An expert in banking corruption and finance has joined the Bernie Sanders campaign. William K. Black, an associate professor at the University of Missouri-KC, is Bernie Sanders’ new economic advisor. Black was one of the central figures in exposing and prosecuting corruption in the savings and loan crisis from the late 1980s and mid-1990s.
For those unfamiliar with the crisis:
In 1982, Ronald Reagan furthered the deregulation of savings and loans by signing the Garn-St. Germain Depository Institutions Act, which allowed property owners to put real estate into trust accounts to avoid future lawsuits or creditors. Both bills reduced regulatory oversight and by the time the crisis was in full swing in 1995, 1,043 out of 3,234 savings and loan associations had failed due to risky and illegal behavior.
Bill Black was a key figure in exposing corruption by members of Congress, called the Keating Five, after Sen. Charles Keating (Note from diarist: Not a Senator, Keating was Chairman of Lincoln Savings & Loan), who Black accused of doing favors for the savings and loans in exchange for contributions. Arizona Sen. John McCain was one of the Keating Five. He, along with the rest of the senators, was reprimanded but otherwise unpunished.
Really pissed off certain people.
Black’s tenacity in investigating the banking corruption angered Keating, so he wrote a memo ordering his death.
“…get Black — kill him dead. If you can’t you ought to retire.”
Also wrote about it in: The Best Way to Rob a Bank is to Own One: How Corporate Executives and Politicians Looted the S&L Industry. Amazon link. He does an amazing job of connecting the dots and I recommend giving this a read if you’re interested in S&L crisis or the prelude to 2008.
Black himself also announced this at the beginning of his article on Wall Street Contributions and Obama. I’d recommend also giving it a read.
I am now officially an economic advisor to Senator Sanders, and this column reflects some of that advice. Part of my advice is not to take money from Wall Street felons. (I am not taking credit for Bernie’s decision — at most I supported a decision he had already made over a year ago.)
Further, the Obama administration has not taken any fundamental action to end the corrupt culture of Wall Street. It has not prosecuted. It has not forced the systemically dangerous institutions that pose global systemic risks to shrink to the point that they no longer pose a global systemic risk. It has not fundamentally changed executive and professional compensation even though they are intensely criminogenic. Obama has appointed a series of weak regulatory leaders. Yes, Dodd-Frank allowed Obama and his regulators to take more effective actions. But Obama and those he appointed have lacked the will to even try to make fundamental changes and restore the rule of law to Wall Street. Wall Street remains rigged and its central business strategy remains fraud and ripping off its customers.
Also as a criminologist and former financial regulator, Bill Black can definitely help Bernie Sanders strengthen his message on Wall Street’s corruption and greed. He’s going to be fantastic member on the team.