James Higgins in the NY Post observes that it was Bubba who encouraged and profited from the corporate excesses of the 90's.
In the '90s, this became a get-rich-quick scheme for investment banks (who marketed wildly overpriced shares of infant companies that were barely more than concepts), the venture capitalists who owned these firms and the insiders and their friends who were allocated shares at artificially low prices before trading opened.And then there was Clinton Treasury Secretary Robert Rubin:
This game went on far longer and got much further out of hand than one would expect in a regulated market. The principals in a very reputable investment management firm told me of their disgust as they found their IPO allocations reduced and then eliminated when they balked at ever more explicit demands for kickbacks in the form of excessive commissions on other trades. "We kept asking ourselves," they told me, " 'Where are the regulators?' "
WHERE, indeed? The regulators came in only after and because the party ended. It wasn't until December 2001, nearly two years after the peak in the equity markets and with a new administration in office, that the SEC and the National Association of Securities Dealers finally secured a $100 million penalty from Credit Suisse First Boston, whose IPO guru Frank Quattrone was widely believed to be the most flagrant corrupter of the process.
WHAT Rubin asked for, by all accounts, was for Fisher to call the debt rating agencies and ask them to find an "alternative" to a downgrade of Enron's securities. This was an astounding request. The rating agencies are meant to be neutral arbiters of the financial strength of the entities they rate. Rubin's request was akin to the owner of a team faced with playoff elimination asking the league commissioner to get the referees to call the next game so that the owner's team doesn't lose.But nothing could stand in the way of Bubba's campaign war chest:
Republican campaign committees are already encountering a predictable challenge with potential corporate donors. The donors want to know why they should contribute to the GOP when Rep. Billy Tauzin (R-La.) is hauling them before the House Energy and Commerce Committee for public scrutiny of their conduct. This tension is a natural outgrowth of a system in which elected officials both oversee industries and raise funds. In Tauzin's case, the hearings have gone on as scheduled.and
The Clinton administration had a simple way to resolve this tension: law enforcement had to yield to fund-raising. It must have been difficult enough to persuade a CEO to come to the White House for coffee at $50,000 a cup. With pending securities-law investigations in the background, it would have been impossible. So the dogs had to be called off.
ONE of the anomalous and confusing aspects of the Merrill Lynch investigation, which lately led the firm to agree to a $100 million penalty over analyst conflicts of interest, is that the investigation was initiated by New York Attorney General Eliot Spitzer. The New York attorney general is not the natural or primary enforcement agent against serious wrongdoing. That role is normally assumed by the United States Attorney for the Southern District of New York, in whose jurisdiction most of the securities industry is located.Bubba, aside from his predation on women, had only one objective: power. Since power meant campaign contributions he became the acknowledged expert at extracting funds from any and all sources. Foreign grifters want a photo shaking hands with the Prez: sure, if they pay. Hollywood ditzs want to jump up and down on beds in the Lincoln bedroom: sure, if they pay. Foreign governments want favorable treatment: sure, if they pay. Investment bankers want to run the world's largest Ponzi scheme: sure, if they pay.
Ronald Reagan, whom Clinton accused of "denial" of ethical problems arising from greed, installed in that post Rudolph Giuliani. Giuliani went at his job with a vengeance, indicting so many Wall Streeters for wrongdoing that he still faced bitterness from the financial community when he first ran for mayor in 1989.
In the same job, Bill Clinton gave us Mary Jo White. This was the same Mary Jo White who could not find any senior official to indict when Ron Carey turned the Teamsters' union treasury into a mutual money-laundering facility for his re-election campaign and for the Democratic National Committee.
White is the person who should have taken the lead in Wall Street prosecutions. But over at the White House, the money, to quote Evita, "kept rolling in from every side." White's boss was Janet Reno, whose name has become a synonym for a certain approach to law enforcement.
