We speak with investigative journalist, filmmaker and author Danny Schechter, "the News Dissector." His latest film features interviews with industry insiders to reveal how the financial crisis was built on a foundation of criminal activity. It’s called Plunder: The Crime of Our Time. [includes rush transcript]
AMY GOODMAN: We turn now to this new film. We’re joined here in New York by investigative journalist, filmmaker and author Danny Schechter, the News Dissector. His latest film features interviews with industry insiders to reveal how the financial crisis was built on a foundation of criminal activity. It’s called Plunder: The Crime of Our Time. The film follows up on his book Plunder, that predicted the coming crisis, and an earlier film, In Debt We Trust, that explored America’s rising credit burden at the time.
This is a clip from Plunder.
DANNY SCHECHTER: To help with our investigation, we spoke with convicted white-collar criminal Sam Antar.
SAM ANTAR: The white-collar criminal has no legal constraints. You subpoena documents; we destroy documents. You subpoena witnesses; we lie. So you are at a disadvantage when it comes to the white-collar criminal. In effect, we’re economic predators.
DANNY SCHECHTER: To an investigative reporter on the business beat, “Wall Street steals far more than the Mafia,” says Gary Weiss.
GARY WEISS: Wall Street takes large, much larger sums of money than were involved in the Mafia scams. The regulatory system is such that they can get away with it.
DANNY SCHECHTER: The lack of media scrutiny, the absence of regulation, the widespread illusion that markets and real estate could only go up, created a casino mentality, an environment for successful fraudsters and white-collar criminals. Moe Saceriby was a VP at Standard & Poor’s.
MOE SACERIBY: There certainly is criminality. We know about it. We know all the people who in fact did something rather simple, which is put their hand in someone else’s pocket and took money that didn’t belong to them.
SAN ANTAR: This crime has been ten, fifteen years in the making. We’re only finding out about this crime because of one specific reason: the tanking economy. Imagine if the economy didn’t tank. Imagine if this was allowed to go on for four, five, six, seven years. Imagine how big it would have gotten then.
AMY GOODMAN: An excerpt from Danny Schechter’s new film Plunder: The Crime of Our Time.
Danny Schechter, welcome to Democracy Now!
DANNY SCHECHTER: Thank you.
AMY GOODMAN: You have been predicting this for a while.
DANNY SCHECHTER: Well, you know, if you want to know about Wall Street crime, let’s ask some criminals. And that’s what I try to do. I’ve been arguing for a jail-out, not just a bail-out, for quite some time. And I’m also arguing with the progressive movement to stop turning this whole discussion into a Harvard economics seminar on financial instruments like derivatives, etc., and let’s get down to the people who have been hurt. Who’s benefited by this? The crime’s not just against investors, which is how they define it, but against homeowners and workers throughout this country, who have been — their whole lives have been, you know, if not destroyed, certainly set back by this financial crisis that came like a tsunami and swept their neighborhoods away and swept them away. So that’s why I’m focusing on crime and what I call the "crime narrative."
There’s a right and wrong in this, not just a left and right. And we have to focus on that, it seems to me, if we’re going to mobilize people. I’ve written a book called The Crime of Our Time, as well as this film, to make the case a little bit stronger. And I think that we have to start thinking in these terms. That’s why you see the protesters wearing prison uniforms in the hearing yesterday, because they understand that, and that’s what the public understands. We’ve got to talk to the people, not to the PhDs.
JUAN GONZALEZ: And much of what’s happening now in Congress is actually both parties trying to angle for the mantle of going after Wall Street, when they’ve actually been sitting around now for a year and a half not doing anything about the origins of the crisis.
DANNY SCHECHTER: Well, there’s a saying, you know, in this world called "capture," you know, that Congress and the politicians have been captured by the industry. It could be said of the White House, as well, because the financial reform really doesn’t go very far. So, you know, we have a situation where we can’t trust the Congress. We’ve got to trust ourselves. We’ve got to get in the streets. We’ve got to do things to press this issue.
The AFL-CIO is marching on Wall Street on Thursday. There was a big rally at the Wells Fargo shareholders’ meeting in San Francisco yesterday. People are moving on this issue. Groups like A New Way Forward and Public Citizen, Citizens for Financial Reform. That’s what we have to do. We have to organize.
And the problem is, we’re so taken with all these, you know, esoteric words, you know, that we’re not kind of keeping our eyes on the fundamentals here. That’s what Plunder: The Crime of Our Time is trying to do. We’re trying to organize screenings across the country. We had one last night in New York. It was packed. We want to do some more. We’d love your viewers, listeners to get involved and show the film and try to get this out. We have a Facebook page, Plunder film. We’re trying to get the word out.
AMY GOODMAN: Let’s go to another excerpt of Plunder.
DANNY SCHECHTER: Please.
AMY GOODMAN: This begins with Bruce Marks from the Neighborhood Assistance Corporation of America, NACA.
BRUCE MARKS: You say that people made bad decisions, right? Well, maybe you could argue that 5,000 people made bad decisions, or 10,000 or 100,000. But when it gets to a million people making bad decisions, and then five million people making bad decisions, then ten million people making bad decisions — because now we’re over ten million people at risk of foreclosure — at some point it turns from making a bad decision because there was a scheme out there. There was a home ownership deception scheme out there.
DANNY SCHECHTER: Enter the Federal Bureau of Investigation. The FBI describes its responsibility for investigating financial and mortgage fraud on its website. It has called mortgage fraud an “epidemic.”
NEWS ANCHOR: They’re calling it “Operation Malicious Mortgage." The FBI unveiled the results of a three-and-a-half-month probe into mortgage-related fraud. FBI Director Robert Mueller.
ROBERT MUELLER: Through this operation, more than 400 defendants have been charged, and we have obtained 173 convictions in crimes that accounted for more than $1 billion in estimated losses.
DANNY SCHECHTER: The FBI first warned of this fraud epidemic in 2004, reporting also, though, that their corporate crime units had been downsized to join the fight against terrorism. Some criminal cases are reported in the press, but not all are prosecuted, with companies often paying fines rather than facing a judge or a jury.
Goldman Sachs paid $60 million to settle a subprime complaint. The Massachusetts authorities said they had designed mortgages to fail, and they paid $60 million, but they did not admit any guilt.
GARY WEISS: That’s standard. It’s standard when Wall Street firms negotiate what are, in effect, plea bargains with regulators, for them not to admit guilt.
MOVIE LOAN SHARK: It’ll be in the envelope, same amount, tomorrow night.
DANNY SCHECHTER: Old movies helped shape our images of gangsters, like this loan shark. But today fraud has gone legit and become pervasive, even accepted in the financial world. According to an investigation by the Center for Public Integrity, twenty-five of the sleaziest subprime lenders were backed by the biggest banks in the United States — Citigroup, Wells Fargo, JPMorgan Chase and Bank of America. Together, the Financial Times reported, they originated $100 billion in subprime mortgages between 2005 and 2007, almost three-quarters of the total.
DAN OSSO: What I did in the mortgage industry, I first got involved in about 1998. I was a loan originator. And during that time, what I had seen was nothing short of amazing, in terms of — it was very predatory, the techniques that were being used, the salesmanship that was being used, the gimmicks on the loans and how they were structured. It really disturbed me. It was the standard. A question of pervasiveness is one thing, but it was the standard. This is the way the business was run. The idea was to make as much money as possible, and not just on the loan, but on the different fees that were added into the loan, and even things that they referred to as “back end bumps” on the interest rates, where the borrower had no idea that the actual loan that he was getting is not what he was necessary qualified for.
AMY GOODMAN: An excerpt of the new film Plunder: The Crime of Our Time.
Danny Schechter, last comments? Do you think the guys should be going off to jail, that we saw yesterday in the Senate?
DANNY SCHECHTER: Well, you know, I’m not alone. Marcy Kaptur has 140,000 signatures on a petition to try to get the Justice Department to file criminal, not civil, charges. You know, we’re in a situation now that’s getting really serious, because the same rating agencies that were part of validating and legitimating this fraud, you know, just brought down the government of Greece yesterday. I mean, they invalidated all of their debt. They’ve called it all junk. There’s likely to be a kind of a domino theory — a domino effect all over Europe, affecting Ireland, Spain.
JUAN GONZALEZ: In a sense, a tsunami in Europe.
DANNY SCHECHTER: Yeah, and, you know, so this situation is periling, putting the whole economic recovery at peril. These companies are running amok, and not much is being done to stop them. And that’s why we have to get engaged with this issue. That’s why I made the film, and I’m so glad that you were able to have me on to talk about it. People want to write to me, dissector(at)mediachannel.org, and I’ll tell them more.
AMY GOODMAN: And do you think this fuels the Tea Party movement? People deeply concerned that they have no money, they have lost their jobs, and their money is going to continue to pay bonuses for the guys we see yesterday in the Senate.
DANNY SCHECHTER: Of course. Of course it is, but the Tea Party is not having polite, you know, seminars about economic financial mechanisms. They’re out in the streets organizing. And where’s the response? Come on, people. We’ve got to get out there, too, and raise the flag of economic justice, because that’s the flag that’s not being raised by the Tea Party.
AMY GOODMAN: Danny Schechter, investigative journalist. His film is Plunder: The Crime of Our Time. He blogs at newsdissector.com.