- Abraham Lincoln, Gettysburg Address
The rise of the American Corporatocracy can be illustrated through a tale of two men: Eric Holder and Eliot Spitzer, both Democrats. The first played the corporate game and was rewarded handsomely. The other tried to fight the beast and was summarily executed.
Let's start with Eliot Spitzer. He was a rising star in Democratic circles, and the leading force fighting the excesses of Wall Street. Elected New York State Attorney General in 1998, he took on the financial barons after the Federal government under Bill Clinton and George W. Bush began abdicating its regulatory and enforcement responsibilities.
Spitzer prosecuted cases relating to corporate white collar crime and securities fraud. He pursued cases against computer chip price fixing, investment bank stock price inflation, predatory lending practices by mortgage lenders, fraud at American International Group (AIG), and the 2003 mutual fund scandal. He also sued Richard Grasso, the former chairman of the New York Stock Exchange, over his excessive compensation package.
Needless to say, Spitzer created some powerful enemies. According to The Atlantic, they retained a notorious Republican dirty trickster, Roger Stone, to lead the attack on Spitzer. According to Stone, his paymasters were "wealthy Republicans." Stone reportedly bragged to a South Florida blogger that the "wealthy Republicans" -- called "The Group" -- were organized around a coordinating operative, Republican lobbyist Wayne Berman, and financiers including former AIG Chairman Hank Greenberg and Home Depot financier Ken Langone -- all major-league Spitzer haters.
Stone began snooping around and learned that Spitzer was a client of Emperors Club VIP, a call girl agency. Spitzer had evidently spent tens of thousands of dollars for sexual favors. Stone had the goods on Spitzer and told associates that "Eliot's going down."
In 2007, Spitzer was inaugurated Governor of New York. Within months Stone leaked the story about Spitzer, who was subsequently forced to resign as Governor. Shortly thereafter, the global financial crisis hit, precipitated by financial malfeasance of the Wall Street titans, with a major player being Spitzer's old nemesis, AIG.
Enter Eric Holder. The first African American to hold the position of US Attorney General, Holder had previously served in various capacities in government and private industry. Just before he became Attorney General, he worked at the law firm of Covington & Burling in Washington, DC, which had an elite clientele of major corporations and large banks including Morgan Stanley, Wells Fargo, Chase, Bank of America, Citigroup, and others.
In 2009 at the tail end of the financial crisis, Holder left his job at Covington & Burling, where he was making $2.5 million per year, and assumed the position of US Attorney General at a measly $200,000, taking a shocking 92% pay cut. Holder had obviously been sent on a mission.
We have Matt Taibbi of Rolling Stone to thank for documenting Holder's role as a double agent. In the guise of Attorney General, Holder was the bankers' best friend, letting them skate on charges of fraud, tax evasion, market manipulation, money laundering, bribery and other offenses. He failed to win a single conviction in court for any crimes related to the financial crisis. This was the first time in modern history that a financial debacle had not resulted in significant jail time for any of the perpetrators.
How did he do it? One creative scheme was known as "collateral consequences," under which the government could pursue non-criminal alternatives for companies to avoid "collateral" damage. To get around bothersome legal formalities, Holder struck huge deals with companies in which judges did not sign off on the agreements, essentially institutionalizing the backroom deal. The banks got off easy ... paying fines with their customers' money and avoiding criminal prosecution.
In July 2015, Holder returned to his high-paying job at Covington & Burling, having earned the undying gratitude of his Wall Street clientele. Matt Taibbi opines about the move, "I think this is probably the single biggest example of the revolving door that we've ever had." Of course, the mainstream media wasted little ink on this extreme abuse of power.
If you plan to take on the American Corporatocracy, you better have no skeletons in your closet ... and you better plan on being lowly paid. Having said that, it's time for the next Eliot Spitzer to step up and go after the bastards!