Hightower: Is Citigroup's $7 Billion Fine Bogus?

[xchrom]

http://www.alternet.org/corporate-accountability-and-workplace/hightower-citigroups-7-billion-fine-bogus

Media outlets across the country trumpeted the stunning news with headlines like this: "Citigroup Punished."

At last, went the storyline, the Justice Department brought down the hammer on one of the greed-headed Wall Street giants that are guilty of massive mortgage frauds that crashed our economy six years ago. While millions of ordinary Americans lost homes, jobs, and businesses -- and still haven't recovered -- the finagling bankers were promptly bailed out by Washington and continue to get multimillion-dollar bonuses. So, hitting Citigroup with $7 billion in penalties for its role in the calamitous scandal is a real blow for justice!

Well, sort of. Actually ... not so much. While seven billion bucks is more than a slap on the wrist, it pales in contrast to the egregious nature of Citigroup's crime and the extent of the horrendous damage done by the bankers. In fact, when it announced the settlement, the Justice Department itself pointed out that Citigroup's fraudulent acts "shattered lives."

For most of us, paying billions is impossible to imagine, much less do. But this is a Wall Street colossus with $76 billion in revenue last year alone. It rakes in enough profit in six months to more than cover this "punishment." Also, the bank will get to deduct 40 percent of the penalty from its income tax. Then there's this little number that the prosecutors failed to mention when they announced the settlement: Citigroup's taxpayer bailout in 2008 was $45 billion -- six times more than it is now having to pay back!

Even by Wall Street standards, pulling a 600 percent profit from grand larceny is a pretty sweet deal. One clear indicator that this "punishment" is way too light is that on the same day it was announced, jubilant Wall Street investors jacked up Citigroup's stock price by 3.6 percent.

[JDPriestly]

1. With the bailouts, the government prevented bank failures, banks going into bankruptcy.

The banks were given debt relief. The pressure on the banks to go bankrupt was lessened by the government bailout. But home- and business-owners got no similar relief. They not only remained liable for the debts they had accrued but in most cases, were not even given extensions on the time to repay debts without accumulating penalties.

So that is one aspect of the unfairness of the bailouts and the small fines that the banks are required to pay for their crimes.

The burden of the defaults was placed entirely on homeowners. A few of the wealthier and more business-savvy homeowners were able to negotiate time and better mortgage terms. But for the most part, the bailout of the banks was of no help to homeowners many of whom lost their jobs, their homes, maybe their marriages and health.

I cannot understand how the members of Congress who voted for the bailout without requiring relief for homeowners and how the AG's office, the lawyers who negotiate these deals can get up in the morning, look at their faces in the mirror and then trot of to their jobs, business as usual.

Don't they understand the human suffering that was caused a) by the banks' loan and derivatives policies and b) by their own (Congress's) short-sighted, banker-friendly, ordinary American-unfriendly bail-out.

You know what? I think that Congress was thinking only of their own pension funds when they agreed to a bank bailout that included on provisions to protect overburdened homebuyers. It's just scandalous.

[PADemD]

2. Yes, but who is going to jail?

[bluesbassman]

3. No one! That's the beauty of a corporation: All of the perks of being a "person"...

None of the consequences! Great work if you can get it.

To be fair though, there have been a few small to medium fry that have done some time around the market crash shenanigans, but the real scoundrels like Chase's Jamie Dimon and Countrywide's Angelo Mozilo will never darken the doorway of a prison cell.

[Enthusiast]

4. Kicked and recommended!

I really like Jim Hightower.

"Even by Wall Street standards, pulling a 600 percent profit from grand larceny is a pretty sweet deal."

This is why so many of us are angry with the Obama Administration's DOJ. You can make every excuse in the book but we all know how regular law breakers are dealt with. This is a blatant disregard for justice. And President Obama is DIRECTLY responsible just as was when he allowed war criminal torturers to suffer no consequences for their actions.

[Demeter]

5. Our whole criminal justice system is bogus, and this is an example of it

nothing to see here...

Good morning, X! Good article!

[xchrom]

6. Hi Miss Demeter!

[Scuba]

7. K&R

[meow2u3]

8. Piercing the corporate veil on the banksters is long overdue

There's long-ignored evidence that the banksters are hiding behind their corporate structure to evade criminal accountablity. If now isn't the time to pierce the corporate veil to get banksters behind bars, then when will it be?

[progressoid]

9. Angry rec.