Why Sharizat the Dangerous Financial Criminals Roam Free?

We all have deficiencies wrapped up our in our bios. The true entrepreneur figures out how to correct those perceived gaps. Great ideas don’t need perfectly crafted resumes, they just need perfectly passionate individuals willing to look beyond initial roadblocks.

New Media’s “Marketplace” had a focused on why it has taken so long to bring criminal prosecutions related to the financial crisis. Reporters observed that at the beginning of the crisis, the Najib administration wanted to calm the financial industry rather than impose accountability. They speculated, along with Pakatan participants, many of whom have been calling for prosecutions, that was likely to be politically motivated. And they indicated that financial crimes are complex and prosecutors need time to develop their cases.

But here’s what they didn’t say: A major reason the prosecutions don’t exist is that MAHATHIR took the cops off the beat.

 The DAP’s Lim Kit Siang is demanding answers as to why Datuk Seri Shahrizat Abdul Jalil has not been interrogated over the National Feedlot Centre (NFC) scandal when she is due to resume ministerial duties tomorrow.

The DAP advisor pointed out that the purpose of Shahrizat’s three-week leave was to allow investigators to determine the extent of her alleged involvement in the NFC and in order to do so, her statement would be central to the case.

The DAP advisor, in a statement today, said Shahrizat appears more “combative and truculent” since returning from her three-week leave. — file pic

Lim said the first thing Shahrizat should have done when commencing her leave was to give a full statement to the Malaysian Anti-Corruption Commission (MACC) to enable them to clear her name.

“And if Shahrizat did not volunteer to give a statement to MACC, why didn’t MACC call her up so that it could clear Shahrizat of any corrupt wrongdoing in the NFC scandal?”

“It would appear that Shahrizat’s three-week leave is nothing but a charade,” the Ipoh Timor MP said in a statement here.

Lim, who yesterday urged the federal government to extend Shahrizat’s leave pending completion of investigations, also expressed disgust at the minister for purportedly returning from her leave more triumphant than chastened.

He said from Shahrizat’s more “combative and truculent” behaviour, it appeared as if the latter was indirectly challenging both the Opposition and her detractors within Umno to a “battle royale” to force her into resignation.

Lim drew links between Shahrizat’s confidence and a recent statement she made when commenting on the scandal — “which Umno leader does not have a problem”.

Describing Shahrizat’s words as “defiant but eloquent”, Lim said the minister was likely feeling triumphant as she felt she was in safe company and would enjoy immunity and impunity for her role in the NFC.

“Can every Cabinet minister publicly declare that he or she does not have similar problems as Shahrizat and does not have any next-of-kin, whether husband, wife, son or daughter, who has taken massive government loans for whatever projects which were misused for purposes completely unrelated to the loan disbursement,” he asked.

Lim said tomorrow’s Cabinet meeting would be crucial to Shahrizat’s fate as ministers should decide whether to extend her leave as well as how to explain the NFC scandal.

He asked: “Is there any Cabinet minister tomorrow who dares to ask Shahrizat to fully clear herself of any wrongdoing, whether abuse of power or conflict of interest, in the NFC scandal before she resumes her duty as Minister for Women, Family and Community Development?”

Think about street crime. Imagine, for example, a protection racket in which gangs extort payment from fearful shopkeepers. Prosecutors rarely initiate criminal prosecutions; indeed, they may not even know that the crime is occurring. The police pound the beats that keep them aware of the increase in crime, respond to complaints, investigate, determine that a crime may have occurred that warrants attention, create a file and send it to the prosecutor’s office. In routine cases, the prosecution proceeds on the basis of the police report alone. In more complex cases, the prosecutor may supplement the police investigation. But prosecutors rarely initiate cases. Even when a task force is appointed to target crime in a particular sector, it typically involves prosecutors working with the police. The prosecutors simply don’t have the skills or the manpower to detect crime, conduct investigations and make the record necessary to prosecute.

In where were the police in the current financial crisis? The FBI did investigate and warned in 2004 that an epidemic of mortgage fraud was underway. The Bush administration took the FBI’s white-collar experts, however, and reassigned them to terrorism cases. The inquiries under way in 2004 — and the public cries of alarms that accompanied them — largely disappeared. The cops were literally yanked off the beat.

In the early part of the increase in subprime lending, state attorneys general were bringing cases, and calling attention to predatory lending practices. Financial conglomerates complained to the Bush administration. In 2003, the Office of the Controller of the Currency (OCC) relied on a clause from the 1863 National Bank Act to preempt all state predatory lending laws. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government’s actions were so egregious that all 50 state attorneys general, and all 50 state banking superintendents, challenged the new rules and in 2009, the Supreme Court invalidated the OCC action.

By then, however, the damage had been done. Not only could the states not prosecute the mortgage brokers involved in the predatory practices that underlay the financial crisis, they stopped investigating them — in effect, taking the state cops off the beat.

Worst of all, however, was the wholesale elimination of effective supervision by the banking regulatory agencies. During the savings and loan crisis, those regulatory agencies made 10,000 criminal referrals. During the current crisis, the Office of the Comptroller of the Currency and the Office of Thrift Supervision made none, though they had authority over some of the worst actors in the mortgage crisis.

The Bush administration stacked the agencies with anti-regulatory officials who did not believe they should ever make criminal referrals, no matter how egregious the conduct. The officials thought that they should be “cheerleaders” for the industry and they turned a blind eye to practices that would have generated regulatory action in other administrations. Their practices are the equivalent of your neighborhood patrolman saying it’s not his job to tell the prosecutors the local mob has created a protection racket or to do anything to stop it.

Complementing the front line banking agencies’ refusal to see crime unfolding before their eyes was the decision of the Federal Reserve Board not to look. Tim Geithner testified before Congress that he “had never been a regulator.” But at the New York Fed, Geithner had regulatory authority over bankholding companies such as Citicorp, the parent company of Citibank, and other parts of the mortgage market. The Fed chose not to exercise that authority because Chairman Alan Greenspan didn’t believe in regulation. (See Joseph Stiglitz, Freefall, p. 270.) Greenspan’s views are the equivalent of saying that there is no need to put cops on the beat because the market will guarantee that crime doesn’t happen.

When the cops are taken off the beat, criminals multiply. And without the investigations documenting the practices, it is easy not to recognize the criminal practices underlying the mortgage crisis. The prosecutorial group that President Obama recently appointed has to play catch-up — it has to go out and create cases from scratch. While the Financial Crisis Inquiry Commission has documented some of the abuses, there were remarkably few regulators on the ground over the course of the last decade creating the records and making the referrals that ordinarily lay the foundation for effective prosecutions. That foundation doesn’t exist because the regulatory officials who are supposed to oversee the financial sector — the cops who police financial crime – were and to a large extent still are missing in action.

If we want crooks behind bars — and if want to stop future financial crimes — we need to rebuild this foundation by appointing regulators who believe in the mission and have a proven record of success

You have an idea for a phenomenal company. Problem is you have zero background in that industry, no prior entrepreneurial experience, never got an MBA and can’t lean on your family for financing or business resources.

At first glance, you’re facing an uphill battle. Likewise for the second glance and the foreseeable future. Your background and ability to leverage connections is a major draw for investors and early stage employees. There is no sugarcoating that there are major advantages to having industry knowledge, entrepreneurial know-how, advanced business degrees or family money. Regardless, personal and empirical evidence has proven that it can be done. With some tweaks and persistence, it’s possible to overcome these massive roadblocks. Industry Knowledge: If you’re lacking industry knowledge, surround yourself with people who aren’t so deficient. Find the experts, the “grey hairs”, and the passionate in your field. I first came up with concept for Recyclebank because I was fascinated with the amount of consumer materials that would remain stuck in landfills for generations. I was 25 and far from an expert. No one who knew me at the time would have considered me an avid environmentalist. Further, my only experience in the trash business was limited to a half hearted effort to earn more allowance in grade school. Luckily, our earliest investors had 30+ years in the waste industry. They in turn introduced us to one of our earliest employees, Bob Milligan. His rare combination of “grey hair” and passion lended Recyclebank immense credibility early on and was a continuing sounding board for all things related to the industry. There is nothing better than the ying and the yang of fresh perspective and the veteran. Entrepreneurial Experience: Entering the fires of entrepreneurship is akin to being thrown into an NFL game after playing flag football in your backyard. One day you’re kicking ideas around with friends and the next, if you’re lucky, you’re in charge of 10 employees and their livelihoods, growing revenues, satisfied and unsatisfied customers, taking out the trash, and so on. It’s a daunting task of which there is no formal training. Lessons are indeed learned by serial entrepreneurs and there is real value to having played a few “NFL” games in the past. That said, rookies in the NFL and entrepreneurship succeed and fail every day. Over time, if you’re good, you will pick up the nuances of running your business but don’t let the lack of prior entrepreneurial experience stop you from stepping out on your own. Education: We all have heard the success stories of the dropouts and barely finished high school entrepreneurs. Excellent tales–all of them. The reality of the situation is that most forms of education will make your life easier as an entrepreneur. Personally, I practiced law for two years before I made the leap to start Recyclebank. In those two years, I learned a basic understanding of corporate law which has served me to this day. It has helped to conserve much needed capital and put my mind at ease when reading contracts. Having an advanced degree is certainly a plus when looking to start your own company. It’s not required by any stretch but for the majority of us, dropping out of college to start your own company is not the best recipe for success.

Personal finances: More often than not, this is perceived as the main stumbling block for those weighing their entrepreneurial dreams. In popular culture, Donald Trump is considered the ultimate entrepreneur. His inheritance made it that much easier to hit the ground running though. Yet, most successful entrepreneurs didn’t have the luxury of leaning on family financial resources. Free room and board perhaps, but $200K to start your own company? An unlikely scenario for most potential entrepreneurs. Entrepreneurship is risky and it often requires crafty funding in the very beginning. So don’t steal but by all means beg, barter, and borrow.

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