The Untouchables: How the Obama Administration Protected Wall Street from Prosecutions

Wednesday, January 23, 2013 by The Guardian/UK
A new PBS Frontline report examines a profound failure of justice that should be causing serious social unrest
by Glenn Greenwald


PBS' Frontline program on Tuesday night broadcast a new one-hour report on one of the greatest and most shameful failings of the Obama administration: the lack of even a single arrest or prosecution of any senior Wall Street banker for the systemic fraud that precipitated the 2008 financial crisis: a crisis from which millions of people around the world are still suffering. What this program particularly demonstrated was that the Obama justice department, in particular the Chief of its Criminal Division, Lanny Breuer, never even tried to hold the high-level criminals accountable.

What Obama justice officials did instead is exactly what they did in the face of high-level Bush era crimes of torture and warrantless eavesdropping: namely, acted to protect the most powerful factions in the society in the face of overwhelming evidence of serious criminality. Indeed, financial elites were not only vested with impunity for their fraud, but thrived as a result of it, even as ordinary Americans continue to suffer the effects of that crisis.

Worst of all, Obama justice officials both shielded and feted these Wall Street oligarchs (who, just by the way, overwhelmingly supported Obama's 2008 presidential campaign) as they simultaneously prosecuted and imprisoned powerless Americans for far more trivial transgressions. As Harvard law professor Larry Lessig put it two weeks ago when expressing anger over the DOJ's persecution of Aaron Swartz: "we live in a world where the architects of the financial crisis regularly dine at the White House." (Indeed, as "The Untouchables" put it: while no senior Wall Street executives have been prosecuted, "many small mortgage brokers, loan appraisers and even home buyers" have been).

As I documented at length in my 2011 book on America's two-tiered justice system, With Liberty and Justice for Some, the evidence that felonies were committed by Wall Street is overwhelming. That evidence directly negates the primary excuse by Breuer (previously offered by Obama himself) that the bad acts of Wall Street were not criminal.

Numerous documents prove that executives at leading banks, credit agencies, and mortgage brokers were falsely touting assets as sound that knew were junk: the very definition of fraud. As former Wall Street analyst Yves Smith wrote in her book ECONned: "What went on at Lehman and AIG, as well as the chicanery in the CDO [collateralized debt obligation] business, by any sensible standard is criminal." Even lifelong Wall Street defender Alan Greenspan, the former Federal Reserve Chair, said in Congressional testimony that "a lot of that stuff was just plain fraud."

A New York Times editorial in August explained that the DOJ's excuse for failing to prosecute Wall Street executives - that it was too hard to obtain convictions - "has always defied common sense - and all the more so now that a fuller picture is emerging of the range of banks' reckless and lawless activities, including interest-rate rigging, money laundering, securities fraud and excessive speculation." The Frontline program interviewed former prosecutors, Senate staffers and regulators who unequivocally said the same: it is inconceivable that the DOJ could not have successfully prosecuted at least some high-level Wall Street executives - had they tried.

What's most remarkable about all of this is not even Wall Street had the audacity to expect the generosity of largesse they ended up receiving. "The Untouchables" begins by recounting the massive financial devastation the 2008 crisis wrought - "the economy was in ruins and bankers were being blamed" - and recounts:

"In 2009, Wall Street bankers were on the defensive, worried they could be held criminally liable for fraud. With a new administration, bankers and their attorneys expected investigations and at least some prosecutions."

Indeed, the show recalls that both in Washington and the country generally, "there was broad support for prosecuting Wall Street." Nonetheless: "four years later, there have been no arrests of any senior Wall Street executives."

In response to the DOJ's excuse-making that these criminal cases are too hard to win, numerous experts - Senators, top Hill staffers, former DOJ prosecutors - emphasized the key point: Obama officials never even tried. One of the heroes of "The Untouchables", former Democratic Sen. Ted Kaufman, worked tirelessly to provide the DOJ with all the funds it needed to ensure probing criminal investigations and even to pressure and compel them to do so. Yet when he and his staff would meet with Breuer and other top DOJ officials, they would proudly tout the small mortgage brokers they were pursuing, in response to which Kafuman and his staff said: "No. Don't show me small-time mortgage guys in California. This is totally about what went on in Wall Street. . . . We are talking about investigating senior level Wall Street executives, even at the Board level". (The same Lanny Breuer was recently seen announcing that the banking giant HSBC would face no criminal prosecution for its money laundering of funds for designated terrorist groups and drug networks on the ground that the bank was too big to risk prosecuting).

As Kaufman and his staffers make clear, Obama officials were plainly uninterested in pursuing criminal accountability for Wall Street. One former staffer to both Biden and Kaufman, Jeff Connaughton, wrote a book in 2011 - "The Payoff: Why Wall Street Always Wins" - devoted to alerting the nation that the Obama DOJ refused even to try to find criminal culprits on Wall Street. In the book, this career-Democratic-aide-turned-whistleblower details how the levers of Washington power are used to shield and protect high-level Wall Street executives, many of whom have close ties to the leaders of both parties and themselves are former high-level government officials. This is a system, he makes clear, that is constituted to ensure that those executives never face real accountability even for their most egregious and destructive crimes.

The reason there have been no efforts made to criminally investigate is obvious. Former banking regulator and current securities Professor Bill Black told Bill Moyers in 2009 that "Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong." In the documentary "Inside Job", the economist Nouriel Roubini, when asked why there have been no such investigations, replied: "Because then you'd find the culprits." Underlying all of that is what the Senate's second-highest ranking Democrat, Dick Durbin, admitted in 2009: the banks "frankly own the place".
The harms from this refusal to hold Wall Street accountable are the same generated by the general legal immunity the US political culture has vested in its elites. Just as was true for the protection of torturers and illegal eavesdroppers, it ensures that there are no incentives to avoid similar crimes in the future. It is an injustice in its own right to allow those with power and wealth to commit destructive crimes with impunity. It subverts democracy and warps the justice system when a person's treatment under the law is determined not by their acts but by their power, position, and prestige. And it exposes just how shameful is the American penal state by contrasting the immunity given to the nation's most powerful with the merciless and brutal punishment meted out to its most marginalized.

The real mystery from all of this is that it has not led to greater social unrest. To some extent, both the early version of the Tea Party and the Occupy movements were spurred by the government's protection of Wall Street at the expense of everyone else. Still, Americans continue to be plagued by massive unemployment, foreclosures, the threat of austerity and economic insecurity while those who caused those problems have more power and profit than ever. And they watch millions of their fellow citizens be put in cages for relatively minor offenses while the most powerful are free to commit far more serious crimes with complete impunity. Far less injustice than this has spurred serious unrest in other societies.

[The one-hour Frontline program can be viewed in its entirety here.]

US Attack on Transparency Continues: CIA Whistleblower Indicted

Among others, Obama campaigned on the issues of increased government transparency and protection for whistleblowers, whom he claimed were heroes. Once in office, Obama's administration has prosecuted more whistleblowers than any president in US history, and more than all the presidents since Truman, combined. He has also blocked every effort to make government transparent while unconstitutionally increasing executive powers. An argument can be made that Obama is worse than Bush because we knew what we were getting with Bush. He sucked, but we knew he would suck. He didn't make and break campaign promises even close to the number Obama has. Obama lied during his campaign about many things (11 distinct campaign promises I tallied in a blog post here within the past couple of years). He has not even come close to being the president he claimed he would be during his campaign, but in fact he's almost the polar opposite of his campaign image. He ran as a progressive, and rules as a fascist authoritarian, taking away as many, or more, of our constitutional rights than Bush did. Obviously, Romney is not any better. The 2012 election may feature the two worst presidential candidates--definitely the two biggest "say anything to get elected" liars-- in US history.--jef

++++

Friday, April 6, 2012 by Common Dreams
Former CIA officer, Kiriakou, faces years in prison

Washington continues its attack on whistle-blowers today as CIA whistle-blower, John Kiriakou, has been indicted in court for charges of violating the Intelligence Identities Protection Act and three counts of violating the Espionage Act.

Former CIA officer, Kiriakou, allegedly leaked information to journalists about classified CIA operations and included classified information in his 2010 book, The Reluctant Spy: My Secret Life in the CIA's War on Terror.

Kiriakou had become a well know whistle-blower after he became the first US official to reveal the use of waterboarding, a torture technique used by the US.

Kiriakou's indictment allows the case to proceed to trial without an evidentiary hearing.

* * *

'Reluctant Spy' indicted for leaking US secrets (Agence France-Presse):

A CIA intelligence officer between 1990 and 2004, Kiriakou was accused in the indictment of leaking information to reporters anonymously identified as "Journalist A" and "Journalist B." 

The charges stem from an investigation into classified information, including photographs of a CIA official, that found its way into classified filings by defense lawyers representing detainees held at Guantanamo Bay, the US naval base in southern Cuba. 

The indictment claims Kiriakou was a source of information for a June 2008 New York Times article that identified a CIA operative and revealed other classified information. 

Kiriakou also was alleged to have lied to a CIA review board while he was seeking permission to publish a book about his experience. 

In the book, Kiriakou sought to include information about a "magic box," which was said to be a CIA scanning device allowing the agency to track Al-Qaeda suspects in Pakistan through their mobile phones.

Why is the Obama Administration Suddenly Fixated on Stomping out Medical Pot?

At the same time public support for marijuana legalization reached record highs, Obama shifted from one time medicinal cannabis sympathizer to White House weed-whacker.
By Paul Armentano, AlterNet
Posted on February 8, 2012

Broken promises are nothing new in Washington, DC. Yet even by the Beltway’s jaded standards, President Obama’s role reversal from one time medicinal cannabis sympathizer to White House weed-whacker is remarkable.

Indeed, the man who once pledged on the campaign trail that he was “not going to be using Justice Department resources to try to circumvent state laws on this issue,” has – since taking the Presidential oaths of office – done virtually everything in his administration’s power to do precisely that. Yet he's taken these steps at the very time that a record number of Americans, including 57 percent of democrats and a whopping 69 percent of self-described liberals, endorse doing just the opposite.

Nonetheless, in recent months, the Obama administration – via a virtual alphabet soup of federal agencies – has launched an unprecedented series of attacks against medical cannabis patients, providers, and in some cases even their advocates.

To review:

-- Deputy Attorney General James Cole, along with the four US Attorneys from California, has ramped up federal efforts to close or displace several hundreds of medical cannabis providers in California. Their tactics have included: raiding specific dispensaries and prosecuting their owners; filing civil forfeiture proceedings against landlords who rent their property to medical marijuana providers; threatening to federally prosecute newspapers and radio stations who accept ad revenue from medical cannabis operations; and, most recently, intimidating local lawmakers who have either enacted or are publicly supportive of cannabis oversight regulations. Speaking with radio station KQED San Francisco last month, Tommy LaNier – Director of the White House Office of National Drug Control Policy's National Marijuana Initiative – boasted about the administration’s efforts to strong-arm local officials, stating "[We] have ... advised those places where they're trying to regulate marijuana -- which is illegal under the Control Substances Act -- (that) they cannot do that.” 

-- In Colorado, United States Attorney John Walsh has sent letters to owners of dozens of the Centennial State’s medical cannabis facilities stating, "Action will be taken to seize and forfeit their property" if they do not cease their operations. Unlike similarly targeted dispensaries in California, the operations on Walsh’s hit list are explicitly licensed by the state and thus fully compliant with state law – a fact that Walsh’s letters readily acknowledge but appear content to ignore. "This ... constitutes formal notice that action will be taken to seize and forfeit (your) property if you do not cause the sale and/or distribution of marijuana and marijuana-infused substances at (this) location to be discontinued,” they state. “[T]he Department of Justice has the authority to enforce federal law even when such activities may be permitted under state law.” Ironically, the Justice Department’s letters arrived just weeks after US Attorney General Eric Holder publicly told (read: lied to) Colorado Congressman Jared Polis, an ardent supporter of the medicinal cannabis industry, that that the federal government would only target medical cannabis operators that "use marijuana in a way that's not consistent with the state statute."

-- But the Obama Justice Department isn’t only sending letters to cannabis dispensaries owners and their landlords. Last year, the DOJ also mailed letters to numerous state lawmakers, including the Governors of Delaware, Rhode Island, Vermont, and Washington, as they were debating legislation to allow for the licensed distribution of medical cannabis. The letters threatened federal prosecution for those involved with said efforts – including, in some cases, state civil servants – if the measures went forward. As a result, most didn’t.

The Justice Department isn’t the only agency directly involved in the administration’s medical pot crackdown. Also over the past six months:

-- The IRS has assessed crippling penalties on tax-paying medical cannabis facilities in California by denying these operations from filing standard expense deductions;

-- The Department of Treasury has strong-armed local banks and other financial institutions into closing their accounts with medicinal marijuana operators. In Colorado, where the state’s estimated 700 licensed cannabis dispensaries are routinely subjected to state audits, there no longer remains even a single bank willing to openly do business with med-pot operators.

-- The Bureau of Alcohol Tobacco and Firearms has sternly warned firearms dealers not to sell guns to medical cannabis consumers, and stated that patients who otherwise legally possess firearms are in violation of federal law and may face criminal prosecution; 

-- In July, the Drug Enforcement Administration rejected a nine-year-old administrative petition that called for hearings regarding the federal rescheduling of marijuana for medical use, ignoring extensive scientific evidence of its medical efficacy. “[T]here are no adequate and well-controlled studies proving (marijuana's) efficacy; the drug is not accepted by qualified experts,” the agency alleged. “At this time, the known risks of marijuana use have not been shown to be outweighed by specific benefits in well-controlled clinical trials that scientifically evaluate safety and efficacy.” 

-- This fall, the National Institute on Drug Abuse rejected an FDA-approved protocol to allow for clinical research assessing the use of cannabis to treat post-traumatic stress disorder; a spokesperson for the agency conceded, “We generally do not fund research focused on the potential beneficial medical effects of marijuana.” 

-- The DEA has reduced the total number of federally qualified investigators licensed to study plant marijuana in humans to 14 nationwide.

Most recently, and perhaps most egregiously, the DEA acknowledged that it was investigating a Montana state lawmaker for potentially conspiring to violate federal anti-marijuana laws. The lawmaker, Rep. Diane Sands – a Democrat from Billings, Montana – served as the chairwoman of a 2011 interim legislative committee that sought to enact statewide regulations governing the production and distribution of medical pot, which has been legal in the state since 2004. "Can you say McCarthy?” she told The Missoulian newspaper. “This sounds like stuff from the House Un-American Activities Committee and Joe McCarthy. So once you talk about medical marijuana in reasonable terms, you're on some sort of list of possible conspirators. … It's ridiculous, of course, but it's also threatening to think that the federal government is willing to use its influence and try to chill discussion about this subject."

* * *

So has the Obama administration collectively lost its mind when it comes to the subject of medical cannabis? That certainly seems to be the case. But the bigger question still remains: Why now?

Speculation among reformers and the general public is widespread. Many activists contend that the administration's about face is due to pressure from the pharmaceutical industry, which they surmise may be hoping to eliminate competition in the marketplace for their own forthcoming, soon-to-be FDA-approved cannabis-based drug.

Others believe that Obama’s crackdown is a Machiavellian attempt on the part of the President and his advisors to appeal to independent, conservative-leaning swing voters during an election year.

Still others argue that the recent attacks have little to do with President Obama at all. Instead, they believe the efforts of the DEA, DOJ, and other federal agencies are being coordinated primarily by drug war hawks within the administration, many of whom are holdovers from the George W. Bush regime, such as DEA administrator Michele Leonhart. Adding weight to this claim are recent statements from US Attorney Andre Birotte, who acknowledged that the DOJ’s recent activities were led by the federal prosecutors themselves and were not instigated by either President Obama or Attorney General Eric Holder – both of which are engaged in their own personal battles for political survival and, as a result, are unlikely to expend even a shred of political capital to halt the efforts of the administration’s more ardent drug warriors.

There may be a grain of truth in all of the above theories. But perhaps the greatest underlying motivator for the administration’s sudden and severe crackdown on medical marijuana providers and patients is its desire to preserve America’s longstanding criminalization of cannabis for everyone else. There is little doubt that the rapid rise of the medical marijuana industry and the legal commerce inherent to it is arguably the single biggest threat to federal cannabis prohibition. Just look at the poll numbers. According to Gallup, in 1996 – when California became the first state to allow for the legally sanctioned use of cannabis therapy – only 25 percent of Americans backed legalizing marijuana for all adults. (Seventy-three percent of respondents at that time said they opposed the idea.) Fast forward to 2011. Today, a record high 50 percent of Americans support legalizing the plant outright and only 46 percent of respondents oppose doing so. It’s this rapid rise in the public’s support for overall legalization that no doubt has the Obama administration, and the majority of America’s elected officials, running scared.

While the passage and enactment of statewide medical marijuana laws – 16 states and the District of Columbia now have laws recognizing marijuana’s therapeutic use on the books – is not solely driving the public’s shift in support for broader legalization, it is arguably a major factor. Why? The answer is simple. Tens of millions of Americans residing in these states are learning, first hand, that they can coexist with marijuana being legal! And that is the lesson the federal government fears most.

In states like California and Colorado, voters have largely become accustomed to the reality that there can be safe, secure, well-run businesses that deliver consistent, reliable, tested cannabis products. They have come to understand that well-regulated cannabis dispensaries can revitalize sagging economies, provide jobs, and contribute taxes to budget-starved localities. Most importantly, the public in these states and others are finally realizing that all the years of scaremongering by the government about what would happen if marijuana were legal, even for sick people, was nothing but hysterical propaganda. As a result, a majority of American voters are now for the first time asking their federal officials: ‘Why we don’t just legalize marijuana for everyone in a similarly responsible manner?’

That is a question the President remains unable and unwilling to answer. And the administration appears willing to go to any lengths to avoid it.

Obama's Puzzling Marijuana Policy (2 articles)

Monday, December 19, 2011 by The Seattle Times
by Neal Peirce

WASHINGTON — "Dance with the One that Brought You" is the title of a well-known song.

But the Urban Dictionary offers a deeper meaning: "The principle that someone should pay proper fealty to those who have gone out of their way to look after them."

Barack Obama should pay attention. In 2008, young voters were enthused and turned out for him by the millions.

But now? The campus/youth enthusiasm factor has declined sharply. The deficiency seriously imperils Obama's re-election effort.

There's one issue, though, that might reignite youthful enthusiasm. That issue is marijuana — partly its medical use, but especially Americans' right to recreational use free of potential arrest and possible prison time.

Today's grim reality is that police continue to arrest youth for marijuana possession by the hundreds of thousands. But each arrest is a red flag of danger, threatening life prospects for a young man or woman suddenly saddled with a permanent "drug arrest" record that's easily located by employers, landlords, schools, credit agencies and banks.

Small wonder then that 62 percent of young Americans (ages 18 to 29) now favor legalizing marijuana, as a Gallup poll reported.

And it's not just youth these days. Gallup this year found 50 percent nationwide support for legalizing marijuana use — the most ever, up from a measly 12 percent in 1969 to 30 percent in 2000 and 40 percent in 2009.

A ballot measure to legalize, regulate and tax marijuana received 46.5 percent of the vote in California last year. Parallel measures are likely to be on the 2012 ballots in Colorado and Washington. Odd political bedfellows — Reps. Barney Frank, D-Mass., and Ron Paul, R-Texas — recently introduced a legalization bill and now have 19 co-sponsors. Paul even gets applause advocating legalization in Republican presidential debates.

But what about President Obama? In 2004 he endorsed marijuana decriminalization. He was candid about his early pot use and in 2006 told a group of magazine editors: "When I was a kid, I inhaled, frequently." By his run for president in 2008, he was slipping away from decriminalization but at least talked of a "public health" approach, emphasizing drug treatment instead of prison, giving drug-reform advocates hope for a new day in national policy.

But Obama as president has been a clear disappointment to reform forces. In White House-initiated electronic town halls, respondents — heavily weighted to original Obama supporters — have repeatedly put marijuana at the top of their issue lists. But the White House has either laughed off or provided dismissive retorts.

Obama's Drug Policy Office claims the drug war is over, replaced by a focus on shrinking demand, "innovative, compassionate and evidence-based drug policies." But Obama has not once singled out marijuana — a substance arguably far less harmful to the human body than alcohol — for special consideration. Nor has he spoken to the harm to youth caused by 800,000 yearly arrests. Or moved to stem the billions of dollars a year spent on marijuana-related arrests.

This is clearly not the "change" Obama's enthusiastic supporters of 2008 expected. And it's deeply ironic. Ethan Nadelmann of the Drug Policy Alliance notes that if local police departments had been enforcing marijuana laws as harshly in the early 1980s as many do today, "there's a good chance a young Columbia student named Barack Obama could have been picked up — and not be in the White House today."

Nadelmann suggests that both the White House Drug Policy Office and the Justice Department enforcement divisions have been "co-opted" by holdover appointees deeply invested in anti-marijuana rhetoric and "let's just bust them" drug enforcement.

Facing the 2012 election, Obama is not likely to advocate, suddenly, marijuana decriminalization. But he could announce that it's time for a serious national dialogue on the issue, and that it will be a hallmark of his second term. He could express his dismay that 800,000 people, mostly young (and heavily black and Hispanic), are being arrested each year for marijuana possession — even as 50 percent of Americans favor legalization. He could focus on the massive costs of enforcement, the deep social costs of imprisonment. Let all America, youth included, join in the debate, he could urge.

A new openness to marijuana reform could help to reignite, on campuses and among high numbers of young people, the hope for "change" that really means something. Perhaps even prospects for the president's own re-election.

******

Obama's Attack on Medical Marijuana Wins Endorsement from Crazy Person

by Scott Morgan, December 14, 2011

Last month, I questioned an absurd claim from the White House that President Obama has been "clear and consistent" in his approach to medical marijuana, rather than erratic and hostile. The facts of the matter are so plain that it feels silly to even debate it further, but this quote from anti-marijuana zealot and youth drug testing cheerleader David Evans of the Drug-Free Schools Coalition got my attention:

"The Obama administration’s recent crackdown on growers and sellers of medical marijuana is totally justified. The federal government is trying to protect vulnerable people from the use of marijuana as medicine, since the drug is not proved safe or effective."

It's really pretty hard for the Obama administration to claim they're not suddenly cracking down on medical marijuana when the president is getting praised by David Evans for protecting patients from themselves and their doctors. This is the guy you don't want complimenting you in public when you're busy trying to convince everyone else that your drug policy isn't a draconian death march.

A little heads up to Obama's re-election team: when both sides of the medical marijuana debate are in agreement that you've launched some kind of major crackdown, you do not get to pretend that there was no crackdown.

The tough question facing candidate Obama will be why he took no action to prevent egregious violations of his campaign promises on this issue, not whether such events ever occurred. A consensus exists in the press and the public that Obama backed away rather blatantly from his widely-understood assurance that state medical marijuana programs wouldn't face an existential threat from the federal government under his watch. Those threats emerged from numerous agencies this year and have scarcely been acknowledged by the White House, let alone addressed to anyone's satisfaction.

Rather than endeavoring to further duck or distract us, the president needs to say something smart about this. He'll have to do better than saying it's "a poor use of resources to bust pot patients," because the propriety of arresting sick people and their caregivers is not a question that ought to hinge on the availability of funds with which to do so. It would also be a poor use of resources to kick glaucoma patients down the stairs, but that isn't the reason we don't do it.

It's time for the president to admit that medical marijuana is a actually a good thing, that we're lucky to have this helpful option available for those who need it, and that people like Newt Gingrich and Mitt Romney are at odds with 80% of Americans when they dare to suggest otherwise.

What Bank Regulation?

A new report finds that federal prosecutions for bank fraud have plummeted almost 30 per cent in the last five years despite the well-documented abuses that have fired up Occupy sites around the country. This chart says it all.

Obama Drug Policy Worse Than Bush's--War on Medical Marijuana Escalates

U.S. Attorneys in California have announced a campaign to target medical marijuana, suggesting the beginning of the end for the medical marijuana industry. 

By Phillip Smith, Drug War Chronicle
Posted on October 8, 2011

 Signaling an intensification of federal government targeting of medical marijuana providers, the four US Attorneys in California Friday announced a campaign of "coordinated enforcement actions targeting the illegal operations of the commercial marijuana industry in California." The announcement came at a Sacramento news conference.

The federal prosecutors said their enforcement actions would rely on pursuing civil forfeiture lawsuits against properties where dispensaries are located, threatening letters to dispensary landlords, and criminal prosecutions. The prosecutors said recent dispensary busts in Fresno, Los Angeles, Sacramento and San Diego were part of the enforcement campaign.

The feds said that enforcement actions would vary across regions of the state and that they would be working with federal law enforcement and local officials to crack down. The Department of Justice in Washington made clear that this was not an instance of prosecutors going off the reservation.

"The actions taken today in California by our US Attorneys and their law enforcement partners are consistent with the Department's commitment to enforcing existing federal laws, including the Controlled Substances Act (CSA), in all states," said Deputy Attorney General James Cole. "The department has maintained that we will not focus our investigative and prosecutorial resources on individual patients with serious illnesses like cancer or their immediate caregivers. However, US Attorneys continue to have the authority to prosecute significant violations of the CSA, and related federal laws."

Medical marijuana supporters were quick to charge the Obama administration with waging a renewed war on them and reneging on its promises to not interfere in states where medical marijuana is legal.

"Aggressive tactics like these are a completely inappropriate use of prosecutorial discretion by the Obama administration," said Joe Elford, chief counsel with Americans for Safe Access (ASA), the country's largest medical marijuana advocacy group. "President Obama must answer for his contradictory policy on medical marijuana."

On the campaign trail and in the White House, President Obama pledged that he was "not going to be using Justice Department resources to try to circumvent state [medical marijuana] laws."

"It is unconscionable that the federal government would override local and state laws to enforce its will over the will of the people," said ASA spokesperson Kris Hermes. "States must be allowed to enforce their own laws without harmful interference from the Obama administration."

"The Obama administration's latest moves strongly suggest that their medical marijuana policies are now being driven by overzealous prosecutors and the anti-marijuana ideologues who dominated policymaking in past administrations," said Ethan Nadelmann, executive director of the Drug Policy Alliance. "Barack Obama is betraying promises made when he ran for president and turning his back on the sensible policies announced during his first year in office. Instead of encouraging state and local authorities to regulate medical marijuana distribution in the interests of public safety and health, his administration seems determined to recriminalize as much as possible. It all adds up to bad policy, bad politics and bad faith."

Large medical marijuana dispensary operations are not health care providers but criminal organizations hiding behind patients, the prosecutors claimed Friday.

"Large commercial operations cloak their moneymaking activities in the guise of helping sick people when in fact they are helping themselves," said Benjamin Wagner, US Attorney for the Eastern District of California. "Our interest is in enforcing federal criminal law, not prosecuting seriously sick people and those who are caring for them. We are making these announcements together today so that the message is absolutely clear that commercial marijuana operations are illegal under federal law, and that we will enforce federal law."

"The California marijuana industry is not about providing medicine to the sick," claimed Laura Duffy, US Attorney for the Southern District of California. "It's a pervasive for-profit industry that violates federal law. In addition to damaging our environment, this industry is creating significant negative consequences, in California and throughout the nation. As the number one marijuana producing state in the country, California is exporting not just marijuana but all the serious repercussions that come with it, including significant public safety issues and perhaps irreparable harm to our youth."

The prosecutors said they had sent out "dozens" of threat letters to dispensary and grow-op landlords in the past few days. In the Southern and Eastern districts, they targeted building owners, while in the Central district they sent letters to landlords "in selected cities where officials have requested federal assistance." In the Northern district, they targeted their threat letters to landlords of dispensaries within 1,000 feet of schools or parks, but warned "we will almost certainly be taking action against others."

The prosecutors also said they had already filed seven civil forfeiture complaints against properties where landlords allow dispensaries to operate. One complaint alleged that an Orange County strip mall had eight dispensaries and that recalcitrant city officials had spent hundreds of thousands of dollars trying to shut them down.

One letter targeted the landlord for the Marin Alliance for Medical Marijuana (MAMM) in Fairfax, which has been operating with the support of the city and without complaint since 1996. In a letter to MAMM's landlord, the US Attorney for Northern California warned that the dispensary was operating within a "prohibited distance of a park." The letter threatened MAMM's landlord with up to 40 years in federal prison, seizure of his property, and forfeiture of all rental proceeds for the last 15 years if he doesn't evict MAMM.

Similar letters have gone out to other dispensary landlords warning them of pending federal action because their tenants are too close to schools. The dispensaries are operating in accord with California law, which treats them like liquor stores and bars them from operating within 600 feet of a school, but federal law imposes additional penalties for the distribution of controlled substances with 1,000 feet of schools, playgrounds, and public parks. MAMM is situated more than 600 feet but less than 1,000 feet from Bolinas Park in Fairfax.

"This is nuts," said Greg Anton, attorney for the Marin Alliance and its director, Lynnette Shaw. "There's a dispensary near where I live that sells guns, narcotics, alcohol and tobacco and it's full of children.  It's called Walmart, and it's safe. So is Lynnette's place. She's proven that over 15 years."

"This is an outrageous abuse of law enforcement resources for the DOJ to use property forfeiture to enforce meddlesome, nanny-state regulations," said California NORML director Dale Gieringer. "The federal government has no business dictating local zoning decisions. No one has any problems with the Marin Alliance except the bureaucrats in Washington."

The DEA is also along for the ride. "The DEA and our partners are committed to attacking large-scale drug trafficking organizations, including those that attempt to use state or local law to shield their illicit activities from federal law enforcement and prosecution," said DEA Administrator Michele Leonhart. "Congress has determined that marijuana is a dangerous drug and that its distribution and sale is a serious crime. It also provides a significant source of revenue for violent gangs and drug organizations. The DEA will not look the other way while these criminal organizations conduct their illicit schemes under the false pretense of legitimate business."

And so is the IRS. "IRS Criminal Investigation is proud to work with our law enforcement partners and lend its financial expertise to this effort," said IRS chief of criminal enforcement Victor Song. "We will continue to use the federal asset forfeiture laws to take the profits from criminal enterprises."

Friday's announcement of a federal crackdown is just the latest in a series of moves against medical marijuana providers by the Obama administration. The Department of the Treasury has been busily scaring banks into shutting down the accounts of providers in California and Colorado, the Department of Justice is aggressively prosecuting dispensary operators in Montana and elsewhere, and the IRS is attempting to drive dispensaries out of business by denying them standard business expense deductions -- Oakland's Harborside Health center was just this week hit with a $2.5 million tax bill after the IRS disallowed its standard business deductions.

Meanwhile, the administration has continued to block federal approval of medical marijuana, with the DEA recently rejecting a nine-year-old petition to reschedule pot, saying it would only accept large-scale, controlled FDA trials. But at the same time, the DEA has acted to block such trials by refusing to allow a private production facility to supply marijuana for medical research. The only existing source for marijuana for research purposes is the National Institutes on Drug Abuse, but it recently blocked a request for marijuana to study its effects on Post-Traumatic Stress Disorder, saying it has no intention of allowing studies that would develop marijuana for medicinal purposes.

"How can the Obama administration say that it's fine for sick people to use this proven medicine, and yet tell them they can't have any legal place to get it?" asked Rob Kampia, executive director of the Marijuana Policy Project. "Medical marijuana isn't going away. Over 70% of Americans support making medical marijuana legal, and 16 states allow it."

But not the federal government. Not under George Bush and, it is increasingly clear, not under Barack Obama. With Obama facing no challengers in the Democratic primary and with reform-friendly Republicans unlikely to win the Republican nomination, it appears that medical marijuana is going to be condemned to wander through the political wilderness for the foreseeable future.

The question now becomes whether any sort of response can stem the federal onslaught, and just what that response might be. Or does the dispensary scene just wither away and die?

Obama's Cynical Approach to Medical Marijuana

The previous ten presidents were staunch prohibitionists. Meanwhile, Obama has taken the federal hand off the scale quite a bit.
By Steven Wishnia, AlterNet
Posted on May 8, 2011

In October 2009, the Justice Department declared that prosecuting medical-marijuana users and caregivers who clearly comply with state laws was not a wise use of its resources. That declaration has dominated public perception of President Barack Obama's policy on the issue-minimal progress, but is a welcome improvement on his predecessors.

In reality, however, the Obama administration has attacked medical-marijuana providers on several fronts. Since January 2010, it has staged more than 90 raids on dispensaries and growers, according to figures collected by the patient-advocacy group Americans for Safe Access. That represents a pace double the Bush administration's, says ASA spokesperson Kris Hermes. The administration has also threatened state officials with prosecution if they participate in licensing or regulating medical marijuana. The Internal Revenue Service has expanded auditing dispensaries for tax evasion, on the grounds that drug-trafficking enterprises cannot legally claim business-expense deductions.

In April, ASA gave Obama an F for his policy on medical marijuana. He's "no better than Bush," says Hermes.

Allen St. Pierre of the National Organization for the Reform of Marijuana Laws calls that stance "hyperbolic." "The previous ten presidents did nothing," he says. Obama has "taken the federal hand off the scale a wee bit."'

Most notably, the Veterans Administration and the Department of Housing and Urban Development have revised regulations to acknowledge the use of medical marijuana.

For example, although federal zero-tolerance laws prohibit illegal-drug users from living in public housing or receiving rent subsidies such as Section 8, HUD has given local housing authorities in states that allow medical marijuana the discretion to not evict users.

Still, St. Pierre worries that the combination of raids and IRS harassment is seriously endangering medical marijuana. An unfavorable court decision regarding the IRS audits "could end medical cannabis," he warns. "They're going the Al Capone route."

The VA is the bright spot, says Michael Krawitz of Veterans for Medical Cannabis Access. Although it still forbids its doctors from recommending marijuana, and possession is illegal on VA property, last year it changed its regulations so that medical-marijuana use is no longer an automatic violation of "pain contracts"-agreements patients sign in which they state that they're not going to abuse their prescription painkillers.

In practice, Krawitz says, some VA doctors still refuse to accept medical-cannabis use, but "the feedback I've gotten from veterans, especially Vietnam-era veterans, is that it's the first time the VA did something because it's the right thing to do. Vets really appreciate that."

Overall, he says, "I'm just completely baffled by what the administration is doing. They're using the DEA and the IRS, but they're trying to look like they're not going after medical marijuana."

Raids Keep Coming

Meanwhile, federal raids on dispensaries continue. On March 14, on the eve of the Montana Senate's vote to repeal the state's medical-marijuana law, federal agencies raided 26 growers and dispensaries there. Hermes calls that "intimidation, with specific intent to undermine a state law." On April 28, DEA agents raided more than five dispensaries in Spokane, Washington.

The Spokane raids came three weeks after Michael C. Ormsby, federal prosecutor for eastern Washington, had sent letters to the landlords of more than 40 dispensaries in the area, warning them that their property could be forfeited if they continued to rent to drug traffickers.

"Nearly half have reported that they have evicted their tenants to comply with federal law," says Ormsby spokesperson Tom Rice.

The touchstone here is a memorandum that Deputy Attorney General David W. Ogden sent to federal prosecutors in October 2009. In it, he told them that they "should not focus federal resources in your states on individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana." Prosecuting cancer patients and their caregivers, he added, "is unlikely to be an efficient use of limited federal resources."

However, a February 2011 letter from U.S. Attorney Melinda Haag, federal prosecutor for the Bay Area and Northern California, to Oakland City Attorney John Russo significantly narrowed that policy. While the Ogden Memorandum says the federal government will not prosecute individual patients, she wrote, "we will enforce the [law] vigorously against individuals and organizations that participate in unlawful manufacturing and distribution activity regarding marijuana, even if such activity is permitted under state law."

The Ogden memo does not grant dispensaries anything remotely resembling immunity, Rice emphasizes. He points to clauses that state that "prosecution of commercial enterprises that unlawfully market and sell marijuana for profit continues to be an enforcement priority of the department" and "claims of compliance with state or local law may mask operations inconsistent with the terms, purposes, and conditions of those laws."

Did the department consider whether Spokane dispensaries were in compliance with state law before authorizing the raids? "No," Rice replies. One dispensary, he says, "was across the street from a grade school."

St. Pierre is not shocked by the raids. Many growers push the limits, he explains. "The regrettable thing about the medical-cannabis industry is that it's often acting in violation of state law," he says. "50,000 plants is crossing that Rubicon."

One thing that provoked the backlash in Montana, he adds, is that some dispensary owners were "charismatic." "Charismatic" in this context sounds like a euphemism for the kind of evangelistic stoner who believes that because they're doing Jah's work, providing the herb for the healing of the nations, they don't have to worry about following the finicky feinschmeckery of bureaucratic details-and that making money is doing well by doing good.

Bill Panzer, a veteran Oakland defense lawyer, voices similar sentiments. Twenty-five years ago, he says, his clients were mostly pot smugglers "who knew they were taking a risk. Now, I'm representing people who think everything they're doing is completely legal. They're in for a rude awakening."

California law is so murky, he says, that 98 percent of the state's thousand-odd dispensaries might be illegal. The only form that would be definitely legal, he adds, would be "a true socialist collective" in which all cultivated herb was divided equally among the members. Instead, he says, lots of people are setting up co-ops and "acting like sellers." The Obama administration has also continued Bush-era prosecutions of medical-marijuana providers. On May 2, Californians Dr. Mollie Fry and Dale Schafer turned themselves in to begin serving five-year federal mandatory-minimum sentences. Fry, a breast-cancer survivor, and Schafer, a hemophiliac, were raided in 2001. In 2007, they were convicted of manufacturing and conspiracy charges for growing more than 100 plants over several years. "The Obama administration vigorously fought an appeal of their sentence," says ASA.

In any case, the federal Controlled Substances Act maintains that marijuana has no valid medical use, and thus any distribution of it in the guise of "medicine" constitutes criminal sale of a controlled substance. In the last few months, federal prosecutors have sent letters reiterating that to governors and other officials in several states, including California, Colorado, Hawaii, Montana, Rhode Island, and Washington. The letters threatened that any official involvement in licensing or regulating medical marijuana would expose state employees to prosecution.

"We maintain the authority to enforce the CSA against individuals and organizations that participate in unlawful manufacturing and distribution activity involving marijuana, even if such activity is permitted under state law," the Colorado letter, dated April 26, stated. "It is well settled that a State cannot authorize violations of federal law."

On April 14, the two federal prosecutors in Washington state warned Gov. Christine Gregoire that if the state licensed medical-marijuana cultivation and distribution, government employees who worked with such a system could be prosecuted, and state property forfeited.

On April 29, Gregoire vetoed most of a bill to regulate medical-cannabis sales and production. The provisions she rejected included state licensing of dispensaries and a state register of patients. She said she feared state workers would be subject to arrest, and she urged the federal government to move marijuana to Schedule II under the Controlled Substances Act.

IRS

The IRS first went after dispensaries during the Bush administration, but it has greatly expanded such efforts under Obama.

More than two dozen dispensaries are now being audited, according to Henry Wykowski, a former Justice Department tax prosecutor now in private practice in San Francisco. Most are in California, he says, including the massive Harborside facility in Oakland and a smaller one in Marin County; at least one is in Colorado. Allen St. Pierre says he expects the probes to expand to Rhode Island, Maine, Montana, and New Mexico.

The law involved is Section 280E of the federal tax code, which prohibits drug-trafficking enterprises from claiming business expenses as deductions. "The government has brought 280E cases for years," says Panzer, but "as far as saying, 'hey, we can use this to go after dispensaries,' it started with Obama."

"I think the IRS didn't know what to do, because of the conflict between federal law and state law," says Wykowski. "When it became clear that there weren't going to be wholesale prosecutions, they decided it was OK to audit."

However, the one case to reach the courts so far yielded highly favorable results for medical marijuana. In 2007, the IRS assessed a defunct San Francisco dispensary called CHAMP--Californians Helping Alleviate Medical Problems--for $426,000 in back taxes and penalties on $2 million in sales. A three-lawyer team that included Panzer and Wykowski got the bill reduced to less than $5,000. The IRS refused to negotiate-which is highly unusual in tax cases, says Wykowski-and lost in court.

The IRS argued that because CHAMP sold marijuana illegally, those sales should count as "an expanding drop of ink in a glass of water" to disqualify deductions, Panzer explains. But because the dispensary also provided social services, including counseling, nursing, housing assistance, and massage; hosted support groups for AIDS patients and others; and put on social events, the judge agreed that 90 percent of its rent was deductible.

Paradoxically, the judge also let CHAMP deduct the wholesale cost of the medical pot it sold. This is a principle called "cost of goods" that dates back to Prohibition, Wykowski explains. The issue is complex, but basically, he says, there is legal authority that people cannot be forced to incriminate themselves in order to pay taxes. The '70s Harlem heroin dealer Nicky Barnes used to file tax returns anonymously, and "the right to selectively assert Fifth Amendment privilege has been recognized by the courts."

It would be self-incriminatory for a taxpayer to report their occupation as "marijuana grower," Wykowski adds. Disallowing the cost-of-goods deduction "would have made it impossible for any dispensary to remain in business." Still, with the IRS continuing to audit dispensaries under Section 280E, that makes lawyers in the field fear a bad precedent. Other dispensaries may not have as strong a case, keep good records, or have the financial and legal resources to defend themselves.

"We are concerned that someone who doesn't know what they're doing will take a bad case to court and lose, and jeopardize everyone else in the industry," Wykowski says." The conflicts between federal and state law and between tax and criminal law also create a massive record-keeping dilemma for dispensaries. If they keep accurate and complete records, they can prove that they're acting like a legitimate business, a legitimate medical-services provider-but they're potentially handing the federal government a cut-and-paste indictment.

"The same records that can help you in state court can screw you over in federal court," says Panzer. If the amount of cannabis a dispensary grows, buys, or distributes is tallied cumulatively over several years, it can be large enough to trigger a five- or ten-year mandatory-minimum sentence.

Rescheduling

The overriding fact is that the Controlled Substances Act, enacted in 1970, puts marijuana in Schedule I, saying it has "a high potential for abuse, has no currently accepted medical use in treatment in the United States, and has a lack of accepted safety for use under medical supervision." Thus, the law does not recognize "medical use" as a valid defense to charges of possession, sale, or cultivation. As far as federal law is concerned, medical-marijuana users are the equivalent of junkies, no matter how sick they are, and the dispensaries and growers that supply them are little different from crack dealers and meth-lab operators.

This rule is tied into a host of other laws intended to prohibit money-laundering and the like. Medical-marijuana users in public housing and landlords who rent to dispensaries run afoul of laws intended to close crackhouses.

The obvious solution, at least to those in the medical-marijuana movement, would be for the federal government to move marijuana out of Schedule I and into the realm of legitimate prescription drugs. Even moving it to Schedule II would gain it that status, although under controls as strict as those for OxyContin or medical cocaine. Marinol, the synthetic THC that is the prime legal cannabinoid drug, is in Schedule III, along with codeine.

That is not likely to happen soon. The Drug Enforcement Administration has jurisdiction over scheduling. In 2002, a coalition including NORML, ASA, and Virginia cannabis-policy expert Jon Gettman filed a petition to reschedule marijuana for medical use. It "has been languishing without a response from the DEA for nearly nine years," says an angry Dale Gieringer of California NORML. "They're sitting on our petition."

The DEA, he says, has also "blocked efforts to establish a legal medical marijuana research garden," which would provide the scientific background needed to obtain Food and Drug Administration approval.

"If the federal government would stop fighting the rescheduling process, we could have a resolution," says St. Pierre. "They're not choosing to lead."

The DEA, headed by Bush holdover Michelle Leonhart, remains resistant. Its official stance, the lead item in "DEA Position on Marijuana," a 54-page booklet issued in July 2010, is that medical marijuana is a "fallacy," that "smoked marijuana is not medicine," and there is "no sound scientific evidence that smoked marijuana can be used safely and effectively as medicine."

It blames "organizers of the 'medical' marijuana movement" for failing to ensure that "the product meets the standards of modern medicine?. [There is] no safety regulation, no way to measure its effectiveness (beyond anecdotal stories), and no insurance coverage." It calls the entire idea that marijuana has medical use "false-trickery [sic] used by those promoting wholesale legalization."

"I don't think that's happening any time soon," a DEA spokesperson who refused to give his name said of rescheduling. "I don't see any movement on that. The science hasn't borne it out."

BP Whistleblowers' Mysterious Deaths and/or Fake Criminal Charges

Short Life Expectancy for BP Whistleblowers?
By Pat Shannan

The investigation, if it can properly be so called, of the unsolved murder of the former high ranking Pentagon official and presidential advisor John P. Wheeler III, who was also an expert on chemical and biological weapons, may be taking a turn in the direction of the Gulf of Mexico oil spill.

Wheeler, 67, a West Point grad, was beaten and thrown into a garbage dumpster. His body was discovered in a Wilmington, Del. landfill last New Year’s weekend. Both police detectives and news commentators described it as “an apparent hit,” but little else was ever learned, and no suspects have surfaced.

There was great speculation by many at the time that Wheeler had begun to blow the whistle on the mysterious bird and fish deaths in Arkansas and Texas, and was about to expose the facts tying this to the chemtrails seen in our skies over the past decade.

Now the speculation may be reverting to British Petroleum and the gulf spill because a number of other BP whistle blowing scientists, before and since the Wheeler murder, have also died mysteriously, been jailed on questionable charges or disappeared without a trace.

Matthew Simmons, 67, a former energy advisor to President George W. Bush and admired among survivalist groups for his dire warnings on the upcoming commodity and fuel shortages about to hit this nation, died in his hot tub in Maine last August. Simmons had been gaining popularity as a whistle blower for blaming BP for its covered-up responsibility in defacing and vandalizing the Gulf of Mexico while hiding the truth from the general public.

Only four days later, Ted Stevens, the 87-year-old defrocked senator from Alaska, said to have received communications regarding BP’s faulty blowout preventer, perished in a plane crash. British Petroleum had donated $1 million to the University of Alaska to catalog the papers from Stevens’s long political career.

Roger Grooters began a cross country bike ride in Oceanside, Calif. on Sept. 10 to draw attention to the Gulf Coast oil disaster. On Oct. 6, in front of the horrified eyes of his wife, who was trailing in a support vehicle, Grooters was struck by a truck and killed instantly in Panama City, Fla.

Only a month later, Dr. Geoffrey Gardner of Lakeland, Fla. disappeared. He was investigating the unexplained bird deaths near Sarasota that are suspected to have been caused by the BP oil disaster. No one has heard from or spoken with him since.

On Nov. 15, Chitra Chaunhan was found dead of cyanide poisoning in a Temple Terrace, Fla. hotel. It was officially ruled a suicide. She worked in the Center for Biological Defense and Global Health Infectious Disease Research and left behind a husband and five-year-old child.

The following week, James Patrick Black, director of operations for BP’s restoration organization for the oil spill, died near Destin, Fla. in a small plane crash.

Dr. Thomas B. Manton was one of the first to warn the public that far more oil than what BP had reported was gushing into the gulf every day and that the massive, toxic oil and chemical plumes would travel up the eastern seaboard, contaminating beaches and wildlife all the way.

“Once the winds change, it will come eastward and pollute the beaches of the west coast of Florida, and the ‘loop current’ could carry this oil spill right around Florida, through the Florida Keys and pollute the east coast of Florida as well,” Manton wrote on May 28, 2010.

Dr. Tom Termotto, national coordinator of the Gulf Oil Spill Remediation Conference, says Manton was murdered in prison. Manton had been sentenced to 15 years last August on a phony child pornography charge. Termotto and others say evidence was planted on his computer.

It is not known whether or not Anthony Nicholas Tremonte, 31, posed any threat to BP, but he too was arrested in January and charged with one count of possession of child pornography. Was this charge also faked? As an officer with the Mississippi Department of Marine Resources on the Gulf Coast, he may have known enough to qualify him for membership in this exclusive series of coincidences. He faces up to 40 years in prison if convicted.

++++++++++++

(Someone inevitably will say "well, those are just coincidences." I will respond by saying, "then you are a fool." Remember those names because those individuals gave up their lives to expose corruption at the highest levels of our corporate govt.

The president was elected on a wave of campaign promises--most of which he has either done the exact opposite of what he promised or just 'hasn't gotten around to doing them' or compromised on them to the point that they don't change a thing. One of those promises on which he has done the exact opposite is regarding openness or transparency in the govt. The man said in his campaign, that whistleblowers were courageous and needed to be protected. Yet, by October 2010, the Obama administration has prosecuted more whistleblowers than any other president in US history. Let that sink in for a second. And then consider this: at the rate Obama is prosecuting whistleblowers, by the end of his term--his only term as president, if we're lucky--he will have prosecuted more whisteblowers than all other presidents in US history COMBINED.--jef)

More on whistleblowers:

Where Are All the Prosecutions From the Crisis?

Peter J. Henning - September 27, 2010

A consistent question since the financial crisis in 2008 is why has the federal government not prosecuted any senior executives for their roles in the collapse of firms like Lehman Brothers and Bear Stearns or the risky investments that led to bailouts of onetime financial giants like the American International Group, Fannie Mae and Freddie Mac. How can companies worth billions of dollars just a few months earlier suddenly collapse in 2008 without someone being held responsible?

At a hearing before the Senate Judiciary Committee last week, Senator Ted Kaufman of Delaware summed up the frustration on Capitol Hill with the lack of any identifiable villains for the financial troubles of the last two years. “We have seen very little in the way of senior officer or boardroom-level prosecutions of the people on Wall Street who brought this country to the brink of financial ruin,” Mr. Kaufman said. “Why is that?”

Judge Ellen Segal Huvelle of the Federal District Court in Washington expressed similar frustration with the settlement between the Securities and Exchange Commission and Citigroup over the bank’s misstatements in 2007 regarding its exposure to subprime mortgage-backed securities. In its complaint, the S.E.C. refers repeatedly to “senior management” receiving information about increased losses in its portfolio from problems with subprime mortgages, but none were named in its complaint.

Although Judge Huvelle largely approved the settlement, she was confounded by the S.E.C.’s failure to at least identify which Citigroup executives were aware of the information. The judge said that “this is where the S.E.C. is doing a disservice to the public” by not providing any more details, or even charging executives for misleading shareholders.

Judge Huvelle also questioned the deterrent impact of the $75 million penalty the company will pay, or the similarly modest $100,000 and $80,000 penalties imposed in a separate administrative proceeding on two Citigroup officers for their roles in the company’s disclosures. She pointed out that “$75 million will not deter anyone from doing anything,” and that “a $100,000 fine is not a deterrent in corporate America to do a better job.”

At the Senate hearing in which Senator Kaufman questioned the dearth of prosecutions of senior executives, Robert Khuzami, director of enforcement at the S.E.C., testified that his agency has been much more aggressive in pursuing cases against Wall Street. He cited as one example the securities fraud charges filed against Goldman Sachs in April that the firm later settled for $550 million.

Like the Citigroup matter, however, the Goldman case did not name anyone in the firm’s senior management as a defendant, with only a lower-level trader, Fabrice Tourre, sued in the complaint. And in both cases the settlements involved an alleged violation of Section 17(a) of the Securities Act of 1933, which is the lowest-level fraud charge the S.E.C. can bring because it only entails negligence rather than intentional conduct.

The bankruptcy examiner’s report filed by Anton R. Valukas about Lehman Brothers that questioned the firm’s reporting of the so-called “Repo 105” transactions may provide the groundwork for civil fraud charges against former executives of the investment bank. As I discussed in a previous post, the likelihood of criminal charges arising from Lehman’s conduct in the months before its collapse in September 2008 is small, so an S.E.C. case is probably the most serious proceeding that may be pursued, if that ever occurs.

The S.E.C. has already accused executives at Countrywide Financial with civil fraud charges for making misleading statements about the company’s mortgage risks, and also accused its former chief executive, Angelo R. Mozilo, of insider trading for making approximately $140 million in profits by selling shares in the company in the months before its near collapse. The trial in that case is set to begin on Oct. 19.

Even in the Countrywide case, civil fraud charges simply do not resonate with the public in the same way as criminal charges, in large part because a term of imprisonment cannot be imposed in an S.E.C. action and the stigma is not nearly as great. The same would be true if the S.E.C. files suit against Lehman executives — it is “only” civil, not a criminal prosecution, so even just the catharsis of an unseemly perp walk will not be available.

One possible reason for the lack of prosecutions involving senior executives is the Supreme Court’s ruling in Skilling v. United States, involving Jeffrey K. Skilling, the former chief executive of Enron, that limits the right of honest services provision, 18 U.S.C. § 1346, for criminal fraud prosecutions to just those cases involving bribes and kickbacks. It is now impossible to pursue cases against corporate executives for questionable conduct that involved some measure of dishonesty that caused harm to the company unless it also resulted in the person lining his or her own pocket.

The Senate Judiciary Committee will hold a hearing on Tuesday entitled “Restoring Key Tools to Combat Fraud and Corruption After the Supreme Court’s Skilling Decision.” It will be interesting to see whether the absence of any high-profile criminal prosecutions from the financial crisis will be cited as a reason for Congress to amend the honest services law to reach corporate misconduct that does not involve some form of personal benefit to the defendant. In the Skilling case, the Supreme Court questioned whether a crime involving only a breach of fiduciary duty could pass muster.

Even if Congress were to amend the honest services statute to reach a broader range of corporate misconduct, it would not apply to anything that happened back in 2008. Mr. Kaufman’s question is likely to remain unanswered for quite a while because prosecutors have not shown much interest, at least to this point, in pursuing criminal cases against executives of companies involved in the financial crisis.