Justice

Money machine crashed, taxpayers injured

ProPublica reporters Jesse Eisinger and Jake Bernstein have been awarded the Pulitzer Prize for National Reporting for their stories on how some Wall Street bankers, seeking to enrich themselves at the expense of their clients and sometimes even their own firms, at first delayed but then worsened the financial crisis. The Pulitzer Citation reads:

“Awarded to Jesse Eisinger and Jake Bernstein of ProPublica for their exposure of questionable practices on Wall Street that contributed to the nation’s economic meltdown, using digital tools to help explain the complex subject to lay readers.”

As the U.S. housing market started to fade, bankers and hedge funds scrambled for ways to maintain the lavish bonuses and profits they had become so accustomed to, repackaging mortgages in complex securities called collateralized debt obligations. The booming CDO market masked how weak the housing market was, and exacerbated its collapse.

In 29 reports, ProPublica presents readable analyses of complex financial exploitations in which the perpetrators go unpunished.

The New York Times examined how government chose to close its eyes to criminal activity in financial institutions. As a result, there have been no prosecution of top officials. An excerpt:

“But several years after the financial crisis, which was caused in large part by reckless lending and excessive risk taking by major financial institutions, no senior executives have been charged or imprisoned, and a collective government effort has not emerged.

This stands in stark contrast to the failure of many savings and loan institutions in the late 1980s. In the wake of that debacle, special government task forces referred 1,100 cases to prosecutors, resulting in more than 800 bank officials going to jail. Among the best-known: Charles H. Keating Jr., of Lincoln Savings and Loan in Arizona, and David Paul, of Centrust Bank in Florida.

“Former prosecutors, lawyers, bankers and mortgage employees say that investigators and regulators ignored past lessons about how to crack financial fraud.”

Categories: Justice

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