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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWilliam K. Black: Why I Won’t be Briefing Congress about Derivatives
We Must Not Speak Uncomfortable Truths to Power: Why I Wont be Briefing Congress about Derivatives
By William K. Black
When I was the Deputy Director of FSLIC, House Banking Committee Chairman St Germain was helping Speaker Wright hold the FSLIC recapitalization bill hostage to extort favors for Texas control frauds, including Don Dixons Vernon Savings (which was providing prostitutes to the State of Texas top S&L regulator and was building towards having 96% of its ADC loans in default which is why we referred to it as Vermin). The attack on our agency was that we were mad dogs biased against Texas S&Ls and causing the Texas crisis by closing too many insolvent but well-run Texas S&Ls. Our response had many elements, but one of our principal points was that the Texas S&Ls we were closing were typically control frauds. At this juncture, St Germains staffers made a mistake. They requested that we testify on a host of issues, but the invite letter had a zinger, premised on an article saying that the Feds were slow to prosecute frauds in the Southwest. The invite specifically called for us to respond and discuss the role of fraud in the Southwest. We used the opportunity to explain the extensive role of fraud in Texas S&L failures.
The day of the hearing, I walked toward the witness table, but was called over by St Germains chief of staff. He proceeded to disinvite us from testifying on the grounds that we had filed non-responsive testimony. (We had, of course, responded to every inquiry they made. They simply hated the response because we documented the enormous role that control fraud was playing in causing Texas S&Ls to fail.) Today, I received definitive word that I had been disinvited from a bipartisan briefing of members of Congress on the subject of financial derivatives. I have deleted the name of the staffer because he is not the issue. The relevant email thread is below.
The member of Congress putting the event together is one of the strongest advocates of the need for banking reform. I have assisted the Members staff in the past in such efforts. The Members chief of staff called me today. His position is that I was never invited to participate and that it was unfortunate that I booked the flights and put UMKC on the hook for the non-refundable fares and hotel before informing his office that I was accepting their inquiry about participation (as opposed to invitation). He explains that it is impossible physically to have me participate and that the decision not to have me participate has nothing to do with concerns about balance or bank bashing. I emphasize also that, unlike St Germains disinvitation the email thread states an interest in inviting me to speak at future briefings. I hope that such invitations will be made. The Member and the Members staff were polite while St Germains chief of staff was deliberately rude.
Nevertheless, I think that the Chief of Staffs phone call to me explaining their view that I was never invited makes my point. We all know that is simple to add a panelist. What is really going on is that things are so toxic in Congress now, and the largest banks are so sensitive to any criticism, that the progressives fear that any criticism of bank practices that will cause the next financial crisis will be considered bank bashing and will cause Republicans to be unwilling to participate. The fact that I have a 30 year record of non-partisan service to the nation on banking matters, including service as a banker with the Federal Home Loan Bank of San Francisco, does not count in such a world. We must not speak uncomfortable truths to power. You will see that it is his staff that informed me that the concerns that prevented me from joining the panel were maintaining a consensus about the panels balance and avoiding bank bashing.
read more: http://neweconomicperspectives.org/2012/05/we-must-not-speak-uncomfortable-truths-to-power-why-i-wont-be-briefing-congress-about-derivatives.html
By William K. Black
When I was the Deputy Director of FSLIC, House Banking Committee Chairman St Germain was helping Speaker Wright hold the FSLIC recapitalization bill hostage to extort favors for Texas control frauds, including Don Dixons Vernon Savings (which was providing prostitutes to the State of Texas top S&L regulator and was building towards having 96% of its ADC loans in default which is why we referred to it as Vermin). The attack on our agency was that we were mad dogs biased against Texas S&Ls and causing the Texas crisis by closing too many insolvent but well-run Texas S&Ls. Our response had many elements, but one of our principal points was that the Texas S&Ls we were closing were typically control frauds. At this juncture, St Germains staffers made a mistake. They requested that we testify on a host of issues, but the invite letter had a zinger, premised on an article saying that the Feds were slow to prosecute frauds in the Southwest. The invite specifically called for us to respond and discuss the role of fraud in the Southwest. We used the opportunity to explain the extensive role of fraud in Texas S&L failures.
The day of the hearing, I walked toward the witness table, but was called over by St Germains chief of staff. He proceeded to disinvite us from testifying on the grounds that we had filed non-responsive testimony. (We had, of course, responded to every inquiry they made. They simply hated the response because we documented the enormous role that control fraud was playing in causing Texas S&Ls to fail.) Today, I received definitive word that I had been disinvited from a bipartisan briefing of members of Congress on the subject of financial derivatives. I have deleted the name of the staffer because he is not the issue. The relevant email thread is below.
The member of Congress putting the event together is one of the strongest advocates of the need for banking reform. I have assisted the Members staff in the past in such efforts. The Members chief of staff called me today. His position is that I was never invited to participate and that it was unfortunate that I booked the flights and put UMKC on the hook for the non-refundable fares and hotel before informing his office that I was accepting their inquiry about participation (as opposed to invitation). He explains that it is impossible physically to have me participate and that the decision not to have me participate has nothing to do with concerns about balance or bank bashing. I emphasize also that, unlike St Germains disinvitation the email thread states an interest in inviting me to speak at future briefings. I hope that such invitations will be made. The Member and the Members staff were polite while St Germains chief of staff was deliberately rude.
Nevertheless, I think that the Chief of Staffs phone call to me explaining their view that I was never invited makes my point. We all know that is simple to add a panelist. What is really going on is that things are so toxic in Congress now, and the largest banks are so sensitive to any criticism, that the progressives fear that any criticism of bank practices that will cause the next financial crisis will be considered bank bashing and will cause Republicans to be unwilling to participate. The fact that I have a 30 year record of non-partisan service to the nation on banking matters, including service as a banker with the Federal Home Loan Bank of San Francisco, does not count in such a world. We must not speak uncomfortable truths to power. You will see that it is his staff that informed me that the concerns that prevented me from joining the panel were maintaining a consensus about the panels balance and avoiding bank bashing.
read more: http://neweconomicperspectives.org/2012/05/we-must-not-speak-uncomfortable-truths-to-power-why-i-wont-be-briefing-congress-about-derivatives.html
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William K. Black: Why I Won’t be Briefing Congress about Derivatives (Original Post)
girl gone mad
May 2012
OP
Well, there you have it. If there was any remaining doubt about how corrupt and inert those
Nay
May 2012
#2
trumad
(41,692 posts)1. Truth is Kryptonite to these shysters.
Nay
(12,051 posts)2. Well, there you have it. If there was any remaining doubt about how corrupt and inert those
in power are, I hope it has been dispelled by the above missive. This is it, folks. There's no option but to allow it to collapse of its own weight, and try to build on the ruins.
JHB
(37,133 posts)3. Frankly, my dear, the banks should be abashed...
...on so many levels.
Zalatix
(8,994 posts)4. Why are the PROGRESSIVES always so fearful?
Selatius
(20,441 posts)5. The banks are proof positive that with enough money, you can buy a negotiated outcome.
You just have to spend the right wads of cash on friendly politicians and the right wads of cash attacking unfriendly politicians during re-election campaigns until everybody either plays ball or at least learns to shut up.
90-percent
(6,828 posts)6. Remarkable
It is amazing to me how delicate these titans of finance can be. Fragile personalities that cannot accept an unkind word.
Wish they could be so sensitive to the millions of lives they wreck with their fraud and corruption.
neener-neener I can't HEAR YOU!
OUR INSTITUTIONS ARE INFESTED WITH CORRUPT SOCIOPATHS
-90% Jimmy