#23 - JRL 2009-193 - JRL Home

Moscow News
October 19, 2009
Thieves above the law
By Tim Wall

In Russian sagas of crime and punishment, such as the life and death of vor v zakone (thief-in-law) Vyacheslav Ivankov, what goes around usually comes around.

But that doesn't necessarily follow for the top bankers who bankrupt the world economy and throw millions out of work, if the events of the past year in the United States are anything to go by.

Instead of having their feet held to the fire by President Barack Obama, Wall Street's "masters of the universe" have got away scot-free. Just one greedy fraudster, Bernie Madoff, has taken the flak, getting 150 years in jail while more well-connected scammers got away with it.

The latest scandal to break is that spelled out by a former Moscow-based journalist, Matt Taibbi, one of the founding editors of satirical paper The eXile.

It seems that writing sarcastic exposes about the seedier side of 1990s Moscow was the perfect preparation for Taibbi, whose adventures have included chasing US presidential candidate John Kerry around in a gorilla suit. (Meanwhile, the mainstream US financial media have hardly scratched the surface of corporate corruption since the financial bubble burst a year ago.)

The scam Taibbi explained in an Oct. 15 article for Rolling Stone was the killing made by speculators who destroyed Bear Stearns and Lehman Brothers last year through a practice known as "naked short selling". Using inside information that both banks were overloaded with bad debt, they bet they were going down, selling fictitious stocks - and spread the word so the banks bit the dust fast.

The very same US investment banks who later were awarded hundreds of billions of US taxpayers' money to take over the fallen banks were likely the ones implicated in the scam, Taibbi pointed out. He reveals that a secret meeting of top US Treasury officials and bankers took place on March 11, 2008 - just hours before Bear Stearns started to come under sustained attacks from speculators. The same "naked short selling" sank Lehman Brothers while other investment banks gathered round like sharks smelling blood.

The market manipulation going on has either been overlooked, or simply legalised by both the Bush and Obama administrations, and the bankers rewarded handsomely. Goldman Sachs, it seems, is ready to dish out billions in bonuses again this year.

It seems the only criminals these days with any code of conduct are the Russian mafia.

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