How can Wall Street destroy a global economy and walk away unscathed by it? Easy. The revolving door between government and Wall Street. There are plenty of high profile cases such as Orszag to Citi and William Daley from JP Morgan to the White House or even the more recent departure of a senior FDIC official to Goldman, but it happens throughout Washington in Congress as well as the agencies. It's rotting the system to the core and nobody in Washington cares. There are future job prospects to consider after all. Country? How much can it really pay compared to business?
It's a long article but as always with Matt Taibbi, it's worth the investment of your time. Here he's talking with a former SEC official who was sacked when he asked questions about former Morgan Stanley CEO John Mack. (He won a lawsuit for his dismissal.) Why isn't Wall Street in jail?
Last year, Aguirre noticed that a conference on financial law enforcement was scheduled to be held at the Hilton in New York on November 12th. The list of attendees included 1,500 or so of the country's leading lawyers who represent Wall Street, as well as some of the government's top cops from both the SEC and the Justice Department.Really. Keep reading because it only gets worse. Taibbi next compares SEC officials to young high school basketball stars who are trying to get their chance at the big time in the NBA where they can rake in the bucks. That's who is policing Wall Street. And this is what Washington supports. The problem is a systemic problem and not a matter of Democrats or Republicans. They both are guilty and we're the happy idiots paying the price.
Criminal justice, as it pertains to the Goldmans and Morgan Stanleys of the world, is not adversarial combat, with cops and crooks duking it out in interrogation rooms and courthouses. Instead, it's a cocktail party between friends and colleagues who from month to month and year to year are constantly switching sides and trading hats. At the Hilton conference, regulators and banker-lawyers rubbed elbows during a series of speeches and panel discussions, away from the rabble. "They were chummier in that environment," says Aguirre, who plunked down $2,200 to attend the conference.
Aguirre saw a lot of familiar faces at the conference, for a simple reason: Many of the SEC regulators he had worked with during his failed attempt to investigate John Mack had made a million-dollar pass through the Revolving Door, going to work for the very same firms they used to police. Aguirre didn't see Paul Berger, an associate director of enforcement who had rebuffed his attempts to interview Mack — maybe because Berger was tied up at his lucrative new job at Debevoise & Plimpton, the same law firm that Morgan Stanley employed to intervene in the Mack case. But he did see Mary Jo White, the former U.S. attorney, who was still at Debevoise & Plimpton. He also saw Linda Thomsen, the former SEC director of enforcement who had been so helpful to White. Thomsen had gone on to represent Wall Street as a partner at the prestigious firm of Davis Polk & Wardwell.
