By Richard Lawless
The Office of Congressional Ethics (OCE) is preparing to tackle a widespread congressional “pay to play” scheme involving Puerto Rico bonds.
In “off the record” conversations, members of the OCE have expressed serious concern over the depth and scope of serious allegations of wrongdoing between Wall Street firms and our elected representatives.
Richard Lawless is a former senior banker who has specialized in evaluating and granting debt for over 25 years. He has a Master’s Degree in Finance from the University of San Diego and Bachelor’s Degree from Pepperdine University. He sits on several Corporate Boards and actively writes for several finance publications.
Based on SEC and FBI testimony that has been supplemented with thousands of pages of supporting documents, the OCE has opened an investigation into a widespread pay to play enterprise aimed at protecting those responsible for the theft of tens of billions of dollars.
The testimony and documentary evidence suggest the following:
• Credit rating agencies knowing issued false credit ratings for municipal bonds
• Major Wall Street banks knowingly sold those bonds to innocent investors
• Administration officials who participated in the original fraud led the efforts in Congress to find a solution
• Congressmen and senators who were fully aware of the alleged fraud, accepted material financial support from the rating agencies and banks and then passed unprecedented legislation designed to protect those responsible
• The legislation known as PROMESA revoked all the legal rights of the victims and prevented or forestalled all lawsuits related to the alleged criminal activity
• These same legislators then put undue pressure on the Securities and Exchange Commission and the FBI to delay or stop investigations and regulatory actions against those who participated in the alleged fraud
• To date there has been $34 billion dollars in losses, incurred mainly by retired Americans
According to the OCE, a report should be completed and available to the public over the next three to four weeks.
A referral from the OCE to congress does not necessarily mean any corrective action will be taken. There has been an obvious reluctance of government representatives to prosecute their own.
You can follow the progress of this investigation through the OCE website