{"id":14770,"date":"2016-11-01T07:02:33","date_gmt":"2016-11-01T13:02:33","guid":{"rendered":"http:\/\/lastbestnews.com\/site\/?p=14770"},"modified":"2016-11-01T07:34:57","modified_gmt":"2016-11-01T13:34:57","slug":"montana-viewpoint-too-big-to-fail-too-big-to-jail","status":"publish","type":"post","link":"https:\/\/montana-mint.com\/lastbestnews\/2016\/11\/montana-viewpoint-too-big-to-fail-too-big-to-jail\/","title":{"rendered":"Montana Viewpoint: Too big to fail, too big to jail"},"content":{"rendered":"
\"JE\"<\/a>

Jim Elliott<\/p><\/div>\n

Wells Fargo Bank recently agreed to a multimillion-dollar settlement for setting up fraudulent bank accounts for existing customers\u2014without their knowledge\u2014and charging those same customers fees for those accounts.<\/p>\n

This prompted a hearing by the Senate Committee on Banking, Housing and Urban Affairs, with the star attendee being John\u00a0Stumpf, then the CEO of Wells Fargo. For this latest in a series of his company\u2019s fraudulent practices, Stumpf was properly chastised \u00a0by committee members, most notably by Sen. Elizabeth Warren, one of the few people\u00a0on the committee who has not taken campaign contributions from Wells Fargo employees or political action committees.<\/p>\n

Stumpf\u2019s patent answer to questioning seemed to be, \u201cI didn\u2019t know about it,\u201d but like a good soldier, he resigned\u2014under pressure\u2014and lost some $56 million in stock benefits\u2014under pressure.<\/p>\n

However, he will more than likely not be charged with criminal behavior because he \u201cdidn\u2019t know.\u201d In fact, most CEOs of large banks are in the same enviable position, enviable at least to those CEOs of small to mid-sized financial organizations who are now serving prison time for\u2014among other things\u2014money laundering, defrauding customers and just plain lying.<\/p>\n

These smaller fish would not be in jail without the efforts of a small government agency named SIGTARP\u2014Special Inspector General for the Troubled Assets Relief Program. SIGTARP was created to police the financial institutions that received government bailout (TARP) money after the financial crisis that led to the Great Recession. It has proved to be one feisty little outfit led by an equally feisty chief, Special Inspector General Christy Goldsmith Romero.<\/p>\n

Since 2009, SIGTARP has filed charges against 366 financial company executives and convicted 259 of them. Of those, 163 are serving lengthy prison sentences and the rest are waiting for sentence to be imposed. But none of those charged with criminal activity are top officers of the really big financial institutions.<\/p>\n

\"CapreAir_Variable\"<\/a><\/div><\/div>The big fish aren\u2019t in jail because they \u201cdidn\u2019t know\u201d what was going on in their own companies. They claim that the companies they run are so large and complex that they can\u2019t be expected to know everything that goes on in them. This raises the question: why are they paid so much when they know so little?<\/p>\n

And it\u2019s true, they don\u2019t know because they are not told. This is not lower-level executives hiding their criminal activities. It is the culture of entire corporations to keep their top officers in the dark about any questionable practices going on so they can\u2019t be held accountable by law enforcement. If they don\u2019t know, how can they be guilty of anything other than ignorance of the company they run?<\/p>\n

This immunity by way of ignorance can be changed. In SIGTARP\u2019s Quarterly Report to Congress last week, Goldsmith Romero proposed a simple solution: require the top officers of large financial institutions to certify that there is no fraud or criminal activity being carried on in their organization.<\/p>\n

By putting CEOs and other top executives in a position of potential liability it could be expected that criminal activities in the company would be discouraged, if only to keep the top officers out of jail. This seems to be a reasonable and fair approach, and the committee, which includes Montana Sen. Jon Tester, would be well advised to pursue it.<\/p>\n

What is really disheartening, however, is the amount of fraud and deception that goes on in so many financial institutions, activity that cheats the taxpayer and devastates homeowners. It\u2019s a painfully long list that is available at SIGTARP.gov<\/a> under \u201cInvestigations.\u201d<\/p>\n

I would like to think that not all financial organizations are running con games, but considering the number of organizations and individuals who have been investigated and convicted by SIGTARP, it is tempting to draw the conclusion that fraud, deceit and cover-up runs rampant in our financial institutions.<\/p>\n

A little jail time for top executives might help them hew to a moral compass\u2014even if it\u2019s not pointing to their direction of choice.<\/p>\n","protected":false},"excerpt":{"rendered":"

Wells Fargo Bank recently agreed to a multimillion-dollar settlement for setting up fraudulent bank accounts for existing customers\u2014without their knowledge\u2014and charging those same customers fees for those accounts.<\/p>\n","protected":false},"author":64,"featured_media":14771,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3864],"tags":[5136,5137,5138,5134],"class_list":["post-14770","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-montana","category-opinion","tag-christy-goldsmith-romero","tag-elizabeth-warren","tag-john-stumpf","tag-wells-fargo","prominence-category-featured"],"_links":{"self":[{"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/posts\/14770","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/comments?post=14770"}],"version-history":[{"count":0,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/posts\/14770\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/media\/14771"}],"wp:attachment":[{"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/media?parent=14770"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/categories?post=14770"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/montana-mint.com\/lastbestnews\/wp-json\/wp\/v2\/tags?post=14770"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}