It's only fitting that the great American tradition of the scam is thriving with Donald Trump in the White House. The political ascent of a man whose entire adult existence was only possible because of his family's tax cheating, and whose own "career" has consisted of a series of spectacular failures matched only by the absurdity of his bluster, seems to have opened the floodgates for grifters and con artists of all stripes. Obviously, scandals and scams have consumed the national imagination—and ruined many peoples' lives—countless times over the centuries. But something about this moment feels different.
Maybe it's the fact that federal regulators of all stripes are being defanged to the point of absurdity, making it easier for aspiring scammers to operate, and for the pursuit of profit to proceed unfettered. Maybe it's the absence of anything resembling moral leadership from the occupant of the White House, who is enriching himself even as he makes excuses for the assassination of dissidents and questions the right of comedians to make fun of him. Or maybe this is how Americans have always acted, and Trump's rise has just helped clarify who we really are.
But with Trump being so prominent in the news, the scams and scandals that don't have his tiny fingerprints on them often get lost in the shuffle. So here are seven of the most absurd scandals, scams, and grifts of 2018 that weren't launched by Trump or his immediate orbit of shady operators.
The Wolf of Wall Street, Goldman Sachs, and 14 Diamond Tiaras
Like almost every other Wall Street mega-bank, Goldman Sachs did not pay much of a price for the meltdown of the entire planet's economic system a decade ago. Even as its hefty profits and elite reputation have made it the target of attack by populists on the left and right, the bank's scandals have never landed as hard in the public imagination as, say, Wells Fargo signing customers up for accounts without their consent, or Bank of America so aggressively pursuing foreclosure that it sent one family to the brink of death. But somehow, even as the economy has (at least until recently) been strong and financial regulators have basically been asleep at the wheel, Goldman is suddenly in deep shit: Last month, the New York Times reported that federal prosecutors were swarming Goldman over its (very lucrative) past relationship with a Malaysian state investment fund whose billionaire playboy face helped finance the Wolf of Wall Street. The scandal over the fund helped topple the country's once-untouchable prime minister (and friend of Donald Trump) Najib Razak, and criminal charges in the US and Malaysia sent the fund's hard-partying booster, Jho Low, into hiding, probably in China. (He has denied wrongdoing.)
But the most remarkable part of this story, besides the obscene amount of excess—key players were said to be spending ostensibly public money on everything from original Picassos to a set of 14 diamond-studded tiaras—is that American bankers actually seem to be getting in trouble for it. Last week, the Times reported that Malaysian authorities were charging multiple ex-Goldman employees—as well as the bank itself—in the scheme. And while Goldman insisted the allegations were off base, a former investment banker there, Timothy Leissner, already pleaded guilty to bribery and money-laundering charges brought by American prosecutors in August. A former employee is one thing, but Andrea Vella, who at least until the scandal blew up was Goldman's active head of investment banking in Asia, was also said to be suspended by the bank earlier this year. (He has not been charged.)
The Silicon Valley Start-Up That Was Too Good to Be True, and Then Some
It was hard to open a newspaper or magazine a few years ago without reading about Elizabeth Holmes. The startup founder was named by Forbes as the world's richest and youngest female self-made billionaire, and her company Theranos seemed to actually serve a laudable purpose, unlike many other Silicon Valley firms: It promised a cheaper, faster way to test blood for everything from potassium to herpes. Prominent people got on board, from former secretaries of State and US senators to (subsequent) Trump cabinet members James Mattis and Betsy DeVos. The sky the was limit, and Holmes was literally on a magazine cover next to the words "The Next Steve Jobs."
Then people started asking questions.
A startling series of reports from the Wall Street Journal showed that the company was doing a bizarrely high amount of its tests with equipment purchased from other device manufacturers. It's own signature "Edison" technology did not seem all that accurate to its own employees, who were in turn said to be silenced by a culture of secrecy. The brand took a big hit, federal regulators and prosecutors started poking around, layoffs ensued, investors bailed, and then things truly hit bottom in June, when Holmes (among others) was charged with fraud (she pleaded not guilty). According to the feds, she and colleagues systematically misled—and lied—about what their product could achieve, potentially endangering hundreds of lives given their error-prone product had been rolled out at Walgreens locations in states like Arizona. Not that Holmes seemed to have regrets: According to John Carreyou, the Journal reporter who exposed the company, Holmes was shopping around a new start-up idea just days before her indictment.
The Government Stopped Even Pretending to Regulate the Shady Student Loan Industry
Chances are you're familiar with the perils of America's deeply dystopian student loan system. But even within the rules of a regime that says young people should load up on debt to finance educations that may or may not be in their long-term best interest, Navient has somehow stood out as a uniquely disturbing actor. Last year, the company—the largest servicer, or manager, of student loans in America—was accused in a series of lawsuits of misleading borrowers about the best repayment plan for them. In addition to failing to appraise people of their options, the company was said to fail to credit borrowers for payments they did make, triggering more misery as people needlessly went into default. Navient has denied wrongdoing.
In some ways what happened this year was even more maddening: The top federal student loan watchdog quit in disgust at the government's coddling of shady private interests like Navient. Seth Frotman, who had been an official at the Consumer Financial Protection Bureau (CFPB), blasted Mick Mulvaney—the Trump acolyte who was just named interim chief of staff (his third gig, in addition to being the president's budget director and the acting head of the CFPB)—for failing the public by effectively not doing anything as a regulator. If all of that wasn't disturbing enough on its own, what came next was even more befuddling: The Associated Press reported last month that an internal government audit had uncovered evidence implicating Navient in the behavior alleged in the suits, but failed to provide that evidence to the state attorneys general suing the company, much less the public. This raised the question of whether officials under Secretary of Education Betsy DeVos, who has been a huge booster of dubious predatory education interests, might have suppressed the audit's release. (The Department of Education claimed they kept it under wraps because it was outside their jurisdiction to regulate a company like Navient.)
We still don't know what key government officials knew—or when they knew it—when it comes to Navient. But if 2017 was the year the government's regulators were defanged, 2018 was the year when we saw the consequences of that defanging.
Amazon Punked Hundreds of Cities and No One Cared
Last year, Seattle-based Amazon—the richest company in the world helmed by the richest man possibly ever—announced to great fanfare that it would be opening a second headquarters, or HQ2, in a lucky city near you. The promise of tens of thousands of high-paying tech jobs—and the attendant receipts for existing businesses in any given community, not to mention possible sweeteners like, say, tech money for infrastructure—was too much for politicians to resist. Well over 200 cities made plays to host the company's second home, and as part of that process, as David Dayen reported at In These Times, they forked over reams of data on transportation, housing, and the like that may come in handy as the company continues to accrue influence and market share in the years to come.
Then Amazon chose the Washington, DC, suburbs and New York City to host not one but two "HQ2s." So not only was the whole premise of competing to be the one place besides Seattle that might enjoy Amazon-related rent inflation a ruse, but two of the largest metropolitan areas in the country—obvious places for a tech giant to set up shop—got the so-called prize. Whether you approve or disapprove of how Amazon conducted the search process and who won, one might argue the largest scandal of all here is that public policy in 2018 America basically amounts to begging tech titans for investment, even if that investment is unevenly distributed and leads to gentrification that hurts communities of color.
A "Wannabe Socialite" Tricked an Entire City
Fashionable people living beyond their means is, of course, an old, old New York story, But the woman known as Anna Delvey was something different. As New York reported, she hosted dinners featuring everyone from "Pharma Bro" Martin Shkreli to child star Macaulay Culkin. She had ambitions, apparently backed up by support from big banks, to start a sort of "arts club" in an elite—and massive—Manhattan space. She was supposedly palling around with the likes of Warren Buffet and Bill Gates. But her credit cards kept getting declined—perhaps most notoriously, she stiffed a luxury hotel in Morocco and cornered a friend into putting over 60 grand on their company card to bail them out. People made excuses for her, or at least had a hard time seeing through her BS. She was just a wealthy heiress, or so they thought—sometimes the soon-to-be-independently-wealthy just get ahead of their trust fund, right?
According to New York prosecutors, Delvey—a Russian woman whose real last name is Sorokin and whose family had moved to Germany—engaged in egregious fraud to prop up her lifestyle, deceiving banks, hotels, and so-called friends or investors into throwing money or services her way. (The New York Post has taken to consistently labeling her a "wannabe socialite.") Last week, she rejected the latest deal from prosecutors—pleading not guilty—and faced up to 15 years in prison on charges of grand larceny, attempted grand larceny, and theft of services, with a trial date set for February. While it remained to be seen how her criminal case might play out, the litany of bold-faced names ensnared made the whole thing seem less like an elaborate scam by some kind of criminal genius and more like an indictment of elite culture. Just post some wild photos on Instagram of yourself in proximity to power or fame, drop a few names, wear some designer clothes, and the rest will come.
A Congressman Lived a Double Life and Won Re-Election Anyway
A member of Congress getting in trouble and being rewarded with another term in office is not exactly unheard of. In fact, it happened several times this year: New Jersey Democratic Senator Bob Menendez, previously charged with corruption only for the case to end in mistrial, won another six years in DC. Chris Collins, the New York Republican Congressman accused of insider trading, hasn't even beaten his case yet and got another term, albeit barely. But Duncan Hunter, the California Republican born into a political dynasty of sorts—his dad was a congressman and GOP presidential candidate back in 2008—is the clear winner in this category. That's because, as the New York Times reported, he basically lived a double life, allegedly using campaign funds to pay for everything from his family's vacations to food to hefty tabs at DC bars while preaching fiscal responsibility in Congress. The contrast between the stoic veteran who had his personal life in order and a guy who tried to portray his own lavish spending as some kind of charity for the veteran community was remarkable, even in the annals of DC corruption.
According to prosecutors, Hunter copped shorts and reported it as campaign spending on golf balls for "wounded warriors." Meanwhile, he was constantly over-drafting his account—racking up tens of thousands in fees—and still hitting up his parents for money, incredibly. He also appeared to blame his wife, who managed his campaign, for all the misdeeds, saying, "Whatever she did, that’ll be looked at, too, I'm sure, but I didn't do it," during a Fox News interview.
The Military-Industrial Complex Is Somehow Worse Than You Thought
That America spends more on its military than most other countries on the planet combined, enriching defense contractors and their lobbyists along the way, is well known. But according to a Nation investigation published last month, the Defense Department is submitting trash budgets to Congress every year, cooking its books by just making up numbers to conceal billions in financial chicanery—mostly moving money around that it hasn't spent—and win ever more funding. (The Pentagon denies this.)
The thing that really twists the knife here is that under the Trump administration, the military is just about the only priority that the US government is willing to spend money on. Republicans are so fixated on eliminating "waste" in the form of social safety-net programs that keep people alive that they've pushed the IRS to audit low-income people who receive tax credits. Meanwhile, the government is handing the Pentagon bags of money and letting them do whatever.
Sign up for our newsletter to get the best of VICE delivered to your inbox daily.
Follow Matt Taylor on Twitter.
from VICE http://bit.ly/2AdOSs6
via cheap web hosting
No comments:
Post a Comment