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LSP’s Cain denies report Supt. Mike Edmonson forced out by Gov. Edwards in wake of investigation and federal subpoenas

March 10, 2017 by tomaswell

Gov. John Bel Edwards has seen and heard enough.

Or has he?

Today, Edwards apparently decided the advantages of keeping the Louisiana Sheriffs’ Association happy by retaining Louisiana State Police (LSP) Superintendent did not outweigh the political liabilities.

A formal announcement was said to have been scheduled for today that Michael Edmonson will step down after 36 years with LSP and slightly more than nine years as the state’s top cop. Now, it looks as though a “retirement” announcement won’t be forthcoming until Monday at the earliest.

State Police public information officer Maj. Doug Cain denied the report. “I just talked to the colonel and he said he is not resigning, nor has he been asked to resign.” he said.

Calls to the governor’s office for comment were not returned.

An interim superintendent will be named by Edwards until a permanent replacement can be found, LouisianaVoice has learned. Speculation that Edmonson’s second in command, Deputy Superintendent Lt. Col. Charles Dupuy would be elevated to Edmonson’s post apparently is not true as sources say Dupuy will not get the post.

Dupuy was among those who took that trip to San Diego back in October and it was his state vehicle in which four troopers drove to San Diego with stops in Las Vegas and the Grand Canyon.

Even before the California trip, Edmonson has been the subject of scrutiny by LouisianaVoice since July 2014. It was then that State Sen. Neil Riser slipped an amendment to an otherwise benign bill in the last hours of the regular legislative session which would have given Edmonson an illegal retirement increase. Initial reports said that increase would have been around $55,000.

His retirement was frozen at a rate based on his $76,000 per year salary at the time he entered DROP. The amendment would have adjusted that retirement based on his salary of $131,000 in 2014. Since that time, however, his salary has been increased to $177,500 which would have ended up giving him an additional $101,500 in retirement income had Claitor not filed his legal action voiding the illegal maneuver.

Edwards was among those in the House who voted in favor of the bill with the amendment attached which would have allowed Edmonson to circumvent requirements of the so-called DROP program which froze his retirement at a rank lower than his present colonel rank. The decision to enter DROP was supposed to be irrevocable but the bill allowed Edmonson, and coincidentally, one other trooper, to make an end-run around the requirements.

Even as then-Rep. Edwards was calling unsuccessfully for then-House Speaker Chuck Kleckley to call for an investigation into the matter (Kleckley refused), State Sen. Dan Claitor filed suit in 19th Judicial District Court and obtained a ruling legally blocking the raise.

But LouisianaVoice continued revealing lapses in Edmonson’s leadership of LSP. Those included cases of payroll fraud; promotions of a trooper who had a documented prescription addiction but was promoted nonetheless to troop commander; and another who was promoted to troop commander after being caught by Mississippi authorities sneaking an underage woman into a Vicksburg casino; examples of token punishment for other troopers, including one who twice had sex with an informant while on duty—once in his patrol unit, were also reported by LouisianaVoice.

LouisianaVoice has presented LSP with scores of public records requests in efforts to determine how the LSP metes out punishment on those troopers found in disfavor as well as how it spends its money.

A recent request for a record of expenditures at Mardi Gras in New Orleans, other than on those who were detailed to the event for security, was met with a response that there were no such records for expenditures other than for SECURITY.

But Suzanne Edmonson, wife of the LSP Superintendent, posted this 2014 Facebook photo with the caption “Here to protect & serve but mostly drink.”

This photo, as well as other photos and messages, have been removed from Suzanne Edmonson’s (on right) Facebook page.

Edmonson was first appointed Superintendent by Gov. Bobby Jindal in January 2008. Prior to that, he was best known as the ever-present bodyguard first for Nick Saban and then for Les Miles at LSU football games. Before that, he was public information for LSP and had never served in a supervisory capacity.

He was reappointed by Edwards in January 2016 as a trade-off for the much-needed endorsement of the Louisiana Sheriffs’ Association in his 2015 runoff election against U.S. Sen. David Vitter.

Edwards’ brother, Daniel Edwards, is the sheriff of Tangipahoa Parish and his office was raided by the FBI last year as part of an ongoing investigation by the federal Drug Enforcement Agency.

Gov. Edwards has steadfastly stood behind Edmonson throughout his superintendent’s turbulent tenure marked by sporadic rumors of partying and lax administration of subordinates, particularly his troop commanders who were pretty much given free rein.

He also has been linked to the Louisiana State Troopers Association’s (LSTA) political contributions even though he says he has nothing to do with the LSTA operations. But LouisianaVoice was able to document that Edmonson approached LSTA right after Edwards’ election victory over Vitter to request the association to write a letter to Edwards endorsing him for reappointment.

LSTA’s board denied that request but did wash members’ money through the personal bank account of its executive director, David Young. Jindal and Edwards, at different points in time, each received $10,000 from Young, who subsequently filed expense reports for reimbursement from LSTA.

Edwards returned his contributions but Jindal never did.

Earlier this week, the FBI walked in on a board meeting of LSTA and served each of its board members with subpoenas to appear before a federal grand jury. The date of that grand jury has not been announced. In all, 18 subpoenas were served on current and former board members and Young.

In another surprise move, former Lafayette Parish Sheriff Donald Breaux resigned from the Louisiana State Police Commission (LSPC). He was the second member to quit the commission in just over a month. Commission executive director Cathy Derbonne resigned under pressure, prompting Lloyd Grafton, a retired career federal agent, to also resign, saying he had tried without success to bring integrity to the board.

Following that meeting yesterday, commission members Eulis Simien and Calvin Braxton met with Gov. Edwards for more than an hour. Braxton, contacted by LouisianaVoice, acknowledged that the meeting took place, “but I’m not saying what was discussed,” he said.

LouisianaVoice will have more details about Edmonson’s resignation as they become available.

Posted in Corruption, Ethics, Governor's Office, Public Records, State Police | 44 Comments »

18 State Troopers served subpoenas for federal grand jury even as DPS declines to investigate Millet LSTA complaint

March 8, 2017 by tomaswell

Perhaps it’s time to direct some hard questions to Department of Public Safety and Corrections (DPSC) Secretary Jimmy LeBlanc.

LeBlanc, after all, is technically Mike Edmonson’s boss. Besides holding the title of Superintendent of State Police, Edmonson is also Deputy Secretary of DPSC.

LeBlanc only recently came through an intensive investigation into the Corrections, also under the DPSC umbrella. That investigation cost Angola Warden Burl Cain and several of his family members their jobs.

And yet DPSC general counsel Kathy Williams notified retired State Trooper Leon “Bucky” Millet by letter dated last Thursday (March 2) that DPS would not consider his complaint against the Louisiana State Troopers’ Association because Louisiana State Police (LSP) “considers the matter closed.”

She may wish to revisit that decision.

Today, FBI agents fanned out across the state to simultaneously serve federal grand jury subpoenas on 18 State Troopers, LouisianaVoice has learned. Included among those served were officers and directors of that very same LSTA that DPSC refuses to investigate.

One report indicated that the LSTA board of directors was in its monthly meeting Wednesday when federal agents walked in and served each board member with his subpoena.

LouisianaVoice has not learned the date of the grand jury nor was the specific subject readily available. But because troopers from across the state were served, it would seem reasonable to assume that the thrust of the federal investigation is the laundering of campaign contributions by the LSTA through the association’s executive director David Young, a story LouisianaVoice broke more than a year ago.

It was not immediately known if Young was one of those served on Wednesday.

It was also learned that the FBI has already interviewed some of those slapped with subpoenas today.

The LSTA board is comprised of trooper representatives from each of the eight state police troops. The individual troop headquarters are located in Baton Rouge in East Baton Rouge Parish, Kenner in Jefferson Parish, Mandeville in St. Tammany Parish, Lake Charles in Calcasieu Parish, Lafayette in Lafayette Parish, Monroe in Ouachita Parish, Bossier City in Bossier Parish and Gray in Terrebonne Parish.

Neither Edmonson, Deputy Superintendent Lt. Col. Charles Dupuy nor Director of Management and Finance Lt. Col. Jason Starnes were among those handed subpoenas. Only LSTA officers, directors and former officers and directors were served.

Regardless, reports out of State Police headquarters in Baton Rouge say command personnel have been in “full panic mode” all afternoon as they hunkered down in meetings. As my grandfather used to say, you probably couldn’t pull a needle out of their butts with a John Deere tractor. A federal grand jury subpoena, after all, is less welcome than an IRS audit letter—and who knows? That might not be far behind.

LSTA general counsel Floyd Falcon cannot represent any of those served if their legal interests should conflict with those of the association, as they quite likely will. That means that each of those served will have to retain his own legal counsel.

With that many having been served subpoenas, it’s likely that at least one, maybe several, will roll over and give the feds information they’re looking for in order to cut a deal. The scramble will be to see who can give up whom first because that’s will will likely get the best deal. What’s not likely is for any of them to lie because we’re sure they are all keenly aware that lying to the FBI, even if not under oath, can get a quick trip to a federal facility where one can work in the laundry for 20 cents per hour.

One thing you can expect out of all of this: there will be no united front. Targets are almost certain to turn on each other as the cannibalization begins in earnest. Edmonson already has thrown the four men who drove the expedition to California—and his secretary—under the bus.

And make no mistake: the clock is ticking on Gov. John Bel Edwards. Mike Edmonson, Charles Dupuy and Jason Starnes represent baggage he simply cannot afford to carry into his campaign for reelection. That campaign cranks up in less than two years.

Edmonson needs to go and he needs to take LeBlanc with him.

Back to you, Kathy Williams.

 

Posted in Corruption, Courts, Crime, DOA, Elections, Ethics, Governor's Office, Media, State Police | 22 Comments »

Mike Edmonson hobnobs with BR man with outstanding warrant, arrested for bribing way into LSU football games

March 8, 2017 by tomaswell

LSP Policy: P. O. 901 – Code of Conduct and Ethics

47 Associations

  1. i)Commissioned officers shall avoid regular or continuous associations or dealings with persons whom they know are suspected felons, persons under criminal investigation or indictment, or who have a reputation in the community for present involvement in felonious or criminal behavior.  

That seems pretty straightforward and easy to understand.

Yet, there Louisiana State Police (LSP) Superintendent Mike Edmonson is hobnobbing with Casey Adam McKenzie in all those Facebook photographs posted by…McKenzie.

Edmonson on left, McKenzie in center. Man on right unidentified.

McKenzie, a Baton Rouge insurance agent, a self-promoting individual who also works as a booking agent for local bands and who likes to gate-crash LSU sporting events to scarf off sideline passes. He was even arrested for that once. http://www.wbrz.com/news/lsu-police-gate-workers-paid-off/.

He was initially booked on a charge of felony theft but that was later reduced to a misdemeanor.

Casey_LSU

So what’s wrong with Edmonson and McKenzie paling around together?

Left to right: Edmonson, wife Suzanne Edmonson, McKenzie. Others unidentified.

McKenzie doesn’t think there’s anything inappropriate about their friendship. “Mike’s a terrific guy,” he told LouisianaVoice in a recent telephone interview.

In fact, it was McKenzie who initiated the phone call. I had emailed LSP public information officer Maj. Doug Cain asking what the relationship between Edmonson and McKenzie. (I never got a response to that inquiry). Other than that, the only other contact I made with anyone about the two was with a sound engineer who I was told had issues with McKenzie over McKenzie’s alleged short-changing the sound company, Premier Production and Sound Services of Baton Rouge, following a band performance.

McKenzie and Edmonson enjoy a harmonica solo together onstage

Within 30 minute of those two contact, McKenzie was on the phone wanting to know why I was asking about him.

Well, regarding that Oct. 12, 2013, charge of theft of LSU “event pass” wristbands, I couldn’t help but be a little curious as to why, after getting the charge reduced to a misdemeanor, the matter has yet to be resolved in court. There have been numerous continuances, with the most recent being on Feb. 13 with the next court date set for 9:30 on May 5 in 19th Judicial District Judge Mike Erwin’s courtroom.

An apparently surprised McKenzie with Edmonson and unidentified women.

Other minor violations on McKenzie’s part that indicate something of a pattern include:

  • Improper equipment on his auto, to which he pled guilty in 2004;
  • Speeding and driving under suspension on Sept. 2, 2010: “Presented without evidence and no action taken.  Case closed” on Dec. 20, 2013 (How did this charge manage to languish for more than three years?);
  • Speeding on June 1, 2014: State moved to drop charges and case dismissed on Sept. 22, 2015;
  • No seat belt on Nov. 22, 2014: No activity on charge since that date;
  • Expired vehicle inspection on Jan. 8, 2015: No activity on charge since that date;
  • Expired vehicle inspection on Jan. 21, 2015: “Presented without evidence on May 9, 2015,” case dismissed;
  • Driving with suspended license on May 9, 2016: Failed to appear for arraignment on Sept. 30, 2016. Bench warrant issued for his arrest and warrant remains outstanding (Erwin is judge).

Casey_Speeding

Casey_No_License

Granted, these offenses don’t thrust McKenzie into the same class as John Dillinger but there are other incidents for which he was not arrested but which call his dealings with others into question.

Patio partying with Edmonson (left foreground), wife Suzanne and McKenzie (purple LSU shirt). Possibly a selfie taken by Edmonson?

One person told LouisianaVoice, “I was personally taken for several thousand dollars, and others (for) much more over the past few years.” That writer continued, saying there was “one despicable incident” of McKenzie’s “ripping off a disabled wheelchair-bound activist for ALS.”

And with a warrant for his arrest pending, one might question the wisdom of Edmonson’s chumming around with McKenzie.

That same writer describes McKenzie as being “obsessed with the social media platforms of Facebook, Snapchat, Instagram, and Twitter. He provide plenty of photo and videos for reference that confirm his close and frequent ties with Mike Edmonson.”

 

Posted in Ethics, State Police | 10 Comments »

Reports have AG, FBI entering LSP probe; LouisianaVoice having trouble obtaining records (but nothing new there)

March 7, 2017 by tomaswell

A couple of reports, unconfirmed to this point, have been swirling about concerning the ongoing investigation into that San Diego trip taken by State Police Superintendent Mike Edmonson and 16 or so subordinates, including the four who went by state vehicle via Las Vegas and the Grand Canyon. Altogether, the jaunt cost Louisiana taxpayers more than $73,000.

But there also are confirmed developments that might have raised some concern on the part of those who want to see an unbiased investigation that will lead to appropriate action on the part of Gov. John Bel Edwards. It seems, however, that initial concern has been defused.

First, the unsubstantiated reports that, while lacking official confirmation, come from those close to the investigation who are considered reliable.

  • Attorney General Jeff Landry’s office is said to have begun an investigation on its own, separate and apart from that of the governor’s office. A spokesperson for the AG said that could be neither confirmed nor denied. “Our office has a policy of not commenting on such matters so as not to compromise any investigation it may be conducting,” she said.
  • Another well-placed source said the FBI is also conducting an investigation of Edmonson and LSP, though Edmonson earlier denied any such investigation. Our source of that story said he initially provided information to the FBI but now that the agency’s investigation is underway, he has not been involved in further dialog with agents.

Conspicuously absent is any report that the Office of Inspector General, that fiercely independent investigative agency, has undertaken any effort to look into possible criminal wrongdoing at LSP. That could, of course, be because OIG isn’t as independent of the governor’s office as it likes to claim.

It likewise would be reassuring if East Baton Rouge Parish District Attorney Hillar Moore initiated a grand jury investigation or at least weighed in if for no other reason than to say he was taking a wait and see approach to the governor’s investigation. After all, any crime committed in the East Baton Rouge Parish falls under his jurisdiction.

The two unconfirmed reports aside, LouisianaVoice has learned that Mark Falcon, an attorney for the Division of Administration (DOA), is assisting DOA auditors in their investigation of LSP. Richard Carbo, communications director for the governor’s office, said, “He is not the lead investigator; he is assisting the auditors in their work.”

Mark Falcon did, however, assauge concerns when he offered full disclosure in informing Commissioner of Administration Jay Dardenne that he is the brother of Floyd Falcon, legal counsel for the Louisiana State Troopers Association (LSTA), the lobbying arm of LSP.

It was LouisianaVoice’s story about the LSTA’s practice of laundering illegal campaign contributions through the personal bank account of its executive director David Young more than a year ago that prompted Floyd Falcon to refer to me as “a chronic complainer,” a characterization that has likely only intensified in his mind, given the manner in which the LSP saga has played out thus far.

But Mark Falcon’s voluntary disclosure of his relationship with Floyd Falcon and the manner in which he presented it is encouraging and provides optimism that the DOA investigation will be complete and above-board.

That is particularly important because two of those who took that trip to San Diego had their travel and lodging expenses on the trip picked up by the LSTA. Only the meals for Trooper Alexandr Nezgodinsky, a native of San Diego, and Lt. Stephen Lafargue were paid for by the state. Several others who made the trip are also LSTA members but had their expenses paid by the state.

In another development, LouisianaVoice received a rather dubious response to a public records requests regarding other trips Edmonson took to receive various awards.

Here is a copy of our request:

From: Tom Aswell
Sent: Wednesday, February 22, 2017 3:55 PM
To: ‘Michele Giroir’; ‘Doug Cain’
Subject: PUBLIC RECORDS REQUESTS

Pursuant to LA. R.S. 44.1 (et seq.), I hereby submit my formal request for the opportunity to review all travel records, including airfare, other travel, lodging, meals, registration fees and any and all other expenses incurred by all personnel (by name) who attended the presentation of any and all of the below awards bestowed upon Col. Mike Edmonson:

  • FBI Washington DC, Top 25 Police Administrators Award, 2009;
  • Sheriff Buford Pusser National Law Enforcement Officer of the Year Award, 2013;
  • Human Trafficking, Faces of Hope Award, 2013
  • Inner City Entrepreneur (ICE) Institute—Top Cop Award, 2013
  • American Association of Motor Vehicle Administrators Martha Irwin Award for Lifetime Achievement in Highway Safety, 2014
  • New Orleans Convention and Visitors Bureau, Captain Katz Lifetime Award for Outstanding Achievement in Public Safety, 2015.

 Also, please provide me with the opportunity to review:

  • all travel records, including airfare, other travel, lodging, meals, registration fees and any and all other expenses incurred by all personnel (by name) who attended the Louisiana Sheriffs’ Association annual conventions/conferences in Destin/Sandestin, Florida for the years 2008 through 2016;
  • all travel records, including airfare, other travel, lodging, meals, registration fees and any and all other expenses incurred by all personnel (by name) who attended the Washington (D.C.) Mardi Gras festivities for the years 2008 through 2017;
  • all travel records, including airfare, other travel, lodging, meals, registration fees and any and all other expenses incurred by all personnel (by name) who attended the New Orleans Mardi Gras festivities for the years 2008 through 2016 (exclusive of security details assigned to the event).

Here is the response I received yesterday (Monday, March 6):

From: Michele Giroir
Sent: Monday, March 6, 2017 8:12 AM
To: Tom Aswell
Cc: Doug Cain; JB Slaton; Faye Morrison
Subject: RE: PUBLIC RECORDS REQUESTS

Mr. Aswell, in partial response to your below public records request, I have been advised that LSP does not maintain any records relating to travel expenses, etc., for attendance at the presentation of the following awards bestowed upon Col. Mike Edmonson:

  • FBI Washington DC, Top 25 Police Administrators Award, 2009;
  • Sheriff Buford Pusser National Law Enforcement Officer of the Year Award, 2013;
  • Human Trafficking, Faces of Hope Award, 2013
  • Inner City Entrepreneur (ICE) Institute –Top Cop Award, 2013
  • New Orleans Convention and Visitors Bureau, Captain Katz Lifetime Award for Outstanding Achievement in Public Safety, 2015

 The remaining requests are still being handling and further responses will be forthcoming.

Any questions that you may have should be addressed to Major Doug Cain.

With kindest professional regards, I am,

Sincerely,

Michele M. Giroir

Attorney Supervisor

 Not complete sold on that explanation, I emailed Cain:

“Doug, I find it inconceivable that LSP has no record of expenses for these trips. Is it the position that LSP keeps no such records or are you saying no expenses were incurred?”

His response? “No expenses.”

“Not even for those who went with him?” I wrote back (because we know by now he rarely travels alone).

“No sir,” he responded.

So the bottom line is we are being asked to believe that Edmonson, who packed 15 of his people off to San Diego, all of whom combined to run up expenses of more than $73,000, including salaries and travel, lodging and meal expenses, either took no one with him on the other trips and he didn’t consume any meals on his trips or perhaps he took traveling companions, none of whom spent a dime of state funds.

Either scenario requires a leap of faith to believe.

(To be incredulously continued.)

Posted in Campaign Contributions, Corruption, DOA, Ethics, Finances, Governor's Office, Lobbyist, State Police | 22 Comments »

Bloomberg story of $310 billion megabank fines since 2008 doesn’t tell the complete story of Wall Street greed, politics

March 5, 2017 by tomaswell

1399909

Bloomberg News Service on March 1 published a STORY that said global megabanks have paid $321 billion in fines for such non-banking-like practices as money laundering, market manipulation and even terrorist financing since the market crash of 2008.

And while $321 billion may sound impressive, Bloomberg failed to mention that because of those same banks, President George W. Bush had little choice but to sign the Emergency Economic Stabilization Act of 2008 that pumped more than twice that amount, $700 billion of taxpayer bailout funds, into the failed banks that precipitated the Great Recession of 2008.

Most financial advisers would describe that as a negative return on investment.

Adding insult to injury, $1.6 billion of that $700 billion was used to award multi-million dollar bonuses to CEOs of the very firms that got us into the mess to begin with. http://www.cbsnews.com/news/16b-of-bank-bailout-went-to-execs/

Bloomberg also failed to mention that those fines had little effect on those who perpetuated the crimes but did have a significant impact on stockholders and retirees, those, in other words, who had nothing to do with the massive fraud carried out on such a grand scale.

In fact, in 2010, former Countrywide Financial CEO Angelo Mozilo was fined $22.5 million and ordered to pay another $45 million in restitution as his penalty for reaping a profit of $141.7 million from stock sale, according to Mary Kreiner Ramirez and Steven A. Ramirez, authors of The Case for the Corporate Death Penalty (New York University Press, 2017). So, despite the penalties, he walked away with a net gain $74.2 million, or a 52 percent return, sending a clear signal his peers that “crime does in fact pay,” the authors wrote.

There are also two questions Bloomberg neglected to address:

  1. What the total cost of the runaway greed and reckless actions of firms like AIG, Lehman Brothers, Merrill Lynch, Goldman Sachs, Citigroup, Countrywide, and J.P. Morgan to stockholders, retirees and American taxpayers in general?
  2. How many top tier officers at these firms who condoned, encouraged and/or actively participated in the illegal practices went to jail?

The answer to the first question is an eye-popping $15 trillion, according to Ramirez and Ramirez.

The answer to the second question is just as unbelievable: ONE.

In fact, as of Jan. 28, that last date that STATISTICS were updated by the Bureau of Prisons, there were exactly 555 people serving federal jail sentences for banking, insurance, embezzlement and counterfeiting. That comes to .3 percent (three-tenths of one percent) of the total federal prison population.

By contrast, there were 82,109 in federal prison for non-violent drug offenses (46.4 percent of the total), and 14,853 imprisoned on immigration charges (8.4 percent).

At this point it might be fair to ask just who did the most lasting damage to the nation’s economy?

It would also be fair to question why, if only one Wall Street banker went to jail, how is that there are 555 imprisoned for banking- and insurance-related offenses? The answer to that is those offenders, situated on Main Street instead of Wall Street, lacked the political clout in Washington that the leaders of the megabanks enjoyed.

Is that an over-simplification of the circumstances? Probably, but it’s interesting to compare the actions of different White House administrations in handling financial crises.

President Obama’s first Attorney General, Eric Holder, in his “too big to fail” proclamation, said, “I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications…it (prosecution) will have a negative impact on the economy.”

Obama, for his part, said, “One of the biggest problems about the…financial crisis and the whole subprime lending fiasco is that a lot of that stuff wasn’t necessarily illegal, it was just immoral or inappropriate or reckless.”

Wasn’t necessarily illegal? Both statements stretch credulity to its breaking point and are in themselves, disgraceful because federal laws were clearly broken knowingly and willfully.

It wasn’t always that way. For example, in the wake of the savings and loan crisis of the 1980s and 1990s, more than 1,100 bankers were indicted and 839 were convicted.

Enron, the seventh-largest company in the U.S. at the turn of the century, is another example of how the feds went after those who played fast and loose with the rules. President George H.W. Bush called on Enron CEO Kenneth Lay to run the World Economic Summit in Houston in 1990 and in 1992, Lay co-chaired the reelection campaign of Bush the First.

Enron and its affiliates also contributed more than $888,000 to the Republican National Committee in 2000, the year that George W. Bush was elected President and another $1.3 million to the Republican Party. Lay and his wife personally contributed $238,000 to George W. Bush campaigns and inauguration celebrations and raised another $100,000 from friends. To the younger Bush, Lay was known as “Kenny boy.”

Still, Enron and its top executives were not immune from prosecution by Bush the Second.

Despite the access to the highest levels of government enjoyed by Enron and Lay, he and Jeff Skilling, his successor as Enron CEO, were indicted by the Department of Justice in 2004 and though the two combined to spend some $60 million on their defense, Lay was convicted on all counts and Skilling on 19 of 28 counts of securities fraud.

George W. Bush’s Attorney General John Ashcroft recused himself from the Enron investigation because Enron and Lay both were major financial supporters in Ashcroft’s Missouri unsuccessful Senate re-election campaign. His chief of staff, David Ayers, also took himself out of the investigation of Enron. That was as it should have been.

Enron’s accounting firm, Arthur Andersen, was convicted of shredding Enron documents and both Enron and Arthur Andersen soon ceased to exist.

The same fate befell CenTrust Savings Bank, Drexel Burnham Lambert investment bank, and WorldCom—all because of flagrant violations of federal securities laws and each was prosecuted by the administrations of the two Bushes. WorldCom, in fact, was the largest bankruptcy in history when it went under in 2002.

Evidently, those firms were not considered too big to fail.

By contrast, Obama’s Attorney General Holder and Lanny Breuer, chief of the Department of Justice (DOJ) Criminal Division, did not remove themselves from DOJ’s investigation of the investment banks that brought on the Great Recession of 2008. This despite the fact that both men had worked for the same law firm of Covington & Burling which included among its clients such eminent Wall Street banking firms as Bank of America (Countrywide’s successor), Citigroup, and JP Morgan Chase.

In fact, at the time Holder was tapped as attorney general, he was co-chairing Covington & Burling’s white-collar defense unit. Good training in case you’re ever called on to investigate your former bosses.

Breuer returned to Covington & Burling in 2013 followed by his boss Holder in July 2015, giving Holder at least a reason for his strained, if not borderline unprincipled logic for not pursuing criminal indictments against the megabanks.

Following Holder’s departure, Deputy Attorney General Sally Quillian Yates (Remember her? She’s the one President Trump fired after she refused to enforce his illegal immigration order) issued a DOJ memo (turns out she was pretty good at memos that cut right to the chase) on Sept. 9, 2015, that reversed Holder and Breuer’s DOJ policy toward pursuing individual accountability, both criminally and civilly, for corporate wrongdoing. The memorandum said the policy change was to maximize DOJ’s “ability to deter misconduct and to hold those who engage in it accountable.”

The comparison between the approaches of two Bushes and Obama to bankers’ disdain for securities laws to the detriment of the entire country represents a stark role reversal for the perceived political philosophies of the Republican and Democratic administrations.

And now, President Trump has expressed his determination to roll back the Dodd-Frank bill passed after the 2008 recession for the express purpose of preventing a recurrence of the runaway greed that nearly wrecked the world economy.

In fact, he wants to remove all regulation of Wall Street banks, quite possibly the most dangerous single cartel in American society.

Posted in Attorney General, Campaign Contributions, Congress, Corruption, Crime, Ethics, Finances, Fraud, Politicians, Politics, Revenue | 3 Comments »

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