished when Congress and the President are on opposite sides of an issue. If anyone can work through the labyrinth that is Congressional leverage, it’s Newt.

Rick Perry – This year’s version of George W. Like our former president, he’s a hard-headed Texan with more balls than sense, but there’s something to be said for a man that stakes his ground and sticks to his guns. You might not like what he stands for, but at least he doesn’t pretend he’s something he’s not.

Michele Bachmann – She and her husband apparently believe you can pray your way out of being gay and she tends to leave a disconcerting Sarah Palin-like aftertaste, but she’s anti-big government and wants to cut both taxes and spending so she can’t be all bad.

Rick Santorum – Virtually unknown outside his home state of Pennsylvania, where he lost his last Senate race by 17%, Rick hasn’t really improved his chances with lackluster debate performances. Nevertheless, he’s a staunch conservative with a strong anti-abortion record so if that’s your hot button issue, you might want to get to know more about him.

John Huntsman – Like Romney, Huntsman is a Mormon and considered too liberal by many of the more conservative members of the Republican party. He’s well spoken, has a solid record of reducing taxes during his one term as the governor of Utah, and has valuable foreign policy experience thanks to his term as ambassador to China under Obama before leaving that position to run against him in the current election.

Gary Johnson – Gary who? I know, many of you probably haven’t heard much if anything about this former governor of New Mexico, but he’s officially running for the Republican nomination and like Ron Paul, is really a Libertarian in disguise. He did an excellent job of cutting spending during his two terms as governor and advocated legalization of marijuana as an alternate approach to fighting the Mexican drug cartels. Due to his lack of national recognition and what appears to be a disorganized campaign, he’s only appeared alongside his fellow candidates in two of the debates so far. It is widely believed he will announce his departure from the Republican race in a scheduled December 28 press conference and run instead as a Libertarian candidate.

So there you have it, something nice about every one of our potential presidents. Sadly, we can’t combine those aspects into one candidate, but hopefully whoever does get elected will do more for 99% of us than what we’ve seen from our current president in the past three years. That would make for a Merry Christmas indeed.

His Name is Mudd

In 2010, testifying before the Financial Crisis Inquiry Commission, former Fannie Mae CEO Daniel Mudd stated "I accept responsibility for everything that happened on my watch." He was held accountable today when the SEC filed suit against him along with former Freddie Mac CEO Richard Syron and six other former top executives at the two mortgage companies for civil fraud.

The son of former TV news anchor Roger Mudd, and a Marine decorated for his combat service in Beirut, Mudd ran Fannie Mae from 2005 to 2008 during the height of the US mortgage crisis.

Mudd is accused of substantially understating Fannie’s investments in subprime mortgages, falsely inflating the value of their portfolio and therefore misleading investors. Fannie and Freddie have already cost taxpayers over $150 million in bailouts and estimates suggest that amount may more than double before the companies are again solvent. In 2007, Fannie claimed that subprime mortgages represented less than “2% of our book” and that the firm had "basically no subprime exposure" however the SEC claims Fannie had 11% of its investments in subprime mortgages for a total of $43B.

In response to the suit, Mudd stated “The government reviewed and approved the company’s disclosures during my tenure, and through the present. Now it appears that the government has negotiated a deal to hold the government, and government-appointed executives who have signed the same disclosures since my departure, blameless -- so that it can sue individuals it fired years ago.”

He has a point. No matter how much his deeds may mirror his name, it is highly unlikely that those that came after him or the members of our government that supported Fannie are blameless. Fannie and Freddie were created by Congress in order to encourage homeownership and make getting a home loan easier. Home ownership means spending money and spending money stimulates our economy. It is probable that misleading Wall Street about the nature of Fannie and Freddie’s portfolio risk was deemed the lesser evil when faced with the choice of admitting the industry’s fragile state and then losing investor confidence. In the end, of course, that fragility came to light anyway and the subsequent losses were that much worse.

For those of us that don’t run the country’s most powerful banks or hold positions of governmental authority, lying about portfolios in order to falsely gain investment dollars is typically punished with lengthy prison sentences and personal financial ruin. As an example, three days ago, Rick Young was sentenced to 25 years in prison and ordered to pay $13.2M in restitution to the investors in his fraudulent securities brokerage, Global One Group. Compared to the Wall Street titans behind Bank of America, Citigroup, AIG, Countrywide, Goldman Sachs, and others, the scope of Young’s crime was minor. While filing civil suit against men like Daniel Mudd is a good first step toward punishing those that were the culprits behind the TARP debacle, it is only a small one. These men need to face the same prison time and fines that any financial conman would, regardless of their political connections or impressive resumes. Hopefully Mudd is just one of many that will wind up before a judge in the next year or two and if our leaders are serious about preventing such crimes in the future, those men will face more than just a loss of reputation and a portion of the ill-gotten wealth they stole from the public. They'll find themselves behind bars. Only then will justice truly be done.

The Face of Justice

With all the corruption, political gamesmanship, and greed in our country today, it’s easy to believe there’s no longer such a thing as justice within the ranks of our government. I often find myself thinking this way, but recently learned of a judge that offers some hope. His name is Jed Rakoff and he’s a U.S. District Judge in the Southern District of New York.

Rakoff was nominated to the bench in 1995 by President Clinton and soon started making a name for himself as an outspoken judge that wasn’t afraid to take an unpopular stand when he felt it was right. Presiding over several large cases, a few of note include:

In 2004 he weighed in favor of the Associated Press in their suit against the U.S. Department of Defense for access to the names of and charges against the inmates at Guantanamo Bay under the Freedom of Information Act. The U.S. tried to argue that it was in the prisoners’ best interests if their identities remained a secret.

In 2009, Rakoff rejected a $33M settlement between Bank of America and the Security and Exchange Commission concerning BOA’s non-disclosed hand-out of billions of dollars in bonuses to Merrill Lynch bankers in the midst of their merger just before claiming the $27.6B annual loss that wound up leading BOA to accepting their share of the TARP bailout that I wrote about in my past posts The Bonus Culture and Wall Street Fraud. Rakoff forced them to a new trial in 2010 where he ultimately approved a $150M settlement for the case but did so only reluctantly, calling it "half-baked justice at best."

Just last month, Rakoff was the judge that handed down a $92.2M penalty to Raj Rajaratnam for insider trading. You might remember this hedge fund thief from my past post, Who is the “1%”?

And finally, Rakoff just rejected a $285M settlement between Citigroup and the SEC last week concerning betting against mortgage investments while at the same time, selling them to their investors, profiting $160M while their investors lost millions. He’s set a new trial date for July 2012 for that one. He said a settlement might undermine investors’ efforts to reclaim their losses since it allowed Citigroup to avoid admitting any liability.

As part of that decision, Rakoff stated "In much of the world, propaganda reigns, and truth is confined to secretive, fearful whispers. Even in our nation, apologists for suppressing or obscuring the truth may always be found. But the SEC, of all agencies, has a duty, inherent in its statutory mission, to see that the truth emerges; and if it fails to do so, this court must not, in the name of deference or convenience, grant judicial enforcement to the agency's contrivances."

That is the sort of opinion we need more of from our justice department.

After discovering Judge Rakoff, it didn’t take me long to wonder if he might not be a strong candidate for our next opening on the Supreme Court. Alas, Rakoff has taken at least one unpopular stand that I cannot agree with and that at least for me, would preclude his consideration for a spot on our highest court. In 2002, he declared the death penalty to be unconstitutional. His decision was reversed shortly thereafter by the Court of Appeals but it suggests perhaps his current spot in NY is in fact, the best one for him. I can only hope he continues in that position for years to come, doing his part to bring some measure of justice to those on Wall Street that would rob others in order to line their own pockets.

Occupy the Debate

With Herman Cain’s announcement Saturday, we’re now down to seven Republicans vying for the opportunity to challenge Barack Obama for our top office. As much as this crop of presidential candidates seems to prefer attacking our current president’s record, attacking one another’s records, or talking about issues such as not raising taxes or repealing the health care bill, none of those things is going to turn our country around. At best, a focus on those issues will maintain the status quo. So what sort of questions should we be asking these politicians in order to determine if any of them have any real solutions or if any would be a more capable Commander in Chief than the one we have now? If I controlled the next debate, my questions would look something like this.

1. The U.S. unemployment rate has not been below 5% since 2008. What steps would you take as president to reach that benchmark in your first term and specifically how would you boost employment in the manufacturing and customer service segments that have steadily migrated offshore in the past decade?
2. Congress is currently debating several bills which would provide a tax break to American corporations that repatriate profits in the hopes it will encourage job creation here in the United States. Studies have shown that the last time this was attempted in 2004, corporations simply pocketed the profits and no rise in domestic job creation was realized. Do you support any of these bills and if so, which one and why do you think its provisions will drive a different result?
3. The American deficit has now reached $15 trillion. As president, would you support a balanced budget amendment and what specific steps would you recommend for reducing government spending and by what amount or percentage? For instance, would you cut Social Security, Medicare, or Medicaid?
4. Banks judged “too big to fail” nearly destroyed our economy between 2008 and 2009, resulting in a taxpayer funded bail-out of “troubled assets” totaling over $300B. HR 1489, the Return to Prudent Banking Act of 2011, is aimed at preventing such a catastrophe from reoccurring by reviving the separation between commercial and investment banks that was first introduced by the Glass-Steagall Act in 1933. As president, would you support this act and if not, why not?
5. Despite the current economic crisis, the U.S. is spending hundreds of billions of dollars supporting Middle Eastern countries such as Iraq, Pakistan, and Afghanistan.  As president, would you dramatically reduce these spending levels and if so, by how much? If not, can you explain to the American public why their taxes are better spent on foreign citizens rather than our own?
6. The most optimistic forecasts suggest the world’s oil reserves will be depleted within the next 50 years. As president, what will you do specifically to develop alternative fuel sources for our country’s transportation and energy needs?
7. In the past 20 years, American middle class incomes have remained stagnant while the cost of a college education has risen by 130%. As president, how would you turn this trend around?
8. The flow of illegal drugs from our southern border has reached epidemic proportions and brought increased violence with it. As president, what measures would you take to stem this tide? Specifically, would you consider stationing troops along the border, building a fence across the entire border, or legalizing marijuana?

Fair Elections

One of my previous posts, The Power of Money, focused on Congressional term limits and how they could offer some relief from the political influence of lobbyist groups. An even larger impact could be made by turning to a publically funded election process, banning large political contributions entirely.

If politicians continue to be forced to pursue lobbyist and corporate dollars in order to fund their re-election, then we’ll never have elected officials that are truly beholden to the people. Like the rest of us, they answer to who pays the bills. As representatives of the public, it stands to reason that the public should be our officials’ sole financiers instead of these special interest groups.

That is not to say that citizens shouldn’t be allowed to donate money to the candidate(s) of their choosing. They should. However those donations should be limited and they must truly be individual.

The Fair Elections Now Act was reintroduced this year in both the House and the Senate. While it doesn’t go to the extreme of mandatory public-only funding for federal elections that I am suggesting, it is an excellent step in that direction. It currently has 78 co-sponsors in the House and 13 in the Senate. All but two of those supporters are Democrats. It’s time we pressured both political parties to adopt this bill and get it pushed though in order to start driving the power back into the hands of the public and away from the lobbyists that currently compromise our elected officials via their financial clout.

You can learn more about this bill at http://fairelectionsnow.org/about-bill. You can also learn how to offer your own support via the Take Action tab on that site.

If you’re not yet convinced, here’s a pair of examples for you from the great state of Texas.

John Cornyn is a Republican Senator that holds several committee assignments and has been in office since 2002. Who are the top five industries that have combined to donate over $4M to his campaigns since 2007 including his top contributor, Exxon Mobile?

Law Firms, Oil & Gas, Retired, Health Professionals, and Real Estate

What is his voting record on energy related bills?

Voted YES on barring EPA from regulating greenhouse gases. (Apr 2011)

Open the Outer Continental Shelf for oil & gas leasing. (Jun 2008)

Voted NO on removing oil & gas exploration subsidies. (Jun 2007)

Voted NO on including oil & gas smokestacks in mercury regulations. (Sep 2005)

Voted NO on reducing oil usage by 40% by 2025 (instead of 5%). (Jun 2005)

Voted NO on banning drilling in the Arctic National Wildlife Refuge. (Mar 2005)

Voted YES on Bush Administration Energy Policy. (Jul 2003)

Voted NO on targeting 100,000 hydrogen-powered vehicles by 2010. (Jun 2003)

Drill in Alaska; oppose global warming treaties. (Jun 2002) 

Randy Neugebauer is a Republican House Representative that sits on the Financial Services Committee and has been in office since 2003. Who are the top five industries that have combined to contribute almost $250K to his current campaign war chest?

Insurance, Commercial Banks, Finance/Credit Companies, Securities & Investments, and Real Estate

Guess which member of Congress has more money invested in Goldman Sachs than any other?

Randy Neugebauer with $550K.

What is his voting record on banking and corporate related bills?

Voted YES on terminating the Home Affordable mortgage Program. (Mar 2011)

Voted NO on letting shareholders vote on executive compensation. (Jul 2009)

Voted NO on modifying bankruptcy rules to avoid mortgage foreclosures. (Mar 2009)

Voted NO on regulating the subprime mortgage industry. (Nov 2007)

Voted NO on allowing stockholder voting on executive compensation. (Apr 2007)

Voted NO on protecting whistleblowers from employer recrimination. (Mar 2007)

Voted YES on restricting bankruptcy rules. (Jan 2004)

Would these two politicians have voted differently if they hadn’t received those financial contributions? We have no way of knowing for sure. But I’ll bet I’m not the only one that wonders.

Change the Game

How many House Representatives from your state can you name and what major bills have they played a significant role in proposing or pushing through?

That’s what I thought.

The House of Representatives has become a bloated organization of self-serving bureaucrats that have gerrymandered themselves into near permanent positions of power at $174,000 a year with little to nothing holding them accountable for performance. Bipartisan bickering and indecision have left them virtually incapable of fulfilling their duty to serve the American public. Last night, we received our most recent example. The House failed to pass the balanced budget amendment. We’re a country that’s 15 trillion dollars in debt, partially owned by a foreign power bent on stealing our technology and overcoming our position as the most powerful country in the world, and yet we can’t agree to stop spending more than we earn. Politicians will tell you the reason for this is a desire to save programs that serve the people such as Social Security and Medicaid, but the real reason is much simpler. A balanced budget reduces the power of Congress by limiting what they can spend. The last thing any politician is going to voluntarily vote for is a reduction in their own power.

Our country is much like a corporation, an industry leader suddenly laden with debt and facing competing firms eager to gobble up its market share. What is one of the first things a company in that position must do? It cuts the fat. It reduces overhead, it increases efficiency, and it removes the roadblocks that have caused its stagnation. How does the United States do that? We abolish the House of Representatives. Removing the 435 members of the House would result in a leaner government that is better equipped and more easily held accountable for making the decisions we need to turn our country around.

Our government was built on a system of checks and balances with three branches - Executive, Legislative, and Judicial - each tasked with ensuring the other doesn’t hold too much power. That wouldn’t change. The Senate would remain as our Legislative branch. The House was built to ensure the population is properly served by giving those areas with a larger number of citizens, a larger share of the 435 spots. That wouldn’t need to change either.

Our leaner Congress would include only a Senate, with each state receiving at least two and sometimes three representatives, based on population. Our country has a population of over 312 million. For the sake of easy math, let’s call it 300 million. With 50 states, that means each state would have 6 million people if the population were evenly spread across the country. Since it’s not and we want citizens to be fairly represented, we make a simple rule. Any state with less than the average gets two senators, any state with more than the average gets three senators. As of 2010, that would mean 17 states would have three senators and the remaining 33 would have two, giving us a total Senate of 117. Every decade, we’d adjust accordingly based on the new census, adding new or removing old positions in the next upcoming election cycle.

A Legislative branch consisting of one chamber made up of 117 members could get things done.  It would only take one majority vote of 59 to pass a bill rather than a majority vote of 218 in the House followed by another majority vote of 51 in the current Senate. It would also be easier for voters to track the performance of their elected officials. You’d only have two or three of them. If they don’t have a record of voting for the bills you like… toss them out.

This idea probably sounds extreme to some, but take a few minutes to question why. Does the House truly serve your needs as a citizen of this country or are your taxes serving the whims of those 435 politicians?

The Power of Money

In 1951, the 22^nd Amendment to the Constitution was ratified, setting a two-term limit on the office of President of the United States. Despite widespread public support of similar term limits for Congress, dating all the way back to the American Revolution, Congress remains unlimited. Many members essentially serve in lifetime positions.

While many of those members were and are no doubt dedicated to serving the citizens of this country, it cannot be argued that money doesn’t influence decision making. If a particular interest group, company, or individual provides a substantial portion of the funds that drive a politician’s campaign, that politician is going to face certain pressures to vote in favor of laws that benefit that group, company, or individual. Allowing members of Congress to serve decades only further supports the influence of those contributions. Congressmen serve more years, making those campaign contributions good long-term investments for the parties that want to influence that congressman.

While one cannot draw a one-to-one correlation of time spent in office to the amount of campaign contributions received, there is definitely a noticeable trend. I’ve listed 10 members of Congress that have been in office at least 19 years and the amount of money they’ve received from just their top two interest groups between 2009 and 2011. You’ll recognize a trend in those groups too – Investment Banking, Real Estate, Law Firms, and Insurance – the very same groups that seem to hold sway over how our economy is run.

On August 10, Matt Caldwell, a Florida State House Representative, filed HM 83 calling for a Constitutional Amendment for Congressional term limits. On October 25, Joe Negron, a Florida State Senator, filed SM 672 calling for the same. I urge every reader to write to their Congressman and ask them to support similar efforts. You can find out how at http://www.senate.gov/ by using the Find Your Senators drop-down menu in the upper right-hand corner or http://www.house.gov/ and using the Find Your Representative search in the upper right-hand corner.

Congress is not going to vote to limit their own time in office unless we, their constituents, demand it.

Here is my list of 10:

John McCain (in office since 1986) – Republican Senator from Arizona

Top two contributing interest groups are Law Firms and Real Estate, accounting for over $19M in contributions in the past two years.

Harry Reid (in office since 1986) – Democrat Senator from Nevada

Top two contributing interest groups are Law Firms and Securities/Investment, accounting for almost $5M in contributions in the past two years.

Barbara Boxer (in office since 1992) –Democrat Senator from California

Top two contributing interest groups are Law Firms and Women’s Issues, accounting for almost $3.2M in contributions in the past two years.

Joe Lieberman (in office since 1988) – Independent Senator from Connecticut

Top two contributing interest groups are Securities/Investment and Real Estate, accounting for over $3M in contributions in the past two years.

Mitch McConnell (in office since 1984) – Republican Senator from Kentucky

Top two contributing interest groups are Securities/Investment and Law Firms, accounting for over $2.2M in contributions in the past two years.

John Boehner (in office since 1990) – Current Republican Speaker of the House, 8^th District of Ohio House Representative

Top two contributing interest groups are Securities/Investment and Insurance, accounting for over $1.2M in contributions in the past two years.

Max Baucus (in office since 1977) – Democrat Senator from Montana

Top two contributing interest groups are Securities/Investment and Law Firms, accounting for over $1.2M in contributions in the past two years.

Orrin Hatch (in office since 1976) – Republican Senator from Utah

Top two contributing interest groups are Pharmaceuticals and Law Firms, accounting for almost $1.2M in contributions in the past two years.

Dianne Feinstein (in office since 1991) – Democrat Senator from California

Top two contributing interest groups are Law Firms and Real Estate, accounting for over $1M in contributions in the past two years.

John Jay Rockefeller (in office since 1984) – Democrat Senator from West Virginia

Top two contributing interest groups are Law Firms and Securities/Investment, accounting for almost $1M in contributions in the past two years.

The Bonus Culture

One of the most egregious Wall Street practices that should have been stopped during the bailout was that of the bonus culture. Investment bankers made ridiculously large bonuses regardless of whether they or their firm actually made their clients any money. I’m not suggesting this practice should be illegal for any business that lives or dies by its own bottom line. America is the home of free enterprise. If a company’s board of directors wants to throw good money away on poor performance, one can only hope it spells that company’s eventual doom. What I am suggesting is that any company that accepted taxpayer dollars to bail it out from its own greed and stupidity should be barred from giving out these types of bonuses. Taxpayers can barely pay their own bills while the government is handing over their income to these white collar thieves to ensure they remain comfortably coddled in their Manhattan mansions and country clubs.

I’ve already written about John Thain and the $4 billion he gave away to his cronies at Merrill Lynch in bonuses just before his firm was sold to Bank of America in 2009 and led to that bank’s near collapse and subsequent $45 billion bailout. That’s hardly the only example.

In 2010, BOA paid out over $4.4 billion in bonuses to investment banking employees for that 2009 performance that required the bailout loan from taxpayers. While seven top executives at Goldman Sachs refused 2008 bonuses based on receiving $10 billion in TARP bailout funds, it still paid almost that same amount in bonuses to its remaining bankers. Citigroup paid $5.3 billion in bonuses in 2008 and nearly the same amount in 2009 despite receiving $45 billion in TARP money over that same period. Similar stories can be told about the other TARP beneficiaries including AIG, JPMorgan Chase, Wells Fargo, Morgan Stanley, and more.

So why go on about offenses that are now two and three years old?

Earlier this week it was learned that Fannie Mae and Freddie Mac, the giant mortgage companies that have already received over $141 billion in taxpayer aid, gave out over $13 million in 2010 bonuses to ten executives. At the same time, Freddie is reporting a third quarter loss of $4.4 billion and asking for an additional $6 billion loan from the Treasury.

Clearly our government still isn’t listening. We cannot continue to support this greed and ineptitude. If a company performs poorly, it and its executives must suffer the financial consequences.

Just like the rest of us.

That’s how free enterprise works.

Who is the "1%"?

Many of the people I hear arguing against the 99% call our efforts “class warfare” or “socialism”. Let me be clear – anyone demonstrating for the 99% that thinks what we need is wealth redistribution is not part of my platform. What we need is political transparency, laws that support fairness rather than favoritism, and quick justice for those that break these laws.

There are plenty of Americans that fall into the 1% of wealth holders that deserve every penny of their money. Anyone that begrudges hard work, the creation of new and innovative products and services, or the riches those things bring is misguided. Steve Jobs, Bill Gates, Mark Zuckerberg, Mark Cuban, Sergey Brin, and Larry Ellison are examples of what America is supposed to be all about. Like them or not, they earned their power and status.

The men that corrupt our politicians, cheat our financial systems, and bankrupt our country to achieve their wealth, those are the men we should be marching against. Men that manipulate currency instead of manufacture goods. Their mansions are the ones we should be chanting in front of. And they are the men that must pay for their crimes before the 99% are satisfied.

Two days ago, a federal indictment accusing Rajat Gupta of insider trading was unsealed. Gupta was a board member of Goldman Sachs and allegedly passed corporate secrets to his friend and hedge fund founder, Raj Rajaratnam, who then made millions off resulting stock transactions. The FBI caught Gupta on tape doing this.  Rajaratnam was sentenced to 11 years in prison for his theft. Now it’s Gupta’s turn. This is an example of the justice the 99% must demand.

Wall Street Fraud

So who were some of the key figures behind the greed and deception that led to the government bailout of Wall Street and the $700 billion price tag that was hung on American taxpayers in the process and where are they now? Here’s a hint; you won’t find any of them in prison.

John Thain – Former COO of Goldman Sachs, former CEO of the New York Stock Exchange, and the CEO of Merrill Lynch when it was sold to Bank of America on Jan 1, 2009 for over 70% above the market value. That sale led to the near collapse of Bank of America when Merrill Lynch announced a quarterly loss of $21.5 billion just two weeks after the deal was closed and was a key contributor to the government decision to loan the bank $45 billion to keep it afloat. Thain is infamous for paying Merrill Lynch employees over $4 billion in bonuses just prior to that sale and for spending over $1 million renovating his Merrill Lynch office a year prior including a $31,000 toilet and a $1,100 trashcan.  So where is he now? Although threatened with investigation in 2009, Thain was named CEO of CIT Group in early 2010 and remains a free man that no doubt enjoys the hundreds of millions of dollars he “earned” during his time at Merrill Lynch.

Angelo Mozilo – Former CEO of Countrywide Financial until its sale to Bank of America in 2008. Mozilo was the driving force behind the subprime lending trend that allowed U.S. homebuyers to purchase property they generally wouldn’t have been able to afford based on ignoring the buyer’s income and foregoing down payments. It’s estimated Mozilo’s personal income from that business during the housing bubble of 2001-2006 was nearly $500 million. Mozilo was investigated for fraud and during that investigation it was learned that his “VIP loans” program that offered unheard of rates to influential political and banking figures included the CEO of Fannie Mae, Frankin Raines, the son of former Speaker of the House, Nancy Pelosi, and former Senator and chairman of the Banking Committee, Christopher Dodd. Mozilo eventually paid $67.5 million in fines and agreed to a lifetime ban from serving as an officer or director of a public company, but all criminal charges were dropped in early 2011.

Charles “Chuck” Prince – Former CEO of Citigroup before retiring in 2007 due to the huge losses the firm suffered under his leadership as he invested in mortgage backed securities and collateralized default obligations (CDOs). His mismanagement led to a government bailout of $45 billion the following year yet Prince still walked away from the job with $150 million in stock options and salary. When asked by the Financial Crisis Inquiries Commission (FCIC) why he green-lighted such obviously risky investments, he responded “as long as the music is playing, you’ve got to get up and dance. We’re still dancing.” Prince still serves as a consultant for Citigroup even to this day.

Joseph Cassano – Former AIG officer who spearheaded the development and sales of credit default swaps. This new method of “creating wealth” through insuring derivatives without putting up any real collateral netted Cassano $315 million in personal income during his 21 years with the company despite the devastating repercussions to the investment industry and American economy when the bubble burst in 2008. Although threatened with investigation, Cassano has yet to be charged with a crime and is living quite comfortably outside London, England.

Raymond McDaniel – CEO of the credit ratings giant, Moody’s. The massive sales of the subprime mortgage-backed securities that brought down companies like Lehman Brothers and Bear Sterns wouldn’t have possible without the favorable credit ratings given by the big three ratings agencies including Moody’s. Paid for by the fraudulent firms that were selling them, McDaniel and his company provided these ratings despite the obvious risk of subprime defaults and grew their own revenue from $600 million in 2000 to over $2 billion in 2007 as a result. Although questioned by the government’s FCIC, McDaniel retains his position as CEO and his 2010 estimated compensation package was over $9 million.

Dishonorable Mention:

Alan Greenspan – Former chairman of the Federal Reserve

Hank Paulson – Former CEO of Goldman Sachs and Secretary of the Treasury

Deven Sharma – Former President of Standard & Poor’s

Stephen W. Joynt – President and CEO of Fitch Ratings

Christopher Dodd – Former Connecticut Senator and chairman of the Congressional Banking Committee

Phil Gramm – Former Texas Senator and one of the major contributors toward bank deregulation

Maurice “Hank” Greenberg – Former CEO of AIG

My 99% Platform

American news media and politicians are finally beginning to take notice of the Occupy Wall Street effort and the 99% of American people it is meant to stand for. Many are questioning what it is "We are the 99%" want. While I certainly don't speak for the masses, I am a supporter of their cause and have my own version of a platform to right some of the current wrongs in our country that are oppressing the 99% while further enriching the 1%. As such, here are my demands:

1.      Congressional Term Limits: Two six year terms for both Congress and House members. This would allow Congressmen to focus on the job rather than constant campaigning and would limit the lobbyists’ influence.

2.     Campaign Reform: Make it illegal for corporations to make political donations.

3.     Wall Street Reform: Make high-speed trading, credit default swaps, mortgage-backed securities, and investment firm payments to ratings agencies illegal.

4.     Economic Collapse Prosecution: Prosecute the individuals responsible for the economic collapse via their involvement in fraudulent hedge funds, bond ratings, and mortgage-backed securities in both criminal and civil courts.

5.     Tax Reform:  Reform the federal tax code to remove loop holes, simplify the rules, penalize the off-shoring of jobs, and tax corporations based on American revenue rather than investment.

6.     Anti-Monopoly Actions: Launch anti-monopoly proceedings against the major banks, oil, and pharmaceutical companies which have falsely inflated fees and prices on the goods and services the American public must have to survive.

7.     Higher Education Costs: All higher education schools must make their graduation percentages and average first five year post-graduation salaries publically available and no public school of higher education may charge more than their average first five year post-graduation salary for a four-year degree including tuition, room, and board.

8.     Welfare Reform: Deny welfare (including Medicaid and food stamps) to anyone under 65 and non-handicapped and replace it with a federal jobs program that guarantees any American citizen a job and focuses on infrastructure, energy, manufacturing, and environmental protection. Revenue from those products would be used to further fund the program.

9.     Defense Strategy: Remove American combat troops from the Middle East and station them along the Mexican border as a fully-monitored, high security fence is built across the entire border by the federal jobs program. Overseas military action would be limited to training and drones.

10.  Energy Investment: Create additional rebate programs for energy efficient appliances, cars, and solar panels to stimulate their manufacture and sales, while lowering our reliance on fossil fuel.