Voices from the Occupation
Putting the 1% on Trial
This morning, members of Occupy London in collaboration with a Veterans group called Occupy Veterans, took occupation of The Old Street Magistrates Court building in London, UK. In their initial statement, the occupiers state their intention to hold trials of the 1% responsible for the global economic crisis. Today’s article reports from the Old Street occupation, and sets the occupation in context – Occupy is no longer waiting for the broken wheels of justice to turn in its favour, it has seized the wagon.
The following is the initial statement released by the occupiers this morning.
It is too soon to tell if this Occupation with be quashed by police, but at time of writing, it is one of the most exciting occupations to date. The team has vowed to engage real legal teams to the site to prosecute, defend, judge and jury. The accused will be invited to attend the Old Street Magistrates court to participate in the trial.
Why do we need to Occupy a Court?
Today, the law is busier protecting the members of the 1% than holding them to account. In a previous article, I discussed the two tier legal system operating today. If you or I were to steal, commit fraud or murder – we would be arrested, put on trial and imprisoned if found guilty. However, the biggest banking corporations get to attend an inquiry, get written up in a report and fined. This has resulted in corporations viewing fraud as a legitimate option, and balancing the risk by keeping aside a few quid to pay off the fines. In short, it is good business to keep playing these god awful games with the economy.
Who are the Accused?
While Occupy Justice have yet to release further information on who they intend to try, in recent weeks, we have seen various possible suspects.
The FSA and RBS
The FSA released areport revealing the outrageous behaviour of the RBS board, including Chief Executive Fred Goodwin (Sir, no less) and the head of its commercial arm Johnny Cameron. RBS chose to buy a Dutch bank ABN AMRO, for £45bn in the midst of the financial crisis in 2007. The board were asked repeatedly if they were undertaking due diligence and thoroughly reviewing the ABN AMRO books ahead of the purchase, as the investment business was known to operate in the US and the subprime collapse was in full swing. However, despite this, Fred Goodwin declined, stating ‘due diligence light’ was all that was required. Months after buying the business, in cash, RBS collapsed under the weight of the toxic debt on ABN AMRO’s books, together with the impact of its collusion in dodgy derivatives. It was kept afloat by taxpayer funded life support of £46bn. The FSA report, despite stating clearly the culpability of the board, and the complete incompetence of its own role as regulator – refused to pursue enforcement action against any person or organisation involved. Meanwhile, Fred Goodwin retired on a £300k plus per annum pension, free to gain lucrative consultancy positions.
MF Global UK and JP Morgan
MF Global engaged in a scheme called hypothecation. They were able to make their own bets on the market, based on using their own customer’s funds as collateral. However, when the bets started going bad, they started using actual customer funds to make the bets. Finally, they sold their debt to JP Morgan, ran away with the proceeds and the company collapsed. Customers of MF Global are now missing $1.2bn, which the courts say they can only claim from MF Global, not JP Morgan who actually have it (because they bought it from MF Global). This means that they will likely never get their stolen money back. Again, Chief Executive Jon Corzine stands down, but he has not had to pay a penny in return for the theft.
This operation could not have proceeded without the UK arms, as banking rules in the US make it illegal to do what they did by running the fraud through the City of London.
Northern Rock and George Osborne
Remember them? Northern Rock saw enormous growth through the early 2000’s, in a similar way to RBS. They were achieving this purported balance sheet miracle, by indulging in the same high risk ventures as other mortgage lenders. In short, they borrowed huge sums, lent out to subprime (skint) customers, then bundled loads of these debts together (to make collateral debt obligations) and selling them on to investment banks like Goldman Sachs. This practise created a paper based profit, in reality the bank was just generating debt. Vast and unsustainable debt. The bubble burst in 2007, and there was the first run on a UK bank in 150 years. The UK government, that’s us, stepped in and bought Northern Rock for 1.4bn. While the board walked away with their bonuses and pensions intact, thousands of staff lost their jobs, while more lost their savings which were manifested in company share save schemes, the shares now worthless. The same went for their wider shareholders.
In January 2009, it was decided that shareholders were not eligible for compensation for their losses.
By 2011, the bank had been split into two vehicles, one squeaky clean retail bank ready to go back to business; the other, a worthless toxic shell containing the debts which dragged the bank to ruin. In recent weeks, George Osborne (UK Chancellor) sold the Good Bank to Richard Branson’s Virgin Money for a mere £747m, half what we paid for it. Furthermore, the Bad Bank, with its £21bn of toxic debt, remains ours.
But Aren’t the Government Getting Tough on the Banks?
You would certainly think so if your main source of news is the Corporate Media. The news cycle for the last few days has focussed on Brave Dave Cameron and George Osborne getting tough on the City by implementing the recommendations of the Vickers Report in full.
The Vickers Report is the outcome of the so called Independent Commission on Banking - a review of the financial crisis and banking operations in the UK. It was supposed to usher in a new era in the UK financial services industry – of responsibility and prudence. It has instead produced watery platitudes to such a degree that the UK government felt it could apply it in its entirety.
At the outset, we were discussing holding the worst offenders of the derivatives market accountable, of fully separating investment banking operations from retail banking operations, of preventing any bank from becoming too big to fail.
On all three counts, the Vickers Report manifestly fails. It suggests only ‘ring fencing’ retail operations, not formal segregation. It does nothing to limit banking organisation growing too big, or making loans and investments so big that their failure could wreck the system. No one will be going to court to face trial for their role in the collapse.
If You Want Something Done Right, Do it Yourself
The list goes on; there is no shortage of people and organisations which should be facing serious questions about their behaviour in the boom years. Not only to hold them to account for past endeavour, but as the MF Global case shows, because they are still out there doing the same thing, right now. As you read this, trillions of pounds of debt teeter on the brink, and all of it insured by us. It has to stop. Private profit with the assurance of socialised losses cannot be permitted to continue. These organisations are ravaging people and planet in their greed for ever accumulating wealth. This is not a recession, it is a robbery. Right now, we are forced to watch as the robbery is perpetrated, funded by us, while our teachers, nurses, bin men and lollypop ladies are bearing the brunt –losing their jobs and their pensions. In a matter of weeks after the crisis, the narrative shifted from bad banks, to bad public sector. We are told on a daily basis that our money should be going to pay down the deficit, rather than heal the sick, teach the children, care for the elderly and the vulnerable. None of these groups caused the financial collapse – the bankers did. They continue each day. It is on us to save ourselves, because our institutions are manifestly failing. This is one means of making this statement.
Occupy your Mind, Occupy our Homes, Occupy the Streets, Occupy Justice….the Occupy Movement continues to grow, morph and develop. So, please send your support to Occupy Justice and watch this space for further reports as the occupation progresses.