Heckuva Job Johnny! How a Bush Regulator Failed to Prosecute.

The NY Times has a good article about how few prosecutions have even been attempted in the aftermath of Big Shitpile (the housing crisis and the following good times). One of the key players was Countrywide, led by CEO Chris Mozilo, which initiated so many bad loans (that were then, through financial alchemy, turned into AAA securities).

Enough background, here's a nut (italics mine):

Historically, Countrywide's bank subsidiary was overseen by the comptroller, while the Federal Reserve supervised its home loans unit. But in March 2007, Countrywide switched oversight of both units to the thrift supervisor. That agency was overseen at the time by John M. Reich, a former banker and Senate staff member appointed in 2005 by President George W. Bush.

Robert Gnaizda, former general counsel at the Greenlining Institute, a nonprofit consumer organization in Oakland, Calif., said he had spoken often with Mr. Reich about Countrywide's reckless lending.

"We saw that people were getting bad loans," Mr. Gnaizda recalled. "We focused on Countrywide because they were the largest originator in California and they were the ones with the most exotic mortgages."

Mr. Gnaizda suggested many times that the thrift supervisor tighten its oversight of the company, he said. He said he advised Mr. Reich to set up a hot line for whistle-blowers inside Countrywide to communicate with regulators.

"I told John, 'This is what any police chief does if he wants to solve a crime,' " Mr. Gnaizda said in an interview. "John was uninterested. He told me he was a good friend of Mozilo's."

Gnaizda has the reputation of being an honest player.

Heckuva job Johnny!

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reminds me of Robert Fripp's description of his former manager at EG Records, Sam Alder, as one in his own words ârenowned for their probity & sound business practicesâ, after he failed to pay the EG artists royalties and later sold the label's content (in violation of contract) to Virgin and BMG.

By Joe Shelby (not verified) on 19 Apr 2011 #permalink