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Matt Taibbi and Bank Whistleblower on How JPMorgan Chase Helped Wreck the Economy, Avoid Prosecution
A year ago this month the U.S. Department of Justice announced that the banking giant JPMorgan Chase would avoid criminal charges by agreeing to pay $13 billion to settle claims that it had routinely overstated the quality of mortgages it was selling to investors. But how did the bank avoid prosecution for committing fraud that helped cause the 2008 financial crisis? Today we speak to JPMorgan Chase whistleblower Alayne Fleischmann in her first televised interview discussing how she witnessed "massive criminal securities fraud" in the bank’s mortgage operations. She is profiled in Matt Taibbi’s new Rolling Stone investigation, "The $9 Billion Witness: Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking."
TRANSCRIPT
This is a rush transcript. Copy may not be in its final form.
JUAN GONZÁLEZ: A year ago this month, the Justice Department announced the banking giant JPMorgan Chase would avoid criminal charges by agreeing to pay $13 billion to settle claims that it had routinely overstated the quality of mortgages it was selling to investors. When the toxic mortgage securities started turning bad, investors lost faith in the banking system, and a housing crisis turned into the 2008 financial crisis that led to millions of home foreclosures. New York Attorney General Eric Schneiderman unveiled the settlement last November.
ATTORNEY GENERAL ERIC SCHNEIDERMAN: Not only will Chase have to pay the largest settlement ever levied against a financial institution, but it has admitted in our statement of facts that its own employees, employees of Bear Stearns and employees of Washington Mutual made material misrepresentations to the investing public about a large number of residential mortgage-backed securities that they issued prior to the crash in 2008. This settlement is a major victory in the fight to hold accountable those who were responsible for that crash.
AMY GOODMAN: Soon after the JPMorgan Chase deal was reached, U.S. Attorney General Eric Holder discussed the bank’s misdeeds during an interview with NBC News’ Pete Williams.
ATTORNEY GENERAL ERIC HOLDER: It packaged loans that it knew did not pass its own stated due diligence test. We have a whistleblower who indicated that she expressed concerns about what the strength of these mortgage-backed securities were, and they put them out there to the market and said that they were perfectly fine, when in fact they were not.
PETE WILLIAMS: So, to be clear, you’re saying that JPMorgan’s conduct here contributed to the housing collapse?
ATTORNEY GENERAL ERIC HOLDER: Not only the conduct of JPMorgan, it was the conduct of other banks doing similar kinds of things that led directly to the collapse of our economy in 2008 and in 2009.
JUAN GONZÁLEZ: During that interview, Attorney General Eric Holder mentioned the role of an unnamed whistleblower from JPMorgan Chase who aided the Justice Department’s case against the bank. Well, until this week, that whistleblower, Alayne Fleischmann, a securities lawyer who worked for JPMorgan, had never spoken publicly about what she witnessed inside the bank. That changed yesterday when Rolling Stone magazine published a major new piece by Matt Taibbi headlined "The $9 Billion Witness: Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking."
AMY GOODMAN: In the article, Alayne Fleischmann criticizes not only JPMorgan’s banking practices, but how government regulators at the Holder Justice Department responded to the bank’s lawbreaking. Today, in her first televised interview, Alayne Fleischmann joins us here on Democracy Now!, along with Matt Taibbi, who has closely covered the financial crisis for years. His latest book, Divide: American Injustice in the Age of the Wealth Gap, has just come out in paperback.
And we welcome you both to Democracy Now! for the hour.
MATT TAIBBI: Thanks for having us on.
AMY GOODMAN: So, Alayne Fleischmann, start at the beginning. Why did you decide to come forward? And how did you end up at Chase?
ALAYNE FLEISCHMANN: Sure. For a long time, I was expecting it to come out. I’ve been talking to the government for two-and-a-half years now. And first it went through the SEC. Then it went through the Civil Division of the DOJ. And at some stage after watching all of these major banks have deals that actually the facts get wiped away, I started to feel that if I don’t come forward, there’s a real chance of that happening here, too.
In terms of JPMorgan Chase, I started there in March 2006 at sort of the height of the boom. When I started, everything seemed normal. I didn’t really realize some of the things that were happening in the background. And then things started to change in about May, a couple months after I had been there.
JUAN GONZÁLEZ: Well, what—when you went to work there, what specifically was your job? And if you could walk us through how you began to realize the huge problem that the bank was a part of?
ALAYNE FLEISCHMANN: Sure. I started as what they call a deal manager. Basically, we coordinate between all these different groups when we’re bringing in these loans, that are then going to be sold to investors. I first noticed that there was a problem when they brought in a new person to do our diligence, which is just the review of the loans themselves to make sure they’re of good quality. As soon as he came in, we suddenly—this wall sort of came down between myself and the group that was doing this review, and you couldn’t get information that you would normally get. On top of that, there was immediately a sort of a no-email policy. He wouldn’t send emails, and we weren’t allowed to send him emails. He would actually come out and yell at you if you sent him an email.
AMY GOODMAN: What was the reason?
ALAYNE FLEISCHMANN: It was never given, which was extremely worrisome, because normally the reason why you have a compliance and diligence department is to actually have written policies about what you’re doing, to be able to explain to people how you’re making your decisions. So it’s exactly the opposite of what you would normally expect.
JUAN GONZÁLEZ: And when you say to review the quality of the loans, if you could—
ALAYNE FLEISCHMANN: Sure, yes.
JUAN GONZÁLEZ: —for people who are not aware—you were, in essence, certifying that these individual loans could be packaged into a group of securities to then be sold to investors in a huge package, right? But you had to go through every individual loan? Was that—
ALAYNE FLEISCHMANN: Yeah, that’s pretty much what happens. It’s really that you’re taking the actual loan files, that was done between the lender and the borrower, and looking at them to make sure everything looks right. Does this person have enough money to pay off their loan? Do they have the sort of history where we think that they’re going to pay this loan? And if we find that they don’t, then we’re actually not supposed to purchase the loans, and certainly shouldn’t be selling them to other investors without at least telling them there’s something wrong with them.
AMY GOODMAN: And so, what was the smoking gun for you?
ALAYNE FLEISCHMANN: Everything about—what really started happening—in particular, it became apparent in October—was that sometimes we had deals coming in where even though I wasn’t even the person looking at the loans, you could tell from where I was that something was wrong with them. The GreenPoint deal, which is what Matt talks about in his article, even when the loans came in, they were very, very old, which usually you try to actually pull these loans and sell them within two to three months—these loans were going back to close to the beginning of the year. If you work in the industry, you know immediately what that means, is either they couldn’t sell them, because the buyers were telling them they weren’t any good, or, even worse, they’d been sold and then had missed a bunch of payments, so they had actually been sold back to the originator. Any of those loans you wouldn’t normally sell to investors as regular loans.
JUAN GONZÁLEZ: Now, Matt, you’ve referred in your article to these loans as basically selling old, beat-up used cars—
MATT TAIBBI: Right.
JUAN GONZÁLEZ: —as if they were new. Could you explain that?
MATT TAIBBI: Yeah, that’s exactly what Alayne is talking about. Essentially, what the bank was doing was they—you know, there are companies out there, these mortgage lenders, like a company that might be familiar to people is, like, Countrywide—in this case, it was an originator called GreenPoint—they would go out into neighborhoods, and during this boom period, they were giving mortgages to anybody and everybody with a pulse, essentially. They were especially low-income neighborhoods. They were offering these very advantageous loans to people, whether they could afford the houses or not. They were buying huge masses of these loans. And then they were—
JUAN GONZÁLEZ: They were called like "liar’s loans," or stated income where no one even checked whether the person had the income to actually pay it off.
MATT TAIBBI: That’s exactly right. That’s exactly right. That was the verbiage, "liar’s loans." The FBI warned that there was going to be an epidemic of these liar’s loans way back in 2004. The industry ignored these warnings. The government ignored these warnings. And there was this huge influx of these stated income loans, where people could just say that they made an enormous amount of money, and nobody would check.
So the bank buys all these loans, and then what they were doing is essentially throwing them into big pools, making hamburger out of them, and then selling that hamburger to pension funds, insurance companies, hedge funds, all kinds of investors. Typically ordinary people were the people on the other end buying this stuff. They were investing in these securities, and often they didn’t even know it.
What Alayne was involved with was making sure that these loans were of good quality, so that pension funds, when they bought these securities, weren’t buying something that was going to blow up on them a year later. And what she found was that they were buying loans that were of very dubious quality, that were extremely risky, and that should not have been made into that hamburger.
AMY GOODMAN: We’re going to break, and when we come back, we want to find out what happened when you went to your colleagues, your superiors, and then went outside the company to the U.S. government, right on up to Eric Holder and the Obama administration. Today, a Democracy Now! broadcast exclusive, Alayne Fleischmann is with us, the JPMorgan Chase whistleblower, speaking for the first time about her experience as deal manager at JPMorgan, where she says she witnessed "massive criminal securities fraud" in the bank’s mortgage operations during the period leading up to the financial crisis. And Matt Taibbi is with us, award-winning journalist, now back with Rolling Stone magazine, his latest piece headlined "The $9 Billion Witness." Stay with us.
[break]
AMY GOODMAN: We’re speaking to JPMorgan Chase whistleblower Alayne Fleischmann and reporter Matt Taibbi. His latest piece, "The $9 Billion Witness: Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking." Last November, Attorney General Eric Holder appeared on NBC News just after the JPMorgan Chase settlement was reached. He was questioned by NBC’s Pete Williams.
PETE WILLIAMS: What about those who say, "Well, the message here is, if you do wrong, you just pay for it and move along"?
ATTORNEY GENERAL ERIC HOLDER: This was not simply something that JPMorgan simply signed a check and smilingly said, "This is a good deal for us." This inflicts pain on that institution.
PETE WILLIAMS: But is this, in essence, a sort of template? We can expect to see other settlements now?
ATTORNEY GENERAL ERIC HOLDER: I certainly think that the way in which this case has been settled is a template of what we can expect, both in terms of getting maximum amounts of money and then using that money so that we get it to people who suffer the greatest amount—that is, either investors or homeowners.
AMY GOODMAN: That’s Attorney General Eric Holder. Alayne Fleischmann, let’s take it back a step. When you started to alert your colleagues and your supervisors at JPMorgan Chase, what did they say?
ALAYNE FLEISCHMANN: Well, what happened was the transaction, at one point, just stopped. It turned out that 40 percent of the loans in this deal had problems with them. When we tried raising this issue with our superiors, what actually happened is they just started yelling at the diligence managers who were clearing the loans, sort of yelling, berating them, making them do reports over and over again. And it became clear that, although they wouldn’t say it, it was going to be like that until they would clear the loans. So what actually happened is these loans started being cleared, but basically just by sort of the brute force of what was going on there.
I raised it first with a managing director and an executive director, and couldn’t get any response. After that, I decided the best possibility would be to write a letter to another managing director that actually laid out everything I was seeing. I used the GreenPoint deal as an example, which is why the letter specifically says exactly who was doing what all over this deal. But it also lays out general problems in our diligence that the salespeople were being involved, which isn’t normal, and that there seemed to be a lot of pressure on diligence managers to clear loans that shouldn’t have been purchased or sold.
JUAN GONZÁLEZ: And the importance of putting it down in a—
ALAYNE FLEISCHMANN: Yeah.
JUAN GONZÁLEZ: —putting all the facts down in a letter, what that meant inside the company?
ALAYNE FLEISCHMANN: Yeah. Well, what it used to be is that the way that you could stop these things from happening was, if you write a memo that lays out what’s happening, the management won’t go forward, because they realize that if they do, there’s going to be this evidence of what happened.
JUAN GONZÁLEZ: There’s going to be a paper trail of the—mm-hmm.
ALAYNE FLEISCHMANN: Yeah. The big worry with these settlements and the way they’re being done—and I’m not the only whistleblower in these cases—is that you have these emails and these memos, but nothing happens. A fine gets paid, and then all of the facts and who did what gets washed away. So, as a whistleblower, you’re thinking, "I did all of this, and the DOJ has all of this, but for some reason they’re not going forward on it."
AMY GOODMAN: So, what happened when you went outside the company? How did you go outside?
ALAYNE FLEISCHMANN: Well, one issue I had is that although I warned not to securitize the loans, there was no way—I was blocked off, especially after I had raised complaints, from being able to see any of the data or the diligence process, which right there shows that something was wrong. So, after I left JPMorgan, I actually had no idea, for a full four years, that the loans had been securitized. On one hand, I was worried they would, but I really thought no one would ever actually securitize those loans.
MATT TAIBBI: This is an important distinction—
ALAYNE FLEISCHMANN: Yeah.
MATT TAIBBI: —because Alayne had no idea that a crime had been committed until she had concrete knowledge that the loans had actually been resold to somebody else. They’re certainly allowed to buy as many bad loans and as many risky mortgages as they want. It’s not until they go to some investor and represent to them that these are, you know, AAA-rated securities or whatever, or highly rated securities, that they’re actually committing fraud. And so, she had no way of knowing that. Even after she was laid off from the company, she had no knowledge of what actually happened. So she couldn’t actually report the crime yet, because she only saw one half of the deal.
JUAN GONZÁLEZ: And you were laid off in—at the beginning of 2008, right?
ALAYNE FLEISCHMANN: Eight, yeah.
JUAN GONZÁLEZ: Yeah, actually before the crash. Already there was turmoil—
ALAYNE FLEISCHMANN: Yeah.
JUAN GONZÁLEZ: —in the home loan market, but there was not—the crash had not happened.
ALAYNE FLEISCHMANN: Right.
JUAN GONZÁLEZ: And so that the bank, when Jamie Dimon and other leaders later said that they had no realization that the market was tanking as fast as it could, at least your memos were certainly indicating to them that there were major problems in their portfolios.
MATT TAIBBI: Well, what’s funny is they actually said two completely opposite things. There was an article in Fortune magazine later in 2008 in which they report that Jamie Dimon, the CEO of the company, knew as early as October of 2006 that the industry was rife with underwriting problems, all the things that Alayne is talking about. The company was aware of this, and there are quotes in which the CEO is telling his subordinates, "We’ve got to get out of these investments, because this whole thing can go up in smoke." And then, meanwhile, so Chase is selling its own investments in these kinds of mortgages, but they’re taking these same mortgages and selling them to investors and not telling them that they have these concerns. Later, when they testify in front of the Financial Crisis Inquiry Commission in 2010, Dimon said exactly the opposite. He said, essentially, "Well, we had no idea that these things were happening. We got caught up in the fact that housing prices were just going continually upward."
AMY GOODMAN: So, talk about the settlement. What happened next?
MATT TAIBBI: Well, so, the settlement happened in—I guess, a year ago about this month. And what’s interesting about it is, Alayne, by that point, had already talked to civil investigators in the U.S. Attorney’s Office in Sacramento, and she talked to some very talented lawyers there who seemed very anxious to press this case. And they were about to release a very detailed civil complaint against Chase in September of last year, and just hours before that press conference, when they were going to announce that, reportedly, Jamie Dimon, again, the CEO of Chase, called up the assistant attorney general, asked to renegotiate, and they canceled the press conference, and they went back into negotiations. And a few months later, they had a settlement in which they paid a lot of money, but none of the facts came out in that.
AMY GOODMAN: Just like if you were in trouble, you could make that call.
MATT TAIBBI: Yeah, I could call up—yeah, I could call up the mayor or the president and have a court case go away. I mean, that’s exactly what happened in this case, is they basically put in a phone call to the very top of the criminal justice system.
JUAN GONZÁLEZ: And what happened to your contacts with the Justice Department, if you could talk about that, that process? How detailed did they want to get into the information that you had?
ALAYNE FLEISCHMANN: Well, my first contact, it was actually after four years. I was working in Calgary, and I got a call from the SEC.
AMY GOODMAN: Because you come from Canada.
ALAYNE FLEISCHMANN: Yeah. He introduced himself as an investigator from the Enforcement Division. And as I sort of paused for a minute, jokingly, he then said, "You weren’t expecting to hear from me, were you?" And after that, they set up my first interview with the SEC, which was very short. It was only maybe an hour, hour and a half. They were only interested in one deal. And even though I kept bringing up GreenPoint and they had the letter that I had written, they weren’t actually interested in that. And the SEC settlement was based on that other deal.
And then, it wasn’t until later, about December 2012, that I first met with the DOJ investigators. And it was very clear that this was going to be very different. As soon as they walked in, you could tell they knew these securities up and down, and they were really anxious to go forward with it and felt very comfortable going forward with the case. So, in that meeting, it was a very detailed meeting, sort of hours of going through how the process works and what happened. And then I had an actual deposition in about May of 2013, where they nailed down a lot more of that.
And you could see at that stage—first, I got to find out for the first time ever how many of these loans had actually gone into—had been sold to investors in sort of one pool, and it was hundreds of millions of dollars’ worth of them, with nothing actually disclosed about the problems with the loan. And then, second, I got to really see what their case was, and they clearly realized they had an incredible case there.
AMY GOODMAN: Testifying before the Senate Judiciary Committee in 2013, Attorney General Eric Holder suggested some banks are "too big to jail."
ATTORNEY GENERAL ERIC HOLDER: I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. And I think that is a function of the fact that some of these institutions have become too large. Again, I’m not talking about HSBC; this is just a more general comment. I think it has an inhibiting influence—impact on our ability to bring resolutions that I think would be more appropriate.
AMY GOODMAN: Matt Taibbi, respond to what Attorney General Eric Holder has testified.
MATT TAIBBI: Well, again, I mean, it’s a crazy thing when the leading law enforcement official in the nation comes out and says, "Well, some companies are just so big that we can’t prosecute them no matter what they do." In that case, he was speaking—he was testifying in the wake of a settlement the government had entered into with HSBC, which is the biggest bank in Europe and the biggest bank in Great Britain, which had admitted to laundering over $800 million for a pair of Central and South American drug cartels. And if you can’t send someone to jail for laundering $800 million of drug money, you know, because the company is too big, clearly something is very seriously wrong. But yet, this became sort of the unofficial official policy of the Justice Department. And this greatly affected the way they dealt with companies like JPMorgan Chase, like Citigroup, like Bank of America. They tried to find a way to effect some kind of resolution that didn’t involve criminal charges, didn’t involve penalties to individuals, and also didn’t put the facts of any of what they had actually done out into the public.
JUAN GONZÁLEZ: And in that vein, this is—you know, it’s the old Monopoly board game all over again, get out of jail free. Instead of paying $200 to get out of jail, you pay $2 billion to get out of jail. But the amounts of money that these governments are getting as a result of this—I mean, I just checked with the New York state comptroller. New York state alone, this year, is getting out of its bank settlements with Wall Street a windfall of $5 billion. That’s just New York state. Other states are getting their share, and of course the federal government is getting huge infusions. And so, they suddenly have all this cash. And then they also had this other stuff that you’ve talked about, which is consumer relief—
MATT TAIBBI: Right.
JUAN GONZÁLEZ: —apportions. So, the governments actually get cash settlements, but then they supposedly negotiate additional money for the citizens, a consumer relief. Could you talk about that?
MATT TAIBBI: Well, OK, there’s a couple of things here. First of all, these settlements, they always come up with a big number, but the number is always actually—when you actually look at the accounting, it turns out to be smaller than they announce. In the case of the Chase settlement, the number they announced was $13 billion. But there’s a couple of really important factors here. One is that $7 billion of that—it’s $7 billion, right?—was tax-deductible, which means that all of us, American citizens, anybody who pays taxes, actually picked up the check for about $2.4 billion worth of the settlement. So we paid part of that settlement, which is crazy. I mean, the ordinary person, if we get a speeding ticket, we can’t deduct that when we go to pay our taxes. But these people cratered the world economy, and they get to write a tax deduction for it.
Four billion dollars of the settlement was what they call consumer relief. And what this really boils down to, I mean, there’s some loan forgiveness, where they’re allowing people to pay less principal towards their home loans, but mostly it comes down to letting people have a little extra time to pay off their payments. And it’s not always the bank that is actually doing that; it’s often the investors in those loans who are actually giving the relief. So, it’s not really the bank paying $4 billion. It’s just a number.
AMY GOODMAN: I want to turn to President Obama speaking in September, when Attorney General Eric Holder announced that he would resign.
PRESIDENT BARACK OBAMA: He’s helped safeguard our markets from manipulation and consumers from financial fraud. Since 2009, the Justice Department has brought more than 60 cases against financial institutions and won some of the largest settlements in history for practices related to the financial crisis, recovering $85 billion, much of it returned to ordinary Americans who were badly hurt.
AMY GOODMAN: Matt Taibbi, your response?
MATT TAIBBI: Well, I mean, the first thing I would say is, OK, they brought a bunch of settlements and they collected a bunch of money, but there isn’t a single individual, in this entire tableau, who is actually individually paying any kind of penalty for any of these misdeeds. All of that money came out of the pockets of shareholders. No executives had to pay a fine. No executives had to do a single day in jail. There were not even charges filed against any individuals. And—
AMY GOODMAN: What was the actual crime you feel Jamie Dimon committed that you feel he should be in jail for?
MATT TAIBBI: Well, I can’t stand here and tell you that Jamie Dimon committed a crime. But certainly there are people in these companies, and in cases like Alayne’s case, who would be targets of criminal fraud prosecutions, and probably at a lower level than Jamie Dimon. I think it would be hard to prove, although who knows? Because they didn’t try. In a normal drug case, what you would do is you would take everybody who was guilty, and you would try to roll them up the chain and see how far you could go. And that’s exactly what they did not do in this case. They didn’t aggressively go after everybody. They didn’t follow every lead. Instead, they just sort of went into a back room, decided on a number and made the whole thing go away. And yes, that is a kind of justice, it’s a kind of resolution, but I think it’s insufficient.
JUAN GONZÁLEZ: In fact, as you note in your article, after the settlement agreement with JPMorgan Chase, the stock of the company went up dramatically, the stock price of the company went up dramatically, and Jamie Dimon ended up getting a huge raise from his board of directors.
MATT TAIBBI: Yeah, yeah, in the first weeks after the settlement was announced, the market capitalization of JPMorgan Chase went up 6 percent, which translated into about $12 billion worth of value. So that’s most of your settlement right there. Actually, it’s more than almost—more than the entire settlement, if you look at it as a $9 billion settlement. And yes, Jamie Dimon, just a few weeks after being dinged for the largest regulatory fine in the history of capitalism, got a 74 percent raise by the board of—by the Chase board.
AMY GOODMAN: And we’re going to break. When we come back, we’ll hear Senator Elizabeth Warren asking questions of Jamie Dimon about that raise. Stay with us.
[break]
AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman, with Juan González. We’re talking about "The $9 Billion Witness: Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking." Today we’re talking with that woman. Alayne Fleischmann is with us. Alayne Fleischmann, a whistleblower who worked at JPMorgan Chase, she’s speaking today on Democracy Now! in this broadcast exclusive, featured in Matt Taibbi’s piece that came out in Rolling Stone this week, Matt Taibbi also with us. Well, earlier this year, Democratic Senator Elizabeth Warren criticized the size of Jamie Dimon’s salary.
SEN. ELIZABETH WARREN: In 2013 alone, JPMorgan spent nearly $17 billion to settle claims with the federal government, claims relating to its sale of fraudulent mortgage-backed securities, its illegal foreclosure practices like robo-signing, its manipulation of energy markets in California and the Midwest, and its handling of the disastrous London Whale trade. And at the end of the year, JPMorgan gave its CEO, Jamie Dimon, a 75 percent raise, bringing his total compensation to $20 million. Now, you might think that presiding over activities that resulted in $17 billion in payouts for illegal conduct would hurt your case for a fat pay bump, but according to The New York Times, members of the JPMorgan board of directors thought that Jamie Dimon earned the raise, in part—and I’m quoting here—"by acting as chief negotiator as JPMorgan worked out a string of banner government settlements."
AMY GOODMAN: That was Senator Elizabeth Warren. I’d like Alayne Fleischmann, the whistleblower within JPMorgan Chase, to respond. I mean, do you think part of what you exposed to the government earned Jamie Dimon this increase of 75 percent?
ALAYNE FLEISCHMANN: And I suppose it—the question is whether you’re concerned about making money or whether there’s criminal activity going on at the bank. There’s actually an excellent website called JPMadoff.com with some lawyers who were involved in the Madoff case, where they’ve been tracking, actually, all of JPMorgan’s fines for fraud and illegal activity. And they’re actually at $29 billion now in the last four years alone. So, the question that needs to be asked is: How is it that you can be a CEO, over $29 billion worth of fines, and get a raise? It also clearly shows that there’s no deterrent to all of these fines. It’s just happening over and over again. And if there aren’t any individuals held accountable, there’s no reason for any of them to actually stop doing these very serious crimes.
JUAN GONZÁLEZ: Well, and not only that, if all of those fines are continually occurring—
ALAYNE FLEISCHMANN: Yeah.
JUAN GONZÁLEZ: —where are the crimes that are the basis of being fined?
ALAYNE FLEISCHMANN: Well, yeah, and so that’s one of the really important points, too, is there’s very little difference between civil securities fraud and criminal securities fraud, or even how you can do this as a wire fraud case. Once you have that strong of a civil fraud case, the only real difference is that you need a little more intent level—they had to have really intentionally been doing the fraud—and you have to prove it to a higher standard. You know, you have to show beyond a reasonable doubt that this is what they were doing. But when you look at these cases, these are some of the easiest white-collar crime cases that you’re ever going to see.
And one of the things that I think has been sold to the public is, well, these are really complex and difficult, or we don’t really know who did what. First, in my case, and what I’ve seen in these other cases, there are all sorts of documents that show exactly who was making the decisions and who knew what. The idea that they’re too complex, you know, these securities themselves that are sold to investors are complex, but the fact that the investors were lied to about the quality of the loans, that’s actually really easy. And the fact that obviously if you have people who can’t afford their loans, there’s going to be no money coming out of these loans, is also something that’s not a difficult thing to understand.
AMY GOODMAN: Alayne Fleischmann, why didn’t you go to the press back then? And what made you decide to do it now?
ALAYNE FLEISCHMANN: Yeah, I, for a long time, believed that this come out, that the government would do their investigation and come forward with it. It’s actually taken a really long time for me, because for me it’s a little bit of an incredible thing to believe. But after watching all of these cases over and over again, at some stage I’m in the position where if I keep silent and the statute of limitation runs, or they do one of these agreements where they whitewash everything, then it’s too late, which is what’s happened over and over again so far. So, I’m trying to change the pattern and come out first, so that they have to either follow these properly, the way they would for any other criminal defendant, or explain why they’re not doing it.
JUAN GONZÁLEZ: And, Matt Taibbi, the reality that all—despite all the claims of the Obama administration that they’ve pursued all these civil cases, that they never really went after the people who practically wrecked the world economy, and how that relates into this election result that we just had, where obviously Americans across the board, from Democrats to Republicans to Independents, are still furious about their economic situation and the failure of holding these people accountable?
MATT TAIBBI: Yeah, I think it’s hard not to make a connection between the total lack of enthusiasm that we saw for the Democratic Party this past week and, for instance, their behavior in pushing investigations of the financial services community. And we saw it with the Occupy protests. I talk to people on Wall Street all the time. I mean, all my sources come from Wall Street. And they all say the same thing, that Barack Obama had an incredible opportunity in late 2008, just after he took office. With his communication skills, he could have gone to the American people and explained to them exactly what happened and said, "This is why the economy is bad. This is why you’re losing your job. There was massive criminal activity. It’s not just an accident." And then he could have gone and put a few people in jail and really put some teeth behind those words. Instead, they swept it all under the rug. And people, even if they don’t completely understand what happened, they sense that nothing was done. And I think it’s important to understand that.
AMY GOODMAN: I presume, Alayne Fleischmann, that you had a confidentiality agreement when you left JPMorgan Chase. Are you violating that? What made you decide to take the risk?
ALAYNE FLEISCHMANN: Yeah, and there are different arguments about whether I am or am not violating it, because of the criminal nature of what I’m bringing forward. For me, at some stage, it’s just sometimes you’re involved in something that’s bigger than you personally. Even right now, there are still all sorts of suits out there by private investors, retirement funds, pension plans, trying to get their money back. And they don’t—in a lot of cases, they don’t know that I have information. So I actually now have, in my email, contacts coming in, asking for help from me, so that they can get this money that was really stolen from their investors, these retirees, back to those people. So, for me, that’s more important than anything that’s going to happen to me.
AMY GOODMAN: Are you concerned about repercussions?
ALAYNE FLEISCHMANN: At some stage, I think I decided that this was more important. And at the end of the day, I’ll be OK. You know, I’ll figure something out, and I’ll get through this. But I think we’re at a stage where unless a lot of people start coming forward and say, "We care about this. We now know what’s happening, and we want someone to do something about it," that this is all just going to pass into history.
AMY GOODMAN: The government contacted you again this summer?
ALAYNE FLEISCHMANN: Yeah, in August they contacted me.
AMY GOODMAN: That call that they made.
ALAYNE FLEISCHMANN: Yeah.
AMY GOODMAN: And do you feel this can reopen, this information, these cases?
ALAYNE FLEISCHMANN: I did meet with them, and I was happy to see that it was an enthusiastic group. The concern I have is that what we’ve seen is that even when they’re really strong cases—you look at the JPMorgan-Madoff case, HSBC—they still, no matter how strong it is, they just get hushed away. So, yeah.
MATT TAIBBI: And this is an important distinction, too, is that it’s often not the line investigators who are the problem. The people who actually work these cases, the career prosecutors who are doing this digging, oftentimes they’re very talented and aggressive lawyers who really know what they’re doing. The problem is, the political wing of the Justice Department can take those cases and do whatever they want with them. And we saw, in Alayne’s case and in many other cases, that they take these excellent investigations, and then they just turn them into these slap-on-the-wrist settlements. And that’s what she’s worried about, I think.
AMY GOODMAN: Well, Matt, it’s great to have you back reporting, to see your piece, but it’s in Rolling Stone, it’s not at First Look. You had left Rolling Stone to be part of this new news organization. You were launching, like The Intercept at First Look, The Racket. You tweeted out that this piece was coming out in The Racket when you launched, The Racket launch, if you will.
MATT TAIBBI: Right, right.
AMY GOODMAN: But it didn’t happen.
MATT TAIBBI: No, it didn’t. You know, I think all I can really say about that is that I’m really devastated by the way everything turned out. It was a really horrible situation all around. I’m very, very sorry for the staff that is still there, the people that I hired who took a leap of faith to come work for me. And in a way, I’m—as happy as I am to be back at Rolling Stone, which I always loved, I’m sad that this piece isn’t out in Racket. I mean, I think it would have been a great piece to launch with, but it just didn’t work out that way, and that’s unfortunate.
AMY GOODMAN: Will Racket launch?
MATT TAIBBI: I don’t know. I don’t know. I’m not at the company anymore, so you’d have to direct that question to them. I think they—you know, they absolutely should. They have a very talented group over there and some great young writers, and there’s no reason that they couldn’t.
JUAN GONZÁLEZ: I just wanted to close by asking you about how you would judge the tenure of Eric Holder in—now, obviously, that he’s going to be leaving—in terms of his particular role in going after these banks, and just this whole idea of bankers being able to call directly to the Justice Department to negotiate their deals and stop prosecutions at the lower levels.
MATT TAIBBI: Well, you know, it’s funny. For years now, I’ve been covering a lot of this stuff. And I’ve spoken to a lot of people in law enforcement. And there are really two types of people that I talk to who are prosecutors. One is the kind of old-school law enforcement type that want to get the bad guy at all costs, and they’re really career civil servants who just want to do their jobs and want to see justice happen. And then there’s this new kind of person who’s appearing in government now, who comes out of the corporate defense sector. These are people who grew up as corporate lawyers defending companies like Chase and Bank of America. And that’s who Eric Holder is, very pointedly. He spent a long time at a company called Covington & Burling. And this type of lawyer, this type of law enforcement official, is much more interested in coming up with a settlement that everybody feels good about when they walk out of the room, as opposed to the old-school kind of justice where the bad guy gets his or her comeuppance in the end. And I think his tenure was very representative of a big sea change in the way we do white-collar crime in this country.
AMY GOODMAN: Well, I want to thank you both for being with us. Matt Taibbi, again, we will link to your piece at Rolling Stone. It’s called "The $9 Billion Witness: Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking." And thank you to that woman, Alayne Fleischmann. Thank you so much for joining us. Alayne Fleischmann, the JPMorgan Chase whistleblower, former deal manager at JPMorgan, where she says she witnessed "massive criminal securities fraud" in the bank’s mortgage operations during the period leading up to the financial crisis. And congratulations on your book coming out in paperback, Matt. Thanks so much, everyone, for being with us.
Happy birthday to Kieran Meadows. I’ll be speaking in Princeton on Sunday. Check our website.
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"The same Republican leaders who decry any mention of amnesty for undocumented immigrants are more than ready to grant amnesty to corporate tax dodgers," writes Juan González in his latest New York Daily News column looking at the renewed push to give tax amnesty to General Electric, Apple, Microsoft and Pfizer. Over the past decade, multinational companies have funneled more than $2 trillion in profits out of the United States and parked it overseas. Much of it is labeled “deferred taxes” and invested to make more money. They keep it overseas to evade paying our 35 percent federal corporate tax. Meanwhile, they are lobbying fiercely in Washington for a huge one-year tax reduction to only 5 percent before they’ll agree to repatriate their money.
Image Credit: http://www.flickr.com/photos/45976898@N02/45745475
TRANSCRIPT
This is a rush transcript. Copy may not be in its final form.
AMY GOODMAN: Before we move on to our Democracy Now! exclusive, Juan, well, this is the end of election week, and you did a very interesting piece in the New York Daily News about the issue of immigration.
JUAN GONZÁLEZ: Yeah, well, my column in today’s paper counterposes the Republicans saying that there will be a war if President Obama moves forward on his promise of an executive order on immigration reform. The Republicans don’t want amnesty or some kind of amnesty for undocumented immigrants, but they immediately have said after the election that they want amnesty for corporate America. One of the big issues they’re going to be pushing forward now, in terms of tax reform, is this amnesty or holiday for repatriated profits from corporations around the world. About $2 trillion are sitting overseas—money of Microsoft and Pfizer and Apple and General Electric. They don’t want to bring it back into the country because they’d have to pay the 35 percent corporate tax. So, the Republicans are pressing. And President Obama, in the press conference when he was asked after the election, seemed open to the idea of reducing that tax for one year to maybe 5 percent, which is what corporate America would like, but he wants in exchange that money used for infrastructure investment. It’s still going to be a huge windfall for corporate America. They’ve been lobbying fiercely for it. And right away, the Republicans want amnesty for that, but they certainly don’t want it for immigrant workers who’ve been undocumented living in the country, many of them working hard and staying out of trouble for decades. So, we’ll see how the Democratic Party and President Obama responds to the choices on this amnesty issue.
AMY GOODMAN: And we’ll link to your article at democracynow.org.
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Supreme Court Review Likely After Same-Sex Marriage Bans Upheld in 4 States
A federal appeals court in Ohio has dealt a blow to marriage equality in a move that’s expected to bring the issue before the Supreme Court. The appeals court upheld the right of four states — Kentucky, Michigan, Ohio and Tennessee — to ban same-sex marriage. The decision is at odds with rulings issued by similar courts in favor of marriage equality, a split that will likely force the Supreme Court to take action. Last month, the Supreme Court rejected appeals from five states that sought to ban same-sex marriage, causing a cascading effect that saw same-sex marriage become legal in more than 30 states. In a statement responding to Thursday’s ruling, Chase Strangio of the American Civil Liberties Union said: "We will be filing for Supreme Court review right away and hope that through this deeply disappointing ruling we will be able to bring a uniform rule of equality to the entire country."
Boehner Warns Obama Against Executive Action on Immigration
House Speaker John Boehner has warned President Obama against taking executive action on immigration, one day after Obama said he would act by the end of the year. Obama had previously delayed steps on immigration until after the midterm elections, which brought a wave of Republican triumphs on Tuesday. Speaking at his first news conference since the victory, Boehner threatened to withhold cooperation if Obama moves ahead.
House Speaker John Boehner: "I believe that if the president continues to act on his own, he is going to poison the well. When you play with matches, you take the risk of burning yourself. And he’s going to burn himself if he continues to go down this path."
Boehner also vowed to prioritize votes to approve the Keystone XL pipeline and repeal Obama’s signature healthcare law. House Republicans have already voted more than 50 times to repeal Obamacare.
U.S. Strikes Hit Rebel Group in Syria; Civilians Reportedly Killed
U.S. airstrikes have reportedly hit a compound belonging to the Islamist rebel group Ahrar al-Sham, one of the top groups fighting Syrian President Bashar al-Assad. The strikes came as the U.S. targeted the al-Qaeda-linked Nusra Front. On Thursday, Ahrar al-Sham said the strikes destroyed one of its bases and killed civilians including children. An unnamed Pentagon official told The Wall Street Journal the group was not targeted intentionally. Speaking Thursday, Chair of the Joint Chiefs of Staff General Martin Dempsey compared the fight against the Islamic State in Syria to a Rubik’s Cube.
General Martin Dempsey: "North of Aleppo right now is just almost — it’s a Rubik’s Cube, frankly. And the more you try — it’s like the Heisenberg principle: Every time you touch it, it changes, and you have something new to consider. So, this is a case of staying true to the principle that we will over time defeat ISIL."
Report: Pentagon Failed to Act After 600 U.S. Troops Reported Chemical Exposure in Iraq
A new probe finds the Pentagon has failed to act on claims by more than 600 U.S. servicemembers who have reported being exposed to chemical weapons in Iraq since 2003. The numbers came to light through an internal Pentagon review after a New York Times report last month found the Bush administration concealed the discovery of chemical weapons in Iraq that had been developed with U.S. support in the 1980s — and then denied medical care to the wounded U.S. soldiers involved. The initial report put the number of injured soldiers at 17, but the Pentagon’s own records now reveal that 629 servicemembers described suspected exposure to chemical agents on post-combat health surveys. According to the Times, after years of failing to properly track or treat the victims, the Pentagon will now launch outreach efforts, including a hotline.
NATO Chief Vows Continued Role in Afghanistan
The new secretary general of NATO has made a surprise visit to Afghanistan. Jens Stoltenberg vowed to continue NATO’s role in the country beyond this year’s pullout date.
Jens Stoltenberg: "Next year we will open a new chapter. The future Afghanistan will be in Afghan hands, but our support will continue. We will start a new mission to train, advise and assist Afghan forces. We will also continue our financial support and as President Ghani and I discussed, we want to further develop our long-term partnership with Afghanistan."
Afghan troop deaths have increased this year, with more than 4,600 killed in 2014 alone — that’s more than twice the number of U.S. soldiers killed since the war began in 2001. An estimated 12,000 NATO troops will remain in Afghanistan beyond this year, most of them from the United States.
Explosions Target Fatah Leaders; Israeli Settler Tries to Run over Palestinian
In Gaza, a wave of explosions has targeted homes and cars belonging to members of the Fatah Party of Palestinian President Mahmoud Abbas. No casualties have been reported. The targets included a stage set for use in next week’s commemoration of former Palestinian president and Fatah leader Yasser Arafat. The memorial has sparked tensions between Fatah and rival Palestinian group Hamas. The bombings also come amidst rising tensions between Palestinians and Israelis. Earlier today, news agencies reported an Israeli settler had crashed into a wall after trying to run over a Palestinian in the occupied West Bank. That follows two alleged hit-and-runs by Palestinians on Wednesday. In one, the suspect was shot dead by police after killing a pedestrian; in the second, the man turned himself in after injuring three Israeli soldiers, saying the collision was an accident.
ICC Declines to Prosecute over 2010 Israeli Raid on Gaza Flotilla
The International Criminal Court has declined to take action over Israel’s deadly 2010 raid on a Gaza-bound aid flotilla, which killed 10 Turkish activists. Chief ICC prosecutor Fatou Bensouda said no action would be taken, even though war crimes had likely been committed when Israeli commandos stormed the aid ship Mavi Marmara.
Fatou Bensouda: "I have determined that there is a reasonable basis to believe that war crimes, under the jurisdiction of the International Criminal Court, were committed on one of the vessels, the Mavi Marmara, when Israeli Defense Forces intercepted the flotilla on 31st of May, 2010. However, after carefully assessing all relevant considerations, I concluded that the potential case or cases likely arising from an investigation into this incident would not be of sufficient gravity to justify further action by the court."
Report: 340 Firms Skirted Billions in Taxes Through Luxembourg Deals
A new investigation has found more than 340 multinational corporations have avoided paying billions of dollars in taxes by obtaining secret deals in Luxembourg. The report was published by the Consortium of Investigative Journalists in collaboration with more than 80 reporters across 26 countries. The journalists obtained nearly 28,000 pages of confidential documents which reveal that some of the world’s largest companies, including Pepsi, IKEA, AIG, Coach and Deutsche Bank, have channeled hundreds of billions of dollars through Luxembourg — a small country in Western Europe known as a "magical fairyland" for corporate tax dodgers. Some firms have secured effective tax rates of less than 1 percent.
WHO: Ebola Cases Rising in Sierra Leone
Sierra Leone is becoming a focal point of concern over the record outbreak of Ebola in West Africa. The number of cases is continuing to rise there with nearly 1,200 new cases in the past three weeks alone, nearly triple the number in Liberia. Ebola treatment units across Sierra Leone only house about 400 beds.
Former Navy SEAL Claims to Be Osama bin Laden Shooter
A former Navy SEAL has publicly identified himself as the shooter who killed Osama bin Laden. Robert O’Neill told The Washington Post he fired the fatal shot during the raid on bin Laden’s compound in 2011. Navy leaders have criticized O’Neill for speaking out, and an anonymous source who spoke to Reuters has cast doubt on O’Neill’s claim, suggesting bin Laden was killed by someone else.
Report: Obama Sends Letter on ISIS to Iran’s Supreme Leader
President Obama has reportedly sent a letter to Iran’s Supreme Leader Ayatollah Ali Khamenei outlining a mutual interest in opposing Islamic State militants in Iraq and Syria. The Wall Street Journal reports the letter, sent last month, was also aimed at boosting efforts at a nuclear deal with Iran. White House Press Secretary Josh Earnest said U.S. policy toward Iran remains unchanged.
Josh Earnest: "The United States will not cooperate militarily with Iran in that effort. We won’t share intelligence with them. But their interest in this outcome is something that’s been widely commented upon and something that on a couple of occasions has been discussed on the sidelines of other conversations."
Belgium: Police Fire Tear Gas at 100,000 Anti-Austerity Protesters
Belgian police have fired tear gas and water cannons at more than 100,000 protesters who gathered to oppose austerity policies set out by the new government. The government, which took power earlier this month, plans to freeze wages, slash public services and raise the pension age.
Catalan Voters to Cast Unofficial Vote on Secession from Spain
Voters in the Spanish region of Catalonia are heading to the polls this Sunday for a symbolic vote on whether to secede from Spain. The vote is nonbinding, and Spain will not recognize it. Demonstrations in support of secession have brought hundreds of thousands of Catalans into the streets.
Brazil: Authorities Probe Possible Police Massacre of 10
In Brazil, authorities are investigating a possible massacre by police in the northern city of Belém after 10 people were killed in a single night. The killings took place Tuesday, hours after a policeman was shot and killed by gunmen, sparking suspicions they were conducted by police seeking revenge.
"Internet Emergency" Protests Across U.S. Condemn Latest Net Neutrality Plan
In the United States, protesters gathered in front of the White House and in over a dozen other cities across the country to call for the Obama administration to keep the Internet free and open. Last week, The Wall Street Journal reported the administration is considering a "hybrid" plan on net neutrality that would expand government oversight of the relationship between corporate Internet service providers, or ISPs, like Comcast, and content companies like Netflix. But the plan would not extend such protections to the relationship between ISPs and users. Critics say the plan could still allow online censorship and discriminatory Internet "fastlanes." Thursday’s protests were bolstered by a recent victory in Hungary, where mass protests successfully defeated a proposed tax on Internet use.
FBI Admits Agent Impersonated Associated Press Reporter
The FBI has admitted one of its agents impersonated an Associated Press reporter in order to catch a 15-year-old bomb suspect in Washington state. FBI Director James Comey acknowledged the move in a letter to The New York Times after last week’s revelations the FBI used a fake AP story in the case. Comey said the agent, posing as a reporter, sent the suspect a link to the fake article that contained software that revealed his location. AP Executive Editor Kathleen Carroll said the revelation "doubles our concern and outrage, expressed earlier to Attorney General Eric Holder, about how the agency’s unacceptable tactics undermine AP and the vital distinction between the government and the press."
Former Mississippi Prisons Chief Arraigned in Private Prison Bribery Scheme
The former head of prisons in Mississippi has been charged with orchestrating a massive corruption scheme that saw him take about $1 million in bribes in exchange for state contracts to private prison firms. A newly unsealed 49-count indictment accuses Christopher Epps of directing contracts to private firms with ties to a former state legislator. A lawsuit filed by the American Civil Liberties Union and Southern Poverty Law Center describes conditions at a prison operated by one such firm as hellish, calling it "an extremely dangerous facility operating in a perpetual state of crisis."
Princeton University Found in Violation of Title IX for Handling of Sexual Assault
A federal probe has found Princeton University violated the gender equality law Title IX by mishandling cases of sexual assault. In a rare move, the Department of Education found Princeton violated the law by imposing a standard of proof that favored accused assailants and by failing to promptly respond to complaints. Princeton will have to return some tuition to three impacted students and re-examine old cases dating back to 2011. More than 80 universities and colleges are currently under federal investigation for their handling of sexual assault.
Syracuse University Students Occupy Building for Improved Resources, Transparency
Students at Syracuse University in upstate New York have occupied the ground floor of the administration building to protest the school’s decisions to close a sexual assault resource center and cut funding for scholarships for people of color. The students have issued a range of demands, including greater transparency, improved mental health resources and more community participation in decisions.
Florida: 90-Year-Old Man Faces Jail Time for Feeding Homeless
In Fort Lauderdale, Florida, a 90-year-old man is facing potential jail time for serving food to the homeless. Arnold Abbott, known as Chef Arnold, has been cited twice in the past week after a city ordinance went into effect that bans feeding the poor. He described one of his encounters with police to a local news station.
Arnold Abbott: "One of the police officers came over and said, 'Drop that plate, right now!' as though I was carrying a weapon. These are the poorest of the poor. They have nothing. They don’t have a roof over their head. And who could turn them away?"
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"Maximum Progress on the Minimum Wage" by Amy Goodman
Elections in the United States are all about money—lots of it, increasingly from untraceable, “dark” sources. Ultimately, though, history is not made of money but of movements. The Republican sweep in this week’s midterm elections has been widely described as a wave, a bloodbath, a shellacking. Beyond the hyperbole, beneath the pronouncements of pundits, strong currents are moving, slowly shifting our society. One movement that shined through the electoral morass demanded an increased minimum wage. It prevailed, even in some of the reddest of states.Going against partisan trends, voters in Alaska, Arkansas, Nebraska and South Dakota approved ballot initiatives to raise the minimum wage, as they did in San Francisco and Oakland, Calif. In Illinois and several Wisconsin counties, both states that elected Republican governors, significant majorities passed nonbinding ballot proposals to increase the minimum wage. Since the Republicans (and some Democrats) in Congress have consistently blocked an increase in the national minimum wage, people are taking control of the issue in their communities, and finding resounding support across the political spectrum.
The federal minimum wage is $7.25 per hour, which, when adjusted for inflation, is less than it was in 1968. This translates into just over $15,000 per year for someone working a full-time job, which is below the poverty line for families of two people. Finally, President Barack Obama has made an increase in the minimum wage a central goal of his presidency. Last February, he issued an executive order that compelled employers that work under federal contracts to pay their employees a minimum of $10.10 per hour, because, he said in his State of the Union address two weeks earlier, “if you cook our troops’ meals or wash their dishes, you shouldn’t have to live in poverty.”
Legendary consumer advocate and former Green Party presidential candidate Ralph Nader has been pushing for an increased minimum wage for years. He joined the “Democracy Now!” 2014 midterm election-night coverage, linking the poor performance of the Democrats to their failure to embrace the issue of the minimum wage: “The president spent almost two weeks in salons from New York, Maine, San Francisco, and Los Angeles raising money for the Democrats,” Nader said, “not barnstorming the country on an issue that has 80 percent support—even Mitt Romney and Rick Santorum have come out for restoring the minimum wage.”
Nader turned to one of the most closely watched Senate races of the night, in Arkansas, where incumbent Democrat Mark Pryor lost to Republican challenger Tom Cotton: “Pryor came to the U.S. Senate and he made sure that he was going to turn his back on the citizen groups, the liberal groups, the progressive groups. He was in charge of the Subcommittee on Consumer Affairs. We couldn’t even get a meeting with him.” he said. “The Democrats have dropped the economic issue that won election after election for Franklin Delano Roosevelt and Harry Truman.”
Arkansas, where the world’s largest private employer, Wal-Mart, is based, actually has the lowest minimum wage in the country, $6.25 per hour—lower even than the federal minimum of $7.25 per hour (in such cases, employers are required to pay the federal minimum). The ballot initiative there, raising the minimum wage, passed with over 65 percent of the vote.
It took months of work by the group Give Arkansas a Raise Now, just one of the regional coalitions working to bring this issue to the voters because Congress refuses to address it.
Workers also are making demands directly of their employers, with a growing campaign among fast-food workers, who are demanding $15 per hour. In coordinated protests in 150 cities last September, more than 400 people were arrested in acts of nonviolent civil disobedience.
Imara Jones, a contributor to Colorlines.com, wrote that the 2014 midterm elections would be shaped by the lack of economic justice.
“Its biggest impact will likely be on the depression of voter turnout this year,” he wrote. “Voter cynicism about a lost economic decade might drive voter participation today to its lowest level in the nation’s history.” Indeed, only about one-third of eligible voters made it to the polls, with very low turnout among young people under 30, single women and people of color.
The popular drive for a fair minimum wage is just one movement surging in the American grass roots. The movements for immigrant rights, for prison and criminal-justice reform, to combat human-induced climate change, against endless war: These are movements that inspire action, that drive people to the streets, often risking arrest, or even deportation. Despite appearances after this year’s midterm elections, people are a force more powerful than money.
Denis Moynihan contributed research to this column.
Amy Goodman is the host of “Democracy Now!,” a daily international TV/radio news hour airing on more than 1,200 stations in North America. She is the co-author of “The Silenced Majority,” a New York Times best-seller.
© 2014 Amy Goodman
Distributed by King Features Syndicate
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