What is it about big bank executives that makes them immune to being criminally prosecuted? Could it be that they are a vital aspect of our economy? Or maybe the fact these big banks, such as Goldman Sachs and JP Morgan & Chase, donate massive amounts of money to our politicians? This is not a conspiracy theory; throughout Hillary Clinton’s political career, from the years 2002-2008, she accumulated $831,523 and $801,380 respectively from the aforementioned financial titans. As some of the most wealthy institutions in the world, these big banks contribute immense amounts of money to political campaigns in hopes of furthering their own interests. This unfortunate phenomenon was exemplified in 2008, when the US experienced its largest financial recession since the Great Depression. From December 2008 to June 2009, the official dates for the recession, the US lost 8.7 million jobs, leaving a significant portion of the country without any means of income. One would think the criminal activity that the big financial institutions took part in would lead to criminal prosecution, but this has not been the case 8 years after the recession hit. Thankfully, the US economy has recovered and regained the jobs lost in the recession; however, that does not exonerate the big banks from their actions.
So, during this time, what exactly did the giants in the financial industry do that constituted criminal activity? It all started with the mortgage companies; for example, Countrywide. Before the 2008 crisis hit, Countrywide would give mortgages out to people whom could not afford them, subsequently selling them as legitimate investments. Then, a bank like Goldman Sachs would buy up these faulty mortgages and sell them to their investors as a credible financial investment. This practice resulted in one of the worst financial crises the world has ever seen, with millions of people losing their jobs along with numerous homes being foreclosed upon. The ripple effects were felt in various countries, but none more than the US.
One would assume these white collar criminals would have been criminally prosecuted; this could not be further from the truth. After all, is not knowingly taking part in shady financial practices, resulting in ruining millions of peoples’ lives, a crime? The Department of Justice (DOJ) does not seem to think so. In fact, the way I see it, these financial giants only received a slap on the wrist when one thinks about how much their company is worth.
The most recent settlement reached with the DOJ revolved around Goldman Sachs, one of the main culprits that caused the 2008 financial crisis. The DOJ and Goldman Sachs agreed to a 5.1 billion dollar settlement stemming from the bank’s conduct in the years before the financial crisis. Unsurprisingly, the DOJ interpreted this as a victory.
The head of the Civil Division at the DOJ said in a statement: “Today’s settlement is another example of the department’s resolve to hold accountable those whose illegal conduct resulted in the financial crisis of 2008”
While Goldman Sachs is the most recent institution to settle out, other big banks did the same thing. JP Morgan & Chase and Bank of America agreed to pay $500 million and $16 billion respectively, resulting from their involvement in the Great Recession.
This thoroughly illustrates the difference between how the government prosecutes white collar crime compared to street crimes; they are more than willing to throw someone into jail for smoking a little weed, but when wealthy businessmen are the reason millions of people lose their jobs, nothing is done about it besides handing them a fine. Now, I am aware the figures mentioned above are substantial amounts of money and to the common person, this would be crippling to their well-being; however, this is not the case for some of the wealthiest people in the world. Indeed, these fines will hurt the banks in the short term, but in a couple years, when they have paid everything off, it will be as if nothing ever happened. The giants on Wall Street make so much money that the loss will be made up within a couple years, if not a year.
Deterrence, one of the primary goals of the Criminal Justice system, seeks to prevent future crimes by making an example of previous criminals. For example, a person may steal an item from a store, resulting in them serving a short jail sentence, thus sending a message to the general population that this will not be tolerated. Therefore, future criminals may not steal something from a store because they know what will happen to them if they get caught. However, when it comes to white collar crime, much like the actions of the banks leading up to the financial crisis, deterrence cannot be established by simply fining the company. These people need to be criminally prosecuted so the whole country knows something like this will not be tolerated ever again. The government is sending the wrong message to the public. As wealthy elites in the US, the big bank executives need to be held to the same standard as the average American citizen; after all, equal justice under law is a staple of our democracy.
–Contributed by R.A.