I am puzzled by the American media’s reluctance to expose the involvement of organized crime in the global economic crisis. Reporters are too busy trying to link President-elect Obama to the Blagojevich scandal to shed any light on the crimes that may have been committed in the financial sector.
It has taken the French to call the world’s attention to the fact that criminals are partly responsible for the global financial mess. Writing in Le Figaro, Jean-Francois Gayraud, divisional commissioner of the National Police, and Noel Pons, adviser at the Central Service for the Prevention of Corruption, “remind everyone that crime – whether organized or not – infiltrates everywhere where money reigns, including the financial markets.”
Recalling that U.S. Attorney General Michael Mukasey warned in a May speech of the growing threat to national security represented by “organized crime’s penetration of the markets,” the two French lawmen charged that “mafias, gangs and cartels” helped bring down the world’s economy. They reminded Le Figaro’s readers of the collapse 20 years ago of America’s Savings & Loan industry, and the financial crisis that rocked Japan at about the same time. (One of several books on the S&L scandal is shown below.)
“The source, at the epicenter of the (American) disaster, was large-scale criminal frauds conducted by executives at these savings and loans, along with outside beneficiaries, sometimes even known Mafiosi,” they charged. “Seventy to 80 percent of these savings and loan bankruptcies were due to criminal activity.” And in Japan, “banks shortsightedly lent to companies and entrepreneurs with a tang of Yakuza, the Japanese mafia.”
In the current crisis, the writers blame “convoluted scams… conflicts of interest between rating agencies and banks, and banks and insurance companies…” They accuse financial companies of setting up fictional balance sheets like those made famous in the Enron scandal.
In this climate, aren’t you troubled by the secrecy surrounding the $350 billion that Treasury Secretary Hank Paulson distributed to American banks recently? The banks refuse to give an accounting, and reporters are complaining that they get the brush-off when they ask questions.
The bailout may well be completely above board. I certainly have no way of finding out what’s going on. But in view of all that has transpired, I would hesitate to trust the bankers without at least getting a few answers. I think it’s time for Congress to start holding hearings. Don’t you?