Senator Kaufman Makes A Stand Against The Criminality Exposed By The Lehman Examiner Report, Questions The Core Principles Of US Democracy

Tyler Durden's picture

Only a few days have passed since its release, and already the Mainstream Media has forgotten all about the Lehman Examiner Report, with barely an occasional mention. As the CJR points out, this unquestionably massive story of corruption and vice, is being covered up by powered interests controlling all the major news outlets, because just like in the Galleon case, the stench goes not only to the top, (in this case the New York Fed and the SEC), but very likely to various corporations that have vested interests in the conglomerates controlling America's key media organizations. One person, however, who refuses to let it go, is Senator Ted Kaufman, whose determined support for an overhaul of market structure we have followed over the past year. The Senator now moves on to yet another pressing issue: the disclosures of unprecedented impropriety conducted by virtually every person of responsibility within the Lehman organization, as well as associated firms like Ernst & Young, and regulators who were asleep at the wheel during the moment of greatest stress for the American financial system. Kaufman calls for a "a thorough investigation, both civil and criminal, to identify every last person who had knowledge that Lehman was misleading the public about its troubled balance sheet – and that means everyone from the Lehman executives, to its board of directors, to its accounting firm, Ernst & Young. Moreover, if the foreign bank counterparties who purchased the now infamous "Repo 105s" were complicit in the scheme, they should be held accountable as well." Zero Hedge sides with Senator Kaufman in this new endeavor (we have yet to see even one other member of Congress or the Senate stand up and voice their opposition to Lehman's criminal conduct). As Kaufman wisely points out: "I’m concerned that the revelations about Lehman Brothers are just the tip of the iceberg.  We have no reason to believe that the conduct detailed last week is somehow isolated or unique. Indeed, this sort of behavior is hardly novel." We look forward to obtaining even more raw data on improprieties conducted by other financial firms, and we hold our breath until we can finally get a glimpse at the heart of that most corrupt and secretive organization of all - the US Federal Reserve.

As Kaufman points out in a Speech to be delivered before the Senate, the precedent of failing to pursue justice in just this one case, may be the final barrier before the fundamental concept of American democracy disintegrates into a cloud of crony interests and captured political elements.

Mr. President, last week’s revelations about Lehman Brothers reinforce what I’ve been saying for some time. The folly of radical deregulation has given us financial institutions that are too big to fail, too big to manage, and too big to regulate. If we have any hope of returning the rule of law to Wall Street, we need regulatory reform that the addresses this central reality. As I said more than a year ago: " At the end of the day, this is a test of whether we have one justice system in this country or two. If we don’t treat a Wall Street firm that defrauded investors of millions of dollars the same way we treat someone who stole 500 dollars from a cash register, then how can we expect our citizens to have faith in the rule of law? For our economy to work for all Americans, investors must have confidence in the honest and open functioning of our financial markets. Our markets can only flourish when Americans again trust that they are fair, transparent, and accountable to the laws." The American people deserve no less.

Full Kaufman speech to be delivered before the Senate, a must read for anyone who still hold out any hope for the survival of US society and the American middle-class.


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
BlackBeard's picture

Indictments bitches.  Lots of em.

Cistercian's picture

 I pray they will be followed by convictions with concomitant severe sentences.

 And fines.Epic fines.

 Failing anything like that.......


  Well, I am not allowed to go there.Use your most lurid imagination.

MarketTruth's picture

NO ONE big goes to jail (unless they admit it like Madoff). You can take that to the TBTF bank.

What you will hear is lots of he said she said and they said and their accountants said and the lawyers said. Lots of running around for sure yet no one being able to be pegged for the crime. Maybe a civil penalty, yet no CRIMINAL charges and no one goes to jail. NO ONE.

Anyone care to place a bet against me?


Everyman's picture

"Somebody's gotta go to jail, Ben."


I think the people will have a lot more to say if these idiots do not start get sent to jail.  Why do the "little people" get tried in court, and the elite get to walk?

Is that the "where all men are created equal", DIES???

I bet you are correct, but I will bet that some loon (or many) will start offing some of these guys if they are allowed to skate.  If the Government is not going to mete out justice, then there are those that will take it in their own hands."

blindfaith's picture

please explain to me why this is any different than MOST of the stock traded companies doing double ordering, marking it as SALES, then returning half the order after the quarter ends????  6 years ago CHTL was blown apart by Barrons for this when (I won't name the names for fear of suit)  a mountain of companies were doing the samething and still are.  And, the tech compainies are the worst.  Where are all the reported "profits" going?  By the next quarter, the investors have forgotten what the company said last quarter.  A shell game, that has no nut indside...just another situation the SEC ignores and investors don't care about as long as there is a gain on the price paid per share.  Crimes we pay to play, right fellas?  We are a part of the problem, and should be the solution...they can make the crimes with out your participation, your money.

Bob's picture

It does seem problematic that certainly the US Treasury Secretary and the very Fed itself (not to mention the SEC) are implicated.  This certainly is a test of whether the rule of law exists for all in this nation, but can you really see this nation's priviledged, crony leaders passing this test?

It would be nice to see Obama faced with the decision of whether to issue pardons for his good buddies, but can you really see it getting that far?

Thank God for Senator Kaufman (whose MBA is from the Wharton School of Business), but I'm afraid--though dearly wishing to be proven wrong--that his arrival in the Senate came too late. 

ED's picture

Honestly, does anyone believe Congress has even 2 modest sized testicles to rub together?

Them eunuchs are yellow as their pee-stained panties

Everyman's picture


Sic semper tyrannis


Tyler, THIS is why you are having a traffic spike.  When corruptiion gets this bad, that it is covered up like this, people will will "take things into their own hands".  People are looking for information, and as a local radio station said this morning:  "we have the lowest 10% of the class in charge of our government and our corporations."  Are we really suprised with the results?

I just wonder when the "shooting starts".  I am not advocating it, but there are things that are terribly wrong here as indicated by your story.  The "everyman" out there knows if they did one one hundredth of what these guys did at GS, Lehman, E&Y, they would never see the light of day again, and be fined and their illgotten gains seized for the losses caused.

If this "looking the other way" continues I can very well see a day soon where elected officals and corporate CEOs and CFOs are dragged out of their offices and are beaten.  If they will not "come to the law, the law will go to them."  This country's economy was nuked in the manner of this post, and it was done so often that this was common businesses practices.  Does any of these elected morons or CEOs and CFOs think for one minute that American Citizens are gonna sit by wilst these crooks spend their grandchildren's future????  Parents sacrifice for kids all the time, can you think of a better sacrifice?  Or a better time to "Stand up"???

I do not think this will be solved "easy", I think it will take a major American Citizen lead revolt.

If I were CEOs of Financials, Banks, or an elected officail, I would invest heavily in bullet proof vests.

lsbumblebee's picture

Kaufman has no favors to pay and nothing to lose. He is retiring at the end of the 111th Congress.

GoldmanSux's picture

Presumably there were no counterparties who lost on Repo105 when Lehman went down, otherwise we would have heard about it. Including the fed? As they went bankrupt two weeks before quarter end, perhaps the fed wouldn't enter into these repos knowing they could be left holding the bag.

Cognitive Dissonance's picture

"Presumably there were no counter parties who lost on Repo105 when Lehman went down, otherwise we would have heard about it."

This is precisely why AIG paid 100 cents on the dollar, why everyone was bailed out and so on. When there are no injured parties, the lawsuits that do creep into the system can be managed. But allow walking wounded in the streets and suddenly there is some explaining to do.

This is also why the victims and next of kin of 9/11 were quickly offered unprecedented settlements in exchange for signing away the right to sue. Up until 9/11, victims of "terrorist" attacks were not given huge sums by the government to go away but rather the standard survivors benefits and told to fend for themselves. The government didn't wish to have hungry lawyers and investigators looking too close.

Same thing with the (long overdue) recent settlement with the injured workers and volunteers who cleaned up the NYC site. In exchange for money, they can't continue the lawsuits they started. While this is standard operating procedure years after the fact during a settlement, the payments made to the victims and family(s) immediately after the attacks were not. Money shuts people up and limits inquires.

strike for return to reality's picture

I thought the payments to American Airlines and United Airlines and all the other property owners were just the true conspiracists way of paying for the property they destroyed.

Personal responsibility for destroying the republic. was promoted to the highest military rank in payment for disabling the East Coast's air defenses on 9/11.

Howard_Beale's picture

Bingo on AIG. No comment on 9/11.

Gimp's picture

I wish the Senator all the best unfortunately he is the hen in the hen house surrounded by wolves who will do anything to keep the ponzi scheme running.

Obama is showing he is "no change" and is looking very much the same as the last two adminstrations. Good luck to Sen. Kaufman.

Everyman's picture

That's right, the "Elected representation" wll do nothing, that is what the people know as well, and they know the game is rigged.  How many meals will they let their kids go without, or how many college savings accounts are now canabilized for "food" will it take for the "needs of the many" to be realized by "the one", that this can no longer go on, and must be stopped, and at all costs???

There are many here that "know" how financials, investing, money, and economies work.  I read the posts and am mistified and often confused, and usually have to do a week of research just to figure out what the hell the author of these articles are talking about.  TBS, I do know people, and I do know AMERICANS, and they are angry, fed up, and it will not take much more, until one decides that they are "the patroitic martyr".

Do you really expect the populace will not have anyone in 320,000,000 that will not "take up arms" against this corruption?

More importantly, do those isoltated in the skyscrapers far above reality, or those isolated in the "DC bubble" do they know the heart of the American People?

SDRII's picture

What ever happened to that FOA request pending in NYC (bloomberg)? Just a guess, but this goes approx nowhere.

deadhead's picture

still pending in the court system.....

ChevronSky's picture

Doesn't Sarbox require that the CEO/CFO sign and attest that their filings are true and not misleading? Didn't Fuld and whatever CFO have to sign the filings? Since the whole point of the 105 was to make the financials MISleading, civil/criminal liability ought to be a slam dunk.  I know if I had done this at my former very small public energy company, I would be in federal pound-me-in-the-you-know-what prison with the key thrown away.

Ruckus Overload's picture

Cant "We the People" file lawsuits ? Class action agianst the Government ?

Everyman's picture

Do you think the American People are going to wait for a lawsuit?

Do you think they are going to be able to "pay" for that lawsuit?



Cistercian's picture

 I wonder if the meme sensing AI is showing the prominence of the REVOLUTION meme.

  Time for a massive distraction before actual "change" occurs....

Squid-puppets a-go-go's picture

Remember, Remember, the 5th of November....

Grappa's picture

Beatyfull story and I love the movie.

lsbumblebee's picture

...That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government...

Tethys's picture

I see your fine excerpt, and raise you two:

When you see that trading is done, not by consent, but by compulsion--when you see that in order to produce, you need to obtain permission from men who produce nothing--when you see that money is flowing to those who deal, not in goods, but in favors--when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you--when you see corruption being rewarded and honesty becoming a self-sacrifice--you may know that your society is doomed. - Ayn Rand, excerpt from Atlas Shrugged.



 US Code, Title 18 Chapter 115 Sec2385, which provides in part:

Whoever knowingly or willfully advocates, abets, advises, or teaches the duty, necessity, desirability, or propriety of overthrowing or destroying the government of the United States or the government of any State, Territory, District or Possession thereof, or the government of any political subdivision therein, by force or violence, or by the assassination of any officer of any such government; or   Whoever, with intent to cause the overthrow or destruction of any such government, prints, publishes, edits, issues, circulates, sells, distributes, or publicly displays any written or printed matter advocating, advising, or teaching the duty, necessity, desirability, or propriety of overthrowing or destroying any government in the United States by force or violence, or attempts to do so; or   Whoever organizes or helps or attempts to organize any society, group, or assembly of persons who teach, advocate, or encourage the overthrow or destruction of any such government by force or violence; or becomes or is a member of, or affiliates with, any such society, group, or assembly of persons, knowing the purposes thereof—   Shall be fined under this title or imprisoned not more than twenty years, or both, and shall be ineligible for employment by the United States or any department or agency thereof, for the five years next following his conviction.

tread accordingly

merehuman's picture

Tenor and tone of respondents over the last few days has changed much. I sense a resignation and with it a certitude. 


Ruckus Overload's picture

You need a good lawyer who still believes in the Constitution. The money sitting on the sidelines, havent you heard.

Bill DeBurgh's picture

Hey, I hear Barry Obama is a constitutional lawyer... oh... wait...

Howard_Beale's picture

An absolutely brilliant letter from Senator Kaufman. I am beyond impressed with the depth and certitude of his presentation and agree with his every word. How is it there are so few like him representing us?

I'll tell you. Lobbyists.

Thanks, Tyler ,for making my night and giving me one less to send to Guantanamo for a waterboard (ing) vacation when I become King. Yeah...people will pay.

And while I'm at it as King--you have the option to preview your posts for spelling before you send them. Try using it once in a while. Many oldtimers here (and I know I speak for more than a few) find your messages get lost in your lack of spell-checking. Just being cranky but it is a fact.

Frank Owen's picture

Since waterboarding is not deemed "torture", and is an acceptable interrogation technique, I second it's use on these shysters! Or is it only for brown skinned people? Or is it just for people who don't wear ties... I am so confused over right and wrong lately.


Howard_Beale's picture

It's totally wrong but as King I am prepared to send the entire Congress for a weekend vacation unless they can prove they are not bought, sold, and paid for by corporate interests. Those who fail get the weekend fun and then, must sign a life long contract to wear an orange suit with a "Hit Me" sign while they collect trash on the interstates and highways.

Frank Owen's picture

You're too kind. I would rather they all be kept in minimum wage earning jobs for eternity, kissing strangers asses for $.25 tips trying to decide if they can afford a meal of meat this week or will it just be KD and maybe some tuna. Watching their children go through the public school system with the other commoners, and dreaming of making it big on Idol... lol

Miles Kendig's picture

After three weeks under the loving supervision of the SERE course instructors at Fort Bragg, whose course syllabus was used to model US terror rendition interrogation techniques, the phucknuts would be completely prepared for total and willing debrief.  They support this crap when they were in power, time to let them get a taste of what they imposed upon others.

I digress, the jump suits, easily recognizable badges of position and gainful employment in the public service as societies designated pooper scoopers is the solution....

Howard_Beale's picture

Pooper scoopers works for me.

Ruckus Overload's picture

I willing to put up some money to throw these people in jail. They are destory trust throught out globe.

MsCreant's picture

I thought of this myself. I am not wealthy but I'd put up a few thousand to help fund a "bounty" fund to send real prosecutors and real law folks after these bastards. I pay a shit load of taxes (like most here) and I should not have to, but this shit is beyond beyondness itself.

Something must be done. We cannot become them to do it though. This is where I get hung up and these bastards COUNT on that.

Howard_Beale's picture

That's because you, my fine MsCreant, have principals and ethics. Since they don't have either of those attributes, perhaps you need to suspend yours temporarily so you don't  compromise who you are. 

It all comes down to breach of contract. Congressmen take an oath. I will investigate this since I just thought of it off the cuff. But it's a start since an oath is a contract.

Howard_Beale's picture

lmao...move down the page to bingo-cat. He really pissed me off!

Miles Kendig's picture

Getting a taste of how the junkers and phucknuts are fluffing up the works I see.  There have been some very unfortunate events pass while you were convalescing.  Time to put on the waders until the pooper scooper brigade shows up. Meanwhile, I advise letting the crap roll away from you rather than attempting to engage it unless you are in need of the release that offering can only provide.  Remember that what you have going on upstairs will not be enhanced by beating your head up against that wall until you tire of hearing the squishy sound. peace

doublethink's picture


Want Revenge?


"If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods."     --Alan Greenspan


Howard_Beale's picture

Like I said a while ago, Greenspan has reverse Alzheimers and it really is a wonder to watch.

deadhead's picture

reverse Alzheimers 

i've never seen that one before Howard but i am sure going to plagiarize it!

Howard_Beale's picture

so we are even with phucknut!

Miles Kendig's picture

I am just loving all of these wonderful additions to our lexicon. Cheers to you both!

strike for return to reality's picture

It would be nice if somebody at the Silently Encouraging Corruption headquarters knew what rule of law means.

Schlep's picture

These people have the balls. Wake up America!

The people who support Freedom’s Vision at support the people of Iceland in their efforts to remain free from debt peonage. We appreciate your courage and leadership for the rest of the world and propose that the people of the world “BUY ICELANDIC” – and tell the central bankers to “POUND SAND!”