DoJ Clears Goldman Sachs in $1.3T Customer Rip-Off

DoJ Clears Goldman Sachs in $1.3T Customer Rip-Off

• Findings of Senate investigating panel completely ignored

By Pete Papaherakles

The Department of Justice (DoJ) announced it would not seek a criminal indictment against Wall Street giant Goldman Sachs (GS)—even after a Senate investigation found the megabank guilty of profiting from its clients’ losses.

“There is not a viable basis to bring a criminal prosecution with respect to Goldman Sachs or its employees in regard to the allegations set forth in the report,” the DoJ said in a statement.

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The original report was issued by the Senate’s Permanent Subcommittee on Investigations, which found that GS “designed, marketed and sold [collateralized debt obligations, or CDOs,] in ways that created conflicts of interest with the firm’s clients and at times led to the bank’s profiting from the same products that caused substantial losses for its clients.”

Along with the report was a recommendation by Sens. Carl Levin (D-Mich.) and Tom Coburn (R-Okla.) that executives at Goldman Sachs, including Chief Executive Officer Lloyd Blankfein, should be investigated for perjury relating to their sworn testimony to the subcommittee.

The 640-page report was based on a two-year investigation and 56M pages of evidence documenting “rampant fraud and criminality” by the bank, involving the sale of $1.3T in sub-prime mortgage-backed securities known as CDOs beginning in 2006 and culminating with the economic crisis America is experiencing today.

In what Levin called “a snake pit rife with greed, conflicts of interest and wrongdoing,” GS packaged these toxic mortgages in complex CDOs and other securities and sold them to its unsuspecting clients while concealing that they were losing value. GS further defrauded its clients by betting for its own profit that the securities it was recommending would collapse—without telling its customers it was doing so.

Not only has DoJ failed to go after GS, but the Securities and Exchange Commission has also refused to prosecute these Wall Street power brokers. The “vampire squid,” as the investment firm and banking giant is sometimes called, is proving to be above the law, as it is one of the most powerful financial entities on the planet. A key member bank of the Federal Reserve System, which creates our money and lends it to us at interest, it could be said that GS and similar firms are the law. The fact that GS employees were cleared without even a slap on the wrist lends credence to that.

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With over $1M in total donations, GS employees made up the biggest contributors to then-candidate Barack Obama’s 2008 campaign, which might explain in some part their immunity from justice. JPMorgan Chase, also a Federal Reserve member—which had its employees contribute $800K to Obama’s campaign—was similarly acquitted of all charges earlier this year.

Another reason for the acquittal might be that GSs’s attorney, Reid Weingarten, is Holder’s best friend. Weingarten also represented child rapist movie producer Roman Polanski. Or it might be because GS was a major client of Holder’s and Assistant Attorney General Lanny A. Breuer’s previous law firm, Covington and Burling.

Holder’s DoJ has not charged, prosecuted or convicted a single top Wall Street executive for the massive damage they did to U.S. investors and the global economy.

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Mayer Amschel Rothschild said in 1790: “Give me control of a nation’s money supply, and I care not who makes its laws.”

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Peter Papaherakles, a U.S. citizen since 1986, was born in Greece. He is AFP’s outreach director. If you would like to see AFP speakers at your rally, contact Pete at 202-544-5977.

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