Humor: The Borowitz Report

Borowitz Report

Trump Threatens to Skip Remaining Debates If Hillary Is There



HEMPSTEAD, N.Y. (The Borowitz Report)—Plunging the future of the 2016 Presidential debates into doubt, Donald J. Trump said on Tuesday morning that he would not participate in the remaining two debates if Hillary Clinton is there.

Trump blasted the format of Monday night’s debate by claiming that the presence of Clinton was “specifically designed” to distract him from delivering his message to the American people.

“Every time I said something, she would say something back,” he said. “It was rigged.”

He also lambasted the “underhanded tactics” his opponent used during the debate. “She kept on bringing up things I said or did,” he added. “She is a very nasty person.”

Turning to CNN, Trump criticized the network’s use of a split screen showing both him and Clinton throughout the telecast. “It should have been just me,” he said. “That way people could have seen how really good my temperament is.”

The billionaire said that debate organizers had not yet responded to his ultimatum, but he warned that if he does not get assurances in writing that future debates will be “un-rigged, Hillary-wise,” he will not participate.

“I have said time and time again that I would only do these debates if I am treated fairly,” he added. “The only way I can be guaranteed of being treated fairly is if Hillary Clinton is not there.”

Naked Capitalism: Yves Smith & Elizabeth Warren Rip Wells Fargo a New One


Wells Fargo CEO’s Teflon Don Act Backfires at Senate Hearing; “I Take Full Responsibility” Means Anything But

It’s a safe bet that Wells Fargo CEO John Stumpf will be turfed out in the next ten days. Not only did he break the cardinal rule of executive survival, namely, throw someone under the bus when the going gets rough, but he couldn’t even manage a credible show of contrition and groveling after a massive fraud took place on his watch.

As one Senator noted, the Wells Fargo fake accounts scam achieved a difficult feat: “For the first time in ten years, you have united this committee, and not in a good way.” Even Republicans like Paul Toomey used the “f” word, as in “fraud”.

The chamber was packed, and the toughest interrogation came from Sherrod Brown, Bob Menendez, and of course, Elizabeth Warren, who reached new levels of bad-assery. For instance, the Massachusetts senator pointed out that Stumpf had gotten $200 million in gains on his Wells Fargo shareholdings while this fraud was underway and demanded that he pay it all back. Too bad she didn’t add that he could easily have paid the restitution to consumers of a mere $2.4 million himself.

Some of the revelations:

Wells Fargo had obvious, glaring control deficiencies that appear designed to give Stumpf and his fellow execs a “whocoulddanode?” excuse. The main audit functions sat in the business units, not the at the corporate level. It is a basic failure to have control functions report into profit centers. This is the structure that led to JP Morgan’s London Whale debacle and elicited incredulous reactions all over Wall Street. Tom Curry of the Office of the Comptroller confirmed that this was a serious deficiency. But that begs the question: how did regulators give this foxes run the henhouse organization a free pass?

Despite saying he’d take full responsibility, Stumpf did nothing of the kind. Even though the press had already found a branch manager (who was later fired) warning him of abuses in February 2011, he says he didn’t have any idea there was a problem until sometime in 2013. Stumpf kept insisting there was nothing wrong with the bank’s culture, which elicited derision: did 5,300 employees really join Wells Fargo just for the fun of forging signatures and making up fake e-mail addresses? The CEO kept insisting the 5300 fired employees were bad apples, leading to the retort by Menendez:

This isn’t the work of 5,300 bad apples, this is the work or result of sowing seeds that rotted the whole orchard,You and senior executives created an environment where a culture of decrepit thrived.

Several Senators argued in some detail how it was absurd to expect low wage workers with families to buck the pressure of Wells Fargo’s absurd sales targets with the threat of firing over their heads. In yet another proof of how out of touch he was, Stumpf tried arguing that these were good-paying jobs, which the Senators again disputed, pointing out that the overwhelming majority of people who were canned were at the bottom of the food chain and $35,000 to $60,000 per year wasn’t something to brag about.

And the regulators agreed. The Los Angeles City Attorney said Wells had an “excruciatingly high pressure” sales culture, and Richard Cordray of the Consumer Financial Protection Bureau concurred, separately using the word “excruciating.”

Another intelligence-insulting theme was Stumpf’s hollow declaration that “I am fully committed to fixing this issue.” Several Senators raised the issue of the cost of credit score damage, which can come about by the mere act of having a bank request a credit report for the purpose of getting a credit card. They asked if Stumpf intended to make customers whole who’d wound up paying higher costs on mortgages and other loans. Stumpf said he’s take it under advisement, and was similarly non-committal about addressing the harm done to employees who’d bucked the unreasonable sales targets and were fired as a result.

Stumpf refused to consider clawbacks. Stumpf will go down over this issue. He’s clearly more attached to keeping his gains than keeping his job. But what was revealing was his refusal to entertain them even for the conveniently recently retired Carrie Tolstedt, who is leaving with an exit package of an estimated $125 million in cash and equity prizes. Note that the financial press has reported that $17 million could be clawed back under the bank’s rules. When pressed, even though Stumpf kept maintaining the party line that Tolstedt had resigned, he said that the bank “wanted to go in a different direction” which is code for “she was forced out”.

Senate Banking Committee chairman Richard Shelby rejected Stumpf’s refusal to consider clawbacks: “Explain to the public: What does accountability look like when an executive departs with millions of dollars?”

Warren blasted Stumpf for not firing Tolstedt, pointing out that she would have been paid $45 million less:

You really have to watch this exchange. Warren flays Stumpf for the fact that Tolstedt is eligible for a 2016 bonus by virtue of not having been fired, and to add insult to injury, he refuses to make a recommendation to the compensation committee of any sort. And he denies that a massive fraud occurred.

Some of the actions look to set up a criminal case. I’m getting out in front of serious legal analysis, but some of the actions were so rancid that they would seem to set up criminal charges. The San Francisco bank would transfer money from deposit accounts to cover fees in unauthorized credit card accounts. In addition, bank employees would forge customer signatures to create phony accounts.

In many ways, this is worse than the robosigning scandal, since the signatures were thousands of fakes of a single mortgage servicer or law firm employee, who presumably was in on the con or would not have objected. It was still a fraud on the court, since the affidavits in question affirmed personal knowledge, where there was often none even if person whose signature was robosigned had made all those signatures him or herself. But forging customer signatures on a widespread basis is another kettle of fish entirely.

Other bad actions fall into the “serious chutzpah” category. For instance, one of the products the bank sold was fraud protection…and it appears the bank committed fraud on the very accounts on which is sold protection. The bank has also insisted that customers go into arbitration, arguing that the mandatory arbitration clauses on real accounts apply to the bogus ones too.

Stumpf conned the Senators and regulators about his credit score remedy, which is not about helping customers, but more damage control by the bank. Stumpf was pressed repeatedly on how he’d repair customer credit scores. And the correct answer isn’t hard: tell the credit agencies for each and every one of the over 500,000 credit cards that the credit reports should never have been pulled on them and that any late charges were the bank’s fault.

But that isn’t what Wells Fargo is planning to do. Stumpf instead said the bank will go through the far more labor-intensive effort of calling each and every customer! Now why would the bank do that?

To sell them again! That is, to try one more time to arm-twist the customers into saying that they will keep the cards, even if Wells faked their application. Several times, Stumpf took the position that the bank didn’t know how many accounts were part of the scam, but they came up with the 2 million total (roughly 1.5 million bank accounts and another 560,000+ credit card accounts) to make sure that they got every one that might be fraudulent. In other words, the bank is taking the position that many of those accounts might be legitimate, and is trying to take another pass at making that look true.

If I were a financial regulator or Elizabeth Warren, I’d demand the scripts that the call center employees will be using to, um, placate customers.

You could see the set-up at work at several points of the hearing. For instance, a Senator pressed Stumpf on whether the bank as a matter of course put customers into products they hadn’t asked for. Stumpf refused to give a straight answer. The Los Angeles City Attorney picked up on that issue in the later panel, pointing out that early in his investigation, Wells Fargo’s position was that these customers needed these products whether they asked for them or not.

Even though it is frustrating for those of us who have been chronicling bank misconduct over the years to see this case be the one that galvanizes regulators, Congress, and legislators, since even though it involved huge numbers of customers, the damage for they suffered was not all that bad when you consider other bank scams that hurt millions of citizens far more deeply, such as fraudulent mortgage lending and foreclosures, debt collection abuses, and payday loans, there is still significant benefit to this rot being unearthed.

First, the odds seem decent that there will be a criminal prosecution, at least of Carrie Tolstedt. By all accounts she was a micromanager. And with so many employees, including some high level ones like regional presidents having been fired, there will be plenty of people to provide evidence. Look at how easy it was for the Wall Street Journal to get over three dozen bank employees at various levels, including senior ones, as sources for a story last week. And given that Tolstedt would have been the logical party for Stumpf to throw under the bus, there are only a couple of reasons I can come up with as to why he didn’t. First (and this is very likely) her separation agreement contains a very stringent non-disparagement clause. But second, it is also certain that if Tolstedt is the target of a criminal investigation, and her attorneys think she is at real risk of losing, the logical path for her is to cut a deal in return for testimony against Stumpf and her boss, the president. So Stumpf is defending her to defend himself. By contrast, Jamie Dimon was in a similar position with the head of JP Morgan’s Chief Investment Office, Ina Drew. But she was still on the payroll. So he could appease bank critics by tossing her over the side.

While one prosecution of a highly-paid bank exec may not seem like much, it’s easy to forget that one thing middle and upper class people really are afraid of is going to jail. You can see in the exchange with Warren that Stumpf finds the premise of her outrage to be incomprehensible. People of his stature, like Tolstedt, are entitled to special protection like solicitous treatment behind closed door, and minimization of embarrassment even when they are cast out. By contrast, lower level employees are tissue paper, to be tossed aside without further thought when they are no longer useful. Stumpf can’t even begin to see his deeply internalized assumptions about class and rank.

In the Great Depression, only one senior banker went to jail, Richard Whitney, who had been head of the New York Stock Exchange. Whitney’s was a clear-cut case of embezzlement, of borrowing against customer assets to fund his lavish lifestyle. In contrast to today, when Whitney’s fraud was unearthed, he was referred to prosecution almost immediately. He admitted his guilt and went to some length to exculpate his accountant, who he had pressured into cooperating.

Even though the ethical norms were vastly higher then than now, the spectacle of Whitney’s fall was riveting, and was a chilling warning to other members of his class that no one was above account. It will be much harder to make a dent on diseased banking industry ethics, but retail banking is widely seen as have so much less wriggle room for bad actions compared to wild and wooly Wall Street that the spectacle of retail bankers in the dock would send a message that the days of financiers being a protected class are numbered.

Second, the Wells Fargo fraud will make it hard for the Republicans to roll back bank reform. The Wells Fargo debacle is sure to remain in the press for weeks, if not longer. This scam, and the display of executive intransigence in its prettied up Stumpfian embodiment strengthens the hand of Elizabeth Warren, Sherrod Brown, and other bank reformers. Even with a Trump presidency, it vitiates the case for rolling back Dodd Frank, since the big objective of that effort was to kill the Consumer Financial Protection Bureau. Even though Warren was a bit too gleeful about the role of the CFPB, the Los Angeles City Attorney, which did the serious spadework that got this case going, said his investigation was critically dependent on the CFPB’s consumer complaint database.

So as Lambert likes to say, pass the popcorn. Wells Fargo will provide more revealing theater as well as a vivid proof that banks need stringent oversight. The real message of Wells, from the cheap pass it got on its mortgage servicing abuses to its comeuppance on its account fakery, is that banks, especially commodity areas of banking like retail banking, can’t generate outsized profits or growth honestly. For the benefit of all of us, they need to become boring again, either by breaking them up or regulating them like utilities.

Naked Capitalism on Wells Fargo Brass: ‘I Know Nothing’


Wells Fargo’s Management by Magical Thinking Comes Up Short in the Cover-Up Category

As the Wells Fargo fake accounts scandal escalates, it has been delicious to see a full-blown corporate pathology on display. With impressive speed, the press has eviscerated the pious mythology that Wells has peddled over the years. Somehow, no one in the top brass was alert enough to realize that creating a boiler room that churned employees, both the ones fired and the one disgusted with the culture, would leave a lot of eye witnesses who’d be delighted to tell their stories. And even by the standards of corporate misconduct, they are wowsers.

The media reports paint Wells as having leaders with their brains rotted by too many TED talks, leadership gurus, motivation coaches, and management information experts. They seemed to believe that boring old banking could become the next Apple….without any iPhone, that the mere force of corporate will could get the American public to buy more Wells banking services, in the absence of any evidence of customer appetite or Wells having better financial mousetraps. It was unadulterated “trees grow to the sky” thinking. We’ve managed to cross sell better than anyone else! Why shouldn’t we be able to stuff more products down customers’ throats? And the delusion started from the top. From the Wall Street Journal:

In the 2010 annual report, Mr. Stumpf said he often was asked why Wells Fargo had set a cross-selling goal of eight. “The answer is, it rhymed with ‘great,’ he wrote. “Perhaps our new cheer should be: ‘Let’s go again, for ten!’

This sounds like a inept parody of managerial hopium meeting Soviet Stakhanovite goal setting. But the worst was that analysts and the media ate it up.

So how were Wells Fargo employees supposed to make Stumpf’s lame imitations of Muhammad Ali’s poetry happen? Did Wells train them how to go out on the street, tackle and hogtie hapless prospects, drag them into the branch, um, store, force feed them credit cards, and then attach ankle bracelets so they’d get electrical shocks if they didn’t use the products often enough? No, the bank’s bright ideas seemed to come straight of of multi-level marketing scams: sign up your all your relatives and harass everyone you meet. And these suggestions, um, requirements, suggest that the San Francisco bank may also have pressured employees to work unpaid, during off hours, to meet the relentless pressure to hit sales targets. Again from the Journal:

Managers suggested to employees that they hunt for sales prospects at bus stops and retirement homes, according to Mr. [Scott] Trainor and other former Wells Fargo employees….Managers asked employees who had fallen short of the targets if they could open accounts for their mother, siblings or friends, according to Mr. [Steven] Schrodt and other former employees…Mr. [Randy] Holbrook says missing targets meant working extra hours when the branch was closed to make more calls.

And even though CEO John Stumpf has tried blaming supposedly greedy employees for gaming the system, the anecdotal evidence is overwhelming that employees were hounded constantly, often multiple times within a day, to meet daily goals. And the threat of firing was live, a corporatized version of Glengarry Glen Ross (see here, though 1:20).

Even the New York Times’ Dealbook, which tries averting its eyes when bank misconduct is so…unseemly, it did point to the underlying threat, “Deliver the numbers or you’re out,” in its headline over the weekend, Wells Fargo Warned Workers Against Sham Accounts, but ‘They Needed a Paycheck’. And it served up some choice examples. For instance:

Mr. [Sharif] Kellogg said he was constantly being hounded by his supervisor to increase his sales, or “solutions,” as they were known.

“I was always getting written up for failing to bump my solutions numbers up,” he said.

Some of his co-workers, facing the same pressure, bent the rules, said Mr. Kellogg, who was making $11.75 an hour when he left the bank in 2012. They would ask local business owners whom they knew well to open additional accounts as favors, saying they could close them later.

“It seems as though you’d have to be willfully ignorant to believe that these goals are achievable through any other means,” Mr. Kellogg said.

The Journal’s story, based on over three dozen interviews, including managers and former area presidents, is far more confident and detailed in profiling the single-minded push for more sales. For instance:

They say many branch managers routinely monitored employees’ progress toward meeting sales goals, sometimes hourly, and sales numbers at the branch level were reported to higher-ranking managers as many as seven times a day. Tension about how to meet the sales targets was common.

“If somebody said: ‘This doesn’t make sense. Where are you getting these sales goals?’ then [the response] was: ‘No, you can do it’ or ‘You’re negative’ or ‘Oh, you’re not a team player,’” says Ruth Landaverde, a former Wells Fargo credit manager in Palmdale, Calif…

Former branch manager Rasheeda Kamar says her Wells Fargo office in New Milford, N.J., had a goal of selling about 15 new products or services a day. If the branch didn’t hit the goal, the shortfall would be added to the next day’s goal, she says.

Ms. Kamar says laggards were threatened with termination and sometimes criticized in conference calls. In February 2011, she wrote to Mr. Stumpf in an email: “For the most part funds are moved to new accounts to ‘show’ growth when in actuality there is no net gain to the company’s deposit base.” She says she got no reply.

After working for Wells Fargo and its predecessor banks for 22 years, she was let go in 2011 for failing to meet sales targets, she says.

In other words, this was grinding, unremitting harassment of staff to meet targets regardless of whether there was any factual basis for believing the actual or potential customers for that office could deliver them. The desires of President Stumpf must be met!

A lawsuit describes some of the predictable outcomes. From Bloomberg:

Three Utah customers sued the bank Friday in federal court, blaming the scandal on the lender’s push to increase the number of accounts held by clients to an average of eight — its “gr-eight” initiative. That strategy led to customers’ money being transferred without their authorization to accounts created without their knowledge, and then the bank charging fees on those accounts.

“Wells Fargo quotas are difficult for many bankers to meet without resorting to the abusive and fraudulent tactics,” the customers said in their complaint. “Those failing to meet daily sales quotas are approached by management, and often reprimanded and/or told to ‘do whatever it takes’ to meet their individual sales quotas.”…

The bank is also accused in the suit of misleading customers to force them to open new accounts, sometimes falsely stating that they would face penalties without additional products.

Even though these articles dutifully present Wells’ defenses, anyone with an operating brain cell can see they aren’t remotely credible. If you put together the timetable, the abuses started in 2009 and 2010, as some executives started seeing red flags. The bank did a limited investigation in response to rising customer complaints and fired 200 people, mainly in the hyper-aggressive Los Angeles area, rattling some managers in other areas of the country. But the convenient internal view was that this was just a few rogue actors.

The Los Angeles Times broke the story of the misconduct in late December 2013. The Los Angeles City Attorney opened its investigation sometime in 2014. In a predictable pattern, not wanting to be show up by an intrepid state probe, the Office of the Comptroller of the Currency pushed Wells to investigate. The reason to take this with a fistful of salt is that Wells hired law firm Skadden Arps. When an institution wants to hide dirty laundry, rather than come clean, it engages a law firm so that the work is protected by attorney-client privilege. If they want to make it clear they really want to get to the bottom of the matter, they turn to a consultant or an accounting firm.

The priceless part is that Wells Fargo expects the chump public to believe that it was serious about stopping the account fakery….because it started giving ethics classes to staff. Help me. Better yet, they appear to have been implemented in 2014, meaning only after the Los Angeles City Attorney put the San Francisco bank in its crosshairs.

Like those human resources bromides that no one reads, courses like these are eyewash designed only to serve as liability shields for top executives. All insider accounts say that nothing changed on a day-to-day basis. And what message are you going to believe, the one from some folks who parachute in with PowerPoint and are never to be seen again, or what your immediate boss demands that you do repeatedly during the day? One manager had the bad taste to call out the charade for what it was. From the Journal:

At a sales meeting in Florida in 2014, Wells Fargo & Co. regional executives scolded lower-level managers about an obvious problem that kept cropping up at the bank. Managers were told that their employees should never open accounts for people who don’t exist, people familiar with the meeting recall.

One manager in the room saw things differently. In an email peppered with exclamation points and capital letters, she urged her employees to ignore the bosses and get sales up at any cost, says someone who saw the email.

The pressure on Wells is rising. The Senate Banking Committee has a hearing set for this Tuesday. The House Financial Services Committee has requested documents from Wells as part of an investigation and in advance of a hearing later this month. And the reaction from the Congresscritters that have weighed in is that they aren’t buying the tripe that Stumpf is hawking, that there’s nothing amiss with the bank and he and it were victimized by rogue employees. The Department of Justice, if it is at all serious about its investigation, isn’t likely to find that excuse too persuasive either.

It will be interesting to see how Elizabeth Warren handles the Senate Banking Committee hearing. She’s boxed herself in by praising the Consumer Finance Protection Bureau lavishly for what now looks like a weak settlement, particularly given the lack of clawbacks or any punishment of executives. If she had any evidence that pointed in that direction, a line of attack that would be deadly and would also exculpate the CFPB was if Wells misled regulators in the investigation. Remember, coverups are always worse than the crime.

Wells’ next line of defense, prefigured in the press stories over the weekend, is “Whocoulddanode?” in the form of “This is a really big bank, we observed only spotty signs of misbehavior, and we acted promptly when we saw it.” The problem with this tidy story is that sprawling retail banks are run like large factories, with intensive monitoring. And that can be accomplished readily because any meaningful employee activity is reflected in records, like new account openings or transactions. So there are no mysteries or secrets.

And as our resident bank IT expert Clive pointed out in an earlier post, any retail bank worth its salt has plenty of metrics in place to catch the sort of misconduct that became rampant as Wells:

Opening up fake products to claim a sale is a trick which goes back to when a TBTF tried to sell Noah Ark insurance. When I started in retail at a TBTF nearly 30 years ago, senior management (as a minimum the VP or equivalent in charge of a geographical area) would get reporting from the internal compliance or risk function about the number of accounts opened which had low turnover. A low turnover account is a serious red flag for either mis-selling or even (as was the case that has been exposed at Wells’) the salesforce boosting their figures by robo-applications….

Of course, it all comes out in the wash eventually — the customer didn’t want the product in the first place and if they didn’t want it, they almost certainly won’t use it. This will result in a low (or no) activity account.

Simplistic attempts are generally made in the bank’s operations to prevent this kind of sales practice. The most common is that if within in a certain timeframe (a month or 6 weeks is usual) there hasn’t been a transaction on the account or the card hasn’t been activated, the account will be closed and this low activity account sale will be clawed back from the salesforce. But of course, this is widely known in the bank employees, so the standard ruse is to diarise a follow-up customer service call, tell the customer some cock-and-bull story about how the bank employee has noticed a potential security issue with one of their cards and could they phone the security team just to confirm the card is still in their possession. Or another variation is to tell the customer If they want to call into the branch, they can sort the “problem” out, while in the branch they get the customer to phone the activation line, then “check” everything is okay by doing a cash advance at the counter on the card (they’ll even refund the fee, how kind!).

These are just some tricks, readers can get the gist of how it works and probably even think of their own alternatives.

But there’s still a trail of evidence which the bank should be following — accounts which are very light in transactions after 6 months or dormant in a year. These are always investigated, not for the customer’s benefit but because it costs the bank money to maintain the account. They are invariably force-closed due to low activity (this will be in the product’s standard Terms and Conditions, to give the bank the ability to do this). This management information is collated and picked over endlessly by the P&L accountants. Too many customers attracted to the brand, sold product to, but who then walk away are value-destructive. Senior management (one part of the senior management team, anyway) are all over this metric like a rash.

Of course, another “arm” of senior management — those who’s bonus is simply determined by sales volume, not long-term profitability — don’t care and unless the one at the top (and I do mean the top, the CEO is the only one who can wield the big stick in this sort of management turf war) has his or her finger on the pulse and determines to stop the rot, the rot will go on and get rottener and rottner until the stench (the stinkyness being the Average Revenue Per Customer declines) becomes too obvious to ignore.

To recap: there is no way Wells’ top management could not have seen what was going on, given the evidence in the form of low or no activity accounts and “solutions”. Those six or “gr-eight” products per customer are meaningless if three of them are dormant. But Stumpf for years has made clear what his priorities are, and had them telegraphed with brutal effectiveness to the lowliest customer-facing staffer: more sales, more products, no matter how you get them, and no questions will be asked as to whether anyone wanted them, which means where anyone actually would use them. This is a prescription for fraud. The only surprise here is that it took as long as it did to become visible to the public at large.


Jim Wright Post Deleted by Facebook

It seems this post from writer Jim Wright ( was too much for Facebook, and it was pulled down. Something about “community standards,” which makes us wonder whose standards these exactly are… But those other Facebook pages that had reposted it—such as the SDS page and the host’s page—lost it as well. But an intrepid person posted it in the comments to Wright’s post mentioning this censorship. So it behooves us to post that jpeg here for your reading pleasure…







Justice of the One Percent


Law Enforcement Losing War on White Collar Crime

By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She now spends most of her time in India and other parts of Asia researching a book about textile artisans. She also writes regularly about legal, political economy, and regulatory topics for various consulting clients and publications, as well as writes occasional travel pieces for The National.

It’s always a reliable sign that things have spun too far out of control when the New York Times Dealbook column gets around to highlighting them. And so it’s now the turn of white collar crime.

From yesterday’s NYT– note in particular the use of the waffly quotation marks enclosing ‘not winning’ in the headline, Law Enforcement ‘Not Winning’ War on White Collar Crime:

The record of combating economic crime is so woeful that governments need a new approach. That was the view of many at a gathering of about 1,600 delegates from academia and the legal and compliance profession here on Monday.

Delegates from over 90 countries convened for the week-long Thirty-Fourth International Symposium on Economic Crime at Jesus College of the University of Cambridge beginning on September 4.

Some Numbers

Since 2001, PricewaterhouseCooper’s (PwC) has conducted a global survey of economic crime. During that time PwC has seen “no significant decrease in the prevalence of fraud. Regulatory regimes have been tightened and billions of pounds have been spent, but economic crime is as tough to tackle as it has ever been.” Instead, in its most recent 2016 survey, Old Dogs, New Tricks, PwC concludes that “UK economic crime figures show both fraudsters and fraud schemes are maturing”.

From the PwC survey:

This year, over half of the respondents to our survey in the UK reported experiencing economic crime, 50% more than the global average of 36%. While the prevalence of traditional frauds such as asset misappropriation, bribery and procurement fraud has fallen since 2014, there has been a huge rise in the number of organizations reporting cybercrime and digital technology is now driving almost every other area of economic crime as well.

While the majority of economic crimes are committed by external parties, a significant percentage of frauds are still being carried out by employees. We’re also seeing that the ‘typical’ fraudster is getting older and more senior, making it more diffcult than ever to detect wrongdoing.

In particular, PwC reports that over half of UK organizations– 55%– have experienced economic crime. Cybercrime is becoming more significant, with 44% of respondents who had experienced economic crime in the last two years also reporting they had experienced cybercrime. PwC found that 18% of fraud is now committed by senior management.

Problem Not Confined to the UK

The Dealbook reporter, Anita Raghavan, quotes stateside practitioner John H. Moscow, the former chief of the frauds bureau and the deputy chief of the investigations division at the New York County district attorney’s office on the prevalence of the problem in the United States:

“We have lost most of the major battles and all of the wars,” said [Moscow]. “The number of people benefiting from large-scale, economic crime is immense, the number of victims is immense, but the number of prosecutions is limited by small and declining budgets.”

Mr. Moscow, who is now in private practice at Cleveland law firm BakerHostetler, said that frequently in large organizations, “the buck stops three levels lower” than where the criminal decision is made. He said it was therefore important “to impose serious fines and penalties on corporations.”

His recommendation squarely repudiates the approach pursued by the Department of Justice (DoJ) during the tenure of Obama’s first attorney general, Eric Holder. During that time, the DoJ instead followed the “Holder doctrine” and eschewed corporate charges against companies and executives, instead opting for negotiated settlements (often imposing de minimis, slap-on-the wrist penalties that were significantly undersized compared to the magnitude of damage done, especially by TBTF banks and other financial predators, to name just a few).

The DoJ under Obama’s second AG, Loretta Lynch, originally followed the Holder doctrine, until that was superseded when Deputy Attorney General Sally Quillian Yates authored a memo outlining a new approach in September 2015. Under this approach, the DoJ intended to increase accountability for corporate wrongdoing, and this included an increased focus on pursuing criminal charges against responsible individuals. The DoJ sought to drive a legal wedge between individuals and the corporations for whom they worked by only allowing corporations to receive “cooperation credit” that would reduce their potential exposure (including penalties) if the corporation cooperates in surrendering as early as possible comprehensive detailed information concerning the individual misconduct.

This shift is summarized in another Dealbook article, Justice Dept. Shift on White-Collar Crime Is Long Overdue. I can’t resist repeating a line I dropped in a recent comment thread here, as I can’t come up with a more apt way of expressing the thought. Note that in this summary, Dealbook calls the doctrine “horribly misguided” and you can bet your pension, savings, and the title to your house that, if anything, that’s an understatement.

Despite the release of the Yates memo in September 2015, to date, there’s been no significant upsurge in corporate prosecutions. Now, to be sure, we might expect it to take time for the DoJ to develop cases that apply the new doctrine. But as we’ve learned from past bait-and-switch maneuvers by the Obama administration– closing Guantanamo, anybody?– there’s a particularly tenuous relationship between rhetoric and reality in this administration. So it’s at the moment unclear how significant in reality the announced DoJ policy shift will prove to be.

In fact, in a May speech at the New York City Bar Association White Collar Crime Conference, Yates suggested that punishment was not the DoJ’s primary focus– and this implies that no upsurge in corporate prosecutions (or for corporate individuals) should be expected:

We’ve affirmatively been hearing that our new approach is causing positive change within companies. Compliance officers have said that our focus on individuals has helped them steer officers and employees within their organizations toward best practices and higher standards. That’s exactly what we had hoped for. After all, it is much better to deter bad conduct from happening in the first place than to have to punish it after the fact.

The question remains how effective that deterrence can be without a credible threat of punishment to back it up.

A Digression on the Red Team, the Blue Team, and Justice

One additional point I want to make is that some readers are all too well aware of the scandal that arose during the tenure of George W. Bush’s AG Alberto Gonzales over the political vetting of non-political DoJ personnel, including assistant US attorney candidates. Recall that a report by the DoJ’s Inspector General in conjunction with the Office of Professional Responsibility found in July 2008 that senior officials Gonzales’s office had flouted DoJ policy and federal civil service laws by, among other things, quizzing candidates about their political, religious and social views.

Now, this is all a matter of public record. Yet as politically corrupted as the DoJ was under Gonzales, when the dotcom bubble burst, this same politically-corrupted DoJ successfully prosecuted corporate executives from Adelphi, Enron, and WorldCom, among others, and sent some away to do serious jail time. We saw nothing even remotely similar under Obama’s DoJ, despite the far higher level of economic losses that occurred when the housing bubble collapsed and financial markets followed.

The guidelines set out by Yates are supposed to be significantly tougher and move the system back closer to the status quo ante the adoption of the Holder doctrine. This discussion of what guidelines the DoJ uses may seem horribly recondite and inside-baseball. Yet understanding the implications of what I’ve very briefly summarized here, IMHO, is at least as important as whether prosecutors play for the red or the blue team.

Incentivize Lawyers and Investigators to Offset the Public Sector’s Lack of Resources

Moving away from the US for a moment, I’d now like to return to the Dealbook NYT account of the Jesus College, Cambridge symposium, quoting a prominent QC, Alison Levitt (of Mishcon de Reya), on another tactic the UK could pursue for fighting economic crime:

[She] offered a novel solution to the problem that strapped governments face in allocating resources to fighting economic crime. She recommended that government involve the private sector. For instance, in Britain, there are nearly £2 billion, or $2.66 billion, in uncollected confiscation orders. The government, she said, could sell these claims to private law firms and investigators at a discount, and they, not the resource-challenged government departments, could work at recovering the money and giving back a portion of it to the state.

Ms. Levitt’s recommendations are most likely to be heard at the highest echelons of government.

Though in private practice today, Ms. Levitt occupied an important position in Britain’s criminal justice system. Before joining Mishcon de Reya, she was the principal legal adviser to the director of public prosecutions, advising on some of the most significant cases of the time and appearing as counsel in the Court of Appeal.

As I wrote last week, SEC Takes Victory Lap for Pathetic Performance of Whistleblower Program the US has long used a bounty system to recover monies that have been inappropriately taken from the federal government, with whistleblowers playing a central role in the process:

Incentives for private parties to spill the beans are a hallowed component of the US legal system, dating back to the Civil War-era False Claims Act (FCA) and extended by Congress in 1986. This statute includes “qui tam” provisions permitting individuals to sue on behalf of the government– and to receive a bounty if they prevail. The phrase qui tam is an abbreviation for the Latin “qui tam pro domino rege quam pro se ipso in hac parts sequitur”, which means “[he] who sues in this matter for the king as well as for himself.”

The system Levitt seems to be advocating does not hinge on whistleblowers per se, because in the UK instance, the Crown has prevailed on its claim and is turning to private lawyers to recover monies due. Yet the US qui tam system also depends on incentivizing private attorneys, in this instance to bring qui tam claims on behalf of clients.

Again referring to my post from last week, these private attorneys:

expand the resources that can be devoted to such cases. IIRC, the Department of Justice (DoJ) in DC has 60 lawyers who take on FCA cases, as compared to several hundred members of the private bar who bring these cases (and sometimes, both DoJ and private attorneys work in tandem). Private lawyers typically get contingency fees of up to one-third of any amounts that they recover on behalf of their clients; the FCA also allows fee shifting to the whistleblower meaning that if these cases go to trial and the whistleblower wins, the losing side pays the whistleblower’s legal fees.

Closing Thoughts

I should point out that there are many significant differences between UK and US legal system. In general, the UK system rejects the use of contingency fees. So it would reflect a significant shift to allow private attorneys to play a much more prominent role in what seems to me to be a performance-based fee contingent on recovery of monies due to the Crown.

It is perhaps a measure of the frustration of ethical public and private attorneys alike with the deteriorating situation with respect to economic crime that such far-reaching changes are being seriously mooted.



The Voodoo We Do


“Voodoo Economics” by Moeromaru


By Judge Steve Russell

How about some macroeconomics for breakfast?

We should have increased taxes a long time ago to pay for those wars. Obama, at least, put the Afghanistan and Iraq wars back on the books.

The US has never had a war before in which we did not make any effort to pay as we fought. Even WWII, in which budget balancing was simply not possible, so we ran up the tab. Even then we made every reasonable effort to pay.

One way macroeconomics differs from micro is that, while you and I have to balance our budgets by at least the year and more prudently by the month, balancing the budget of a nation is not a goal worth much sacrifice to reach. In any given year, it simply does not matter. The number that tells us whether we are better or worse is the relationship of the increase in the national debt to the GDP. Even that is not an absolute cap when there’s an emergency.

Let’s say we go with the Obama method, which makes the deficit look way worse than the Bush method Obama inherited. Regardless of the political optics, it’s a more honest way to keep score.

We only talk about cutting the discretionary part of the budget. Foreign aid, food stamps, medical research.

Look at the numbers for yourself. Cutting the ENTIRE discretionary part of the budget would not make it balance. It would also cut off most of our access to “soft power,” leaving only the military option on the table.

If you want to balance the budget, you have to:

1. Raise taxes because we put two wars on the cuff.

2. Cut the “defense” budget substantially OR cut the entitlement programs.

I want to cut defense and I know exactly where to cut. We are building weapons systems our own generals don’t want and can’t use.

I do not think cutting the entitlement programs is necessary or desirable.

Medicare and Medicaid can cost less simply by repealing the Stupid Tax, imposed on us for letting the private insurance hogs in the creek and failing to negotiate with Big Pharma or allow Canadian drugs to compete.

Social Security is a big deal in more ways than one. Both candidates for POTUS promise not to cut benefits and there’s not only no need to cut benefits, the benefits need to be raised and expanded.

As an aside, the only reason the SS trust fund looks pretty safe right now is that those undocumented workers Mr. Trump wants to deport are putting in enough money they will never get back. You do realize, I hope, that if Social Security would share the fake numbers and the dead people that appear to be working with ICE, it would be really easy to go pick up those people who are paying for our benefits? There’s a big incentive for SS not to do that.

Anyway, the benefits need to be raised and expanded because:

1. A shocking percentage of Americans have no 401K, no IRA, no Roth. I have seen to it that all four of my kids do, but it was not easy to get them on the bus and most people’s kids are not doing it.

2. The rise of the gig economy means the fixed retirement benefit is a thing of the past.

3. You don’t deal with the problem of systemic unemployment by claiming it’s temporary or by making workers stay full time longer.

So, I say you lower the retirement age for partial benefits. Here in Sun City lots of people are still earning (and therefore paying into Social Security) while getting SS retirement. I have even had a couple of years when my earnings exceeded the lowest years of my SS earnings (when I was in school for seven years) and as a result my retirement benefit was raised!

How do you pay for it? Uncap the payroll tax. The first year I exceeded my cap was the year the Texas Legislature hitched the pay of County Court at Law judges to the pay of District Judges and allowed us to start hearing District Court cases. It was a big raise at the first of the year. Then, around September, I suddenly got another raise that really surprised me. I called human resources to ask where the money came from and was informed that I had exceeded the payroll tax cap and so there was no deduction for Social Security/Medicare. I was gobsmacked. I had not known there was a cap because I had never made enough money to hit it. (I hit the cap again in my second career when I moved from a third tier university to a first tier university and got a big raise.)

I’ve had plenty of time to think about the cap, and I understand the logic of it. It represents the limit on Social Security retirement benefits. If the cap were higher, guys like me would be paying in money that the actuarial odds say we would never get back out. You know what? That’s fine with me. The whole point of the SS program was that during the Depression there were people who had worked all their lives homeless and hungry. Avoiding that is a big value and having the benefits high enough to encourage geezers like me to go part time and make way for younger folks to be tenured is also a big value. (Not very many people get tenured at the level I was tenured. I was the only one in my hiring cohort who made tenure. That is because there are fewer positions as universities rely on more adjuncts and graduate students.)

Nobody who busts out the top of the cap right now is a likely candidate for living under the bridge but in return for having the top end of their income taxed these folks get the maximum benefit on retirement and—as important if not more so—they are protected by Social Security disability insurance.

This is not a poor country, but our infrastructure has begun to look like we are a poor country.

The economic downturn under Carter combined with the Iran hostage crisis brought us the Reagan Revolution and since then we’ve been going farther and farther in the hole. It’s a choice to have wars without paying for them. It’s a choice to allow private insurance to skim a profit off health care—a choice made by only one other industrialized country in the world, Switzerland, under greatly different circumstances.

Our debt problem is entirely self-inflicted by our disastrous experiment with what the first President Bush correctly called “voodoo economics.” The discredited dogma of supply side economics remains in the GOP platform and every budget their alleged policy wonk, Paul Ryan, has produced.

Ronald Reagan:
Took office January 1981. Total debt: $848 billion
Left office January 1989. Total debt: $2,698 billion
Percent change in total debt: +218%
1981 +9.69%
1982 +3.79%
1983 +11.39%
1984 +9.26%
1985 +7.37%
1986 +4.86%
1987 +7.57%
1988 +7.76%

George H.W. Bush:
Took office January 1989. Total debt: $2,698 billion
Left office 20 January 1993. Total debt: $4,188 billion
Percent change in total debt: +55%
1989 +6.48%
1990 +4.51%
1991 +4.25%
1992 +6.66%

Bill Clinton:
Took office 20 January 1993. Total debt: $4,188 billion
Left office 20 January 2001. Total debt: $5,728 billion
Percent change in total debt: +37%
1993 +5%
1994 +6.31%
1995 +4.32%
1996 +6.25%
1997 +6.05%
1998 +6.11%
1999 +6.44%
2000 +5.50%

George W. Bush:
Took office 20 January 2001. Total debt: $5,728 billion
Left office 20 January 2009. Total debt: $10,627 billion
Percent change in total debt: +86%
2001 +2.19 %
2002 +3.76%
2003 +6.42%
2004 +6.31%
2005 +6.52%
2006 +5.12%
2007 +4.40%
2008 -0.92%

Barack Obama:
Took office 20 January 2009. Total debt: $10,627 billion
Total debt (as of the end of April 2011): $14,288 billion
Percent change in total debt: +34%
2009 +0.11%
2010 +4.56%
2011 +3.64%
This is as far as the debt figures go, but I’ll continue with GDP just so we’ll have a clue:
2012 +3.24
2013 +4.05%
2014 +3.88%
2015 +3.12%
to May 2016=+3.29

I’m aware that for apples to apples I should break out the debt by year but there are time limitations.

Note the anemic recovery and understand those numbers could be very robust if Congress could see fit to fix our roads and bridges and electrical grid. We would be borrowing money from ourselves to do it, but at a time when interest rates are at historic lows.

As it is, we still have to fix that stuff and the economy is not likely to have a major power up because the Great Recession was worldwide and our recovery has been much more robust than the rest of the world because we have the reserve currency and it’s a money magnet. We are doing better than the rest of the world, so there’s no basis to think there’s a turbocharger coming.

By fixing our infrastructure, we turbocharge ourselves. Those GDP numbers go up along with the debt numbers, but the with a tax increase it would be easy to keep the debt rise under the GDP rise.

THEN, the next time we have a budget surplus and the choices are a tax cut (Bush) or pay down the debt (Gore) THAT’S when we pay down the debt.

A Raw Deal


1935 Vanity Fair cover

By Judge Steve Russell

I do wish the election were today, but it’s not, and two months is an eternity in a national election. So Ms. Clinton would be foolish to be making decorating decisions about the White House just yet. Anyway, she should let Bill do that.

But let’s suppose, just suppose, that nobody can persuade Mr. Trump to pull out of his death spiral. Suppose an outcome of LBJ-AU H2O or Reagan-Mondale proportions.

The first problem is that Trump is laying the groundwork to claim the result is illegitimate and revolution would be a rational response. Trump is no Al Gore, tamping down ego for the sake of the country.

There are several ways that could play out. None are good for the country but none are good for the GOP either.

Which leaves me wondering….at what point do we have a historic realignment? Do the center-right voters get a new home or do they become Democrats and try to jerk that party to the right?

I’m no fan of the two party system but I can’t see a path to a parliamentary system and I am a fan of having elections.

The country is split, and always has been in my lifetime. If there must be two parties with some relation to reality, then one will occupy the center-right like Eisenhower and the other will occupy the center-left like Obama.

Outliers on both sides would duke it out with the party mainstream in primaries and some issues would be mainstreamed because of those primary fights.

The problem with that scenario is there is such a gulf between the GOP elite, the “donor class,” and the bulk of the voters.

Here’s what I think happened and is happening. We are still fighting over the New Deal.

Before the New Deal, class distinctions in the US were clear and both parties were unabashed about the class interests they primarily represented. On the GOP side, the Taft faction vanquished the Roosevelt faction and the progressives decamped for the Democratic Party.

The dominance of the working class party, the Democrats, was never a given. There was too much Horatio Alger in American drinking water. Too many people conflated social mobility with necessity to care for and feed big business.

The Republicans went on a long and lucrative roll and the stock market blew a bubble of monumental proportions that did not just go “pop” in 1929. It went “boom!”

The middle class and the working class plunged into poverty together and even the wolves of Wall Street ended up skinny. As Will Rogers famously said, “they had to wait in line to rent a window to jump out of.”

Tens of thousands of people just disappeared in the Great Depression, leaving on on rumors of jobs–often by rail–and never returning. Pauper’s cemeteries sprang up around the well known places for hopping on freight trains. Boarding a moving train is dangerous business. Those lucky enough to have jobs with the railroad would find bodies in empty boxcars, frozen to death or starved.

In those days, nobody carried picture ID.

In those days, if your bank went belly up, your money was gone. 4,000 banks failed in 1933 alone, of at least 10,000 over the decade. $140 billion evaporated. Mortgage foreclosures happened every day, putting people out of their homes and farmers off their land.

This is why public opinion seriously differed over whether robbing a bank was a real crime, and many who took on bank robbery as a profession became folk heroes.

The Depression was world wide. In Europe, it stoked the rise of fascism.

In Russia, Lenin kicked off the Comintern in 1919. There really was a Communist conspiracy to seek world domination, but there was nothing secret about it. One of the primary goals of the Third International (Comintern) was to deny leadership to socialists.

After Stalin cut a deal with Hitler, Leon Trotsky founded the Fourth International.

None of these movements–Nazism, Italian Fascism, the Comintern, the Fourth International–meant any goodwill for capitalism of the US variety. The working class in the US was in no mood to play defense for the greedheads who blew the economy up.

Herbert Hoover, a man of good personal qualities but elected on the canard that sustains Donald Trump–that “government should run like a business”—could feel the country’s pain but was clueless what to do about it.

The shantytowns erected by homeless Americans were called, uncharitably, Hoovervilles. My own grandparents squatted in a condemned building with no utilities.

If you look up “change election” in a political science text, it probably should take you to 1932.

The New Deal consisted of many, many laws we take for granted today. The US went into the Great Depression as a capitalist country and came out as a mixed economy. Republicans saw each one of those laws as a razor at the throat of capitalism.

The GOP line on recovery from the Depression is that WWII made it happen. If that were so, it would be a substantial upside to an awful calamity, but most sane economists could parse the aggregate demand curve before war spending hit and see that the New Deal was getting us out of the ditch, save for the brief period when FDR was persuaded to take the pedal off the metal in the interest of balancing the budget.

The one sense in which WWII rescued the economy was that it made the budget balancers STFU because it was an existential emergency.

FDR cleaned Hoover’s plow so completely that we didn’t see another Republican POTUS until the war hero Dwight Eisenhower was persuaded to run as a Republican rather than as a Democrat. It was necessary for Eisenhower, with his “middle way,” to wrest control from the Taft conservatives.

Ike refused to dismantle the New Deal. He did nibble around the edges with reforms that tacked to the right like Taft-Hartley. Ike’s conservative brother Edgar wrote him a letter accusing the POTUS of selling out to the New Deal. Ike famously replied:

“Should any political party attempt to abolish social security, unemployment in­surance, and eliminate labor laws and farm programs, you would not hear of that par­ty again in our political history. There is a tiny splinter group, of course, that believes you can do these things. . . . [But] their number is negligible and they are stupid.”

These sorts of remarks led to the John Birch Society–right wing crazies funded by the father of our contemporary Koch Brothers–insisting that Eisenhower was a Communist.

William F. Buckley, who founded National Review as the organ of American conservatism, read the Birchers out of the GOP because of their attempts to Red-bait Eisenhower.

The New Deal remained safe until the Reagan Revolution. The New Deal had engineered the greatest redistribution of wealth from the haves to the have nots in the history of the nation.

EVERY ACT OF GOVERNMENT REDISTRIBUTES WEALTH. It matters not how limited you think government ought to be, it can’t pave a road or hire a firefighter or deliver the mail without taxing and spending. Taxing and spending is everything governments do and every time they do it, wealth is moved from A to B.

By convincing the working class that they live in a classless society of limitless opportunity and government should never redistribute wealth or pick winners and losers, Reagan engineered the second largest redistribution of wealth in US history–from the bottom to the top.

The Reagan Revolution was such a political force of nature that it begat Bill Clinton’s political vehicle, the Democratic Leadership Council. Clinton signed the bill that tore down the Glass-Steagall Act, the firewall between investment banking and commercial banking that had worked so well since the New Deal.

The New Deal gave us the Federal Deposit Insurance Corporation, funded not by taxpayer money but by assessments on commercial banks. Thanks to the FDIC, when banks started failing during the Great Recession, the government auditors typically moved in at quitting time on a Friday and the failed bank was reopened under a new name by Monday and no depositors lost a dime.

Investment banks did not have to pay the FDIC assessments but they were free to gamble with other people’s money…but the gamblers were uninsured, and investment operations were separated from commercial operations and both were separated from insurance.

Gambling? Yes, with collateralized debt obligations (CDOs) and a de facto insurance called Credit Default Swaps. They were trading in CDOs backed by subprime mortgages leveraged 30-1 and hedged with Credit Default Swaps. Unfortunately, they were also gambling with depositor money from the commercial operations, dragging the whole banking system down.

Some of the smartest graduates of the best business schools devoted themselves to designing and then buying and selling leveraged debt instruments so complex auditors had trouble understanding them.

Because the investment banks had been allowed to get their hooks into commercial banking, we the taxpayers had to bail them out. Remember TARP? Troubled Assets Relief Program. The assets were troubled because their true value was concealed and they were leveraged and hedged with Credit Default Swaps written by banks that also were connected to the real economy.

The perpetrators of this nonsense called themselves “masters of the universe.” I am not making that up.

TARP wound up compensating the suckers…er, buyers..of the Credit Default Swaps at 100 cents on the dollar.

And the people who signed those predatory mortgages?

They got foreclosed. If they were not kicked out of their homes, it would cause “moral hazard,” doncha know?

The US is still politically divided over the New Deal.

The Democrats favor New Deal programs.

The Republicans oppose the New Deal. They oppose it with numbers they gained by taking in three waves of homeless Democrats.

1. The Dixiecrats turned to the GOP in last ditch defense of Jim Crow laws.

2. Evangelical Christians alarmed by birth control, abortion, and gay rights became Republicans.

3. Finally, neoconservatives seduced by the idea of extending our time as the only superpower with the principal tactic of making war on countries easily beaten for the purpose of demonstrating our willingness to protect our hegemony by force.

So…if it’s time for a realignment on the level of Whigs to Republicans, how does it happen? Who goes where and why?

Or do the Republicans satisfy themselves with all the state governments they control?

I realize I’ve run my mouth for so long people may have forgotten the question, but it was what will a realignment look like? Are we going to continue fighting over what’s left of the New Deal? Or can there be a modern vision of conservatism that means more than lower taxes and smaller government and privatize everything: pensions, prisons, drinking water. Take government out of the business of governing. Then it will be off your back.

If that’s all conservatism has to offer, I’m not sure what conservatives can do but continue to stand for small government as long as it’s big enough to make sure every woman is forced to carry every pregnancy to term and watch Social Security be destroyed by refusing to adjust to the gig economy.

Then we’ll be free like we were when Hoover was POTUS.

The top 1/10th of 1 percent will finally have enough money to make America great again.