Top 10 Ways the US is
the Most Corrupt Country in the World
By Juan Cole | Dec. 3, 2013 |
Those ratings that castigate Afghanistan and some other poor countries as hopelessly “corrupt” always imply that the United States is not corrupt.
While it is true that you don’t typically have to bribe your postman to deliver the mail in the US, in many key ways America’s political and financial practices make it in absolute terms far more corrupt than the usual global South suspects. After all, the US economy is worth over $16 trillion a year, so in our corruption a lot more money changes hands.
1. Instead of having short, publicly-funded political campaigns with limited and/or free advertising (as a number of Western European countries do), the US has long political campaigns in which candidates are dunned big bucks for advertising. They are therefore forced to spend much of their time fundraising, which is to say, seeking bribes. All American politicians are basically on the take, though many are honorable people. They are forced into it by the system. House Majority leader John Boehner has actually just handed out cash on the floor of the House from the tobacco industry to other representatives.
When French President Nicolas Sarkozy was defeated in 2012, soon thereafter French police actually went into his private residence searching for an alleged $50,000 in illicit campaign contributions from the L’Oreale heiress. I thought to myself, seriously? $50,000 in a presidential campaign? Our presidential campaigns cost a billion dollars each! $50,000 is a rounding error, not a basis for police action. Why, George W. Bush took millions from arms manufacturers and then ginned up a war for them, and the police haven’t been anywhere near his house.
American politicians don’t represent “the people.” With a few honorable exceptions, they represent the the 1%. American democracy is being corrupted out of existence.
2. That politicians can be bribed to reduce regulation of industries like banking (what is called “regulatory capture”) means that they will be so bribed. Billions were spent and 3,000 lobbyists employed by bankers to remove cumbersome rules in the zeroes. Thus, political corruption enabled financial corruption (in some cases legalizing it!) Without regulations and government auditing, the finance sector went wild and engaged in corrupt practices that caused the 2008 crash. Too bad the poor Afghans can’t just legislate their corruption out of existence by regularizing it, the way Wall street did.
3. That the chief villains of the 2008 meltdown (from which 90% of Americans have not recovered) have not been prosecuted is itself a form of corruption.
4. The US military budget is bloated and enormous, bigger than the military budgets of the next twelve major states. What isn’t usually realized is that perhaps half of it is spent on outsourced services, not on the military. It is corporate welfare on a cosmic scale. I’ve seen with my own eyes how officers in the military get out and then form companies to sell things to their former colleagues still on the inside.
5. The US has a vast gulag of 2.2 million prisoners in jail and penitentiary. There is an increasing tendency for prisons to be privatized, and this tendency is corrupting the system. It is wrong for people to profit from putting and keeping human beings behind bars. This troubling trend is made all the more troubling by the move to give extra-long sentences for minor crimes, to deny parole and to imprison people for life for e,g, three small thefts.
6. The rich are well placed to bribe our politicians to reduce taxes on the rich. This and other government policies has produced a situation where 400 American billionaires are worth $2 trillion, as much as the bottom 150 million Americans. That kind of wealth inequality hasn’t been seen in the US since the age of the robber barons in the nineteenth century. Both eras are marked by extreme corruption.
7. The National Security Agency’s domestic spying is a form of corruption in itself, and lends itself to corruption. With some 4 million government employees and private contractors engaged in this surveillance, it is highly unlikely that various forms of insider trading and other corrupt practices are not being committed. If you knew who Warren Buffett and George Soros were calling every day, that alone could make you a killing. The American political class wouldn’t be defending this indefensible invasion of citizens’ privacy so vigorously if someone somewhere weren’t making money on it.
8. As for insider trading, it turns out Congress undid much of the law it hastily passed forbidding members, rather belatedly, to engage in insider trading (buying and selling stock based on their privileged knowledge of future government policy). That this practice only became an issue recently is another sign of how corrupt the system is.
9. Asset forfeiture in the ‘drug war’ is corrupting police departments and the judiciary.
10. Money and corruption have seeped so far into our media system that people can with a straight face assert that scientists aren’t sure human carbon emissions are causing global warming. Fox Cable News is among the more corrupt institutions in American society, purveying outright lies for the benefit of the billionaire class. The US is so corrupt that it is resisting the obvious urgency to slash carbon production. Even our relatively progressive president talks about exploiting all sources of energy, as though hydrocarbons were just as valuable as green energy and as though hydrocarbons weren’t poisoning the earth.
Even Qatar, its economy based on natural gas, freely admits the challenge of human-induced climate change. American politicians like Jim Inhofe are openly ridiculed when they travel to Europe for their know-nothingism on climate.
So don’t tell the Philippines or the other victims of American corruption how corrupt they are for taking a few petty bribes. Americans are not seen as corrupt because we only deal in the big denominations. Steal $2 trillion and you aren’t corrupt, you’re respectable.
How the System Favors Corporations Who Break the Rules Over the Working-Class
A tiny class of Americans seem to get off scot-free when it commits fraud to make untold millions.
By Leo Gerard / AlterNet --- May 19, 2015
Some of the biggest banks in the world are expected to plead guilty to felonies this week. Felonies! They are scandalous crimes, too: fraud and antitrust violations.
Finally, America will see members of the class that crashed the economy dressed in black and white suits that are hardly the Brooks Brothers pinstripes to which they’ve grown accustomed.
Oh, wait, no. The New York Times says these felons will just pay some fines and go about their business of playing roulette with the world economy. Of course they won’t face prison like normal criminals. They’re bankers! Members of the exclusive Too Big to Jail Club.
They’re protected. Just like millionaires and CEOs are. A CEO can, for example, be fired for failing to produce but still get $21 million in severance, then lose a well-financed race for U.S. Senate and still be considered a viable presidential candidate. That’s because the rules are written for them. The economy currently is constructed to ensure their enrichment.
The felonious banks, Barclays, Citigroup, JPMorgan Chase and Royal Bank of Scotland will plead guilty to illegally making a bundle for themselves at the expense of travelers, businesses and others by manipulating the price of foreign currencies.
Even so, not one bank CEO will lose his million-dollar bonus, let alone his job. They’ll laugh all the way to the, well, to the bank. Just like oil companies snicker as they grab government subsidies [welfare] even though they’re among the most profitable corporations in the world. Just like hedge fund operators chuckle while luxuriating in their special, super-low tax rate.
Over the past 35 years, the rules have been written to facilitate trickle-up economics. The theory was that in a financial structure that guaranteed the rich received all income gains in the economy, millionaires and billionaires might let a couple of nickels slip out of their bulging pockets for workers to try to catch.
Unfortunately for workers, Brooks Brothers suits have really deep pockets. Almost nothing fell out of those pouches for workers. Their wages stagnated for decades while the rules facilitated the pinstriped boys getting richer and richer.
Last year, the pay gap between CEOs and typical workers widened to 373-to-1. That means for every $1 a worker earned, the CEO took $373. In just 7 minutes of slurping coffee or gazing out his penthouse office window, the typical CEO was handed more money than the average worker earned for 40 hours of labor.
Those numbers were very different before the dawn of trickle up. In 1965, the CEO-to-worker compensation ratio was 20-to-1. For every $1 a worker earned, the CEO got $20. And still, corporations made profits! And lots of people wanted to be CEOs! It was a time when the economic rules enabled workers to receive a larger share of the wealth that their labor helped create.
After trickle up, CEO compensation skyrocketed while worker pay languished. From 1978 to 2013, CEO compensation increased 937 percent, while the typical worker’s pay rose 10.2 percent. That trend continued last year, when CEO pay jumped up 16 percent while worker wages inched up 2.9 percent, which is hardly at all considering the 2.1 percent inflation rate.
At a press conference in Washington, D.C., last week, New York City Mayor Bill de Blasio explained this situation in simple terms: “The system is rigged to benefit those at the top and to leave everybody else behind.”
De Blasio was surrounded by liberal lawmakers and leaders including former Vermont Gov. Howard Dean, Rev. Al Sharpton, U.S. Sen. Jeff Merkeley and me, all of whom spoke in favor of the Progressive Agenda to Combat Income Inequality that the mayor presented. It is a 13-point plan to change the rules to ease the lives of workers and to increase opportunity for all Americans.
The same day, de Blasio spoke at the Roosevelt Institute, a nonprofit group devoted to restoring America’s promise of opportunity for all. At that event, the institute released a report by its chief economist, the Nobel laureate Joseph Stiglitz. It’s called Rewriting the Rules of the American Economy. (see the Executive Summary)
It begins with a damning statement: “The American economy no longer works for most Americans. We pride ourselves on being the land of opportunity and creating the first middle-class society, yet profound and largely overlooked changes have put the middle-class life increasingly out of reach for the majority of Americans. At the same time, we have enabled a small percentage of the population to take home the lion’s share of economic gains.”
“Until economic and social rules work for all Americans,” it says, “they’re not working.”
The report examines the rules that have over the past several decades created the situation in which “the benefits of economic growth have disproportionately gone to the top 20 percent of the population while the share of national income going to the bottom 99 percent has fallen.”
Stiglitz points out that the resulting income inequality, now at the highest level since the heyday of robber barons, is not an irrevocable destiny preordained by some goofy invisible hand of the market. It is, instead, a result of rules. Rules that can be changed.
The report recommends a comprehensive series of changes, and includes all of the points in The Progressive Agenda to Combat Income Inequality released by de Blasio.
Both seek to raise wages, support working families with policies like paid sick leave and universal child care and reverse some of the rules passed in homage to corporations and CEOs. That includes ending tax breaks for corporations that ship jobs overseas as well as the special break that hedge fund honchos get.
The promise of America is that anyone who works hard and plays by the rules can earn a middle-class life. That promise is betrayed when the system provides a tiny class of Americans with special treatment, including a get-out-of-jail-free card when they commit fraud to make untold millions.
De Blasio is right. The rules are rigged. Workers, families and communities – the vast majority – need new rules.
Leo W. Gerard president of the United Steelworkers union. President Barack Obama appointed him to the President’s Advisory Committee on Trade Policy and Negotiations. Follow him on Twitter: @USWBlogger
UBS could pay a fine of up to $500 million to avoid a trial over charges from 2012 that it manipulated benchmark interest rates.
For most people, pleading guilty to a felony means they will very likely land in prison, lose their job and forfeit their right to vote.
But when five of the world’s biggest banks plead guilty to an array of antitrust and fraud charges as soon as next week, life will go on, probably without much of a hiccup.
The Justice Department is preparing to announce that Barclays, JPMorgan Chase, Citigroup and the Royal Bank of Scotland will collectively pay several billion dollars and plead guilty to criminal antitrust violations for rigging the price of foreign currencies, according to people briefed on the matter who spoke on the condition of anonymity. Most if not all of the pleas are expected to come from the banks’ holding companies, the people said — a first for Wall Street giants that until now have had only subsidiaries or their biggest banking units plead guilty.
The Justice Department is also preparing to resolve accusations of foreign currency misconduct at UBS. As part of that deal, prosecutors are taking the rare step of tearing up a 2012 nonprosecution agreement with the bank over the manipulation of benchmark interest rates, the people said, citing the bank’s foreign currency misconduct as a violation of the earlier agreement. UBS A.G., the banking unit that signed the 2012 nonprosecution agreement, is expected to plead guilty to the earlier charges and pay a fine that could be as high as $500 million rather than go to trial, the people said.
The guilty pleas, scarlet letters affixed to banks of this size and significance, represent another prosecutorial milestone in a broader effort to crack down on financial misdeeds. Yet as much as prosecutors want to punish banks for misdeeds, they are also mindful that too harsh a penalty could imperil banks that are at the heart of the global economy, a balancing act that could produce pleas that are more symbolic than sweeping.
Holding companies, while appearing to be the most important entities at the banks, are in less jeopardy of suffering the consequences of guilty pleas. Some banks worried that a guilty plea by their biggest banking units, which hold licenses that enable them to operate branches and make loans, would be riskier, two of the people briefed on the matter said. The fear, they said, centered on whether state or federal regulators might revoke those licenses in response to the pleas.
Behind the scenes in Washington, the banks’ lawyers are also seeking assurances from federal regulators — including the Securities and Exchange Commission and the Labor Department — that the banks will not be barred from certain business practices after the guilty pleas, the people said. While the S.E.C.’s five commissioners have not yet voted on the requests for waivers, which would allow the banks to conduct business as usual despite being felons, the people briefed on the matter expected a majority of commissioners to grant them.
In reality, those accommodations render the plea deals, at least in part, an exercise in stagecraft. And while banks might prefer a deferred-prosecution agreement that suspends charges in exchange for fines and other concessions — or a nonprosecution deal like the one that UBS is on the verge of losing — the reputational blow of being a felon does not spell disaster.
“For any company there’s a huge reputational difference between a deferred-prosecution agreement and a guilty plea,” said David A. O’Neil, a partner at Debevoise & Plimpton and former senior Justice Department official who helped secure a guilty plea to a financial crime last year from the French bank BNP Paribas. “But the government needs to be careful that it doesn’t turn a guilty plea into a D.P.A. with just another name.”
The foreign exchange investigation, which centers on accusations that traders colluded to fix the price of major currencies, will test the Justice Department’s strategy for securing guilty pleas on Wall Street.
In the case of UBS, the bank will lose its nonprosecution agreement over interest rate manipulation, the people briefed on the matter said, a consequence of its misconduct in the foreign exchange case. It is unclear why that penalty will fall on UBS, but not on other banks suspected of manipulating both interest rates and currency prices.
The action against UBS underscores the threats that Justice Department officials issued in recent months about voiding past deals in the event of new misdeeds, a central tactic in a plan to address the cycle of corporate recidivism. Leslie Caldwell, the head of the Justice Department’s criminal division, recently remarked that she “will not hesitate to tear up a D.P.A. or N.P.A. and file criminal charges where such action is appropriate.”
Still, the bank is expected to avoid pleading guilty in the foreign exchange case, the people said, though it will probably pay a fine. While UBS was unlikely to plead guilty to antitrust violations because it was the first to cooperate in the foreign exchange investigation, the bank was facing the possibility of pleading guilty to fraud charges related to the currency manipulation. The exact punishment is not yet final, the people added.
The Justice Department negotiations coincide with the banks’ separate efforts to persuade the S.E.C. to issue waivers from automatic bans that occur when a company pleads guilty. If the waivers are not granted, a decision that the Justice Department does not control, the banks could face significant consequences.
For example, some banks may be seeking waivers to a ban on overseeing mutual funds, one of the people said. They are also requesting waivers to ensure they do not lose their special status as “well-known seasoned issuers,” which allows them to fast-track securities offerings. For some of the banks, there is also a concern that they will lose their “safe harbor” status for making forward-looking statements in securities documents.
In turn, the S.E.C. asked the Justice Department to hold off on announcing the currency cases until the banks’ requests had been reviewed, one of the people said. As of Wednesday, it seemed probable that a majority of the S.E.C.’s commissioners would approve most of the waivers, which can be granted for a cause like the public good. Still, the agency’s two Democratic commissioners — Kara M. Stein and Luis A. Aguilar, who have denounced the S.E.C.’s use of waivers — might be more likely to balk.
Corporate prosecutions are a delicate matter, peppered with political and legal land mines. Senator Elizabeth Warren, Democrat of Massachusetts, and other liberal politicians have criticized prosecutors for treating Wall Street with kid gloves. Banks and their lawyers, however, complain about huge penalties and guilty pleas.
And lingering in the background is the case of Arthur Andersen, an accounting giant that imploded after being convicted in 2002 of criminal charges related to its work for Enron. After the firm’s collapse, and the later reversal of its conviction, prosecutors began to shift from indictments and guilty pleas to deferred-prosecution agreements. And in 2008, the Justice Department updated guidelines for prosecuting corporations, which have long included a requirement that prosecutors weigh collateral consequences like harm to shareholders and innocent employees.
“The collateral consequences consideration is designed to address the risk that a particular criminal charge might inflict disproportionate harm to shareholders, pension holders and employees who are not even alleged to be culpable or to have profited potentially from wrongdoing,” said Mark Filip, the Justice Department official who wrote the 2008 memo. “Arthur Andersen was ultimately never convicted of anything, but the mere act of indicting it destroyed one of the cornerstones of the Midwest’s economy.”
After years of deferred-prosecution agreements, the pendulum swung back in favor of guilty pleas in 2012. It began modestly with a Japanese subsidiary of UBS pleading guilty to manipulating interest rates. UBS A.G., the main banking unit, reached the nonprosecution agreement.
In pursuing cases last year against Credit Suisse and BNP Paribas, prosecutors confronted the popular belief that banks had grown so important to the economy that they could not be charged. BNP, which was accused of doing business with Iran and other countries blacklisted by the United States, paid a record $8.9 billion fine.
Yet after prosecutors announced the deals, the banks’ chief executives promptly assured investors that the effect would be minimal.
“Apart from the impact of the fine, BNP Paribas will once again post solid results this quarter,” BNP’s chief, Jean-Laurent Bonnafé, said.
Brady Dougan, Credit Suisse’s chief at the time, said the deal would not cause “any material impact on our operational or business capabilities.”
Criminal Fines Are Not Punishment - Fines Are Only A Part Of The Cost Of Doing Business, really not different than making payroll or purchasing a computer...
'They' say that after paying nearly 9 billion dollars in fines, the bank "will once again post solid results this quarter" and the fine will not cause "any material impact on our operational or business capabilities.”
Jail Time for The Banksters !!! Jail Time for The Banksters !!!