I am not allowed to mention The Mob in my house any more. My wife Sandra will leave me if I do. She says I am obsessed with the notion that The Mob controls just about everything in America these days. But I can’t help it: I see the shadow of the Black Hand behind so much of what is going on. I guess I’m just a conspiracy nut. But I wasn’t the only one who saw The Mob’s greedy hands reaching for those billions (estimated at between $500 billion and $1.4 trillion) lost in “bad investments” by the Savings & Loans institutions back in the late 1980s. Here’s what I think happened then:
Criminals infiltrated the Savings & Loan industry, managed to get control of the institutions, and then made “bad loans” to confederates, wiping out the institutions. The government then stepped in and took your tax money to pay off the investors hurt in the scandal. (You will recall several people, including John McCain’s pal Charles Keating Jr., went to prison in connection with the scandal. Keating was convicted of fraud and sentenced to twelve and a half years, but served less than five. McCain was one of five senators who intervened to stall regulators looking into the case.)
Keating (photo on book cover at left) and McCain’s father-in-law Jim Hensley were reportedly connected to people like Kemper Marley and Meyer Lansky, who – according to legend – did business with the Bronfmans back in the days of Prohibition. Sandra covers her ears when I go into all this, but as I said, I am not the only conspiracy nut who believes there was something fishy about the S&L crisis. For example, investigative journalist, Pete Brewton of the Houston Post, wrote in February 1990:
During an eight-month investigation into the role of fraud in the nation’s savings and loan crisis, The Post has found evidence suggesting a possible link between the Central Intelligence Agency and organized crime in the failure of at least 22 thrifts, including 16 in Texas.
The CIA? Is he saying… Yes he is! In his Houston Post series, Brewton traced links between S&Ls, organized crime figures and CIA operatives, including some involved in gun running, drug smuggling, money laundering and covert aid to Nicaraguan contras. The suspicion was that S&L funds went to the contras or other covert operations.
I know, it sounds like an old-time B movie. But you can read another version of the story in “Inside Job: The Looting of the Savings and Loan Industry” by a trio of respected investigative reporters (photo at right). And Stephen Pizzo, one of those reporters, said in a recent blog that current events give him a deja vue feeling. But what loyal American would really believe the government could be in league with crooks? I might suspect as much in the depths of my heart, but I wouldn’t dare give voice to my suspicions – not in my wife’s hearing, anyway. She doesn’t like subversive talk. Still, just between you and me, I suspect criminal interests might possibly have infiltrated our political system. Does that make me un-American? I hope not. You have to admit there’s an eerie similarity between the current mortgage industry/Wall Street crisis and the S&L rip-off. I suspect this is what has happened:
Criminals infiltrated the investment banking and mortgage industries, managed to get control of the institutions, and then made “bad investments” with the money going to confederates. Now that major institutions are collapsing like dominoes, the government is stepping in (with your tax money) to bail them out.
And there’s a story floating around that would make the situation even more similar:
You may remember that in 1989 Congress established the Resolution Trust Corp. to buy $394 billion worth of real estate, mortgages and other assets of hundreds of failed savings-and-loan institutions. The corporation operated for several years disposing of the associations’ assets, and then went out of business. Now, Wall Street is rejoicing over a report to the effect that Treasury Secretary Henry Paulson plans to create a vehicle like the RTC to help financial institutions hand off their bad mortgage debts.
Paulson met with Congressional leaders on Thursday and later announced that a bail-out plan is in the works but didn’t reveal any details (AP photo above, left) . I wonder how many billions of your money will go into that plan. Already, the government has pumped many billions into rescue operations for Bear Stearns, Fannie Mae, Freddie Mac and AIG. It seems our government has a bottomless money pit for this kind of rescue, but no money for a health care plan. I suspect that means The Mob has yet to gain control of the health insurance industry (but I wouldn’t bet on it).