Does It Take a Thief?

Who would you trust with the power to police business?

We hear it all the time: “Business needs more oversight,” “There needs to be more regulations.”

Maybe they’re right, maybe we do need more of those competent, efficient government bureaucracies micromanaging business. Maybe we need people in Washington picking and choosing which laws to enforce, which businesses should win and which should lose. Who would you trust to run these agencies? I have a few suggestions.

Jon Corzine has quite an impressive resume. He was the head of Goldman Sachs before he served as a New Jersey Senator, then he stayed in politics and became the Garden State’s Governor. He lost an election, but returned to the private sector and ran MF Global. He has quite a lot of experience in the private and public sectors; he was supposedly President Obama’s choice to be the next Treasury Secretary. His name was also tossed around to be the next Federal Reserve Chairman.

The President and Vice President have both sung his praises on how he’d guided them through this incredible economic recovery we’re having (happy days are here again), so we know he already has the confidence of people in the highest places.  The firm he was running, MF Global, also collapsed because Jon Corzine bet the ranch on the European debt, and somehow more than a billion dollars vanished (even Penn and Teller can’t do that), so he knows from experience, and from the inside what it looks like when a company is run into the ground (MF Global was the eighth largest bankruptcy in US history). Corzine would be a perfect choice to watch over the private sector, and as luck would have it, he recently resigned from MF Global so is available for a new assignment.

Tom DeLay would be another good choice, and I’ll bet he’s not employed now. Lots of people remember DeLay from “Dancing with the Stars” but before that, he had quite a nice career as a powerful and corrupt Congressman. He knows firsthand about the cronyism and corruption that goes on between business and government, because he was right in the middle of it. DeLay was convicted of money laundering; he also accepted some hefty donations from Russian businessmen, apparently to influence his vote on the IMF’s bailout of Russia. As a convicted felon, a few rules might need to be pushed aside to get DeLay an oversight job, but pushing aside rules has never stopped our government before.

Charlie Rangel would be another natural, he knows what ethics violations look like; he sees one whenever he looks in the mirror. His violations are too numerous to name, but to sum up the last round; he wasn’t paying taxes on rental properties claiming ignorance of the very laws he helped to write. As head of the House Ways and Means Committee, Charlie was in charge of writing the tax laws the rest of us would have to obey (or else). I’m sure Charlie would be a great corruption cop, he know exactly what it looks like. 

Former three-term Congressman Rick Renzi from Arizona also comes to mind. In 2008, a Federal Grand Jury indicted him of conspiracy, extortion, money laundering and wire fraud. Renzi (an insurance salesman) is being accused of embezzling almost a half million dollars from his insurance clients to fund his Congressional campaign. Since he didn’t run for re-election, he might be interested in a new job, but I think he still has his long list of charges to deal with.

Rod Blagojevich would be another good choice. He knows all about the “pay for play” game so many politicians have mastered. “Blago” rose to the top of Chicago’s Tammany Hall-style political machine, which more or less makes him an expert at spotting corruption (and exploiting it). Too bad he’ll be tied up for the next decade.

California Representative Maxine Waters would also be a great choice. In 2008, she got Treasury Secretary Henry Paulson to cough up 12.1 million dollars of TAARP money to bail out the OneUnited Bank in Los Angeles, but she forgot to mention that her husband was the Director of the Bank and a major shareholder. She knows firsthand what nepotism and power abuse looks like, so she’ll be sure to spot it.

It seems that Illinois Congressman Joe Walsh (no, not the guitar player) didn’t have money to pay child support, but was paying more money for rent than he was reporting as income. At the same time he wasn’t paying child support, he loaned his campaign $35,000.  He’d be another fine member of the oversight team. 

Florida Congressman Vern Buchanan would be another good one. Witness tampering, obstruction of justice and bribery could be his areas of expertise, since that’s how he ran his Congressional office. I believe his case is pending, so it might take a while until he’s available. 

In 2008, Former Speaker of the House Nancy Pelosi got in on the ground floor of a VISA IPO, then pushed legislation through Congress that caused her stocks to skyrocket. She made a bundle as her stocks soared from $44 a share up to more than $70 in two days, thanks to her actions in the House. Luckily for her, insider trading rules don’t apply to Congress, so she got away with it. You or I would have gone to prison for doing less (not that we’d have had the power to do what she did), so she can sit there and make sure us regular folks don’t act like we’re members of Congress. 

Longtime Congressman Barney Frank was getting lots of campaign contributions from Fannie Mae and Freddie Mac, and as ranking member Financial Services Committee, he was in charge of overseeing their books. In 2003, it was proposed that Fannie and Freddie’s oversight would be transferred from Congress and HUD to the Treasury Department, but Barney fought and helped to block the proposal, and they stayed under his watchful eye.

In July of 2008 (about two months before the mortgage giants collapsed), in a CNBC interview, Barney said “I think this is a case where Fannie and Freddie are fundamentally sound, that they are not in danger of going under. They’re not the best investments these days from the long-term standpoint going back. I think they are in good shape going forward.” Barney Frank has oversight experience, and I’m sure he’ll be better at it the next time around.

We’re lucky to have Timothy Geithner watching out for us at the Treasury Department. He was making some big bucks at the International Monetary Fund, but his Turbo Tax software had a glitch in it. He forgot to pay $34,000 in Medicare and Social Security taxes. He finally did pay up, in order to get his nice new job heading up the Treasury Department.  He can be in charge of Turbo Tax fraud since he has experience. 

Of course there’s also the “Sheriff of Wall Street.” Eliot Spitzer had very high standards for others, but didn’t think the same rules applied to him. Why should they? What good is being a king if you have to play by the same rules as your subjects? He aggressively prosecuted people and deprived them of their freedom for the very things he loved to do himself.

With government watchdogs like these on the job, how could any crook possibly get away with anything? The Tom DeLays, Vern Buchanans, Eliot Spitzers, Barney Franks, Maxine Waters, Eliot Spitzers and Rick Renzis of the world are always asking for more power. Why is that?  Is it to protect us, or is power something they’d like to keep in their inventory (arsenal), to sell to the highest bidder? Should we really entrust people like these with more power? If the answer is “yes,” there is no shortage of them, we have a deep well of would be protectors to choose from. Power-hungry politicians and bureaucrats is one natural resource that will never be in short supply. 

How do so many people of modest means get elected to office, not earn a whole lot in their government jobs, but manage to acquire fortunes? More than a few will need their millions for legal defense.  

If we get the people in Washington to police the rest of us, to micromanage our lives and the way we do business, who is going to police the police?

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John Cocchiola December 19, 2011 at 06:22 AM
The Triangle Shirt Factory and Sinclair's Jungle. I love ancient history that keeps getting dug up. The Regulators are the enablers. Of course there should be laws (for everyone), when laws are broken people should be held accountable, but our excess regulations are hobbling our economy, moving jobs overseas and actually allowing for companies like GE to make huge profits, at the expense of their competitors and the people buying their products. I'm not saying it should be legal to dump toxic waste, but our economic plan is looking more and more like a mild form of fascism. Private companies are allowed to profit, even thrive as long as they're on board with the people in power. The last administration had their favorites, the current administration has theirs, and it's always at the expense of the people. Government rules imposed on the oil companies, bought and paid for by farm lobbyists have given us the ethanol mandates; it doesn't do any good and it raised the price of almost all of our food, that is of course until subsidies were handed out for farmers not to grow certain crops, which comes from our tax dollars anyway. We're stuck with terrible light bulbs, toilets that barely flush and we're living in a "free country" where we can't smoke a cigarette or drink a four loco. We're handing all of the power to people in Washington that are for sale, and the lobbyists that buy them.
Rob Germino December 22, 2011 at 04:03 AM
John, great article. The problem with government regulations is that it tends diminish individual liberty and create a slippery slope of statism. Did you know that in Nassau County, for example, a business can be fined for not providing "written notice of the prices of all restaurant specials offered to its customers?" I asked the legislative aide to the sponsor of the law why he thought individuals were not capable of asking his or her server the price of the restaurant special. The aide stated that when he was on a date, he felt embarrassed to ask a server for the price of the specials in fear of being perceived as "cheap." All restaurant owners are now subject to another government regulation with civil penalty because a legislative aide feared offending his "date."
Rob Germino December 22, 2011 at 04:04 AM
Here's the link to the law: http://www.nassaucountyny.gov/agencies/Legis/documents/2009_LL3.pdf
John Cocchiola December 22, 2011 at 04:39 AM
I don't think most people realize that the CEOs of major corporations usually welcome regulations. The only free market leaning CEO I can think of is John Mackey, from Whole Foods. Most of the others love being able to exploit government, use the regulations to tilt the playing field in their favor. They have the money to hire lobbyists, or pay people to look the other way. They can pay the right people to have things go their way. The small businesses usually get the brunt of it. They've been talking for years, about making it mandatory that all restaurants have to include fat content, calories, carbs, etc. on menus and specials. That would pretty much be impossible for Mom and Pop restaurants to do accurately, they'd each have to hire a dietician, at least for the menu. The specials would pretty much be out. The large chain restaurants would LOVE that, because they only need one dietician for all of their restaurants. That proposed regulation would knock out a lot of the small guys, which means more market share for the giants.
John Cocchiola December 22, 2011 at 04:49 AM
There are puppy mills operating all over the country, even though they're almost always breaking laws that are already there. The Amish run lots of puppy mills, they don't consider it immoral to mistreat animals. I'm not a Bible guy, but it says somewhere in there that we have dominion over the beasts, and the Amish take that very literally. They have puppy mills where the dogs are mostly kept in deplorable conditions, and litter after litter is run through each bitch until they can no longer produce, and then they're killed. They're visited by Government inspectors on a regular basis, and they usually get straight A's, in spite of the terrible conditions, because the puppy farmers know how to bribe, they just consider it a business expense. Every now and then, they get exposed by some investigating journalist, but the government can't seem to control it. Look at our prisons, the most regulated grounds in our country. Everything is supposedly controlled in our prisons, yet somehow, there is more drug dealing being done at any Prison than all of the CVS and Rite Aid pharmacies in the entire State. How do you think that's possible? How is that possible with all of the rules, the guards and the cameras? Do you think it's because the "regulators" are for sail to the highest bidder?


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