PRESS RELEASE
‘How Citi Stayed Open’ May Become Senate Hearings Question
Sept. 19, 2016 (EIRNS)—Tuesday’s Senate Banking Committee hearing on Wells Fargo Bank—which was just compelled to admit an astonishing scale of fraud against its depositors and customers—may provide some fireworks for the Glass-Steagall fight. Wells Fargo’s frauds illustrated once again the ravages which the "trading and sales culture" of speculative firms visit on commercial banks’ deposit bases, when the two kinds of financial firms are combined. That is why Glass-Steagall kept them separated.
But beyond Wells Fargo, Sen. Elizabeth Warren and others may bring in the recently revealed referrals for criminal prosecution of top bankers, which were made confidentially by the Financial Crisis Investigation Commission (FCIC) in 2012, and ignored by the FBI and Justice Department of Obama’s AG Eric Holder. Those criminal referrals focussed on a Citibank group including former Treasury Secretary Robert Rubin, and for Citi, CEO Charles Prince and two other Citi senior bankers. As the Wall Street Journal-linked Australiannoted in an editorial Sept. 19,
"Many people still understandably attribute the roots of the crisis to the repeal of Glass-Steagall.... The wave of what might be called casino banking started then, and led to what the FCIC, in its final report, called 'a systemic breakdown in accountability and ethics.' "
Witnesses at the hearing include Wells’s top regulator, U.S. Controller of the Currency Thomas Curry. That could open up Senator Warren’s demand for the FBI’s files on the criminal referrals, showing why they were not pursued by the FBI and DoJ, and why they were ignored by the bank regulators.
FCIC chairman Phil Angelides released a statement Sept. 19 fully supporting Warren’s demand.
"The DOJ has yet to hold a single senior Wall Street executive accountable for the matters referred to the DOJ by the FCIC," Angelides wrote.
"Furthermore, while the DOJ has obtained more than $40 billion in fines from the shareholders of major financial institutions related to the mortgage securities fraud matters referred by the FCIC, it has not named one executive in any civil or criminal action related to the misconduct that led to those fines. How is it possible that banks engaged in such massive misconduct, but no banker was involved? Is it possible that we have witnessed an immaculate corruption?"
Major bank crimes committed since Glass-Steagall disappeared include the creation of huge derivatives contracts which magically make large liabilities disappear from their books at key accounting dates—the way Lehman Brothers and Italy’s Monte dei Paschi Bank each concealed its insolvency. This brings the top regulators into the criminal circle, as they knew that Citibank, for example, was completely insolvent, and accepted these huge lies, causing huge taxpayer bailout loans to insolvent banks.
