Here's what the Beltway crowd still doesn't seem to get: If any of us stole from the company till, or forged documents, we'd be in jail right now. So average Americans, smarting from the fallout of these far-reaching and fraudulent deals that left so many people out of work, are wondering why there seems to be a separate standard of justice for Wall Street bankers. How do you respect your government when jail time only applies to the pot dealer down the street?
When are some of the bigwigs behind these scams going to prison?
WASHINGTON — A Senate panel investigating the causes of the nation's financial crisis on Thursday unveiled evidence that credit-ratings agencies knowingly gave inflated ratings to complex deals backed by shaky U.S. mortgages in exchange for lucrative fees.
The Senate Permanent Subcommittee on Investigations will hold a detailed hearing on Friday, where its chairman, Sen. Carl Levin, D-Mich., will introduce e-mail records in which executives from Standard & Poor's and Moody's Investors Service acknowledge compromising the integrity of ratings to win business from big Wall Street firms.
"They did it for the big fees they got," Levin told reporters on Thursday after outlining the broad strokes of what he'd pursue Friday when he puts current and former ratings agency officials on the hot seat.
The documents to be released Friday confirm what a McClatchy investigation revealed in October _ that pressure from top ratings-agency executives to retain market share and the fees that it brought meant that ratings on complex deals were malleable. Some fees were as high as $1.4 million.
The agencies rate the quality of financial products such as bonds and serve as guides trusted by investors. Many of the bonds they rated as top-quality in the recent crisis turned out to be junk. The fallout from their deference to Wall Street's financial firms was a housing collapse that triggered a global financial crisis.
In one example obtained by the committee, Yvonne Fu, a Moody's employee, sent an e-mail to a banker at Merrill Lynch in June 2007, pressuring the investment bank to lock down a big fee in exchange for a positive rating.
"We have spent significant amount of resource on this deal and it will be difficult for us to continue with this process if we do not have an agreement on the fee issue," Fu wrote.