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Letter: Wall Street owns 'all' politicians
Published on February 8, 2016 Email To Friend    Print Version

Dear Sir:

I recently watched the Republican debate and the Democratic town hall. I listened to all the presidential candidates claim how they would be tough on Wall Street and Big Corporations. Like most Americans, I didn’t believe a word of it and for good reason.

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We are in the mist of what should be a huge Wall Street scandal and all of our politicians are doing their best to protect their Wall Street friends, both parties, no exceptions.

The government of Puerto Rico admitted in a June 2015 legislative report that they fraudulently issued $11 billion dollars in bonds among other criminal acts. The document spells out how most of our largest Wall Street firms participated and how our rating agencies granted unjustified high credit ratings for generous fees. This is all 100% undisputable, recorded in historic government documents and verified by third parties.

Here are some excerpts that make the scope of this crime clear:

“This Commission realized that PREPA paid previous bondholders with capital received from new investors, to the point that owed interests were capitalized and re-grouped whenever a new debt was issued. The abovementioned was done to benefit the financial community that issued the debt and who today is collecting same, without any moneys having been invested in improvements to infrastructure, all to the detriment of the best interest of the people of Puerto Rico. We believe that the actions and circumstances mentioned above caused the economic insolvency which has plagued PREPA in the past years. Said debt was sold at discount, a large quantity of it between .60 to less than .50 cents to the dollar with the agreement to pay to the dollar in full upon its maturity. This goes to show that the financial intermediaries and the institutional holders, despite being fully aware of PREPA’s fiscal situation, had no qualms with Unjustly Enriching themselves and with having the consequences of their negligent acts be paid for by the people of Puerto Rico.”

The majority of these bonds were owned by retired Americans that lost $5 billion.

The Ponzi Scheme:

“Investors allowed PREPA to issue bonds, then, PREPA borrowed from private banks to pay the bond’s interests; then, borrowed from the Government Development Bank (from herein ‘GDB’) to pay back the private bank loans, and the GDB, in turn, issued more bonds to refinance all. Afterwards, PREPA would issue a new debt to pay GDB’s outstanding interests, pay principal and pre-pay the new bonds’ interests for several years -a cycle that is repeated over and over- and in which the original debt is never paid. This practice could constitute a fraud scheme for which the federal agencies that regulate financial instruments and the Security Exchange Commission could take action against and/or pursue civil suits against these institutions.”

Without stating the obvious, this is a confession by a criminal enterprise that committed criminal fraud. Let’s see how our politicians responded:

Democrats

• Recently added a rider to the Senate Energy Bill that would temporarily prevent the victims of this crime from filing lawsuits to recover damages.

• Pushed hard for bankruptcy protection for the criminal enterprise.

• Requested significant financial aid for the criminal enterprise.

• Trying to block any significant control board to monitor this criminal enterprise. They support a board but one with no real power to prevent this from happening again.

• They dispatched Secretary of the Treasury Jack Lew to market for the above. Jack Lew was the COO for Citibank when Citibank started selling these defunct bonds to the general public. No conflict there?

Republicans

• The Republicans are calling for a strict fiscal control board.

• The Republicans want to give this criminal enterprise another $3 billion dollars a year to help them out.

No one is calling for any prosecution, fines or even acknowledging these well known facts. I filed a criminal complaint seven months ago with the FBI. When I received no response I went to my congressmen.

Two days ago the DOJ left me a message. They said that this is a complex case and that they have special prosecutors trying to figure out if a crime actually happened here. Seven months, a confession in writing and they can’t prosecute $11-billion-dollar fraud with $5 billion is losses to the American people. A case that a second year law student could win in court and our best prosecutors are struggling?

The system is broken and ALL our political leaders are participating in it. God save this nation.

Richard Lawless
 
Reads: 2585







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