Matt Taibbi for Rolling Stone, pulls no punches in describing the bid-rigging conspiracy that saw almost every major bank and finance company on Wall Street participate in the pillage of public bids on municipal bonds. The conspiracy is alleged to have lowered the interest rates that towns earned on infrastructure investments — i.e. schools, hospitals, libraries etc.
The three men on trial for the collective gouging of municipalities were all GE Capital employees. But Taibbi puts the whole mess into context — Wall Street, in its pursuit of increasingly awesome profits has crossed a line into corruption. Not just a few bad apples, but the whole neighbourhood. I’ll let Taibbi run with it:
USA v. Carollo involved classic cartel activity: not just one corrupt bank, but many, all acting in careful concert against the public interest. In the years since the economic crash of 2008, we’ve seen numerous hints that such orchestrated corruption exists. The collapses of Bear Stearns and Lehman Brothers, for instance, both pointed to coordinated attacks by powerful banks and hedge funds determined to speed the demise of those firms. In the bankruptcy of Jefferson County, Alabama, we learned that Goldman Sachs accepted a $3 million bribe from J.P. Morgan Chase to permit Chase to serve as the sole provider of toxic swap deals to the rubes running metropolitan Birmingham – “an open-and-shut case of anti-competitive behavior,” as one former regulator described it.
Moreover the case,
… marks the first time we actually got incontrovertible evidence that Wall Street has moved into this cartel-type brand of criminality. It also offered a disgusting glimpse into the enabling and grossly cynical role played by politicians, who took Super Bowl tickets and bribe-stuffed envelopes to look the other way while gangsters raided the public kitty.
And how did they get caught? They talked on phones that were being recorded not because they were stupid but rather “… the bid rigging was so incredibly common the defendants simply forgot to be ashamed of it.”
The whole piece is a testimony to the rot that has crept into the US financial system. The fascinating bit is … no one seems to really be paying attention.