Crime and Punishment in Banking



You gamed the washateria system in 1963 with a cardboard dime (and were actually convicted)? --- you're fired!


When it comes to recent banking system justice, this recent Wells Fargo Home Morgage story made me think of Joseph Stalin's infamous quote:

"The death of one man is a tragedy, the death of millions is a statistic."

"That's what Soviet dictator Joseph Stalin allegedly once said to U.S. ambassador Averill Harriman. And Stalin was an expert on the topic since his regime killed as many 43 million people. It turns out that the mustachioed murderer may have been expressing an acute insight into human psychology. The Washington Post's always interesting Department of Human Behavior columnist Shankar Vedantam reported on the research of University of Oregon professor Paul Slovic who looked at how people respond to humanitarian tragedies."

Here's the whole Post article:

http://www.washingtonpost.com/wp-dyn/content/article/2009/01/04/AR2009010401307.html?sub=AR

We can paraphrase Stalin's meme for banking, The loss of one dime is a crime, the loss of trillions of dollars is a shame."

So while disgraced banking CEOs aren't held quite so liable for gaming with billions of dollars (what "crime?") and even award themselves big bonuses and "golden parachutes," after their unethical and fraudulent tricks fail, this WFHM employee was soundly fired for using a cardboard dime in a washing machine -- 50 years ago. Hey, they had to, it's the law.

DES MOINES, Iowa — A 68-year-old Des Moines man fired from Wells Fargo Home Mortgage over a minor crime 50 years ago has stirred national interest.

Richard Eggers was fired in July when a background review sparked by new federal rules for banks revealed a 1963 conviction for putting a cardboard cutout of a dime in a laundromat's washing machine. He has since received a waiver from the Federal Deposit Insurance Corp., or FDIC, and Wells Fargo offered to rehire him.

But Eggers says he won't accept the bank's offer to return to work unless Wells Fargo changes its background check policy, which he believes discriminates against low-level workers.

Banks have fired thousands of employees like Eggers since new federal banking guidelines were enacted in May 2011. The regulatory rules forbid the employment of anyone convicted of a crime involving dishonesty, breach of trust or money laundering.

The tougher standards are meant to clear out executives and mid-level bank employees guilty of transactional crimes – such as identity theft and money laundering – but banks are applying them across the board because possible fines for noncompliance can total in the millions of dollars.

Before the guidelines were changed, banks widely interpreted the rules to exclude minor traffic offenses and misdemeanors.

San Francisco-based Wells Fargo & Co. said this week that it's disappointed that Eggers doesn't recognize its "responsibility to apply the law equitably and fairly" for all employees.

Oh, really?

Much Ado About Sports-- Our American Version of "The Commissar Vanishes"

I wish "the powers that be" would go after the far more serious financial finaglers of America with same dogged zeal  (or more) that they have on a number of recently tarnished sports icons, such as Roger Clemens, Barry Bonds, and now Lance Armstrong. In the grand scheme of things, who gives a hoot about these beleagured sports-fudgers?

If we're now retroactively erasing accomplishments and rewards, how about targeting John Paulson's and Goldman Sachs' unethically-engineered Abacus short-selling scheme -- let's claw back not just that $500,000 fine, but the whole $4 billion gain. And deem it the fraud it was. Save these minor sports scandals for later.

Geneva –  Cycling legend Lance Armstrong's fall from grace was completed Monday, when the sport's governing body stripped him of all seven Tour de France titles and banned him for life on the heels of a damning report from U.S. officials that concluded he cheated throughout his career.

The 41-year-old cancer survivor's unprecedented dominance in the grueling sport can now be stricken from the record books, though Armstrong continues to insist he never cheated.

The announcement came Monday morning, and was based on a report from the U.S. Anti-Doping Agency that accused Armstrong of leading a massive doping program on his teams.

The report included testimony from several former teammates who competed alongside Armstrong as he won the sport's most coveted title every year from 1999 to 2005.  Tour de France director Christian Prudhomme has said the race will have no official winners for those years.

USADA said Armstrong should be banned and stripped of his Tour titles for "the most sophisticated, professionalized and successful doping program that sport has ever seen" within his U.S. Postal Service and Discovery Channel teams. International Cycling Union President Pat McQuaid announced that the federation accepted the USADA's report on Armstrong and would not appeal to the Court of Arbitration for Sport.

The USADA report said Armstrong and his teams used steroids, the blood booster EPO and blood transfusions. The report included statements from 11 former teammates who testified against Armstrong.

Armstrong denies doping, saying he passed hundreds of drug tests. But he chose not to fight USADA in one of the agency's arbitration hearings, arguing the process was biased against him. Former Armstrong team director Johan Bruyneel is also facing doping charges, but he is challenging the USADA case in arbitration.

On Sunday, Armstrong greeted about 4,300 cyclists at his Livestrong charity's fundraiser bike ride in Texas, telling the crowd he's faced a "very difficult" few weeks.

"I've been better, but I've also been worse," Armstrong, a cancer survivor, told the crowd.

While drug use allegations have followed the 41-year-old Armstrong throughout much of his career, the USADA report has badly damaged his reputation. Longtime sponsors Nike, Trek Bicycles and Anheuser-Busch have dropped him, as have other companies, and Armstrong also stepped down last week as chairman of Livestrong, the cancer awareness charity he founded 15 years ago after surviving testicular cancer which spread to his lungs and brain.

Armstrong's astonishing return from life-threatening illness to the summit of cycling offered an inspirational story that transcended the sport. However, his downfall has ended "one of the most sordid chapters in sports history," USADA said in its 200-page report published two weeks ago.
  
Armstrong has consistently argued that the USADA system was rigged against him, calling the agency's effort a "witch hunt."
  
If Armstrong's Tour victories are not reassigned there would be a hole in the record books, marking a shift from how organizers treated similar cases in the past.
  
When Alberto Contador was stripped of his 2010 Tour victory for a doping violation, organizers awarded the title to Andy Schleck. In 2006, Oscar Pereiro was awarded the victory after the doping disqualification of American rider Floyd Landis.
  
USADA also thinks the Tour titles should not be given to other riders who finished on the podium, such was the level of doping during Armstrong's era.
  
The agency said 20 of the 21 riders on the podium in the Tour from 1999 through 2005 have been "directly tied to likely doping through admissions, sanctions, public investigations" or other means. It added that of the 45 riders on the podium between 1996 and 2010, 36 were by cyclists "similarly tainted by doping."
  
The world's most famous cyclist could still face further sports sanctions and legal challenges. Armstrong could lose his 2000 Olympic time-trial bronze medal and may be targeted with civil lawsuits from ex-sponsors or even the U.S. government. (let's just leave it at that)
  
In total, 26 people -- including 15 riders -- testified that Armstrong and his teams used and trafficked banned substances and routinely used blood transfusions. Among the witnesses were loyal sidekick George Hincapie and convicted dopers Tyler Hamilton and Floyd Landis.
  
USADA's case also implicated Italian sports doctor Michele Ferrari, depicted as the architect of doping programs, and longtime coach and team manager Bruyneel.
  
Ferrari -- who has been targeted in an Italian prosecutor's probe -- and another medical official, Dr. Luis Garcia del Moral, received lifetime bans.
  
Bruyneel, team doctor Pedro Celaya and trainer Jose "Pepe" Marti opted to take their cases to arbitration with USADA. The agency could call Armstrong as a witness at those hearings.
  
Bruyneel, a Belgian former Tour de France rider, lost his job last week as manager of the RadioShack-Nissan Trek team which Armstrong helped found to ride for in the 2010 season.

The Associated Press contributed to this report.