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Statement of Robert Weissman, President of Public Citizen

Today, the Commodity Futures Trading Commission (CFTC) is penalizing five of the world’s largest banks for concerted efforts to manipulate global foreign exchange markets – yet another reminder of the rampant criminality and wrongdoing on Wall Street.

Strikingly, as the CFTC notes in understated fashion in its release, “[S]ome of this [improper attempted manipulation of foreign exchange markets] conduct occurred during the same period that the Banks were on notice that the CFTC and other regulators were investigating attempts by certain banks to manipulate the London Interbank Offered Rate (LIBOR) and other interest rate benchmarks.”

In other words, the banks were on notice that they were under investigation for similar wrongdoing in another global financial market – and still continued with the attempted manipulation of the foreign exchange market!

For too long, U.S. law enforcement agencies have been far too soft on Wall Street lawbreakers. In recent years, the U.S. Department of Justice has entered into deferred prosecution or non-prosecution agreements with RBS, JPMorgan Chase, UBS and HSBC, choosing not to prosecute these firms for large-scale wrongdoing. The department has also agreed to high-profile civil settlements with JPMorgan and Citigroup.

Completely absent has been serious criminal enforcement against the Wall Street firms and Wall Street executives.

It’s past time to say: Enough is enough. It’s past time for the Justice Department to enforce the law and hold the powerful to account.

Numerous published reports indicate that the Department of Justice is considering criminal prosecutions of individuals responsible for the attempted foreign exchange manipulation schemes. It is vital that the department pursue these prosecutions, holding both top-level executives – not just lower-level functionaries – and the firms themselves criminally liable.

And, if bank regulators tell the department that criminal prosecution of large financial institutions would endanger the global financial system, then those same regulators should act immediately to break up firms whose size affords them immunity from criminal sanction.

Wall Street managed to escape criminal sanctions for wrongdoing that crashed the global economy, and threw millions of out of their homes and tens of millions out of work. If there is no criminal enforcement against Wall Street firms and executives for wrongdoing, there is no justice for Main Street, and we’re virtually certain to see epic-scale misdeeds and epic-scale devastation yet again.

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The industry-funded 60 Plus Association is back with another bogus analysis attacking the EPA’s Clean Power Plan. This one focuses solely on Louisiana, presumably in an attempt to influence the state’s Dec. 6 run-off election for U.S. Senate. This report uses the same basic tricks as the last one: focus on electricity prices, not actual bills that consumers will pay, and focus more on the near term than the long term.

There’s a lot of fluff in the report, but its main charge against the Clean Power Plan is that the rule will increase retail electricity prices 4.5 percent to 11.7 percent by 2020 in the power regions that include Louisiana. As I discussed last time, the retail price of electricity is misleading. Here’s why: The Plan also projects that people will use less electricity due to increases in energy efficiency. That means electricity bills will decline even though the price of electricity goes up. Actual consumer costs don’t fit 60-Plus’s narrative, so it cites misleading figures on retail prices instead.

The 60 Plus study also focuses on the EPA’s projection for electricity prices in 2020 rather than 2025 or 2030 because the latter numbers are more favorable. (Clean Power Plan Regulatory Impact Analysis (RIA) Tables 3-21, 3-22, 3-23).

The report actually helps make the case for a stronger Clean Power Plan, though surely unintentionally. It cites multiple projections that electricity prices will rise steeply through 2040. (60 Plus Louisiana Report at 4). Rising prices are all the more reason to reduce the amount of electricity that consumers use by promoting aggressive energy efficiency measures.

A recent report by the American Council for and Energy Efficient Economy (ACEEE) found that Louisiana could invest in energy efficiency to

  • save 157,763 gigawatt-hours of electricity between 2016 and 2030 (ACEEE Change is in the Air Table C1);
  • save $6.2 billion between 2016 and 2030 by investing in energy efficiency (Table C6); and
  • create 11,500 additional jobs by 2030 (Table C7).

I haven’t attempted to calculate how much of Louisiana’s Clean Power Plan compliance this approach would take care of, but it’s probably very high. ACEEE estimates that the efficiency measures it outlines would curb carbon emissions nationwide by 26 percent from 2012 levels by 2030. That’s about 73 percent of what the Clean Power Plan seeks (a 30 percent cut from 2005 levels by 2030). By the way, ACEEE notes that its analysis is intentionally conservative. We can do even better.

Maybe reporters can ask 60 Plus whether it supports these robust efficiency measures. (In the unlikely even that it says yes, they can follow up by asking what it’s doing to support them.) They should also ask it why it doesn’t support the Clean Power Plan if it really cares about seniors’ expenses — and why it doesn’t support strengthening the Plan with more robust energy efficiency targets.

 

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The corporate accountability expert offers his thoughts on campaign finance reform.

Robert Weissman is an expert on issues related to financial accountability and corporate responsibility. As president of the nonprofit Public Citizen organization, he’s championed citizen interests before Congress, executive branch agencies and the courts on various policies, including healthcare, intellectual property and trade and globalization.

Advocates deliver 100,000 comments and petitions to the EPA

Advocates deliver 100,000 comments and petitions to the EPA

In comments and petition signatures delivered to the Environmental Protection Agency (EPA) this morning, more than 100,000 people urged the

agency to update the safety requirements for some of the country’s largest hazardous chemical processing facilities.

Comments and signatures were gathered by Public Citizen, Greenpeace, U.S. PIRG, the Sierra Club, BlueGreen Alliance, and many others.

The chemical processing facilities in question are places like fertilizer plants, oil refineries, and bleach manufacturers. Roughly 110 million Americans, or one-third of the country, live in a high-risk zone near a chemical processing facility.

The Center for Effective Government has put together a handy (or terrifying) map showing the locations these chemical plants, and their proximity to public schools.

The EPA is looking for ways to improve its Risk Management Program, a move prompted by an executive order from President Obama that was issued in the wake of the fertilizer plant explosion in West, Texas.

The fertilizer plant, which housed more than 270 tons of flammable chemicals but lacked a fire sprinkler system, exploded last April while emergency crews were responding to a fire. The blast killed 15 people, injured 226 more, and destroyed 150 homes.

The EPA’s new plan could prevent tragedies like the one in West, Texas by making new safety standards a requirement for facilities that manufacture and process hazardous chemicals.

The EPA’s new plan to manage these dangerous plants should include requirements for safer processing methods, reduced use of the most dangerous chemicals, and of course, commonsense safety measures like fire sprinklers.

With more than 110 million Americans at risk, it’s far past time for the EPA to act.

Kelly Ngo is the Online Advocacy Organizer for Public Citizen’s Congress Watch Division.

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By Robert Weissman

The big banks want an effective license to steal. And they are counting on you to give it to them.

You would never knowingly agree to any such thing, right?

But did you ever wonder what’s in the fine-print terms of the contracts that we agree to when applying for a new credit card, opening a new checking account or applying for an automobile loan?

Pretty much no one reads the fine-print terms in those contracts. That’s entirely rational. The contract language is almost impossible to decipher; and, even if you do, you can’t very well negotiate.

But that doesn’t mean the language doesn’t have consequences. Buried in the service terms of all kinds of financial products – as well as everything from cell phones to cable provision, software downloads to rental cars — are clauses that bar individuals from suing companies that wrong them.

These provisions require individuals to seek redress for wrongdoing not in courts of law – with the right to have their case heard by a jury, guarantees of due process, and the ability to engage in robust discovery – but in company-selected arbitration schemes.

Perhaps the worst elements of these contracts are prohibitions on class actions – preventing consumers from banding together over shared wrongs. For low-dollar grievances, this effectively means there is no remedy available.

No remedy equals no deterrent (except for regulatory enforcement). For enterprises with no sense of shame, no deterrent equals an effective license to steal.

In other words, if you get cheated, there’s pretty much nothing you can do.

But we can fix the problem itself. The banks do care about their reputations, so join the campaign to tell the biggest banks using forced arbitration clauses — JPMorgan Chase, Citigroup, Wells Fargo, US Bancorp and PNC Financial – to stop.
Would the big banks really trick consumers into agreeing to such unfair contracts? C’mon – of course they would.

And they do.

Preliminary results from a Consumer Financial Protection Bureau (CFPB) study show how widespread are forced arbitration terms in consumer financial contracts:

• Around 80 million credit card holders were subject to arbitration clauses as of the end of 2012.
• Tens of millions of households are subject to arbitration on one or more checking accounts.
• 81 percent of the prepaid cards studied have arbitration clauses.

Moreover, the CFPB found, these provisions foreclose any effective remedy for consumers. Consumers file about 300 arbitration cases related to financial disputes a year, almost none for disputes of less than $1,000.

Do the banks really cheat and defraud their own customers? Heck, we know from the fallout of the Wall Street crash that they mislead and deceive even the biggest, most sophisticated and powerful customers (though you do get to be called a “client” or an “investor” when you’re more powerful).

The same big banks will surely take advantage of everyday customers if they get a chance – that’s why they have invented and hidden new fees and charges, used “robosigners” to stipulate falsely that they have carefully reviewed foreclosure documents, and even imposed charges for services not rendered.

If you’re a victim of this kind of chicanery, you may well be out of luck, thanks to forced arbitration clauses. Join together with others to sue and demand compensation, and you may well find your case kicked to kangaroo court arbitration systems, where you must arbitrate your own case individually and in secret. Not exactly practical if you and thousands of your fellow customers each have been hit with an unjust $35 fee.

This is happening all the time, as cases are routinely thrown out of court and into the arbitration system – or simply not filed in the first place, because it’s not economically feasible to do so. . Example: New York consumers alleged that banks, credit card companies, and debt collectors – including Citigroup, Bank of America and JP Morgan Chase — obtained thousands of judgments against debtors through false affidavits, misleading evidence, and other improper litigation tactics. Thanks to an arbitration clause, the courthouse doors were slammed shut. A U.S. district court told the aggrieved consumers that they would have to arbitrate their claims, on an individual basis.

Ultimately to solve this problem, these provisions must be prohibited. The CFPB has authority to issue such a rule for consumer financial products and services; and hopefully will do so as soon as possible.

In the meantime, however, no company should have a license to steal. Join the campaign to tell the big banks to end the use of forced arbitration clauses.

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