Remember when they called Scoop Jackson the Senator from Boeing?
TL
Lisa & Ian Murray wrote:
> Teflon Bob and Banking Deregulation
> By Russell Mokhiber and Robert Weissman
>
> Few top government officials, whether elected or appointed, have managed
> to emerge as unscathed from a half dozen years in the Washington, D.C.
> spotlight as former Treasury Secretary Robert Rubin. And Rubin did better
> than escape without scratches -- he ended his term of office with his
> image enhanced.
>
> Wall Street and the financial press practically beatified him for his role
> in overseeing the global economy through difficult times and working in
> tandem with Federal Reserve Chair Alan Greenspan to keep the U.S. economy
> working smoothly.
>
> Rubin helped precipitate the Asian financial crisis which has inflicted
> untold suffering on tens of millions, orchestrated the bailout of foreign
> bankers and investors in connection with the Mexican and Asian financial
> disasters, and crafted or helped implement domestic policies that ensured
> the overwhelming portion of benefits from economic growth would go to the
> rich -- but none of this managed to sully the reputation of the Secretary
> Rubin.
>
> Now Teflon Bob appears on the verge of demonstrating that his immunity to
> criticism makes Ronald Reagan look like he was coated with bubble gum.
>
> When he stepped down from his Treasury post this past summer, Rubin left
> unfinished a legislative effort to re-write the nation's banking laws.
> Misnamed "financial modernization" legislation was really a deregulatory
> initiative -- reminiscent of the S&L deregulation that led to a corporate
> crime spree, the collapse of the industry and the subsequent taxpayer
> bailout of epic proportions.
>
> The centerpiece of the deregulatory bill, which different fragments of the
> finance industry have pushed for a decade and a half, is the repeal of the
> revered Glass-Steagall Act, which bars the common ownership of banks on
> the one hand, and insurance companies and securities firms on the other.
>
> Although powerful interests have long backed the legislation, it has
> repeatedly failed to make it through Congress because of a maze of
> intra-industry disputes, turf fights between different parts of the
> federal regulatory structure, and the concerted efforts of consumer and
> community development advocates.
>
> Another failure seemed possible or likely this fall, especially as Senate
> Banking Chair Phil Gramm, R-Texas, refused to compromise on privacy and
> community development issues.
>
> Another failure, however, was not acceptable to one company above all --
> Citigroup. The product of the merger between Citibank and Travelers,
> Citigroup is operating in apparent violation of the bar on common
> ownership of banking, and insurance and securities, thanks to a loophole
> that provides for a two-year transition period.
>
> Enter Robert Rubin. According to a report in the New York Times, Rubin
> helped broker the final compromise language on financial deregulation.
>
> And while he was brokering a deal between Congress and the White House, he
> was also, according to the New York Times account, negotiating his own
> deal with Citigroup. A few days after the banking deal was finalized,
> Citigroup announced it was hiring Rubin as a de facto co-chair of the
> corporation.
>
> This chronology and these arrangements raise serious issues about whether
> federal ethics statutes and informal Clinton administration rules have
> been violated.
>
> Rubin told the New York Times that he was proud of his work in preserving
> the Community Reinvestment Act (CRA -- an important law that requires
> banks to make loans in minority and lower-income communities in which they
> do business). In fact, the final version of the bill significantly weakens
> CRA: there will be no ongoing sanctions against holding company banks that
> fail to meet CRA standards, it will lessen the number of CRA examinations,
> and provisions of the bill will discourage community groups from
> challenging banks' CRA records.
>
> And the weakening of the CRA is only one element of the finance industry's
> deregulatory wish list which is included in the compromise legislation.
> The bill will:
>
> * Pave the way for a new round of record-shattering financial industry
> mergers, dangerously concentrating political and economic power;
>
> * Create too-big-to-fail institutions that are someday likely to drain the
> public treasury as taxpayers bail out imperiled financial giants to
> protect the stability of the nation's banking system;
>
> * Leave financial regulatory authority spread among a half dozen federal
> and 50 state agencies, all uncoordinated, that will be overmatched by the
> soon-to-be financial goliaths;
>
> * Facilitate the rip-off of mutual fund insurance policy holders by
> permitting mutual insurance funds to switch domicile states -- thereby
> enabling them to locate in states where they can convert to for-profit,
> stockholder companies without properly reimbursing mutual policyholders (a
> conversion of tens of billions of dollars);
>
> * Aggressively intrude on consumer privacy (and promote a still-greater
> intensification of direct marketing), thanks to provisions permitting the
> new financial giants to share finance, health, consumer and other personal
> information among affiliates; and
>
> * Allow banks to continue to deny services to the poor (Congress rejected
> an amendment requiring banks to provide "lifeline accounts" to the poor,
> so they would have refuge from check-cashing operations and the
> underground economy).
>
> Robert Rubin helped deliver this ticking time bomb of a bill to Wall
> Street, first while in Treasury and then while in negotiations to land a
> top spot at the finance industry's largest and highest-profile company. He
> may well escape unscathed yet again, but it is sure to blow up on the rest
> of us.
>
> Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
> Reporter. Robert Weissman is editor of the Washington, D.C.-based
> Multinational Monitor. They are co-authors of Corporate Predators: The
> Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common
> Courage Press, 1999; http://www.corporatepredators.org)
>
> (c) Russell Mokhiber and Robert Weissman
>
> ---------------------------------------------------
>
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