A smoldering author-interview ready to burst into flames, below.
Noncompliant explores one of the darkest chapters in modern American history, but with a crook and unabashed narcissist occupying the Oval Office, its lessons are proving remarkably timely. “We live in a culture where we reward bad behavior, we worship bad behavior, and it’s something that needs to stop,” she cautions. “Changing the regulatory culture on [a] U.S. governmental level is something that’s going to take a decade, maybe two. And we need to start now, before things get worse.”
CS [author]: One of the things that happened as a result of Glass-Steagall coming down was that a lot of the investment bankers were allowed to take over the commercial banks. And those investment bankers knew nothing about banking, and Goldman is a great example of that. I mean, when I arrived three years in after the financial crisis, what was one of the things that was very shocking to me was going into meeting after meeting with Goldman senior management and hearing them lie, doublespeak, and most shockingly of all, insist that they didn’t have to comply with the law. And that is a problem. Because a bank that doesn’t believe, or management at a bank that doesn’t believe they have to comply with the law–you bet they are not supervising their employees correctly, and they’re not incentivizing employees correctly in terms of how to do their job. So their behavior is injecting enormous risk into the system.
RS: Why should they think they should comply with the law when they got the law written and they could get it rewritten? I mean, after all, the treasury secretary, who pushed in the Clinton administration, right, to get rid of this restraint of Glass-Steagall and allow companies like Goldman Sachs to cross that line, was Robert Rubin. And he had been a top executive at Goldman Sachs. In fact, people used to refer to it as Government Sachs, that they had people all over the government, and it was a revolving door. And I want to point out that what you did, which was really unique–you had the guts to record these conversations. When you finally got to have your say before Congress, you could be backed up because you had the record. And tell us about that record. The conversations you recorded are absolutely chilling in describing an atmosphere of cynicism; you know, corruption; contempt, actually, for the political process and for restraint and regulation.
CS: Yeah. And I would sort of add that part of what the book sort of points out is that I didn’t really get my say. I mean, Congress did hold a hearing, but they did not invite me to testify. They didn’t want to hear what I had to say. And so I think what we have in terms of this story is really not just a failure of the banks and the regulators, but also a failure of our prosecutors. I mean, a lot of the statutes that could be used–criminal statutes, even, that could be used to hold these executives accountable are not being used, and they have not expired; we could have prosecutors holding these people accountable. We could have trial lawyers filing cases and holding these people accountable. Yet we can’t count on them to do it; we can’t count on the judiciary to do anything about it. I mean, when you read about what happened in my case in the book, it’s tragic, you know? It’s unbelievable.