In my grandparents generation the generation now we celebrate with the day, 70 years on june 6th, as a respected, the elderly. In asian cultures they still do. They are willing to wait decades and possibly centuries. We are talking about this and they are in a war with us. And there is no difference between us and them. And wait a minute, hold it, we just had a headliner. No difference between obama and bush. And we did talk about foreign policy. And we cant do everything or go every well. And so i think we need a debate and we used to have a responsible conversation between the republicans and democrats. And this includes harry truman and another of umbers who cared more about america and than if it came to a choice between him their Political Party and the strength and safety of the United States, they would choose their country first. And i think that we have a cooperative effort from our allied and we have troops all over the world that we are mostly paying for. But my friend up beckel agrees with this, we need to ask them to start ponying up some money. And this includes france and germany and all of these countries in europe. And we cant do this forever without this. And we are not at war with the nationstate. This includes be underwear the underwear bomber, but shoe bomber and some suitcases and this includes bringing the United States our and then eventually taking over and they hide among the good people and if you are living in chicago in a street and three doors down you see too many people with a gun breaking into the house, and then after they break into that house or comes next for you, and sees the you are seeing a report after i break into this house until these people, im going to come and break into your house. Are there other questions. This includes how we might handicap the horse races right now. Its always a problem. Its not about a panel of ideas and many of us on the media fueled this because it is, it is competition and the battle is more exciting than a Real Exchange of ideas and improving the country. So you knew who they are and its still a debate whether Hillary Clinton will marco rubio, ted cruz, i dont think so, and they are all out there. We have to decide what we want or what we expect from the government and we need to expect more from ourselves unless from the government. And so i think that going back to an earlier question, republicans have a tendency to be democrat light. They just want to manage Big Government and they dont want to dismantle it. And its very powerful when you have an entitlement mentality and you have an and the mentality anything because someone makes more money than you, they owe you to be fair instead of you asking them how they made the money and then they have their education and work ethic is something on their own and i think that there is a problem. And the cameras are there and they are going to make Mother Teresa look like a loose woman for the right kind of sound bites. Do you see this as capable of dismantling rather than sustaining the government . I think you need to show the new policies work and i think the problem outfall with the republicans as they took over the congress or for the first time in 40 years, in 1990 work, it was that they tried to do too much too soon. And you have to prove that your ideas and programs work at each step along the way. And ive been telling republican governors instead of debating this poverty versus success thing, why dont you get some people who used to be to be poor, get them up on a stage and tell them how they became not so poor. Again, it aspirations, motivations, perspiration. And paul harvey, he always had this inspirational story. People born on the wrong side of the tracks, absent father, lived in a bad neighborhood, ben carson has a story of this in detroit. But they overcame. And so the idea was that those people can do it, so can you. So we dont tell those stories anymore. We and the people. So we get less of it. Would you say the Republican Party is that a doing a . Incredibly bad. The biggest intervenors dont hear about it. And there are others who are coming along, marco rubio, paul ryan, others, they were kind of being channeled by him. And there was an individual that had been part of this when he attended the 1998 Republican Convention and its probably true. It still seems like a mostly white older party. And so i think ive talked to a number of younger africanamerican leaders that say that you have to show up in between elections and you have to show that you really care. You really have to help people out of their misery and out of their poverty. I think that School Choice is probably the best way to start doing that. But you have to spend in the neighborhood and republicans dont do that enough sure they dont understand the language or how to relate. And it is a sad thing and something that they have to do not just to get the minority vote, but because its the right thing to do an immoral thing to do and it gives you a lot of personal satisfaction when you see somebody overcome this. Great. I think we will wrap it up with [applause] thank you. I was actually at a speech for a law firm in new york about a month ago and the crowd was way bigger than i expected and i was about to go to the podium and i asked the partner of the firm how did you get so many people to come to this thing we told you he was ben bernanke. I dont know who they told you me was coming tonight but my name is matt. I made a quarter of Rolling Stone magazine i will explain what that is later but first i just want to thank all of the folks that brought me here craggy from the library and everybody that had a hand in helping me to come here today. Is that better . Okay. So i have a new speech for you all tonight that i had written for this book to her and i used it a few times and i threw it out this morning. I was dissatisfied with it. I thought it turned out to be not entirely honest, and so i try to tell you a different story for the back story in the book because there is sort of an interesting back story to the book. What happened with the writing of divide said it was a classic example that began as kind of a classic example of what can happen in journalistic lazy. I should go back to the beginning. In the Financial Sector which this book is significantly concerned i didnt know anything about wall street and i can date practically today. I was a humorist would go on the campaign trail and make jokes about people. To this day it is still funny. But this all goes back. It was september 3 of 2008. I was in minnesota. I guess st. Paul covering the Republican Convention as everybody remembers becerra paling speech. So i was at the convention and i was covering the speech and i remember sitting as people were going nuts for the speech thinking well, this is amazing. This person is going to be an important phenomenon in american politics and i was trying to formulate what thing i was going to say about this and trying to come up with a funny angle and i went back after the speech to the filing room. How many people are journalists in this room . So the filing room is always like this whole they find in any event and any location where they stick all of the journalists in your supposed to write the story after the event and basically this cage they keep the journalists. And so i went back and i was without the other Campaign Reporters and i logged onto the internet and i was sitting down to write my story when i looked on the internet and i see all of these news stories about how the International Economy is not down. And i was completely mystified by it and i was trying to figure out what was going on and all i could get is that they have some duty with mortgages and who knows what it was and there were no Fees Companies that were going to go out of business tomorrow unless we gave them 100 trillion or Something Like that. And iran were looking to my right and there was a very prominent reporter for an east coast news publication. And i said to him are you reading the news, do you know anything about this or what a subprime mortgage is and he looked up at me and said like whatever. That was his response. He didnt care at all. Has anyone seen the movie clueless . So i was deeply disturbed because obviously as journalists our job is to pretend to be experts about things we know nothing about but this was going far beyond that. Here we were in the middle of a president ial election that was becoming more and more about the economy and the economy was melting down and not one of us even had a faintest clue about the cause and the more i read in the newspapers the less i understood all the stories about the causes of the 2008 financial crisis that were written in this totally impenetrable camouflaging jargon where it was impossible for an ordinary person to make heads or tails of what was actually going on. And i got some word ahead of time from my editors that as soon as the election was over that i was going to be a signed to cover this phenomenon to write a story about for the causes of the crash word that sends me into this terminal panic basically because i couldnt understand a story for the life of me and now i was going to have to become an expert at length because it is and always 3,000 widgets 5,000 survivors imagine 5,000 words of ignorance so journalists are basically like professional test grammars. We dont know anything. We try to learn it all by the next morning by studying up and so i got all these books and i started at the very beginning, the wealth of nations. [laughter] builtin friedman and i was coughing up wall street analysts sort of at random like cold calling them saying things like just tell me something about something. I knew so little that i didnt know what questions to ask so i just made general inquiries hoping somebody would help me figure out what was going on and nobody could. It was all the same stuff and nobody could make sense and then finally i got very lucky and i found this guy who was a former trader for credit squeeze who held an interesting sideline hobby that he made funny cartoons about the banks on the internet in his spare time and so i figured if this guy can do cartoons, then he can probably help me. He took me to lunch and i started explaining to him my problem that im three weeks away from a deadline and i dont know anything. He says to me, you know the problem is that youre looking in this the wrong way. Its a crime story. And then everything from that moment. Its a to scale version of the counterfeiting scam and when we are having the discussion we pointed out the window of the people the people that are selling phony bags out of a trunk on the streets of chinatown. He said its the same thing except for take handbags that is aaa mortgages and he starts telling me this whole thing about how what the banks were essentially doing. They were lending hundreds of billions of dollars to these flybynight countries which were incurred in fanning out in turn fanning out into the middle class and lower income neighborhoods giving mortgages to anyone with a pulse. I remember talking to a mortgage broke her that worked for a countrywide like company lets say and he told me that his strategy was to go to 711 at night and hang around the beer cooler and that is how he found customers for his subprime bridges. They would hand out these mortgages to anybody and everybody and of course they didnt mind doing that because they were not going to hold onto them for more than ten minutes. They sold them back to the banks and the banks then to go these mortgages basically through and talked them into securities and they believe the rating agencies with are financially dependent upon the bank and they bullied them into getting high aaa ratings for some of the securities and then they would turn around and sell the securities to the Institutional Investors like Pension Funds, Foreign Trade unions, hedge funds. So what they were really doing is creating huge masses of risky and essentially worthless debt and using math to turn them into triple rated securities and then selling them to state Pension Funds so they were robbing old ladies. Its the same thing as selling handbags rolex watches except it was in this case tony mortgages. And so i was fascinated by this and i was completely hooked and this new approach to looking at the subject i thought it gave me an approach to covering the topic of appeals have and i did a couple of stories the first one i did was about a ig and the causes of the bailout because one of the interesting sidelines of all of this is that while many of the companies were creating these bad loans a lot of them got smart and realized that all of this was unsustainable so as they are selling these loans out into the world, they started to bet against them at the same time. They went to Companies Like aig where they bought Insurance Companies against their own product and they didnt know they would blow up their own wiki by doing this and that is the back story that the ig was crushed under the weight of its own portfolio in its Financial Product portfolio that involves a member number of these sort of credit default swaps. So they blew up in the pokey and when he was going to to the wonder they went to the federal government and said this is intolerable. We need a federal bailout on the bed they made against their own product which is great and brilliant when you think about it. So i was thinking about all of these things and i became completely fascinated by the subject and over the course of a year or here and a half i became illiterate and in the jargon and i began to be able to read the wall street journal and not be completely mystified by the language they were using and to sort of read between the lines of a lot of things that were going on in the business understanding the bailout and all that. And i occupied this kind of strange space in the media because really if you think about it, there was no place in the American Media where anybody was explaining anything that was going on in the Financial Service sector or the rest of america like the Financial Press is written for people in finance. If you pick up the Financial Times or the wall street journal and you are somebody that lives not in Lower Manhattan and has a job that is not connected to finance will find it hard to read most of the material. Has anyone tried to read the wall street journal from cover to cover and make sense of it . They are essentially translating what was going on in the high finance for these mass audiences it has been lasted forever and now somebody was going to put it in english and how revolutionary was that. It had a tremendous intellectual challenge that previously the work was in a way existentially kind of disturbing to me just going out on the campaign trail making comments about politicians. It was much more important and it was very personally satisfying to me. So i started to i wrote a book about it which did fairly well and i started to get more offers to write another book and this is around the time of the occupied protest and i remember thinking that there was a persistent theme in the stories id written which was that no matter if it was subprime mortgage fraud or if it was signing, whether it was a situation like Jefferson County alabama where a bunch of the banks have sold piece toxic swap deals to the sort of mystified locals who didnt know what they were getting into and might have even bribed some of the local officials into taking these deals. Whatever it was, nobody ever got punished, nobody got indicted or went to jail. I thought well that is an easy subject i will just write about that. Here are all of these people that have done tremendously socially destructive things across the country and not one of them is being punished for it and im talking to prosecutors and lawyers and they are assuring me that a large percentage of the behavior is criminal and that it could easily be prosecuted but it is not being prosecuted. I started hearing things like after the crisis they put 800 people in jail and what are we doing now . B. Are not putting anybody in jail. So this is interesting to me. And i thought this would be easy i will take a whole bunch of chapters and write one story after another but each one of these into the punchline after each will be the same. Nobody goes to jail and people will read it and they will be upset enddoublequote so its somewhat cynically i thought this would be an easy thing for me to do. And this is where i want to talk about laziness because ive gotten lazy. The whole experience of having gone through that stage of my career where i was doing this and it was intellectually challenging and interesting. I had stopped asking questions about a lot of things and when you start doing things because they are easy you can get into trouble quickly. So just to do my Due Diligence at the time, i decided that it was important just to cover my bases rhetorically as i told this infuriating story of people who commit fraud in the billions and dont go to jail for it that i should find out a little bit about who does go to jail in america and why and how the criminal Justice System works and i would have to re educate myself about another thing where i was not an expert and so i started traveling across the country into spending a lot of time in court and Police Stations talking to people who had been in prison, talking to immigrant lawyers and i was completely overwhelmed by how much i didnt know about what ordinary people went through when they have to go had to go through the criminal Justice System. I was sort of happily living through this hole my life in a weird kind of twisted way the financial crisis had been a huge boom to me personally. And i havent been paying attention to this other thing that apparently had been going on for decades in this country that i didnt know anything about. One of the first stories i went to a Public Defenders Office and i found out about it a mentally disabled africanamerican boy thrown in the back of a squad car and told that he could go home that night on toast he hoped the officers find that you people and illegal gun. They didnt know they couldnt get out of the car any time and the lieutenant was going to get them in trouble with this little boy didnt his little boy didnt help them and the little boy finally tells the police and theres a gun at his grandmothers house so you can all guess the ending. They descend upon the grandmothers house, arrest everybody there. The grandmother of the kids brother of the cave. They are all dragged down to the Police Station and i start to hear this is not an uncommon circumstance people are just swept up all the time. Theres a thing called the crime squad and its dedicated to finding the end of a do extraordinary things to trick to get people to give them information including this and i started to contrast this behavior to how for instance we pursue a highlevel offenders who might have defrauded people out of billions of dollars and you think about the aggressiveness going after the 13yearold kid and the total passiveness we bring to going out of this with this other part of the population. And i started to get more emotionally involved. Then i a member i went to georgia after that sometime not long after that and i heard a story of a woman who was an undocumented immigrant. This story is in the book actually. She went to the supermarket to buy groceries for her kids and gets rearended on the way home and she begged and pleaded with the person shes involved in the accident with ibm undocumented immigrants. If the police come i will be deported and i wont see my kids ever again. And the woman that actually hit her was an immigrant herself from india and she didnt listen in to the woman was taken away and thrown in jail and over the local ministry who would know this woman from church because she had been here for ten years she went through the whole process of deportation seedings and ultimately prevailed in the case but it took a long time and she was separated from her kids for a long time. Similarly i met a woman in los angeles and this story is also another. Her husband was involved in a fight with some gang members in his neighborhood and he was a working man mad about them selling drugs on the corner. He told them to move off the corner away from his kids and he got in a fight and the Police Brought everybody in andsign out shes left with six kids by herself. It turns out you cannot have a car legally in the state of los angeles if you are undocumented because youre not allowed to have a drivers so she gets arrested for that. To find she has the find she has to pay 1,700. That is another persistent feature that whenever you start to see findings in finds in this segment of society they are always outside and incredibly high compared to the people that have to pay. She tells the judge that she cannot pay that much money so he sentences her to 170 hours of Community Service and she starts talking about how she would have to bring each of her kids to school on the public bus system every day and go to the job of cleaning houses and at the end of the day she would take her kids up by the us again and go to a soup kitchen where she would do Community Service until past made right with her kids running around and then she would get a few hours of sleep and the process would repeat itself over and over again. She talked about crying herself to sleep every night for three months. Then in new york i met another guy named andrew brown and his story is also in the book. I was in a mall this on another story waiting to hear another, talk to a lawyer about another case when this 35yearold africanamerican bus driver comes in and he tells me that he had been arrested for what he called on obstructing pedestrian traffic and i didnt know what that was and i asked him to show me the summons and he pulls out a ring old piece of paper and he shows it to be and sure enough its written obstructing pedestrian traffic. It turns out that he had come home at one in the morning after driving a shuttle bus and he works for a casino company. He comes home and the police see him standing in front of his own Apartment Building with his friend listening to music sharing a set of headphones into the whole purpose of the new statistic aced policing strategy of new york is to stop people for any reason whatsoever. What they are looking for is again done the work mornings or future. They stop them into the ostensible reason is that they were restricting pedestrian traffic even though it was one in the morning and there was nobody else on the street and they were just standing there in front of their own apartment. Of course neither of them had guns or warrants so theoretically what they do is throw the innocent people back after they threw this big net over the communities that they dont always do that. What i found out is in practice they precede with whatever these ridiculous locations are and force people to go through the process of either pleading to these ridiculous offenses were fighting them out. And so andrew had to go through months and months and months of Court Appearances where he was continually unable to convince his own lawyer that he was innocent of the offense of standing in front of his own house and they kept asking him will you take a 50dollar fine is only 50 he would say no. They would say alright have about 25. And he would say no when you know, im not guilty. Im not going to pay this fine. I watched the whole process beginning to end. It took some us. It wasnt until the very end of the process the judge finally asked the policemen on duty was there anybody on the street at night into the the policemen sheepishly admitted no, there was not in your honor your honor and he said well in that case the case dismissed. He gaveled it out and andrew was let go and thats how long it took for him to get out from under the case of standing in front of his own house. My white guilt meter went through the roof out of this. I never asked enough questions about what was going on. I never got stopped by the police for anything. And it turns out that for other people, it is a completely different experience. I realize this reflected very badly on me as a person and as a reporter and it also occurred to me that this had to be there was no way to rate the story about people going to jail for these crimes without also talking about the other side of the coin about this sort of gigantic mindless punishment machine that we have for people without means. The whole process of the book became a gigantic juxtaposition where i wanted people to go through the whole process of discovery that i did and i figured that if people could see these stories out sidebyside over and over again i wouldnt even have to make an argument about how fair it was you could just see for your self and thats why if you read this book from a literary point of view it is sometimes not the tightest narrative in the world there are long stretches of the book where you can see that ive kind of gotten caught up in just saying can you believe this happened . And there would be a passage about someone thats been through this incredible experience and then i will finally downshift from that back into something that happened on wall street. Its not the most structured levelheaded argument in the world. It became a big emotional exercise to try to put the stories together so that thats what this whole thing is. Its a big exercising sort of placing them sidebyside like for instance you have a woman who loses custody for accepting too much in welfare and she males who suffer a jail sentence in fact there is an amazing case in ohio involving a woman who had told him who lied about who lied about where she lived and she claimed she and her kids was with her father in the neighboring town where they have a Better School district because she wanted her kids to go to a Better School and when this came to the attention of the authorities, the judge who was the one ruling on the case said that that it would they would outweigh justice if this woman didnt get a jail sentence so she was sentenced to 15 days in jail and ultimately got off. That is the sidelines of the story. But again, this is all chucks deposed against people like Angela Mozilla was country wide. Think of a person like this who created billions and billions of dollars with toxic loans and nearly build up the International Economy and the process. And not only was he not charged and not only did nobody considered taking his kids away from him, and the civil case they did bring against him and didnt find him on the order of 49 million. Most of that was covered by an insurance policy by bank of america which then had acquired a country wide in the order of the 500 million so they got to keep a 400 plus Million Dollar fortune and walk away without doing today in jail and sort of ride off into the sunset with his famous tennis you ever seen him into this as a justification if you do the movie crimes and misdemeanors and create a small crime the consequences will be extremely severe and if you commit an unbelievably massive crime like the people at countrywide, there were no consequences at all. And i just cannot underscore how completely fraud in the classic sense of fraud and i talked to the whistleblower who worked for the company who ironically was brought into the top of the control officer at the firm. He had worked in other major american corporations before and he tells the story about coming to the office the first day and driving into the parking lot and he sees one of the executives. It was like his number two or Something Like that but he had a personalized license plates that read from them to be co funded and he was told while we mortgages to everybody and thats what that means. They put it under the vanity plates in their luxury cars got to do jo Due Diligence on to crank out as many bad loans as they could and sell them back to the banks would would again chalk them up and put them into soap and to the rest of us so these are the kind of things that are in the book. There are lots of sidebyside stories like this and there are a lot of things i learned a very basic inequities in the System People dont think about a lot. For example here are a couple of stories about a very important phenomenon in this country people dont think about much which is the dale. Its critically important to the question of whether or not you are going to get away with the crime in america. Lawyers and court rooms at least new york city they have a saying if you go in you stay in and if you get out you stay out. If you survive the hearing and you have enough to get out on bail you fight the case and you will probably win. If you dont if they find another thats high enough you cant pay they analyze the assets and find out just how much it would take to keep you in jail and a name and number for the amount that is just beyond your ability to pay. If you go when youre not going to be able to fight it. They have in other places in the country a speedy trial rule that ostensibly means they either have to bring it to trial or dismiss the case within 90 days but they have a track and i detailed in the book. What they do is on the first court date for prosecutors to show up in court and i watched this happen over and over again and i would say to the judge we are not ready to proceed today. And the judge who always has an overstuffed pack calendar. There are so many crimes going through the courtroom that its not like you can reschedule for tomorrow. He looks at the calendar and this is okay lets meet again and in eight weeks or nine weeks or ten weeks and the defendant is rolling his eyes because he knows that he or she knows that they are going to be in jail for that work a lifetime at least if the prosecutor agrees and they go away and then what happens the next day is the prosecutor files the readiness which attests to the court that while we were not ready to proceed yesterday we are in fact ready to proceed today. It doesnt charge the prosecutors that amount of time it only charges them for one day towards the period even though technically you are supposed to either be convicted or out of jail within 90 days they can actually keep you in jail more or less infinitely by using this process over and over again so if you dont have enough money to get out on bail you are going to be in there a while and this is sort of the four corner misdemeanor prosecution in some big cities and what happens as many defendants realize they can spend a lot more time waiting to go to court and they even what if they were convicted and sentenced of whatever crime is especially if it is a misdemeanor like petty theft or Something Like that. Its not a crime that involves a weapon or some kind of a violent assault you will almost certainly do less time by pleading then you would than you would by sitting and fighting it out in jail. They would be able to take a plea and they get up in ten days as soon as they know that they can keep you in jail they start coming to you with offers just like andrew brown started getting offers for 50 then it was 25 or whatever it was they start coming to people and seeing how about the time served us ten days or five days or time served plus two hours and a snickers bar. If you have kids in jail and you might be losing your job or you already have lost her job you are going to take that youll 99 times out of 100 so people plead out to the cases and now they have a record so now the next time they get swept up for whatever it is, its going to be higher so they are going to have less of a chance to fight it out and there are enormous consequences to having a conviction or being accused of a crime. I described the two men and this is terrible but they were stopped in the bronx basically for driving a nice car. The police totally vital to them. They said that that an odor of marijuana was emanating from the vehicle. This is the middle of winter where the windows are rolled up and help the police detected the odor is impossible to say that of course they sweep them up on the idea that they smelled marijuana. They dont find any in the car but they charge them with possession anyway and they are in a system for a year and a half before the case goes away but enough time to go one of them had been applying for a job as a journey through for the system and you cant proceed with a application for the state job scope is the number of people they catch on warrens and the summons they write it in the precincts theres been evidence that has come out where the policeman testified that theyve been told they have to empty the summons every month and they will be told if they have a squad of eight that goes out in the morning they have to pick up eight people before they come back to the station house so there are quotas and i would be told over and over again about how the system works. They would be put into the squad car and it would then bring them to a van somewhere in the neighborhood where all the other people that have been swept up in the operation were sitting. The process is very much like commercial fishing. They bring it back to the factory ship. Getting back to the question contrasting that sort of trick they use to keep people in jail was the case i learned about that i heard a lot of complaints about some highlevel prosecutors and this was the case involving a Company Called general reinsurance. This was a major target of Eliot Spitzer back in january a ig was accused of a 750 million stock fraud and the strategy that the prosecutors wanted to employ is that they were going to go after some little players january 1 and convict them and throw them in jail and then get them to roll on the higherups and specifically they were going after the ceo of the company at the time but they got their convictions of the defendants but first of all none of these guys had a bail impost upon the death was high enough to keep them in jail and they had a huge people come to the hearing and that they would weep and told the judge this is somebody that wouldnt even jaywalk. He might commit a 750 million stock fraud but jaywalking, no. More than that after they were convicted, the judges didnt even force them to go to jail to be a bail out of them all to stay out and speak in their own names and have an appeal bus removing the leverage of the state might have had to roll up the parties into more serious targets at aig. This is to contrast where you see or very people who are tossed in jail by the book and there is a formula they used to calculate how much you get that space the taste of how many times youve been arrested and whether how many people show up in court to support you that they and whether you have Strong Community ties or you have a job or telephone in your house there is literally a formula so this is a sort of long condo line of descendents that come in for street crimes that come into court and the judge is dont look up half the time and he simply announces an amount of bail to get sent away and they end up pleading and you contrast that with the situation of the highlevel targets at the time that were the most significant targets in all of the wall street prosecution and thats the difference. Its simply not a factor for people involved in white collar crime. Another situation thats important to talk about his repeat of the repeat offenders who commit to things like welfare fraud. If you are caught once you are out of the system forever. You will never get any other kind of public assistance. You will lose your ability to obtain professional licenses and members of your family may even be thrown out of their home. There is a bizarre anomaly in new york state where they actually teach people in prison how to cut hair but when they get out, they find out that convicted criminals cannot get a burgers license. Meanwhile on wall street repeat offenders there is no consequence to being a repeat offender. How many people have heard of the hsbc case . So this is a case a few years ago in which the largest bank in europe admitted to laundering among other things laundering 850 million in drug money for repairs over the south American Drug cartels. The behavior was so brazen that they had a specially fitted holes in the wind does for drug dealers to slide boxes of cash through. Hsbc had been warned that they violated an agreement not to longer money over 30 times in the ten years prior to that agreement. And in that agreement, it was 80 for the prosecution agreement. They paid the fine. Not one person did one day in jail and the only individual consequence for any individual at the company is that some of the executives have to be further bonuses for five years. The New York Times a few years ago to the story where they found there were 51 cases involving 19 and wall street firms who broke the fraud statutes that they already promised not to break. An example would be citigroup in 2011 which paid a 285 million fine to settle fraud charges. And again the actual economic damage in the case was hired in 285 million but they paid that much area that they had been saying chen for breaking the same statute in the year 2000, 2005 for 2006 and 2010. He and each time, they were not off with a fine and once again, they were allowed to just promise they would never do it again. And this is a common circumstance in wall street enforcement. But again, contrast that with the ordinary street criminals. One liquor store is one thing but if you rob two of them you can imagine what the consequences are. To talk about the difference between the cases i know i already mentioned the single mother on welfare versus Angela Mozilla but theres also the question of how to make a fraudulent case. I cannot for instance when got up for instance when you apply in states like california, one of the things you have to do this show up every quarter andsign a document where its it basically says i the undersigned upon the penalty of perjury and other penalties test that and then you list all these things about your life and you basically have to write this mini biography every three months. And what they are really looking for is are you cohabiting with somebody, do you have assets that youre not telling us about, you have side words youre not telling us about . Do you own a car that youre not telling us about and so you have to write down all these things and everybody in the system knows what answer you have to give in order to get welfare. As soon you signed that document, it goes into this big computer and it starts checking it against all these different state databases. So if it happens that you say you dont have a car and you suddenly apply for a drivers license, the case is automatically generated. Or it could be even more primitive than that. You could check the box saying i am living alone. I dont have anybody staying at my house and your neighbor may get a reward for calling the tip line and seeing my nextdoor neighbor had a man staying at her house two out of seven days last week and that can become the genesis of the fraud case. If you show about the Welfare Office to talk to your officer and he or she sees you getting out of a car driven by a man that can become a genesis of the case so basically what you are doing on a semi regular basis you are saying i promise all these things about my life are true and if you find any holes in my story anywhere then you can catch me for fraud and i can lose custody of my kids, etc. , and thats how it works. Meanwhile on the other side of the coin, they said were recipients of the major bailouts are of course another kind of affair recipient. We dont even have the right to go into those companies and look at their books have the time. So it is a starkly different situation where the state claims the ability and the right to evade the privacy almost at will if you are a common welfare recipient but if you are a major bailouts recipient, you still maintain all of the protections of the probation corp. And as an corporation and as an individual you will never see any kind of a retribution for committing any kind of fraud or almost never. If you think about the cases i know ive been going on and on. I will wrap it up quickly. But those cases are all fraud. You can walk into any courthouse and you can go into the city and all you have to do is google famous signers and to get a list of names for any foreclosure documents in this city and the public courthouse and you will find cases of fraud it will be a situation where some person who purports to be the Vice President s of j. P. Morgan chase and wells fargo infected is always a 23yearold kid that they just hired who is given this title and he says i attest that i have had personal knowledge of this home loan from the beginning and they they filed the affidavit to the court when they want to propose upon someone and in reality that kid signed a thousand documents and he doesnt have any personal knowledge of anything. Thats fraud. But nobody does anything like that. Its like the movie the untouchables where sean connery says its not like we dont know where the liquor is viewed as just a question of if we are going to bring people in or not. He goes to the post office and arrest folks for bringing liquor in chicago. The last thing i want to talk about is the restitution. Its always at least 100 . Again, not to go on about the welfare thing but if you get caught for welfare fraud and that case you were the tc were going to p. 800 minimum. That is how much the restitution is going to be. I interviewed one man who under the california three strikes provision he was sentenced to life in jail for stealing a pair of tube socks and his restitution was somewhere north of 11,000. In order to pay that off, he had to work in a prison cafeteria every day of his life for 17 years until his sentence was commuted and he still hasnt paid off the restitution on the sox. Meanwhile if you look at the settlements involving the wall street companies if you see a billiondollar settlement coming you can add to that the prophet was 30 billion or if you see chase, for instance last year selling for 20 billion which they did for a variety of offenses you can bet they do if they made an awful lot more money than that. They committed fraud. The dead to rights. Documentary evidence. Why arent they in jail . And the guy says to me, have you been to jail . Dale jails are dangerous. People get stabbed in jail. Im not disagreeing with you, but over to Million People in jail in this country. The mentality that sale is just not the right resolution for this kind of offender. It is the ride resolution for another kind of offender. And that is a dangerous situation to be in. And lastly, the last thing i want to talk about is collateral consequences which is this doctrine that plus invented by our current attorney general eric holder back when he was the Deputy Attorney general and the Clinton Administration in the late 90s, this thing that came to be known affectionately as the holder memo. In it he outlines this policy called collateral consequences. And all collateral consequences of was that if you are a prosecutor and heal worried about the innocent victims of a prosecution of a major company, for instance shareholders or executives who were not guilty of wrongdoing, the guys who were not laundering money for drug dealers, if youre worried about the community, with a Company Might have its headquarters he may seek other remedies like fines, not prosecution agreements, deferred prosecution agreements. And this is a few bad apples might have been laundering money for pterosaur everett is. But what they have done now is conflated that policy with another policy which is not to proceed is the individuals of these firms. You may understand filing criminal charges against the company decided apparently and it was said as openly, but you could see it but actions but there are not going to move against the individuals of these this speaks to a psychological movement. And today to zero, but their executives are increasingly viewed by the people in the Justice Department and our Law Enforcement structure as being just not the right kind of people. There are certain kinds of people who will pay fines and then there are other kinds of people who can handle going to those dirty, dangerous jails where people get stabbed. That is a dangerous place for us to be. And that is what this book is about. I hope it has some kind of impact and i hope you enjoy the book. Im happy take any questions for you. [applause] cause. If you have questions, please take the microphone. Okay. Let me start it. Giving us another version of a talk. And then you said you threw it out this morning. And then he started to give us the honest version. I want to know with the dishonest version is. [laughter] i just left out the part about al i just left out the fact that there is an undercurrent of this book that is actually kind of ridiculous. This is a story about a middleaged white man who just did not know that poor people and go to jail is lee. This kind of pathetic really. This is part of the reason why the book is written in this scattershot fashion. A lot of these kind of bursts of out rage mixed with analysis. You know, i just should have been more open about this and the text. This was something that i personally should have been ashamed that i did not know beforehand as a reporter. And so i am trying to tell the story a little bit more. That is definitely the background of the story. What can people do . The media in general has not picked up a lot of stories. You have. What can the people in this room to to get our local media, local politicians more involved as starts to get looking at some of these issues. Well, that is a great question. It is hard. I get past the solutions question of what. I am not great at it. For instance on the question of too big to fail and we will do about these companies that are so big we cant prosecute them, the obvious answer, even the chiefs of most of the Federal Reserve branches of come to his we have to break up these companies. How do we right . [applause] youre too big to exist. Theres no way around it. These companies enjoy federal backing. The funny thing about this for me is that i am probably thought of as a politically very left person, very progressive person. This experience of doing this story has pushed me a little bit more in the other direction. The fastest way for all of this is to get us back to a situation where these companies are small enough where if they are corrupt, stupid we can just let them go down the drain of history which is what we did not do in 2008. And theyre is a growing sentiment in government toward making this happen somehow. Bills that are being sponsored by people like him, and sharon brown in ohio. Thank you. To break up these companies. Honestly and will take another gigantic cataclysm to get there. There are lot of people in congress who will tell you privately that intellectually they are there already. It is a huge step from member of congress to take to decide to cut himself off from the money. And thats what it would take. A sacrifice. In asking politicians to make a sacrifice is generally a fruitless endeavors i have some hope that will happen. That is one important things that people should be lobbying for come up pressuring their elected representatives to think about. Thank you. A few years ago ron paul introduce legislation to either abolish the Federal Reserve were to audit it. And the house subcommittee had a hearing about the Federal Reserve. They had somebody in the witness stand who was responsible for oversight. Testify that there were several trillion dollars missing. I saw the videotape on youtube. And have not heard anything else about battobat. Well, it does not really matter whether there is money missing. They can create money anyway. But i completely support ron pauls effort to audit the fed. I knew a lot about it because you worked with Bernie Sanders on that bill. The audit revealed extraordinary information about the bailout. Most people only know about the 700 billion tarp bailout. It turns out that in addition to that there were 16,000,000,000,000. 0 interest emergency loans handed out to all the companys. Now we are in another situation where the fed is propping up the economy through quantitative easing pumping 45 billion into the Financial Sector every month which is having all kinds of strange consequences. What really does is buys up and forces investors to seek yields elsewhere. Rather than savings interest as you might have in the past year after get into brazilian mergers or invest in the stock market or something riskier. So it is creating all of this risktaking behavior. The banks are making a fortune because all of this investment money pouring into different places, as a result your having mergers in brazil and india and places like that. Who do you think is doing that . So it is like a Welfare Program. Using these trillions of dollars to buy up other companies. Well, the trillions of dollars to less to say, artificially propping up a lot of things including the bottom line is a lot of these firms. Everyone is deeply concerned with what will happen when they turn that spec it off. And we theyre worried about what they call the taper when they taper off this ongoing Welfare Program did and they are worried another bubble might burst. The fed is something that people have to learn about more. They need to learn about its rules. It is a strange extra democratic force. People on both the left and the right have a common interest in understanding what is going on. It is a good question. But at i