Archive for the ‘Activism’ Category

Follow on Twitter

Nobody openly supports unequal justice.

When Attorney General Eric Holder confided to Congress that some banks were too “large” to prosecute because it might cause systemic tremors, he was appropriately pilloried for declaring a “too big to jail” policy.

A recent disquieting episode sheds light on some of the interactions between government regulators and the banks they oversee. This episode refines our understanding of regulatory capture (at least at one bank). The “Carmen Segarra” incident shows us more about how the regulators think, how they approach errant bankers, and how far the regulators may be from adopting the obvious solution of breaking up these too-big-to-jail banks.

Spoiler alert: they are far.

Carmen Segarra spent seven months beginning in October 2011 as a senior bank examiner at the New York Federal Reserve Bank. The New York Fed is one of the front-line supervisors of the big Wall Street banks. It counts among of the regulators that the Justice Department might consult before prosecutors decide whether to seek full penalties, or to pull a punch if advised that a criminal conviction of a bank could endanger the economy,

Segarra took this job after positions at Citigroup, Societe General and MBNA, and after schooling herself at Harvard, Columbia and Cornell. The NY Fed assigned her to help oversee Goldman Sachs. While there, she uncovered serious problems. In a chain of events, when she brought these problems to her supervisors, they fired her.

In 2013, Segarra sued the New York Fed and several of her supervisors. She outlined episodes where her bosses blocked her efforts to ask tough questions or promote better policies at Goldman Sachs. For example, Goldman worked for El Paso Corp as an advisor as it bid for Kinder Morgan, Inc. Advisors help buyers secure the lowest price and best conditions. But Goldman also owned some $3 billion worth of Kinder, and a Goldman banker held a sizeable personal stake in Kinder. Sellers want the highest price when they sell. Segarra questioned Goldman’s conflict-of-interest policy. But her bosses demanded that she tone down her memorandum on the issue.

Her allegations from 2013 received some public attention at the time. Regulatory capture — where crooks control the cops — is a festering problem in bank supervision.

This September, Segarra went a step further when she released audio tapesThe very Goldman and New York Fed staff described in her lawsuit can be heard saying what she alleges. The “tone it down” conversation with her boss allows the listener to verify her charge. You are there. As Michael Lewis observed, these tapes could become the “Ray Rice moment” for bank regulators. (Rice is a Baltimore Raven football player guilty of domestic violence. That episode had been known for months, but when the tape was released, the NFL increased its sanctions on the player.)

The Segarra audio tapes emphasize the servility of regulators. In one exchange, Segarra’s boss’ boss — Michael Silva — raises a glaring problem with a Goldman executive with the indirection and timidity of a mail room clerk searching for a delicate way to tell the CEO he’d spilled coffee on his shirt. (Silva now works for GE Capital, another example of the revolving door problem behind regulatory capture.) Pulitzer winner Jake Bernstein of ProPublica shepherded Segarra’s tapes, of which there are 46 hours, into the public domain. As he summarizes, the tapes demonstrate the extraordinary deference of the regulators to the banks. (Of note, it is legal under New York and federal law to make tapes.)

It may be unrealistic to expect Hollywood histrionics from our bank regulators, but the Segarra tapes reveal that some senior bank regulators can’t even utter a clear criticism to a banker.

If Segarra was told to tone down her criticisms, if her bosses won’t confront bankers, if these same regulators leave government to work for mega-banks, we might realistically expect them to tell prosecutors in a timid way that a serious criminal charge is unwise for the financial system.

How can regulatory capture be addressed? Legislating spine may difficult.

One step would be greater transparency. Presumably, officials at the New York Fed are thinking more seriously about their capture problem following Segarra’s lawsuit and the release of the audio tapes. If these regulators knew in advance that discussions would be made public, particularly in the case where they consult with the Justice Department about a pending prosecution, they might be less beholden to the mega-banks. Transparency might serve as a prophylactic against capture. Public Citizen believes that criminal cases with too-big-to-jail banks deserve this kind of transparency.

Congress should hold hearings on the Segarra case. Helpfully, several leading members have called for hearings, including Sens. Elizabeth Warren (D-Mass), Sherrod Brown (D-Ohio), and Reps. Maxine Waters (D-Calif.), Keith Ellison (D-Minn), Al Green (D-Texas). If and when they do, Public Citizen believes that solutions including transparency should be accorded a full discussion.

Bartlett Naylor is the financial policy advocate for Public Citizen’s Congress Watch division.

Join Sen. Elizabeth Warren (D-Mass.) and other lawmakers in calling for hearings to hold the New York Fed accountable for its disgraceful deference to Goldman Sachs and its firing of Carmen Segarra.


This Labor Day, I’ll be thinking about my family.

My great grandfather, an immigrant from eastern Europe who crossed the Atlantic to work in a western Pennsylvania steel mill, died in that mill in 1929 when a piece of industrial equipment came crashing down on him.

His daughter – my grandmother – was less than a year old.

How many millions of families have suffered similar tragedies? The deadly nature of work in the “Steel Valley” is well documented. Local histories and literary classics such as Blood on the Forge and Out of This Furnace testify to this bloody past.

Clearly, we’ve come a long way since 1929, most significantly with the formation of the Occupational Health and Safety Administration (OSHA) in 1971.

Nevertheless, tragic workplace deaths occur in America almost every day. Scroll through OSHA’s 2014 document recording “FY14 Fatalities and Catastrophes to Date” (PDF), and you’ll begin to get a sense of the lives lost each day that may have been prevented.

Continue Reading

by Burkely Hermann

Lobbying usually gets a bad rap, and sometimes for good reason: it can be part of corporate special interest money’s current corruption of the political system. But during the first-ever national Single-Payer Lobby Day events in May, real people lobbied for a good cause that benefited the general public, not just a wealthy few.

As Congress’ August recess approaches and activists prepare to make in-district visits with their lawmakers’ offices, now is a good opportunity to recall my experience lobbying for single-payer.

As an undergraduate student who is currently interning with Public Citizen, I participated in the second day of events, which kicked off with a training for participants. I saw many different faces in the room, which was filled with about 75 people, ranging from nurses, who are part of National Nurses United, physicians who are members of PNHP, union leaders fighting for healthcare justice and concerned citizens who want a universal and inclusive healthcare system.

Next was an informational panel featuring single-payer advocates, labor leaders and physicians railing against the unjust lack of coverage, administrative waste caused by billing multiple insurance companies and urging Congress to pass a Medicare-for-all single-payer healthcare system. Representatives Jim McDermott (D-Wash.) and John Conyers (D-Mich.) also spoke to participants about their single-payer bills, H.R. 676 and H.R. 1200. Rep. McDermott focused on building on the existing reforms put in place by the Affordable Care Act, while Conyers advocated directly for single-payer.

Participants in the lobby meetings spoke of single payer as a fair and comprehensive solution to the many shortcomings of the Affordable Care Act (ACA). I joined my fellow Marylander single-payer lobbyists, consisting of physicians, labor leaders, concerned citizens and a dietician. A member of PNHP, which advocates for a national single-payer healthcare system, led our lobbying team, but the group still made decisions collectively.

Continue Reading

by Burkely Hermann

Recently, Every Voice came out with a new poll on money in politics, showing how American voters spanning political spectrum in twelve battleground states reject the idea the huge amount of money spent in the political system is “business as usual.”

The poll shows intense dislike of money interfering with elections. The poll shows that while more than 62 percent of voters support plans to reform campaign finance to empower small donors, super PACs are seen negatively. Additionally, 65 percent of voters feel that spending lots of money on elections “is wrong and leads to our elected officials representing the views of the wealthy.”

The results of this poll should be no surprise. After all, Americans have expressed a desire to reform the campaign finance system in the past. For example, in a 2011 Washington-ABC News poll, 69 percent of American voters said that they would like super PACs to be illegal and in a June 2013 Gallup poll, 79 percent of Americans said they would support “limiting the amount of money that U.S. House and Senate candidates can raise and spend for their campaigns.”

A Rasmussen poll shows that a majority of Americans believe that “elections are rigged in favor of incumbents.”

Continue Reading

Tuesday marked the beginning of a series of public hearings on the U.S. Environmental Protection Agency’s (EPA) proposed rule to limit carbon emissions from our nation’s power sector. The hearings took place over the course of four days in Atlanta, Denver, Pittsburgh and Washington, D.C.

The proposal – and subject of the public forums – aims to cut overall carbon pollution from existing power plants to 30 percent below 2005 levels by 2030, a goal the U.S. is already halfway to achieving. According to U.S. Energy Information Administration data, current carbon emissions from the energy sector have fallen nearly 15 percent from 2005.

That’s why the proposal not only is achievable, but we can do much better. In fact, the science demands – and our technological advancements allow for – a more aggressive plan to cut climate-causing pollution.

Public Citizen staff and activists turned out to each hearing to deliver to the EPA the message that we all support an aggressive plan that uses our vast renewable energy sources and cost-saving efficiency technologies to address the largest source of U.S. climate altering pollution (power plants).

Public Citizen Standing up to Dirty Energy, Standing up for Consumers and the Climate:

On the first day of testimony in Denver, I told the EPA that “Public Citizen supports strong carbon emissions regulations. The unlimited dumping of carbon into our atmosphere has led to a global climate crisis. We can no longer afford inaction or half measures. We urge the EPA to strengthen its proposed plan by adequately reflecting the role of energy efficiency and renewable energy in transitioning to a clean and affordable energy economy.

Allison Fisher testifying at the EPA hearing in Denver on July 29.

Allison Fisher testifying at the EPA hearing in Denver

That same day in Atlanta, Public Citizen member, Albert Roesel, a retired teacher, told the EPA, “I have been distraught watching this climate catastrophe cascading in the late years of my life, having grown up with the idea that each generation is obligated to leave succeeding generations better off, knowing that instead, we have loaded the dice against the dreams of our children. Now with EPA’s Clean Power Plan, I have a glimmer of hope. It’s not enough, but it’s a start.”

Continue Reading

© Copyright . All Rights Reserved.