This fall, presidential candidate Hillary Clinton announced plans to crack down on Wall Street. Clinton says she wants to punish Wall Street “bad actors” on an individual basis. She claims she’ll implement a ban on brokers and bankers who violate rules from future employment in the financial industry.
That’s a huge leap compared to the “new normal” standard of punishment that’s doled out to perpetrators of major white collar crimes. Remember, not a single Wall Street bad actor was jailed for anything tied to the 2008 financial crisis. Instead, firms settled with the government—and oftentimes the individual Wall Street criminals retained their positions.
She also wants to eliminate the carried interest provision in the tax code and impose a “risk fee” on big banks with assets of more than $50 billion. Clinton intends to impose a new tax on high-frequency trading (HFT). The fee would apply to trading strategies that involve a large amount of order cancellations—a common attribute of HFTs. Big investment institutions and hedge funds use computers to transact a large amount of orders at high speed.
The Democratic front-runner’s plan would include an extension to the statute of limitations on major financial fraud cases to provide prosecutors more time to develop cases. While these intentions sound appealing, they are an obvious pander to garner populist support as Clinton’s ties to Wall Street are quite intimate.
It was just last year that Andrew Ross Sorkin reported in The New York Times that bankers have been lining up left and right to try to capture jobs in her administration. After Clinton gave a speech claiming that corporations and businesses don’t create jobs and railed against “trickle-down economics,” one of the bankers told Sorkin, “I don’t think she meant that.”
Of course she didn’t. Clinton’s relationship with Wall Street draws skepticism regarding her conviction. And rightfully so. This is politics; just follow the money.
The Atlantic reported that as secretary of state, Clinton helped UBS Group AG by stepping in on an IRS investigation, and subsequently the Swiss bank paid former President Bill Clinton $1.5 million for speaking gigs and, between 2008 and 2014, donated a cumulative sum total of about $600,000 to the Clintons’ nonprofit charity.
Back in May, UBS was one of four major banks to plead guilty to manipulating foreign exchange rates. They cheated clients to boost their own profits by utilizing “invitation only” Internet chat rooms and coded language to hatch their plan and execute their trades.
Based on her rhetoric, UBS would be one of Candidate Clinton’s biggest foes, but, the financial institution is one of her biggest donors.
Another big eyebrow-raiser regarding Clinton and her true ties to the big banks occurred in June 2014 when she delivered a speech at the New America Foundation in Washington, D.C. Clinton lamented about the “financial elite” and “the one percenters” operating without accountability on Wall Street.
She decried how their irresponsible actions wiped out clients’ retirement funds, college savings and nest eggs. Just after that speech, left-leaning Mother Jones reported that on June 4, 2014, the Clinton family hosted a day-long fete at—surprise—Goldman Sachs’ Manhattan headquarters.
That firm alone has donated between $250,000 and $500,000 to the Clinton Foundation, reported Mother Jones.
But it wasn’t just the foundation. In 2013, she gave two paid speeches to Goldman Sachs audiences. Her customary speaking fee was $226,000, according to Reuters. But it’s not just Goldman; CNN reports that Clinton earned $3.15 million in 2013 alone from speaking to banks that include: Morgan Stanley, Deutsche Bank and UBS, according to her own campaign.
Go back to 2008, during her run for president, among her top contributors are also employees of Citigroup, JPMorgan, Goldman and Morgan Stanley, according to the Center for Responsive Politics.
Finally, one of Clinton’s top campaign donors has been Citigroup, one of the leading firms responsible for the 2008 financial crisis. In fact, on July 14, 2014, Citigroup was ordered to pay out a $7 billion settlement by the U.S. Department of Justice for selling bad mortgage-back securitizations.
And just how much has Citigroup donated to Clinton? According to nonpartisan government watchdog OpenSecrets.com, $824,402 as of Aug. 3, 2015.
Is anyone really taking any of this rhetoric seriously?