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New Document
Pecora Commission Targets Then and Now
July 20, 2013 • 9:22AM

In the 1930s, the Pecora Commission investigation of the causes of the crash of 1929 paved the way for the enactment of the Glass-Steagall Act by focusing the attention of the nation on the cabal of Wall Street bankers who were responsible for damaging the General Welfare of the people of the United States of America and the world. LaRouche PAC has previously called for a Pecora Commission to investigate the culpability of Wall Street. Instead the Obama Administration has pursued a policy of "Too Big to Jail," at most slapping Wall Street criminals with civil fines, but no jail time, and most importantly, allowing them to continue to operate against the interests of the nation.

As momentum has grown for the reenactment of Glass-Steagall, the National Policy Committee of LaRouche PAC has called again for a new Pecora Commission.

What follows is a list of some of the top targets of the original Pecora Commission, and a preliminary list of prospective targets of a new Pecora Commission.

Targets then:

* Richard Whitney, the president of the New York Stock Exchange and a man with close ties to Morgan. In 1938 he was officially charged with embezzlement. Following his indictment by a Grand Jury, Richard Whitney was arrested and eventually pleaded guilty. He was sentenced to a term of five to ten years in Sing Sing prison.

* Thomas W. Lamont, acting head of J.P. Morgan and Company at the time of the 1929 crash.

* Albert Wiggin, president of the Chase National Bank. What came out in the Pecora Commission investigation into the Wall Street crash, was that beginning in September 1929, Wiggin had begun selling short his personal shares in Chase National Bank at the same time he was committing his bank's money to buying. He shorted over 42,000 shares, earning him over $4 million. His earnings were tax-free since he used a Canadian shell company to buy the stocks. Wiggin eventually retired under pressure from the bank.

* Charles E. Mitchell, chairman of National City Bank (decades later renamed Citibank). Mitchell was indicted for tax evasion and ended up paying a $1 million civil fine.

* J.P. Morgan, Jr. During the Pecora Commission hearings he was revealed that he and many of his partners had not paid any income taxes in 1931 and 1932.

* Otto H. Kahn, senior partner of Kuhn, Loeb and Company

* Arthur W. Cutten, commodity market speculator. He was under indictment for tax evasion upon his death in Chicago in 1936.

* Samuel Insull, President of Chicago Edison, who fled the country a year later; later extradicted to the United States, where he was charged with mail fraud and anti-trust violations.

Targets today:

* The following 15 financial entities should be investigated. They include the top eight U.S.-domiciled banks on the Financial Stability Board's global systemically important financial institutions (G-SIFI) list (as of November 2012), the top derivatives holders among U.S.-domiciled bank holding companies (billions of dollars, March 31, 2013), and the top ten bank holding companies in the U.S. ranked by assets (as of March 31, 2013): 1) Ally Financial; 2) Bank of America; 3) Bank of New York Mellon; 4) Citigroup; 5) General Electric Capital; 6) Goldman Sachs; 7) HSBC North America; 8) JP Morgan Chase; 9) Morgan Stanley; 10) Northern Trust; 11) PNC; 12) State Street; 13) SunTrust; 14) U.S. Bancorp; and 15) Wells Fargo.

* The major players at these banks are:

* At JPMorgan Chase: Jamie Dimon has been the leading voice on Wall Street against re-regulation and in favor of letting the banks do whatever they want. Dimon was the long-time protégé of Sandy Weill, whose career was sponsored by Lazard's Felix Rohatyn and the Rothschilds. He broke with Weill and took over Chicago-based Bank One, which was acquired by JPMorgan Chase. In Chicago, he was reportedly tight with the Obama circles and developed a reputation as Obama's favorite banker. Another player worth noting at the bank is Blythe Masters, a Brit who led the team credited with developing the first credit default swap, and the helped usher in the era of securitization through the use of a special purpose vehicle (SPV) to off-load some of the banks loans, forming the basis for the first synthetic collateralized debt obligations (CDOs).

* At Goldman Sachs: Lloyd Blankfein, the current chairman, seems to have led the bank even deeper into the casino, and unabashedly claimed Goldman Sachs was "doing God's work." Then there is the long-time chairman of London-based Goldman Sachs International, Sir Peter Sutherland, KCMG, who was also the chairman of the Inter-Alpha Groups Allied Irish Bank, the chairman of BP, and a director of the Royal Bank of Scotland, Allianz, and the former Director General of GATT and the WTO. Beyond that, there is the panopoly of former Goldman Sachs bankers who have played significant roles in creating the financial disaster and then protecting the banks from the consequences of their actions. The list includes former Treasury Secretaries Bob Rubin and Hank Paulson; current New York Federal Reserve Bank president William Dudley; former New York Federal Reserve Bank chairman Stephen Friedman; current Bank of England head Mark Carney; the European Central Bank's Mario Draghi; former New York Stock Exchange and Merrill Lynch head John Thain; current New York Stock Exchange Euronext head Duncan Niederauer; former Treasury Undersecretary and Wachovia head Bob Steel.

* At Bank of America: Hugh McColl is the person who turned North Carolina National Bank into NationsBank and then bought Bank of America and adopted the purchased name for the combined bank, is long gone, but the monstrosity he created lives on. McColl was replaced by Ken Lewis, under whom the acquisitions continued, right up until the Panic of 2008, when Bank of America rescued Merrill Lynch in an emergency operation run by Treasury and the Fed. The move turned Bank of America into an investment banking giant, and nearly doubled its derivatives holdings. Bank of America also acquired Countrywide Financial in January 2008. The head of Merrill Lynch at the time of the takeover was former Goldman banker John Thain, who left not long after. The current CEO of Bank of America is Brian Moynihan.

* At Morgan Stanley: John Mack was the CEO of Morgan Stanley, the investment bank spun off by JPMorgan and Company after the enactment of Glass-Steagall, until Jan. 1, 2010. Morgan Stanley was long the premier white shoe investment bank of Wall Street, until it was taken over by Sears spinoff Dean Witter Discover to form Morgan Stanley Dean Witter. After a bitter and prolonged struggle, the Morgan Stanley side won a faction fight and changed the name back to Morgan Stanley.

* At GE Capital: The head of GE Capital is Michael Neal. GE Capital is the financial arm of semi-industrial giant General Electric. GE Capital Retail Bank bought MetLife Bank from MetLife in 2011. General Electric was one of the companies put together by JP Morgan. The current chairman and CEO is Jeffrey Immelt, who replaced Jack Welch. Immelt is a member of Obamas Presidents Economic Advisory Board, appointed chairman of that board to replace Volcker.

* At Wells Fargo: John Stumpf is the chairman and CEO. The largest shareholder of Wells Fargo is Warren Buffett's Berkshire Hathaway, with 8.7%.

* At Citigroup: John Reed took over as CEO in 1984. Citi was a major player in the Pecora hearings. Citigroup was formed from the merger of Citigroup with Travelers Insurance in 1998, the deal that spurred the final nail in Glass-Steagall's coffin. Travelers was headed by Sandy Weil. In 2003 Charles Prince became CEO, replacing Weill as Chairman in 2006. Prince stepped down in late 2007, replaced by Vikram Pandit who was CEO from December 2007 until October 2012.


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