American Conspiracies - Jesse Ventura [102]
Enter George W. Bush with a rousing mandate of “Free-dom! Free-dom!,” as Richie Havens once sang at Woodstock. You’d think something might have been learned from the scandals that sank Enron and WorldCom soon after Bush took office. Instead, “this administration made decisions that allowed the free market to operate as a barroom brawl.”17 Bank regulators took a chainsaw to thousands of pages of troublesome things that Wall Street objected to. States that tried to do something about predatory lending were blocked by the federal comptroller of the currency. Back in 2003, the Office of Federal Housing Enterprise Oversight warned that Fannie Mae and Freddie Mac—the icons that held trillions in mortgages—were in deep doo-doo. But the White House set out to deep-six Armando Falcon’s report and replaced him with a Bush buddy from their prep school days together. To W, home ownership was at an all-time peak and that was what America was all about, forgetting that thousands of those people couldn’t really afford the loan payments. When the house of cards collapsed, W commented that “Wall Street got drunk.” I guess it takes one to know one.18
The Securities and Exchange Commission was another legacy of the New Deal, a watchdog agency created after Wall Street had pushed our economy over the cliff. Bush sliced its budget, and his first SEC chairman promised a “kinder, gentler agency.” It sure was, when it came to looking the other way. They did six investigations into Bernie Madoff, and knew back in 2005 that he was running a Ponzi scheme—taking bucks from new victims and using it to reimburse some of the old ones. Madoff said in a jailhouse interview that nobody was more surprised than he was, when he didn’t get busted long ago. But, like Bernie once said, “In today’s regulatory environment, it’s virtually impossible to violate rules ... and this is something the public really doesn’t know.” So he was able to scam folks out of at least $50 billion. Once he couldn’t come up with any more “investors” and people started asking for their money back, they found out that Bernie had none left. It had all gone toward financing his yachts and a number of mansions. Eventually, SEC Chairman Christopher Cox admitted they’d failed to check out “multiple credible and specific allegations regarding Mr. Madoff’s financial wrongdoing.” In fact, the agency had been missing numerous “red flags” since at least 1992.19 It took one in-house expert all of 20 minutes to figure out that Madoff’s claims were bogus—but somehow, that analysis didn’t make it to the SEC’s investigative team.20
After Bush’s second SEC chairman wanted to regulate high rollers playing fast-and-loose with their hedge funds, he got dumped fast. There was even a hotline for Wall Street companies to ring up SEC brass to “stop an investigation or slow it down.”21 Then again, “For many SEC attorneys, especially those atop the enforcement division, their time at the agency is a stop on their way to seven-figure jobs representing Wall Street elite.”22
Through most of the eight Bush years, insurance giant AIG was having a grand old party at the bottomless money pit. Eliot Spitzer, as attorney General of New York, had begun investigating AIG, especially its shady affiliates like the Coral Re outfit in Barbados. CEO Greenberg was forced to resign during an accounting scandal in 2005. It looked like the jig might be up. But it wasn’t too long after that when Spitzer, by then governor of New York, was forced to resign when his involvement with a prostitution ring suddenly became public.23 And now that our own government holds 80 percent of AIG’s stock as part