Federal investigators set the bar low for Citigroup's multi-year mortgage security fraud investigation. The Department of Justice failed to specify the period of the settlement in any of their public documents. Thank heaven Citigroup did so in their press release:
Today’s agreement resolves actual and potential civil claims by the U.S. Department of Justice (the DOJ), several state attorneys general (State AGs), and the Federal Deposit Insurance Corporation (the FDIC) relating to RMBS and collateralized debt obligations (CDOs) issued, structured or underwritten by Citi between 2003 and 2008.The Holder documents read like the White House Lessons Learned report on Hurricane Katrina in that it offers a few anecdotes but no critical analysis. Both reports omitted responsible parties, important analysis and critical data.
This is the quality of federal investigations when the party in power wishes to protect friends and eventually enrich themselves. Who is Attorney General Eric Holder protecting?
Ex-Clinton Treasury Chief Robert Rubin moved to Citigroup in 1999, and until 2009 he served as chairman of the executive committee and, briefly, chairman of the board of directors. On his watch, the federal government was forced to inject $45 billion of taxpayer money into the company and guarantee some $300 billion of illiquid assets. Taxpayers ended up with a 27 percent stake in Citigroup, which was sold in 2010 at a cumulative profit of $12 billion. Rubin gave up a portion of his contracted compensation—and was still paid around $126 million in cash and stock during a tenure in which his serenity has come to look a lot more like paralysis. “Nobody on this planet represents more vividly the scam of the banking industry,” says Nassim Nicholas Taleb, author of The Black Swan. “He made $120 million from Citibank, which was technically insolvent. And now we, the taxpayers, are paying for it.”Eric Holder is protecting Blue team legend Bob Rubin. For this Holder will be richly rewarded.
Katrina Lessons Learned author Frances Townsend omitted the hospital with the highest patient death toll from her 2006 investigative report. Memorial Medical Center lost 35 patients post Katrina, with 25 of those deaths on the LifeCare unit on the seventh floor. The Carlyle Group owned LifeCare Hospitals (having purchased it weeks prior). Tenet Healthcare, Memorial's owner, created a board seat for President George W. Bush's brother Jeb a year after Townsend's report was released without any mention of Memorial, LifeCare, Carlyle or Tenet.
Fran Townsend went on to work for James A. Baker III's law firm. Baker has long been associated with The Carlyle Group. Townsend later joined MacAndrews & Forbes, an investment firm which looks and acts much like a private equity underwriter (PEU). Eric Holder's reward awaits.
"Insiders understand one unbreakable rule. They don't criticize one another."--Blue team legend Larry Summers
"Just us" has been done and another round awaits.
Update: It doesn't hurt that Peter Orszag now works for Citi making $4 million a year. Orszag blocked for BP on the Gulf Oil Spew in the Obama White House. Some called that Obama's Katrina. Nowadays, it's who you know, not what.
