$178 Billion In Government Kickbacks: Meet The World's Biggest Organized Crime Syndicate

Tyler Durden's picture

Once upon a time it was the Sicilian, or Russian, or Japanese, or Chinese mob that were some of the biggest sources of funding for corrupt government officials (incidentally, most of them). After all, the government is smart enough to realize that it is more lucrative to "cooperate" with the world's biggest criminal syndicates than to wipe them out and cut off a major source of funding (of course, when it comes to populist optics and reelection, there is always an easy low-level perp walk every week or so to keep the peasants in place... and Diebold). So while the underlying symbiotic principle between the government and the world's biggest criminal enterprise remains the same, the counterparty has changed.

So who, in simple numeric terms, is the world's biggest organized crime syndicate?

The answer, courtesy of a new report by the Boston Consulting Group, which shows the transfer of some $178 billion in litigation costs into the pockets of government appartchiks in the past 6 years, is clear.


From the report:

The new era in banking is characterized by a rigorous enforcement of sanctions. As of September 2014, the cumulative litigation costs for EU and U.S. banks since the onset of the financial crisis has reached some $178 billion.


Most of the costs originated with U.S. regulators' mortgage-related claims, and the remaining litigation costs are divided among claims focused on misselling, violations of U.S. sanctions, improper conduct, market manipulation, tax evasion and misrepresentation. Litigation costs of banks headquartered in the U.S. leapt higher in 2011, driven by mortgage-related claims, which continue to dominate. EU bank costs were kick-started in 2012, beginning with redress payments for misselling payment protection insurance in the UK, followed by market manipulation issues-for example, those related to the London Interbank Offered Rate scandal-as well as improper-conduct litigation, such as anti-money-laundering cases.


The current wave of litigation cases has not yet been settled, and potential-still hidden-litigation risks are substantial. Meanwhile, regulators have shifted their view toward more unified and sanction-based supervision, adopting regulations with a stronger focus on business conduct.


All of these developments reflect the persistent character and future burden of litigation-a new cost of doing business.

Sure enough: when one is a criminal syndicate, the largest in world history, paying litigation kickbacks in the hundreds of billions to the government is just the cost of "doing business."

And here is the absolute punchline: the Sicilian, or Russian, or Japanese, or Chinese, or any other mob, they all had one or more members thrown in jail for good measure.

Just how many bankers have ended up in prison in the past 6 years?

This may be a trick question.

Source: BCG

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ekm1's picture

They do NOT have $178 billion to pay. Large banks are insolvent.

They recycled QE money.

Its_the_economy_stupid's picture

sure they do. they turn dogshit paper in to par money by recycling it through the FED. Yum, yum. How does your dogshit taste today.

CH1's picture

Central banking: The second biggest scam in human history.

Bollixed's picture

Boston Consulting Group. Now where have I heard that name before? Oh yea...


JRobby's picture

"The two young men had woefully little in common: one was a wealthy Mormon from Michigan, the other a middle-class Jew from Israel."

A phony religion teams up with the worshipers of money and nothing else. What could go wrong?

crusty curmudgeon's picture

$178 Billion isn't much out of $16 Trillion.  Just sayin'.


philipat's picture

To be clear, it is the Bank Shareholders who pay the penalties and the inflated bonusus. Which explains why the incentive is NOT to change anything.

stacking12321's picture

"A phony religion"

news flash, dummy: they're *ALL* phony

bilbert's picture

+1000 for being the only one to catch this...............

ACP's picture

What's the first?

Obombya being a Christian male heterosexual citizen of the US?

froze25's picture

Yeah its pretty clear now that he is gay.

e_goldstein's picture

I was going to go with religion, but you win.

SamAdams's picture

There are three major scams.  Historically, war was first, then religion as a tool to create war, then money creation as a tool to coerce people into war.  Today, the order of their effectiveness is money creation, religion and war.  Each is headquartered in a city state, with laws unto itself and beholden to no tax system.  Money creation = Inner City of London; Religion = Vatican; War = Washington DC.  Each also is host to an obelisk, because you know the triangle club loves Egyptian reference.  Why do you suppose that is?

max2205's picture

So obvious I've been saying that for 3 years....this is bullshit

Seasmoke's picture

3 years ????......So you are admitting here, that you are a little slow to catch on. 

Rainman's picture

Excellent ... but how did you let Bubba Clinton slip through the dragnet ..?

cro_maat's picture

And Bart "Pretty Boy" Chilton.

Rainman's picture

And Phil and Wendy Gramm < Billy B  gonna need a bigger chart > 

Felix da Kat's picture

Similar to the deck of cards with the Iraqi hierarchy, There should be a deck of " Top 52 Scum Bag Elites" . This may require additional decks of cards. It is an outrage that the corrupt, key political players, who made the world what it is today, are scot-free and thriving for the most part. Where is the accountability? How can justice be served and rightful responsibility become known?

Ariadne's picture

Fuck you. Pay me. Fuck you. Pay me. Fuck you. Pay me. 

noben's picture

Wm, can you please make another chart, showing this Network/Syndicate and their link to Top-Level Oligarchs (Rockefeller...), global Bankstas (Rottenchild, BOE, BOJ, ECB, IMF, BIS, WB, PBOC), and the Deep State (MIC, Gov, LEAs, Academia, Stink/Think Tanks, Ruling Societies) and its State Oligarchs (Bush Syndicate, Brzezinski, Kissinger, Likud, AIPAC, Bilderberg)?

Kinda like a Linkedin for Banksters (degrees of Separation).  Thanks, much obliged.

Chupacabra-322's picture

Here's a look at the 10 most profitable tax evaders and the politicians their CEOs, employees, and PACs give the most money to.

Verizon Communications
Profits: $19.8 billion Effective tax rate: -3.8%
Top recipients, 2011-2012
President Barack Obama: $51,493
Sen. Robert Menendez (D-N.J.): $24,450
Sen. Mitch McConnell (R-Ky.): $23,700
Rep. John Boehner (R-Ohio): $22,500
Sen. Kirsten Gillibrand (D-N.Y.): $15,000

General Electric
Profits: $19.6 billion Effective tax rate: -18.9%
Top recipients, 2011-2012
Mitt Romney: $53,750
President Barack Obama (D): $30,493
Sen. Scott Brown (R-Mass.): $23,900
Rep. Howard Berman (D-Calif.): $21,860
Rep. Chris Murphy (D-Conn.): $19,750

Advertise on MotherJones.com

Profits: $14.8 billion Effective tax rate: -5.5%
Top recipients, 2011-2012
Rep. Buck McKeon (R-Calif.): $31,750
Rep. Adam Smith (D-Wash.): $25,000
Former Sen. George Allen (R-Va.):$23,500
Sen. Maria Cantwell (D-Wash.):$23,125
Rep. Ron Paul (R-Texas): $20,986

NextEra Energy: North America's largest solar and wind power operator, based in Florida
Profits: $8.8 billion Effective tax rate: -2%
Top recipients, 2011-2012
George LeMieux (R-Fla.): $9,500
Mike Haridopolos (R-Fla.): $4,800
Sen. Maria Cantwell (D-Wash.): $2,000
Rep. Ron Paul (R-Texas): $2,000
Rep. Tom Rooney (R-Fla.): $2,000

American Electric Power: Electric utility based in Columbus, Ohio
Profits: $8.2 billion Effective tax rate: -6.4%
Top recipients, 2011-2012
Rep. John Boehner (R-Ohio): $34,750
Rep. Steve Stivers (R-Ohio): $34,050
Rep. Bob Gibbs (R-Ohio): $21,700
Sen. Joe Manchin (D-W. Va.): $19,750
Sen. Sherrod Brown (D-Ohio): $18,450

Pacific Gas & Electric: California electrical utility
Profits: $6 billion Effective tax rate: -8.4%
Top recipients, 2011-2012
President Barack Obama (D): $6,250
Rep. Jim Costa (D-Calif.): $5,000
Rep. Kevin McCarthy (R-Calif.): $5,500
Rep. Fred Upton (R-Mich.): $5,000
Rep. Jeff Denham (R-Calif.): $3,500

Apache: Houston-based oil and gas company
Profits: $6 billion Effective tax rate: -0.3%
Top recipients, 2011-2012
David Dewhurst (R-Texas): $25,000
Rep. Connie Mack (R-Fla.): $5,000
Rep. Bill Cassidy (R-La.): $2,500
Rep. Mike Conaway (R-Texas): $2,500
Rep. Gene Green (D-Texas): $2,500
Sen. Mitch McConnell (R-Ky.): $2,500
Brendan Doherty (R-R.I.): $2,500

Consolidated Edison: New York energy company
Profits: $5.9 billion Effective tax rate: -1.3%
Top recipients, 2011-2012
Sen. Maria Cantwell (D-Wash.): $15,050
Sen. Kirsten Gillibrand (D-N.Y.): $8,000
Rep. Edolphus Towns (D-N.Y.): $6,650
Then-Rep. David Wu (D-Ore.): $2,500
Rep. Joseph Crowley (D-N.Y.): $1,500
Sen. Harry Reid (D-Nev.): $1,500
Rep. Jose Serrano (D-N.Y.): $1,500

El Paso: Houston-based energy company that operates the country's largest natural gas pipeline
Profits: $4.6 billion Effective tax rate: -0.9%
Top recipients, 2011-2012
David Dewhurst (R-Texas): $7,500
Mitt Romney (R): $5,000
Rep. John Barrow (D-Ga.): $3,000
Rep. Diane Black (R-Tenn.): $2,750
Sen. John Barrasso (R-Wyo.): $2,500
Sen. Max Baucus (D-Mont.): $2,500
Sen. Mitch McConnell (R-Ky.): $2,500
Gov. Rick Perry (R-Texas): $2,500
Rep. Fred Upton (R-Mich.): $2,500
Sen. Roger Wicker (R-Miss.): $2,500

CenterPoint Energy: Electric and gas utility company based in Houston
Profits: $3.1 billion Effective tax rate: -11.3%
Top recipients, 2011-2012
David Dewhurst (R-Texas): $22,050
Gov. Rick Perry (R-Texas): $13,458
Sen. Mitch McConnell (R-Ky.): $10,299
Rep. Greg Walden (R-Ore.): $7,000
Rep. Kevin Brady (R-Texas): $4,000

Giving data from the Center for Responsive Politics. Includes all 2011-12 campaign donations from each company's employees and corporate PACs.

waterhorse's picture

Some political whores are sure a lot cheaper than others.  Of course, this is just the "known value".  Who knows what goes on behind closed doors?

cynicalskeptic's picture

Look at the tax savings compared to the 'contributions'


Politicians make crack whores look expensive in comparison

waterhorse's picture

Rubin the Scrotum is aptly named.  But who is Johnny Commode?  Looks kinda like that HUD skunk Sean Donovan.

besnook's picture

that's thain isn't it?. whatever happened to him?

TheReplacement's picture

Best one yet.  Too bad you missed Nicky Two Toes.

Blythes Master's picture

Red arrow. Can't see the whole thing because of Tylers cunty right margin follows me wherever I scroll. Red arrow me if you like, I'm getting tired of not being able to see Williams' fine works of art because of permamargins.

Edited to add: Same thing for any videos. Cant watch them because of the immovable movable margin on the right. These issues are so 1990's, wtf Durden?

Eireann go Brach's picture

Austin Powers just woke up and said, what the fuck is that in the White House?

Captain Willard's picture

This ^.

It's a tax on QE. It has the side benefit of making well-connected lawyers and revolving-door regulators rich too.

nasdaq99's picture

How do you say "Protection Money" at Harvard?

cro_maat's picture

Just as the Inuit have 18 different ways to describe snow Harvard has their list for "Protection Money":

HFT, weekend float, rehypothication, bid / ask spread, securitization, slam the close, cook the books, mark to fantasy, structured products and my personal favorite - Doctorate

midtowng's picture

Litigation != Kickbacks

ebworthen's picture

Hangings would be a lot cheaper, and effective.

knotjammin2's picture

Also, with Hangings there are no repeat offenders.

The 22nd Prime's picture

Guillotines would be a shit pile more fun.

TheReplacement's picture

We are Americans.  We hang people.  You want guillotines, then move to France.

KnuckleDragger-X's picture

a lot more entertaining at least. What's really sad is fines will be recorded as losses and litigation costs are written off the tax liabilities, hell they could come out ahead with our tax system as it is,

venturen's picture

but nail guns are dual use!

waterhorse's picture

I'm actually ok with no jail time for the banksters, but only as long as a fatal power tool accident is involved...

noben's picture
noben (not verified) ebworthen Dec 3, 2014 3:53 PM

I think you've answered your own concern:  Cost.

There has to be Cost in Doing Business.  As in "spending FRNs", to keep the Fiat+FRB Ponzi going.  Hangings would short-cut that process.  Am I mistaken?

JailBank's picture

As longs as nobody goes to jail we can sleep easy at night.

Glass Seagull's picture



What are you going to tell me next, that the US is in Afghanistan for the opium??  Not true...right, right?? 

Kobe Beef's picture

Hmm..shortly after the Anglo-American takeover of the World's Largest Opium Producer, Americans were offered a choice of Presidents between Skull & Bones A vs Skull & Bones B. Skull & Bones is a Yale secret society founded and funded by the Russell Trust, whose family fortune was made running drugs and weapons during the Opium Wars.

After the invasion, opium production leapt over a 100-fold and exports of raw Opium increased likewise. Significantly the large amounts of foreign aid have upgraded Afghan roads, distribution systems, and industrial processing plants, so that "value-added" Heroin can be manufactured and exported on an industrial scale, somehow occurring under the blanket airspace surveillance of the DOD, ISAF, and CIA. 

I'm sure it's all a coincidence.

And certainly not a $4,000,000,000,000 slush fund enriching political elites, drug and weapons traffickers, and money laundering TBTF banks.

Gotta be a coincidence. I mean, it's not like there's historical evidence pointing toward exactly this type of complicit Elite Shadow Syndicate Power directing Multi-National Criminal Enterprise...


i_call_you_my_base's picture

Nothing short of racketeering.