Download Big Money Crime: Fraud and Politics in the Savings and Loan by Kitty Calavita PDF

By Kitty Calavita

At a price of $500 billion to American taxpayers, the mark downs and personal loan debacle of the Nineteen Eighties used to be the worst monetary challenge of the 20 th century in addition to a criminal offense remarkable in American background. but the majority of its perpetrators seriously isn't prosecuted, and those that have been have got minimum sentences. within the first in-depth scrutiny of the methods and technique of this catastrophe, this groundbreaking publication involves tense conclusions concerning the planned nature of this monetary fraud, the political collusion concerned, and the leniency of the felony justice procedure in facing those "Gucci-clad white-collar criminals."Using fabric from over 100 interviews with govt officers and leaders and lately declassified records, the authors convey how--contrary to prior executive and "expert" causes that chalked the catastrophe as much as enterprise dangers long gone awry or hostile fiscal conditions--S&L leaders engaged in planned fraud, stealing from their very own companies to take a position on high-risk ventures. Tempted through the coverage internet, perpetrators looted their very own associations in a brand new form of white-collar crime the authors dub "collective embezzlement."Big cash Crime additionally demonstrates how systematic political collusion--not simply coverage errors--was a serious aspect during this unparalleled sequence of frauds. Bringing jointly statistics from a number of govt organisations, the authors offer an in depth interpreting of the song checklist of prosecutions and sentencing and locate that "suite crime" gets even more lenient remedy than "street crime," regardless of its considerably greater price ticket. The ebook concludes with a couple of modest, yet no much less pressing, coverage concepts to counter the present deregulatory pattern and to circumvent a replay of the S&L debacle in different monetary sectors.FROM THE BOOK:"We equipped thick partitions; we now have cameras; we've time clocks at the vaults . . . these kinds of controls have been to guard opposed to anyone stealing the money. good, you could thieve way more funds, and take it out the again door. the way to rob a financial institution is to possess one."--House Committee on executive Operations, 1988

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Additional info for Big Money Crime: Fraud and Politics in the Savings and Loan Crisis

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The politics of our research and the implications for data quality are worth mentioning here. One reason we found it so difficult to obtain reliable data for this study was the highly politicized environment in which the S&L crisis unfolded. Many of the details of the S&L scandal were kept from the public until after the presidential election of 1988. Once the enormity of the problem became clear, politicians from both parties were eager to minimize the estimated costs of the thrift crisis as well as their own responsibility for creating the conditions that allowed the crisis to escalate.

Ely's own calculations provide the best example of the fallacy of separating fraud from investment losses or bad government policies. " Ely divvies up losses into separate categories such as "losses on junk bonds," "real estate losses," and "crime," with no thought for any overlapreal estate losses due to fraudulent lending, to cite one obvious Page 20 example. 9 Having precluded the possibility that crime and investment losses might be overlapping categories, Ely concludes that criminal activity was a relatively small part of the problem.

At the same time that the law unleashed savings and loans to compete for new money, it bolstered the federal protection accorded these "free enterprise" institutions, increasing FSLIC insurance from a maximum of $40,000 to $100,000 per deposit. As we will see in chapter 3, this selective application of the principles of free enterprisespearheaded in large part by members of Congress with ties to the thrift industrylaid the foundation for risk-free fraud. When the industry did not rebound, Congress prescribed more deregulation.

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