The Corporate Veil — Still working?

Gold BarsHaving my experience in business and high finance that I do, I got to see the height, and the subsequent crash of the Financial Boom several years later… I literally watched it from my corner office begin to unfold in March 2007 — in the subprime mortgage market.  Watching in sheer terror while lender after lender sent emails stating they were no longer funding unlocked loans, or were closing their doors and declaring bankruptcy altogether.

Many harmed were innocents — those who either didn’t know better and were taught by lousy or bad brokers, or were roped into it by dirty Account Executives just looking to fill their pipleline and collect their cut of the dough, as well, loan officer and client be damned.

One question I find myself wondering about is, “Why aren’t more executives and bank owners in jail?  These are the people who, if they didn’t engineer the crisis, they at least ignored the signs.  These are supposed to be the world best, brightest and finest in high finance, right?”

How can one man, who steals $400 by knocking over a gas station with a knife as a weapon get four times as much prison time as the executive who colluded, knowingly with others to cover up and lie about it to the American people, who wind up bailing out the company for millions, and insuring their bad notes and purchases?  While a handfull have gone to prison for their role in the crisis, many on the other hand, have not.

Case in point: Angelo Mozilo.Image

The founder of Countrywide, his accidental email replies and golden parachute, even after he singlehandedly ran his brainchild into the ground, are the stuff of legends.  Offering the most powerful people incentives to work with him through his “Friends of Angelo” program in the way of favorable mortgage rates and programs otherwise not available to anyone else.  Big names benefitted from this program — names like “Dodd,” “Pelosi,” ‘Clyburn” and “Boxer.”  Indeed, Senator Christoper Dodd was later documented to be given a $75,000 reduction on properties he owned held by Countrywide.  Michael Moore’s movie Capitalism, A Love Story,” shows proof that he received credits and reductions in excess of half a MILLION dollars.  These Representatives, Senators and Regulators are the people who were supposed to oversee his business.

While Mozilo later settled with the Securities and Exchange Commission to pay a massive fine and accept being barred for life from serving as an officer or director of a public company within the United States, he never did do jail time for his role.

Is this justice for those who lost their homes to his business practices?  What about the American Taxpayers who had to subsidize his business failure?  What about Bank of America, which absorbed Countrywide?

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