Spitzer OCC and 911
Sometimes conspiracy theories just keep getting better. In an early piece, I drew a line between the OCC and the Spitzer downfall. Now the connection appears a bit stronger. Two banks are involved in red flagging Spitzer. Both are national banks; both were involved in making excessive sub prime and predatory loans. The OCC is charged with overseeing both.
The first bank is North Fork Bank, a subsidiary of Capital One. The second is HSBC Bank USA. As I said, both are national banks making predatory loans; the OCC is charged with overseeing both.
As the New York Times notes:
As it turned out, both the North Fork Bank and HSBC had faced inquiries into their lending practices led by Mr. Spitzer when he was New York attorney general. In the case of North Fork, Mr. Spitzer announced a settlement in 2003 requiring it to refund more than $20,000 to dozens of homeowners and cease what he said was its practice of charging homeowners illegal fees.
I do admire the chutzpah in the responses both these banks and the OCC have made:
These officials said that banks are likely to more closely monitor the transactions of politicians like Mr. Spitzer than those of average customers. In part, that is because of legislation passed after the 2001 terrorist attacks.
As part of the “know your customer” requirements, banks must assess their clients’ financial patterns and set guidelines to ensure that an alarm is sounded if there are unusual transactions, said Bob Serino, a former deputy chief counsel at the Office of the Comptroller of the Currency, who now advises banks and individuals on anti-money laundering regulations.
Know your customer? Well, did Bob Serino advise these banks not to make thousands of questionable, predatory loans? But maybe that was part of the “know your customer” jingle.
The NYT piece continues:
“The idea is that if somehow a customer who usually deposits $3,000 a week starts depositing $300,000 into his account daily, that would be kicked out and looked at,” Mr. Serino said. “Banks could certainly decide that a politician’s risk rate is higher and thus have a higher level of due diligence set for someone like Spitzer.”
Spitzer’s deposits were approximately $10,000.
Now, look at how 911 has now been used:
A former director of FinCEN, who now works in the industry at a company whose policies prohibit speaking on the record, said that since 9/11, suspicious activity reports had increasingly been used as a source of tips for law enforcement.
“What 9/11 taught us is the value of financial information,” the former director said. “Money doesn’t lie. Money leaves a footprint. And that’s exactly what happened with Spitzer.”
In addition, banks must exercise an extra level of due diligence for a “politically exposed person.” While the law defines such people as “current or former foreign political figures, their immediate family and their close associates,” several banking officials at major institutions said that as a matter of practice, they extend extra scrutiny to American political figures.
911 has become a new tool for checking on your enemies, enemies abroad and enemies domestic…and I emphasize domestic.
Do you have a domestic, non-terrorist enemy? Well, we at the OCC have just the tool for you.
I could make the argument for prostitution. There are familial situations where it might be acceptable. On hearing about the Spitzer scandal, my wife, a Canadian, so argued. She explained to me the condition of endometriosis, as one situation. I had never heard of it. I had to Google it. Nonetheless, I was surprised at her defense of Spitzer. (And, “No, I have never visited a prostitute!” Personally…and this is only personal….I do not insist others hold to this value….I find the idea of prostitution repugnant.)
Like me, she believes people’s personal lives are theirs alone. Both of us do not judge on that score. Consenting adults is our rule of thumb.
But America has foolishly chosen to make sex and the bedroom a matter of national policy. We have also chosen, alas, to spy on every unusual domestic financial transaction. Did you move an unusual amount of money today? Did you say something on the phone or in an email that might reveal hmmmm a lack of patriotism? Rest assured, it will be reported. 911 has become the excuse for Big Brother to peer everywhere, into every life, into every blog, into every bedroom.
Nonetheless, I do judge Spitzer on his hypocrisy, his arrogance, and his stupidity.
He knew the rules of the road better than anyone. If he was going to lead the charge against serious white-collar corruption, he should have acted accordingly. If he were in a different country….
What interests me more than Spitzer’s stupidity is the battle now being waged over responsibility for the financial carnage taking place before our eyes. Sex has muddied the waters, as usual. The OCC has claimed that its oversight has been stellar. Yet, the banks who brought down Spitzer were the banks under its charge, banks that have been deeply involved in predatory lending. The OCC’s hands are not clean in this matter, regardless of their press releases.
In our 911 zeal, we have handed oversight to officials who have special interests of their own. In our 911 zeal, we have given officials with special interests of their own carte blanche into peering into every corner of our lives. Richard Nixon would have been proud. They use fear of 911 to attack their enemies…and we have given them the tools with which to do it.
Even if their counter attack is justifiable–as in the case of Spitzer–, it nonetheless is a political weapon. Real accountability becomes confused and lost.
And here we are, struggling to stave off a financial meltdown, unable to hold anyone accountable. It will take a great deal of honest reflection to set this country aright once more.