(Update: This just in - yet another journalist caught being paid to write stories to further the interests of big money: BIRMINGHAM, Ala. (AP) -- Throughout the six-month trial that led to Richard Scrushy's acquittal in the $2.7 billion fraud at HealthSouth Corp., a small, influential newspaper consistently printed articles sympathetic to the defense of the fired CEO. Audry Lewis, the author of those stories in The Birmingham Times, the city's oldest black-owned paper, now says she was secretly working on behalf of Scrushy, who she says paid her $11,000 through a public relations firm and typically read her articles before publication. Audry Lewis and Henderson now say Scrushy owes them $150,000 for the newspaper stories and other public relations work, including getting black pastors to attend the trial in a bid to sway the mostly black jury.)
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Our Elected Officials And Media Are For Sale? Gasp…Sputter…Say It Isn’t So…
Today, Jack Abramoff pleaded guilty to a host of charges involving paying politicians for their votes and their political favor. The man was one of the more recognized lobbyists on the Beltway, and it turns out he was nothing more than a bribery mechanism for special interests who wanted to buy legislation and policy.
Now, imagine that.
Elected officials in our capital, taking money and favors, in exchange for their votes and their power. Huh.
But I thought that didn’t happen, at least not anymore. That was all the bad old days – you know, those wild, go-go Eighties, when the S&L crisis turned out to have been aided and abetted by our elected officials and regulators. We were told that was all fixed. Put behind us. A brave new future of honesty and a brighter tomorrow our hard-earned legacy from those dark days of the past.
But it turns out it wasn’t.
Fixed.
At all.
At first, Abranoff insisted that it was all untrue, that he was a victim of political foes or rivals, that the charges were ludicrous, that he would never do anything of the kind, that he was the last honest man in Washington – everything but a SLAPP argument, frankly.
Of course, that was all a lie.
“This is the most corrupt Congress in U.S. history,” said Toby Chaudhuri, communications director of the Campaign for America’s Future, which is running television and newspaper ads in Texas and Ohio calling on voters to “clean the stables.”
The most corrupt in U.S. history? Come on, I mean, that's a tall order. How bad would it have to be to outstrip the Congress that violated every treaty we ever signed with the Indians? That would be almost unimaginable – every time one of the palefaces showed up with a pen, it turned into genocide and wholesale land theft. Or what about the S&L crisis? Wasn’t the bar on thievery set pretty high by the Keating Five, who actively worked with the worst criminals of that era to steal hundreds of billions from American taxpayers? How bad could it get, to make those shrink in comparison?
Well, for starters, it could be a situation where special interests have bought and paid for most of the decision-making process in Washington, allowing criminals to effectively legislate their own meaningless laws and pardons. Kind of like I've been saying for over a year in my editorials.
I saw that $50K bought a Congressman’s vote, to block some legislation some interest wanted quashed. That's a bargain. I mean, inflation isn’t a problem in the bribery business – that's cheap for that kind of clout. Makes you wonder what it would cost to buy the House Finance Committee, or what the pricetag to bury Senate Banking Hearings would be, hypothetically speaking… $5 million would be mice nuts to put the kibosh on hearings about naked short selling if you're running tens of billions of FTD positions, or are splitting the bill with the larger banks on the Street. That's beer money by those standards.
And yet, now we find out that instead of some wild-eyed conspiracy, that is how business is conducted on Capital Hill. Huh.
If the Native American lobby can afford Abramoff, and he can buy Congressmen at wholesale prices, doesn’t it make one wonder what the industry that will handle $1.2 quadrillion this year, and which owns the biggest business of its kind in the world, can afford? Wall Street money makes a hundred K here or there seem like subway tokens.
Why, given what we are now discovering from the Abramoff affair, I wonder what it would cost to buy immunity for defrauding investors for years, by taking money for sales and never delivering the product ? Or to get laws passed that contain no penalties for violating them? Wouldn't it be more efficient to just publish a menu? You know, "Look the other way from Congress, $250K per year, pro-industry law passage, $500K," and so on...
At this point, I would say, who cares what it costs – I’m in! The barriers to really putting the pork to Main Street America are gone if you can just buy the legislation you want, and whatever the price tag, we’ll make it back in a few hours of trading – let the good times roll, man. Come on, it’s like free beer night at the wayward nymphomaniac cheerleaders’ home, and we’re in the band! Whooo hoooo.
If you are Wall Street, how many million-dollar jobs do you have to give ex-SEC staffers in order to get them to work for your interests, rather than in the interest of the public? What if it cost $10 million a year? $20? What’s the difference when the money is so huge - when trillions are being discussed as the profits from naked short selling and stock manipulation? How price sensitive would you be, to ensure that les bons temps continued to roule?
Seriously. What part of this isn’t so obvious as to make your skin crawl?
Does anyone have any difficulty whatsoever in understanding how this works?
On a related note, Doug Bandow, a Fellow at the prestigious CATO Institute, and an influential columnist, resigned today. The reason was that he admitted to taking money from Abramoff over a period spanning at least the last 10 years, in exchange for WRITING EDITORIALS USING “TOPICS AND INFORMATION PROVIDED BY ABRAMOFF” – basically selling his editorials to the lobbyist in exchange for envelopes filled with twenties – not even hundreds, as Bandow was cheap, even by big money standards. A couple grand per gig, tops. Chump change. And he wasn't/isn't the only one doing it, if you read the article - some even defend the practice. Bandow was syndicated in several hundred newspapers around the country, so the notion that he wasn't a member of the media is specious - he had reach, and a lot of people read his columns believing that his was an unbought perspective. Wrong.
This was especially interesting to me, given the recent controversy over the notion that a cadre of the NY financial press could be co-opted, or even bought, given their amazing penchant for attacking companies certain short sellers dislike. I wish I had a dollar for every message board post accusing me of being krazeeee, that this was impossible, didn’t happen. How dare you. And so on.
But, tut tut, apparently it does happen. And it doesn’t even cost much – journalists are apparently far cheaper than Congressmen.
I guess the only question would be, do you pay piecemeal, or on retainer? In the Abramoff case, the first one that rolled over was a piecemeal play, but who wants to bet that we start hearing about others that had anonymous ATM cards to BVI accounts, and had a nice little $50K-$250K per year gig going? That would be my hunch as to what the NY financial guys could command – this isn’t Indian gaming we are talking, this is real money, Federal Reserve-level denero. All my opinion, but it certainly explains things handily.
Up until now, the rejoinder would have been that “it doesn’t happen.” We're supposed to forget the Dorfmans of the world – they were CNBC touts with colorful shticks, but there won’t be any more CNBC touts with colorful shticks that are compromised. No way. That was all in a vacuum.
But it does happen. It is business as usual. That is what we are seeing confirmed.
So now we have a credible explanation for a, "see no evil, hear no evil" stance from our regulators and our elected watchdogs, and a cone of silence from the press. It isn’t that it is too complicated to explain or that America isn't interested. That was always hogwash - allow me to do it in a few sentences everyone can grasp: Wall Street has ripped off hundreds of billions by taking orders and processing sales transactions, pocketing the money, and never delivering the product, defrauding investors by lying to them at every step. The SEC and the DTCC (Wall Street’s alter-ego, the wholly-owned, private company that is the largest entity of its kind in the world) cover it up, pass laws that forgive all instances of the fraud until a company winds up on the Reg SHO list, have no penalties for violating the rules, and keep all the info secret.
The end.
It’s not complicated. And it isn’t that Joe Sixpack doesn’t care or understand - he just hasn't been asked the appropriate question: “Have you lost money in the market over the last 5 years? That money was likely stolen from you, rather than lost legitimately. Interested?”
No, the explanation that I advanced, and that Dr. Byrne sets out in his brilliant slideshow series linked here in the Slideshows section, is much more straightforward: Wall Street money is big money, and it has bought most of Washington, the regulators, and the press.
Simple.
And here, in living color, is confirmation that those wild theories are in fact a clinically precise description of how Wall Street and Washington operate.
Figure it out, people. It isn’t hard.