Angelo Mozilo Will Not Be Charged

In news that will not surprise you in the least–but will put you off your breakfast–Countrywide CEO Angelo Mozilo will not be charged.

Federal prosecutors have shelved a criminal investigation of Angelo R. Mozilo after determining that his actions in the mortgage meltdown — which led to $67.5-million settlement against him — did not amount to criminal wrongdoing.

Perhaps the most insightful comment in LAT’s coverage of Mozilo’s escape of any liability is this:

Columbia University law professor John Coffee said mortgage cases like Mozilo’s were muddied by the numerous parties involved, unlike Enron and other “cook the books” cases in which executives were convicted.

Countrywide’s model was to make or buy mortgages only to sell them off immediately to Fannie Mae or Wall Street as fodder for securities.

Given that model, Coffee said, blame could be assigned to an entire chain of players: mortgage brokers who falsified applications; investment bankers who concocted complex and “opaque” mortgage bonds; rating firms that provided high ratings on the bonds but said they were lied to; and institutional investors that relied on dubious ratings because the securities carried above-market interest while promising to be risk-free.

“All share responsibility, but none are culpable enough by themselves to compare with [Enron’s] Ken Lay, Jeff Skilling or the WorldCom CEO,” Coffee said.

I guess we could write a new corollary to the line, “If you owe the bank $100 that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.” If you commit massive amounts of fraud by yourself, even George Bush’s DOJ will indict you; but if everyone in an industry conspires to commit the same kind of fraud, Barack Obama’s DOJ won’t charge anyone.

  1. slide says:

    “All share responsibility, but none are culpable enough by themselves to compare with [Enron’s] Ken Lay, Jeff Skilling or the WorldCom CEO,” Coffee said.

    What bullshit. John Coffee, a person who knows better, is just shilling for the Dept. of [No]Justice.

    • seaglass says:

      The conspiracy to obstruct justice goes on and the whole or nearly the whole political class of both parties is complicit in the cover up is all this tells us.

    • jawbone says:

      Based on what I’ve heard Coffee say previously, this may be a comment on the way of our world right now, not necessarily condoning what’s happening.

      But, perhaps I’m missing out on some things Coffee has been saying or doing, so would love to know why you’re saying this. Thnx!

  2. MickSteers says:

    Any bets on how long it will take before he is offered a spot on Fox or a GOP nomination? Now that he officially Did Nothing Wrong (SEC charges are always just a difference of opinion and sour grapes) he’s a Randian poster child.

    He’d be a great asset for the upcoming season of anti-union wars. He’d be like a dream for a network booker, or campaign manager. His Rolodex is a Who’s Who of special “Friends”.

  3. PeasantParty says:

    While they say the wheels of Justice turn slowly, we can state that the past 12 years at least, they have been pinned to a halt.

    I have no idea how America is going to go forward until all of these things are addressed.

    • PJEvans says:

      We won’t. We’ll collapse because the people at the top have all the money and no responsibility, and have no knowledge of how to run a business or anything else, and the rest of us will have no money and everything else will be on our backs.

      Egypt, coming to a neighborhood near you….

      • PeasantParty says:

        I’ve been thinking about this situation so much. I can’t tell you how many ideas and items I’ve had in my mind, just that I am brainstorming away trying to think of ways to take back our country.

        All I know is that we can’t do this individually. It is going to take group effort, in every aspect. I may write a post about it when I can get my mind to settle down and not be continually outraged. Right now, I am very happy to be in solidarity with all the protests in the US.

        • pdaly says:

          What about a “patriotic company” campaign?

          Patriotic companies will be defined as corporations large and small (but especially large, including banks) which will now increase dramatically their pay to the workers in the lower two tax brackets.
          This is a patriot thing to do because it keeps patriotic families in their patriotic homes. Patriotic companies think about patriotic America first. Patriotic companies do not have to wait for the ‘broken US government’ to save the people in these hard times.

          The increase in worker salaries to the lower 2 income tax brackets will have a win/win effect for the country as well. It will increase tax revenue to the country without “raising taxes”, it will increase the money supply to the market place and banks if these workers now have money to spend or pay bills. and it makes the rich feel like they are doing something (they will need to be jedi mind-controlled so that they don’t notice paying more to the little people means less in year-end bonuses for themselves.)

          But even without jedi mind tricks there can be a separate campaign of discouraging big bonuses during such hard times for financially strapped patriotic Americans. Even if the PTB don’t want to buy in to the project, we push the concept to the masses–to raise average patriotic Americans’ expectations about their richer patriotic MOTUs. Maybe we can post end-of-the-week totals on the news: the top 10 companies this week which have outbid the others in raising the pay of their workers. It could be just like the end of the weekend movie receipts lists that are an otherwise useless detail to the average American but one that everyone seems to be able to quote come Monday morning.

          For those people who have not supported the U.S. Constitution but have to date avoided any DOJ investigation or judicial punishment, I like the idea emptywheel once suggested: putting Cheney, Bush et al in a glass cage in the middle of the Washington Mall. How about a virtual one which we can call a time-out pen for bad behavior, or the accountability pen?

          It could be placed infront of a virtual US. National Archives, Congress, or even the US Supreme Court and be populated by recognizable characters. Clicking on the individuals will bring up a hyperlink summarizing the bad behavior and who in government is supposed to be investigating and who in government has sabotaged that investigation/accountability. When the pen becomes too crowded, we talk up the crises of running out of space, the growing need for a second pen, the stain on the Mall that the growing pen is causing, etc.

          FDL and other websites are already cataloging these abuses of power, but it would be nice to point to a visual at a glance to get the overall message across. Who is going to deal with the bad actors in the time out pen?

      • stevo67 says:

        thank god for real journalists like Taibi and Marcy, and places like FDL that still report the truth. If it weren’t for their incredible efforts I doubt anyone would be aware of the totality of the crime syndicate known as Wall Street.

  4. ackack says:

    Yup. How could a man who ran the company that once wrote 20% of all home loans in the nation, the highest proportion of the total by any lender, how could the man who ran it round, as a virtual criminal enterprise, be held responsible?

    Please, let’s all just take a breath and be rational folks. No need to get worked up.

    For a good laugh, go to this link from a 2006 mortgage industry site:

  5. jdmckay0 says:

    No surprise there.

    Per my comment in wee hrs this morning, take a read of Matt Taibbi’s article up @ Rolling Stone:

    Why Isn’t Wall Street in Jail?

    Allan @ 3: running out statue on limitations is the way it’s done these days. From above link:

    The pattern of inaction toward shady deals on Wall Street grew worse and worse after Turner left, with one slam-dunk case after another either languishing for years or disappearing altogether. Perhaps the most notorious example involved Gary Aguirre, an SEC investigator who was literally fired after he questioned the agency’s failure to pursue an insider-trading case against John Mack, now the chairman of Morgan Stanley and one of America’s most powerful bankers.

    Aguirre joined the SEC in September 2004. Two days into his career as a financial investigator, he was asked to look into an insider-trading complaint against a hedge-fund megastar named Art Samberg. One day, with no advance research or discussion, Samberg had suddenly started buying up huge quantities of shares in a firm called Heller Financial. “It was as if Art Samberg woke up one morning and a voice from the heavens told him to start buying Heller,” Aguirre recalls. “And he wasn’t just buying shares — there were some days when he was trying to buy three times as many shares as were being traded that day.” A few weeks later, Heller was bought by General Electric — and Samberg pocketed $18 million.

    After some digging, Aguirre found himself focusing on one suspect as the likely source who had tipped Samberg off: John Mack, a close friend of Samberg’s who had just stepped down as president of Morgan Stanley. At the time, Mack had been on Samberg’s case to cut him into a deal involving a spinoff of the tech company Lucent — an investment that stood to make Mack a lot of money. “Mack is busting my chops” to give him a piece of the action, Samberg told an employee in an e-mail.

    A week later, Mack flew to Switzerland to interview for a top job at Credit Suisse First Boston. Among the investment bank’s clients, as it happened, was a firm called Heller Financial. We don’t know for sure what Mack learned on his Swiss trip; years later, Mack would claim that he had thrown away his notes about the meetings. But we do know that as soon as Mack returned from the trip, on a Friday, he called up his buddy Samberg. The very next morning, Mack was cut into the Lucent deal — a favor that netted him more than $10 million. And as soon as the market reopened after the weekend, Samberg started buying every Heller share in sight, right before it was snapped up by GE — a suspiciously timed move that earned him the equivalent of Derek Jeter’s annual salary for just a few minutes of work.

    The deal looked like a classic case of insider trading. But in the summer of 2005, when Aguirre told his boss he planned to interview Mack, things started getting weird. His boss told him the case wasn’t likely to fly, explaining that Mack had “powerful political connections.” (The investment banker had been a fundraising “Ranger” for George Bush in 2004, and would go on to be a key backer of Hillary Clinton in 2008.)

    Aguirre also started to feel pressure from Morgan Stanley, which was in the process of trying to rehire Mack as CEO. At first, Aguirre was contacted by the bank’s regulatory liaison, Eric Dinallo, a former top aide to Eliot Spitzer. But it didn’t take long for Morgan Stanley to work its way up the SEC chain of command. Within three days, another of the firm’s lawyers, Mary Jo White, was on the phone with the SEC’s director of enforcement. In a shocking move that was later singled out by Senate investigators, the director actually appeared to reassure White, dismissing the case against Mack as “smoke” rather than “fire.” White, incidentally, was herself the former U.S. attorney of the Southern District of New York — one of the top cops on Wall Street.

    Pause for a minute to take this in. Aguirre, an SEC foot soldier, is trying to interview a major Wall Street executive — not handcuff the guy or impound his yacht, mind you, just talk to him. In the course of doing so, he finds out that his target’s firm is being represented not only by Eliot Spitzer’s former top aide, but by the former U.S. attorney overseeing Wall Street, who is going four levels over his head to speak directly to the chief of the SEC’s enforcement division — not Aguirre’s boss, but his boss’s boss’s boss’s boss. Mack himself, meanwhile, was being represented by Gary Lynch, a former SEC director of enforcement.

    Aguirre didn’t stand a chance. A month after he complained to his supervisors that he was being blocked from interviewing Mack, he was summarily fired, without notice. The case against Mack was immediately dropped: all depositions canceled, no further subpoenas issued. “It all happened so fast, I needed a seat belt,” recalls Aguirre, who had just received a stellar performance review from his bosses. The SEC eventually paid Aguirre a settlement of $755,000 for wrongful dismissal.

    Rather than going after Mack, the SEC started looking for someone else to blame for tipping off Samberg. (It was, Aguirre quips, “O.J.’s search for the real killers.”) It wasn’t until a year later that the agency finally got around to interviewing Mack, who denied any wrongdoing. The four-hour deposition took place on August 1st, 2006 — just days after the five-year statute of limitations on insider trading had expired in the case.

    • larry b says:

      “No One Would Listen” by Markopolos documents the same kind of performance by SEC over the past twelve years. The foxes control the hen house.

  6. nomolos says:

    Kee-bloody-ryst they went after us with RICO for importing a few lbs of weed…I guess in the corporate world it is OK to screw millions of dollars out of thousands of people but smoke a bone and your busted. Gotta love ‘merca more and more every day.

    • jawbone says:

      Why, yes! It is OK to do whatever is necessary to maintain you money and power once you’ve reached the top 3 or higher percent of wealth.

      At that point, the pols need you more than you need them. Bingo.

    • EternalVigilance says:

      Why is Holder getting paid? He is Bankster shill and a traitor to justice.

      Q: Why is Holder getting paid?

      A: He is Bankster shill and a traitor to justice.

      I’ve reformatted your astute observation to make it a little easier to read.

  7. Synoia says:

    Pursing Mazillo should have been easy. Follow the train of the development and approval of SISA & NINA underwriting standards, and all the communication, email and correspondence, around that approval process.

  8. Knut says:

    “All share responsibility, but none are culpable enough by themselves to compare with [Enron’s] Ken Lay, Jeff Skilling or the WorldCom CEO,” Coffee said.

    I was only following orders.

  9. rmacdonald says:

    Some poor slob helps his friend rob a gas station for a few bucks and they both go to jail. A few people steal trillions, and the legal case is to “muddy” not to prosecute.

    Can anyone here spell oligarchy ?

    • seaglass says:

      Yes, PLUTOCRACY same thing. The payments are now made in advance of the robbery. The usual suspects are rounded up ( Bernie Madoff = Emanuel Goldstein) and everyone else is just too confused to do anything.

  10. ThingsComeUndone says:

    Given that model, Coffee said, blame could be assigned to an entire chain of players: mortgage brokers who falsified applications; investment bankers who concocted complex and “opaque” mortgage bonds; rating firms that provided high ratings on the bonds but said they were lied to; and institutional investors that relied on dubious ratings because the securities carried above-market interest while promising to be risk-free.

    “All share responsibility, but none are culpable enough by themselves to compare with [Enron’s] Ken Lay, Jeff Skilling or the WorldCom CEO,” Coffee said.

    RICO case and we need a special Prosecutor no mention of Countrywide or the banks lobbying making the government unable to bring such a case.
    As far as statue of limitations the crime doesn’t end until the last of any of these guys stop buying politicans with lobbyists and campaign cash.

  11. dakine01 says:

    Book Salon up with Danielle McGuire’s At the Dark End of the Street: Black Women, Rape, and Resistance–A New History of the Civil Rights Movement from Rosa Parks to the Rise of Black Power hosted by Steven Lawson

  12. Slothrop says:

    Bad journalism: goint to one law professor, the on in your crack reporter index file, and stopping there.

    Are there other professors of law with opposite opinions?


  13. lordgoogoo says:

    Sooner or later, someone is going to off one of the bastards that the government lets go free.

    I’m rooting for a new millenium Bonnie & Clyde to address the banking problem once and for all.

  14. lordgoogoo says:

    And one more thing – if he did not engage in any “wrongdoing”, why the hell did he pay the $67.5 million judgment? Or did he?

  15. hackworth1 says:

    Mozilo can now look forward, not backwards to WIN THE FUTURE!

    What great new scheme can Mozilo come up with next? Of course, he doesn’t have to if he socked away enough cash. Surely he did. He is untouchable.

    Another Fox News hero is born. Like Scarboro and Ollie North. Like Murdoch himself.

    Laws are only for the little people.

  16. masaccio says:

    There is no reason in the world he wouldn’t be convicted. Put all of the low-lifes on trial, no jury of sensible Americans would vote to acquit.

    It’s the one thing that unites us right now: we all know they did it, and we all know they should go to jail, and we all hate it that the prosecutors are spineless.

  17. arcadesproject says:

    OK, Angelo Mozilo won’t be charged. Bradley Manning hasn’t been charged, either. So I guess, when it comes to justice in the era of O, everything sort of evens out. (Not.)

  18. madprogressive says:

    You’re correct, I’m not surprised in the least. Obama and Holder have no interest in punishing the real criminals in this fiasco, but damn it if the poor people and working people don’t have to pay a price. Damn I’m sure glad we’re getting that change we voted for in 2008!

  19. CarmanK says:

    He got the mob of doctors that stealing billions from Medicare. They are criminals that deserve to go to jail and they don’t have the hold over the repugs in DC that Wall Street commands. Holder goes after the targets he has a chance of nabbing and convicting. there are sooooooo many crooks on Wall street that it is difficult to focus on the players.

  20. kabuki101 says:

    Totally lawless. You will have to wait for the US version of #Jan25th after which the rule of law will be restored. There will be limitless opportunity for “looking back” then. Moreover, not only will the crimes of people like Mozillo be prosecuted, but the actions of those who conspired not prosecute him, and a raft of other government sponsored criminals, will be investigated, and those apparatchiks will also land in jail.

    But what is abundantly clear now is that short of something at least as momentous as the Egyptian revolution, the rule of law will not return to the United States.

  21. pmorlan says:

    This reminds me of the Panetta quote about the CIA from the AP article, Grave Mistakes and then Promotions that Emptywheel linked to here.

    ‎”The conclusion was that the blame just didn’t rest with one individual or group of individuals,” Panetta said. “That there were some systemic failures that took place here.”

    It was a collective failure, Panetta said. So nobody was held accountable.