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Getting Rid of the World's ***** Riots, Kangaroos, Bananas and the Rule of Law

Politics / Social Issues Aug 14, 2012 - 06:20 AM GMT

By: Raul_I_Meijer


Best Financial Markets Analysis ArticleKangaroo Court : An unfair, biased, or hasty judicial proceeding that ends in a harsh punishment; an unauthorized trial conducted by individuals who have taken the law into their own hands, such as those put on by vigilantes or prison inmates; a proceeding and its leaders who are considered sham, corrupt, and without regard for the law.

The concept of kangaroo court dates to the early nineteenth century. Scholars trace its origin to the historical practice of itinerant judges on the U.S. frontier. These roving judges were paid on the basis of how many trials they conducted, and in some instances their salary depended on the fines from the defendants they convicted. The term kangaroo court comes from the image of these judges hopping from place to place, guided less by concern for justice than by the desire to wrap up as many trials as the day allowed.

Banana Republic : In practice, a banana republic is a country operated as a commercial enterprise for private profit, effected by the collusion between the State and favoured monopolies, whereby the profits derived from private exploitation of public lands is private property, and the debts incurred are public responsibility. Such an imbalanced economy reduces the national currency to devalued paper-money, hence, the country is ineligible for international development-credit, and remains limited by the uneven economic development of town and country.[5]

Kleptocracy, government by thieves, features influential government employees exploiting their posts for personal gain (embezzlement, fraud, bribery, etc.), with the resultant government budget deficit repaid by the native working people who "earn money”, rather than “make money”. Because of foreign (corporate) manipulation, the kleptocratic government is unaccountable to its nation, the country’s private sector–public sector corruption operates the banana republic, thus, the national legislature usually are for sale, and function mostly as ceremonial government.

Rule of Law : In 1215, Archbishop Stephen Langton gathered the Barons in England and forced King John and future sovereigns and magistrates back under the rule of law, preserving ancient liberties by the Magna Carta in return for exacting taxes. This foundation for constitution was carried into the Constitution of the United States.

An early example of the phrase "rule of law" is found in a petition to James I of England in 1610, from the House of Commons:

Amongst many other points of happiness and freedom which your majesty's subjects of this kingdom have enjoyed under your royal progenitors, kings and queens of this realm, there is none which they have accounted more dear and precious than this, to be guided and governed by the certain rule of the law which giveth both to the head and members that which of right belongeth to them, and not by any uncertain or arbitrary form of government....[..]

Among the first modern authors to give the principle theoretical foundations was Samuel Rutherford in Lex, Rex (1644). The title is Latin for "the law is king" and reverses the traditional rex lex ("the king is the law").

Western media are enjoying predictable field days with a set of trials that are being held in the (formerly?!) communist countries Russia and China.

In Russia, the three members, all in their early twenties, of all female punkband ***** Riot (two of whom are mothers of young children) have been imprisoned since early March and are presently on trial for reciting a "punk prayer" that contained the line "Virgin Mary, Banish Putin", during a performance in the Christ Savior cathedral in Moscow on February 21.

It's not entirely clear who was more offended, the Virgin or the President. What we know is that the Russian orthodox church called the "prayer" blasphemous and the court, under Article 213 in the Russian criminal code, accuses the three of "hooliganism motivated by religious hatred". The fact that the band added "The patriarch believes in Putin / Bastard, better believe in God" won't help their case.

They will be convicted on Friday, and risk up to 7 years in jail.

The Gu Kailai case in China has been going on about as long as the ***** Riot one. The actual trial last week was semi-illegally held 1000 miles from both the scene of the crime and the defendant’s home. It lasted 7 hours. Gu, Bo Xilai's wife, was reported by Xinhua, the official Chinese news agency, as having confessed to killing a British citizen. One of the few things that seem certain is that the case has something to do with huge amounts of money being transferred abroad.

But Bo Xilai's status, popularity and following, prior to his "rendition". leaves room for much doubt about the real reason for his wife's trial. Reuters suggests it's all about the politburo cleansing the party ahead of this fall's "5th Generation" leadership change:

Bo was sacked as Chongqing boss in March and his wife was publicly accused of Heywood's murder in April, when Bo was also dumped from the Politburo and detained on an accusation he had violated party discipline - code for corruption, abuse of power and other misdeeds. Until then, Heywood's death had been attributed to a possible heart attack brought on by too much alcohol.

Chen Guangwu, a criminal defense attorney who has followed the Chongqing case closely, said he expected the verdicts against Gu and the four policemen to come in about two weeks.

"But they won't delay for too long, because this case is being heard in order to pave the way for dealing with Bo Xilai himself," said Chen, who is based in Shandong province. "This case is in part about testing the waters for that. That is, they will sentence her and see what reaction there is in society and public opinion."

Bo's downfall has stirred more public division than that of any other party leader for more than 30 years. To leftist supporters, Bo became a charismatic rallying figure for efforts to reimpose party control over dizzying and unequal market growth. But he made some powerful enemies among those who saw him as a dangerous opportunist who yearned to impose his harsh policies on the entire country.

Perhaps the most striking thing about both cases is the influence analysts claim public opinion has, an influence that depends to a large extent on the social media that help shape it. It's tempting to get the impression that neither Beijing nor Moscow have a full grip on, and understanding of, the new media. Their apparent beliefs that they can control Twitter as easily and in the same manner as they did radio and TV, could well come back to haunt them. Still, there can be little doubt that before that happens, and before they realize what has happened, they will resort to brutal violence.

As for Gu Kailai, for all we know she may well have killed Neil Heywood. But whether it's true or not, it's not easy to see that as the main reason for the trial. In a system as opaque as China's, people who can get away with skimming the system for hundreds of millions of dollars without being caught can probably also get away with murder, provided they have the right friends.

It's not hard to see why western media report so much on these cases. It's not just the elements of sex and danger, though these carry the story. What's even more important is that they paint a picture of a legal system elsewhere in the world that appears to function much worse than our own, that we can proudly and smugly proclaim to have much better systems. The problem with that, of course, is that we don't. The difference between us and the former communists countries is not about functioning vs non-functioning systems, it's about a difference in the way the systems don't function.

And we all know this. We're just not very eager to fully admit it to ourselves. We see only what we want to see. Even if the evidence is so prevalent all around us that it's impossible to escape.

Take a few examples from just the past week:

US drops investigations of Goldman Sachs

The US Justice Department announced Thursday evening it was ending a one-year criminal investigation and would not file charges against the giant Wall Street investment bank Goldman Sachs or any of its employees.

In April 2011, the Senate Permanent Subcommittee on Investigations released a voluminous report on the role of major banks, federal regulators and credit rating firms in the collapse of the subprime mortgage market and ensuing financial crash of September 2008.

Of the report’s 640 pages, 240 pages, or 40%, were devoted to a detailed examination of Goldman Sachs' deceptive practices in marketing mortgage-backed securities and collateralized debt obligations. The report alleged that Goldman bilked clients by selling them mortgage-backed securities without informing them that the bank itself was betting the investments would fail. [..]

In its statement released Thursday, the Justice Department said it had conducted “an exhaustive review of the report,” but concluded that “based on the law and evidence as they exist at this time, there is not a viable basis to bring a criminal prosecution with respect to Goldman Sachs or its employees in regard to the allegations set forth in the report.”

There is not a shred of credibility in this assertion. In the course of its investigation, the Senate Permanent Subcommittee on Investigations amassed 56 million pages of memos, documents, prospectuses and emails. The section of its report on Goldman Sachs gave chapter and verse, provided dates and named names, to meticulously document how the bank defrauded its clients by selling them mortgage securities while betting against the same investments, without telling them it was doing so.

“We are pleased that this matter is behind us,” a bank spokesman said Thursday of the Justice Department decision.

Also on Thursday, Goldman revealed in a regulatory filing that the Securities and Exchange Commission (SEC) had informed the bank it had ended a separate probe of a $1.3 billion subprime mortgage deal stemming from 2006, and had decided to take no action. This was an about-face by the SEC, which had notified the bank last February that it planned to pursue a civil action in relation to the Goldman security.

The SEC decision to drop the investigation comes as regulators are approaching a statute of limitations deadline for mortgage securities issued before 2007.

I really like that last line, don't you? US regulators need to do one thing and one thing only: hold off investigations and prosecutions long enough for the statute of limitations on any and all criminal activity involved to expire. Easy as pie. What do these guys get paid?

Ironically, US Attorney General Eric Holder, at around the same time he decided NOT to charge Goldman Sachs, made sure he took the time to go public and denounce the Sikh temple shooting as 'an act of terrorism, an act of hatred, a hate crime'. Dear Eric, always has time for the proper semantics. Especially when attention needs to be averted from elsewhere. Sure, maybe what Goldman did was not an act of terrorism. But not even a crime, Eric? Or are there other priorities in play here?

Five Senior Goldman Sachs Execs Gave $130K To 'Obama Victory Fund' WHILE Eric Holder Was Deciding Whether To File Criminal Charges

[The Government Accountability Institute] argues that the Obama administration’s decision to not go after Big Finance is due to senior DOJ leadership — Holder, Associate Attorney General Tom Perrelli, Associate Attorney General Tony West, Assistant Attorney General Lanny Breuer, Deputy Attorney General James Cole and Deputy Associate Attorney General Karol Mason — who “all came to the DOJ from prestigious white-collar defense firms where they represented the very financial institutions the DOJ is supposed to investigate.”

The report details how Holder and Breuer both came to the DOJ from Covington & Burling, a “top-tier Washington law firm” with a client list that includes financial firms like Wells Fargo, J.P. Morgan Chase, Bank of America, CitiBank, Deutsche Bank, Goldman Sachs, ING, Morgan Stanley, UBS and Wilmington Trust.

GAI said that President Obama’s decision to choose Holder, “a white-collar defense attorney from Covington,” as his attorney general, over a “more fiery prosecutor,” appears to have sent “a subtle signal to the financial community” that this administration isn’t going to actually do anything, despite the harsh words.

As one of many examples of where Holder’s DOJ could have gone after Wall Street but failed, GAI cites how Michigan Democratic Sen. Carl Levin “proposed that the DOJ criminally investigate Goldman Sachs for its handling of the Abacus 2007-AC1 transaction” in an April 2011 Senate Permanent Subcommittee on Investigations report.

In that 635-page report, Levin and his staff — who are Democrats — recommended that Holder’s DOJ investigate potential crimes committed. Levin’s subcommittee and the Federal Financial Crisis Inquiry Commission both made formal referrals to the DOJ for investigation – and Forbes magazine ran an article with the headline, “Criminal Charges Loom for Goldman Sachs After Scathing Report.”

Nothing happened. But, over the course of the rest of 2011, Obama went on a massive fundraising drive down Wall Street. “By the fall of 2011, Obama had collected more donations from Wall Street than any of the Republican candidates, and employees at Bain Capital had donated more than twice as much to Obama as they did to [Mitt] Romney, the firm’s founder,” GAI wrote in its report.

“In the weeks before and after the Senate report on Goldman Sachs, several Goldman executives and their families made contributions to Obama’s Victory Fund and related entities and some contributors maxed out at the largest individual donation allowed, $35,800.”

“Five senior Goldman Sachs executives wrote more than $130,000 in checks to the Obama Victory Fund,” GAI continued. “Two of these executives had never donated to Obama before and had previously only given small donations to individual candidates.”

But wouldn't you know, there are still, from time to time, guys turning up that haven't been initiated into the revolving door racket yet. Oh well, we have ways....

'Rogue' New York Regulator Benjamin Lawsky Sets Feds Scrambling In Standard Chartered Laundering Case

A little-known bank regulator from a newly formed New York agency might just shame federal regulators into getting tougher with the banks. Or he should, anyway.

The Wall Street Journal reported on Thursday that federal regulators are in talks with the New York State Department of Financial Services about negotiating a deal with British bank Standard Chartered, which has been accused of letting Iranian interests launder $250 billion over a course of years, in violation of U.S. sanctions.

This was an intriguing development in the case, because for the past 48 hours or so, these same federal regulators have been beside themselves with fury at the guy in charge of that same New York State Department of Financial Services, Benjamin Lawsky.

Now they're talking about joining forces with him. It's almost enough to make you hope that, if there is a penalty coming, it will be more than the usual wrist-slap.

"It's the state of New York leading the charge, with the Treasury Department falling behind," Notre Dame law professor Jimmy Gurule, a former Treasury official, told the Huffington Post. "Eventually I think Standard Chartered will be hit with a substantial criminal penalty, and then Treasury can say, 'Me, too.'"

Officials at the Treasury Department and Federal Reserve are reportedly outraged with Lawsky for going rogue and bringing a case against Standard Chartered, stealing the thunder from cases they claim they, too, were slowly developing. The regulators grumbled that they weren't notified of Lawsky's case, an unseemly faux pas that caused several monocles to fog up in horror. Just what you'd expect from a New Yorker whose agency has only been open since October 2011, who probably has ambitions to be like his mentor, New York Governor Andrew Cuomo.

More chillingly, federal regulators have been whispering to the press that Lawsky's case is full of holes, going so far as to adopt Standard Chartered's argument, that if there was any money-laundering happening in Standard Chartered branches -- and it's not saying there was! -- then said laundering amounted to only about $14 million or so. A pittance. Hardly worth noticing at all, really. [..]

Reuters points out that none other than Treasury chief Timothy Geithner may have a stake in the whole mess, because he was the head of the New York Federal Reserve, a key bank watchdog, for much of the time of the alleged money-laundering. Geithner is already criticized for being too close to banks, most recently because of his relative inaction during the Libor scandal. It would not help his image to find that banks were just willy nilly laundering money on his watch.

[..] if an individual was convicted of doing the sort of thing Standard Chartered is accused of doing, he would spend "two decades or more in the slammer," writes Eleazar David Melendez at the International Business Times.

"If you are taxpayer and you fail to pay taxes, you will go to jail," said former Treasury official Gurule. "If you are a banker and engage in undermining sanctions against Iran, nothing happens to you. It's mind-boggling."

So the modus operandi - or so one might be tempted to think - is to frustrate whoever would - foolishly - want to interfere with a scheme that evidently works like a charm. And then, a happy chosen few that rise above a certain critical mass can get invited to join the Kangaroo Banana party:

In Google's Privacy Settlement, Tech Giant Denies Liability (Again)

We'll pay your fine, but we won't admit we did anything wrong. Those are the terms Google agreed to in its record-breaking settlement with the Federal Trade Commission, which announced Thursday it had penalized Google for the second time in a year for violating privacy promises made to its users.

Google's failure to cop to any wrongdoing has sparked dissent within the FTC and outcry from privacy advocates, who call the settlement "woefully insufficient." While Google hasn't assumed liability for any transgressions, the explanations it has offered are troubling themselves.

First, some background: Google has agreed to pay a $22.5 million fine for violating a consent decree signed with the FTC and misrepresenting privacy settings to users of Apple's Safari browser. The FTC faulted Google for using "cookies" that tracked Safari users online, despite Google's assurances that it would not do so.

The FTC order states that the defendant, Google, "denies any violation of the FTC Order, any and all liability for the claims set forth in the Complaint, and all material allegations of the Complaint save for those regarding jurisdiction and venue." In a dissenting statement, FTC commissioner J. Thomas Rosch expressed concern that allowing the company to deny liability in these circumstances was "unprecedented" and could set a troubling example for other firms. [..]

Google has answered regulators' fingerpointing with what amounts to an "Oops, we didn't mean to." That's our personal information they're "oops-ing" with, and not just once or twice, either. Intentional or not, Google's string of privacy oversights, and disquieting attempts to explain them as "by accident," are cool comfort from a company we're supposed to trust with our emails, questions, contacts, and, increasingly, whereabouts. [..]

In Thursday's announcement, Google didn't go so far as to say that there weren't any cookies tracking user activity, or dispute facts laid out by the FTC, but seemed to dismiss the regulators for getting hung up over some technicalities.

Google's response when Stanford researcher Jonathan Mayer first noted the Safari breach essentially amounted to a "shucks, sorry, that wasn't supposed to happen." In a statement released in February of this year, Google blamed the presence of Google advertising cookies on a "functionality" in the Safari browser that activated them, adding that it "didn't anticipate that this would happen." [..]

Google has been embroiled in another public relations nightmare, with slip-ups seemingly at every turn, following its admission that its Street View team accidentally collected personal information, such as emails and passwords, via Wi-Fi networks.

First, Google told the world in 2010 that the Wi-Fi data free-for-all was "quite simply...a mistake," and pinned the "inadvertent" data collection on a single "engineer working on an experimental WiFi project." That engineer wrote some code that Google's mobile team later included in its software, though Google said the team didn't specifically intend to capture personal data. This effort to contain the problem by pointing fingers at one engineer only raises more questions about how carefully the company is considering the public's privacy. Do people often slip code into products without oversight? And no one took a look at this programmer's code?

Turns out a few people did. The FCC's investigation of the matter revealed that that lone engineer actually shared his work with the entire Google Street View team. And two years after promising to delete the data it collected by "mistake," Google has admitted to regulators in Europe that due to an "error," it still had some of that data in its possession.

Some use their stranglehold on their legal system to try to get rid of the world's ***** Riots, the young people of every generation with the foolish bravery to stand up to oppression. Others use it to try to get rid of political rivals, a battle among - almost - equals. A story as old as civilization. And others still use their stranglehold on their specific laws to squeeze every last penny out of their people and their economies.

And we can philosophize until we're blue in the face about which situation is worse, but we need to stop thinking that there are legal systems left that have anything at all to do with the rule of law. And that they would happen to be ours. The rule of law used to be supposed to mean that everyone, big or small, rich or poor, should be treated the same. Used to. Don't time fly.

These days, we get fed the stories about ***** Riot and we read about Gu Kailai, and we hardly manage to make the connection to ourselves. We're getting robbed blind and since no-one goes to jail, we presume it must be all legal. We're all in the same spot ***** Riot are, we just don't have any idea we are, and we certainly don't have the guts the girls have. We're much more scared, and we're much more numbed by much more sophisticated and manipulative media. We are the sheep on the way to the slaughterhouse, not those three girls.

We all of us live in a banana republic of one sort or another: "a country operated as a commercial enterprise for private profit, effected by the collusion between the State and favoured monopolies". And we all risk ending up in a kangaroo court: An unfair, biased, or hasty judicial proceeding that ends in a harsh punishment . Only, in our system, it ends in no punishment at all for those in the right place. That's just as much kangaroo, though. Either the thing functions, or it's kangaroo. It's either the rule of law, or there might as well be no law at all. At present, there is no such thing as the rule of law in either Russia, China or the US. So let's stop fooling ourselves.

The main difference between us and the ***** Riot girls is not that they are more oppressed; it's that they have balls, and we have none.

By Raul Ilargi Meijer
Website: (provides unique analysis of economics, finance, politics and social dynamics in the context of Complexity Theory)

© 2012 Copyright Raul I Meijer - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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