If You’re Gonna Buy a Court, You Might as Well Use It

“They have eyes, yet they cannot see,” otherwise known as the Alan Greenspan Phenomenon.  Poor Greenspan, his underlings and his beloved Wall Street friends were pulling off the largest, most destructive fraud in the world’s history right under his nose, so presumably his eyes could see it, but his brain could not recognize it.  

There’s the saying that those who don‘t know history are condemned to repeat it.  The saying needs to be updated.  Those who cannot remember yesterday are today’s befuddled morons.

In 1970's, Equity Funding sold bogus life insurance policies to its re-insurers knowing that in two years, Equity Funding would have to start paying the premiums to the re-insurers who had purchased the bogus policies.  No one could be that stupid – and insurance is a business 100% dependent on actuaries, the science which predicts the likelihood a bad event will happen.  Duh!  The likelihood of financial disaster was 100%!!!  If I have to explain why, go get a coloring book and sit in the corner.

Then, in the 1980's Savings and Loans were intentionally making bad loans.  What happens when an S&L makes a bad loan?  The borrower walks away with all the cash and the S&L gets bupkis, especially when the loan was for a shopping center in the desert 30 miles from the nearest town.  When some people turned out not to be blind, the crooks called in the Keating Five for Congress to poke out the regulators’ eyes.

Yes, corrupt corporate leaders constantly loot their own companies. In fact, the California’s infamous and disgraceful “Malcolm Lucas” Supreme Court decided in 1988 that it was okay to fire any employee who tried to stop executives from looting the corporation.  Mr. Foley, an employee of Interactive Data, warned the executives they had hired a guy who was an embezzler.  The executives ignored Foley and then they fired him.  The embezzler stayed employed until he plead guilty to felony embezzlement in federal court.

The Lucas Court said that it was not against public policy to fire an employee who was trying to protect the company from embezzlers.  Oh, yes, the new guy was arrested for embezzlement.  If you think Interactive Data rehired the employee who protected the company, you can return to your coloring book.  From reading between the lines, one may conclude that the reason the executives hired this new guy was so he could help them embezzle from the corporation.  Foley v. Interactive Data Corp. (1988) 47 Cal. 3d 654

Yep, that’s what society needs, a court that protects corporate looters. Listen, if you’re gonna buy a court, you might as well use it.

Then, Enron was caught inventing income and lying about losses.  Gee, how long can that last?  A long, long time due to corruption and fools who say, “Oh Ken Lay would never falsify the books.”  If regulators never heard of Equity Funding or the S&L Scandals, then they might be forgiven for their blindness.  When people tried to stop Enron’s frauds, the courts threw out their lawsuits. Listen, if you’re gonna buy courts, you might as well use them.

So what did we do in response to almost two decades of executives looting their own companies and robbing people of hundreds of millions of dollars?  Why, we deregulated the financial sector.  After all, Alan Greenspan said all businessmen were rational and none would do anything so foolish as to  intentionally buy tens of thousands of bad mortgages and sell trillions of dollars of Credit Default Swaps which they could never pay off if the bad mortgages turned out to be bad mortgages.

BTW, at the end of the mortgage scams, some lenders were not even bothering to find a homeowner or a home; they just wrote fictitious mortgages and sold them to Wall Street.  You cannot really blame them.  Equity Funding type scams mathematically require that the fraudsters eventually write completely bogus life insurance policies and completely bogus mortgages.  There simply are not enough people on earth to insure or to buy enough homes to keep the scams running.

So here we are, still suffering from the largest fraud in human history and no one asks, “Why does Millennium want to build on an active earthquake fault in a town pressed against the Hills with horrible, terrible traffic and no chance of a functional subway system?”

“Who builds an additional one million square feet in a town that has been losing people for twenty years and there is not a single reason to expect the population decline to reverse itself and increase?”

“Who is so dumb as to not know until five years into the project that the subway entrance is on the other side of Hollywood Boulevard?”

“Who’s so stupid not to notice that one block away the W Hotel has sold only 29 out of its 143 condos after two years?”

“Who’s so foolish as to openly pattern their project after Hollywood-Highland which was the nation’s largest real estate write down – over $400 Million [$625 M to $201 M]

The real question is not how dumb is Millennium because it isn’t dumb at all.  Why haven’t we learned in 40 years, that there is more money to be made by looting a corporation and the public treasury, i.e. taking $200 Million from the LAFD while giving CIM Group several million dollars.

The weapon of choice in this type of looting is Accounting Control Frauds.  (William K Smith, Ph.D., Geithner Channels Greenspan and Air Brushes Fraud Out of Crisis, FINANCIAL SENSE 5-2-12).

Accounting – that refers to lies about how well the company is doing.  Arthur Anderson falsely verified that Enron was making tons of money.  The LAFD’s January 12, 2011 verified that the Emergency Response times were great.  

Control – that means the crooks control the accounting.  Wall Street firms got the rating agencies to give AAA ratings to junk mortgage bundles.  The important part is that some entity controlled by the fraudsters does the tabulation of income, response times, loan default rate, etc.

Fraud – that means the accounting is simply a lie like the falsified LAFD response times or the newly released traffic report for the Millennium project.

Now that Garcetti’s Hollywood Community Plan is subject to multiple lawsuits and Hollywood United Neighborhood Council [HUNC] has called for a Federal Grand Jury probe into 75% downsizing of its Fire Station 82 and the falsified LAFD response times which justified looting an additional $200 Million from the LAFD budget, the Hollywood Chamber of Commerce has hired Sheppard Mullin to watch over the judge in Hollywood Community Plan litigation.

Gee, I wonder whether the judge is another Judge Anne Jones who can recognize deception when she sees it or will we have another opportunity to say, “Listen, if you’re gonna buy a court, you might as well use it.”

(Richard Lee Abrams is a Hollywood activist and an attorney. He can be reached at: [email protected] ) –cw




CityWatch
Vol 10 Issue 77
Pub: Sept 25, 2012