Crimes of Wall Street: Report No. 3 — State by State


This is the third installment of the Weekly Crime Report series initiated by LaRouche PAC in July, 2013, documenting, state-by-state, and in national patterns, the criminal actions by Wall Street, with the consent of the state or Federal government, now destroying the lives of American citizens and the means to the future.

The first Crimes report was issued July 21; the second, Aug. 5. The items reported show the direct rake-off of local government revenues and assets by the Wall Street/City of London mega-financial houses, through their contrived deals of interest-rate swaps, termination fees, rigged-indices including LIBOR, ISDAfix Index, FOREX, and others. From 2005 to 2010, for example, an estimated total of more than $30 billion was stolen from state, city, and specialty entity (ports, water, transit, schools, etc.) treasuries, through interest rate swap agreements, according to a survey by the Service Employees International Union (SEIU), whose state breakdown is given below. (See Service Employees International Union-SEIU, March 2010 report, Big Banks Squeeze Billions in Profits from Public Budgets.)

The grid of items also shows the undermining of the physical means of existence — water, power, health care delivery systems, food, education, etc. — through speculation, de-regulation, and domination.

In Atlanta, Georgia, at the Aug. 12-15 conference of the National Caucus of State Legislatures, the opposition to Wall Street was manifest in wide support for the re-instatement of the Glass-Steagall law, against which Wall Street mobilized thugs and threats to protect its looting system.

The grid is organized by region, with specifics on 11 states, leading with updates on Detroit — an international battlefront for emergency policies in the interests of the population, not Wall Street.


MICHIGAN. Gov. Rick Snyder is moving to set up a “Receivership Transition Advisory Board [that would be] in place to approve all budgets and collective bargaining agreements. Under Public Act 436, the advisory board would serve at the Governor’s pleasure or until a future administration removes them,” reported the Detroit News on Aug. 9, about a scheme under the new state emergency manager law that took effect in March, which Snyder is using as a means for a Wall Street dictatorship in the state.

As the Detroit News further reports, “The oversight boards for cities and school districts previously run by an emergency manager are modeled after the New York State Financial Control Board, which controlled the Big Apples’ finances from 1975 to 1986 during its financial crisis.” Under BigMac — the Municipal Assistance Corporation — New York City was de-structured, under Felix Rohatyn, the Lazard Freres/BigMac bank dictator, through sweeping cuts in workforce and vital government functions.

It is pointed out that at present, more than half of Michigan’s 1.4 million black residents live under rule by emergency managers — which effectively nullifies their rights, as noted in a lawsuit filed against the state emergency process by the NAACP.

DETROIT. The state-appointed axeman emergency manager, Kevin Orr, is proceeding with plans to dismember the city, in the name of fiscal responsibility. He was appointed by Gov. Snyder in March; then on July 18, Detroit was declared bankrupt under Ch. 9 of Federal bankruptcy law.

PONTIAC. On Aug. 14, Gov. Snyder confirmed that the city’s public schools are in an official category of financial emergency, leaving leaders of the Pontiac School District seven days, under the new state law, to take one of four actions: accept appointment of an emergency manager; declare a Ch. 9 bankruptcy filing; get a “neutral” evaluation; or make a consent-agreement with the state on what to do. Schooling for 5,500 students is at stake. The state has three other districts under emergency managers: Detroit, Highland Park, and Hamtramck.

ILLINOIS. The rate of annual payments being made to the mega-banks in interest rate swaps deals was $57.7 million as of 2010.

CHICAGO. The City was paying annually some $66.9 million in interest rate swaps deals as of 2010. Chicago Public Schools was paying out, as of 2010, an annual amount in the range of $35.7 million in swaps deals. Now, under Mayor Rahm Emanuel, Obama’s former chief of staff, the school system itself is being radically downsized, losing 50 schools and firing 2,100 teachers and staff. The mayor appoints the school board members, who have connections to Wall Street and for-profiteering charter schools.

In Chicago, speculation in futures and derivatives is proceeding at Mach-speed rates and volumes on the CME Group’s exchanges, whipsawing the ability of any actual producer or user of commodities, in particular energy and food. For example, on Aug. 12, an oil futures trading volume record was reached for NYMEX Brent [crude oil] at 104,839 trades, exceeding 100,000 for the first time ever.


GARY. The former steel center, in the Great Lakes industrial belt, is in physical collapse. Its population was once 180,000 in the 1960s, and now is down to 80,000. City officials estimate that a third of the houses are unoccupied; there are an estimated 10,000 abandoned homes. In June, a program was started, where your can buy a house for $1, as long as you meet a minimal income requirement. The state of Indiana is one of 21 which do not allow their localities to file for Federal Ch. 9 bankruptcy protection, because they do not have state law in accordance with that, according to the NCSL (National Conference of State Legislatures).


MASSACHUSETTS The rate of annual payments being made by the state to the mega-banks in interest rate swaps deals was $18.5 million, as of 2010.

NEW JERSEY The rate of annual payments being made by the state to the mega-banks in interest rate swaps deals was $118.4 million as of 2010.

NEW YORK The rate of annual payments being made by the state to the mega-banks in interest rate swaps deals, as of 2010, was in the range of $102 million. THE NEW YORK METRO TRANSIT AUTHORITY alone was paying out $103.7 million annually as of 2010.


PITTSBURGH and more than 20 other towns are under state oversight, through Act 47, the “Financially Distressed Municipalities Act.” Pittsburgh was put under receivership in December, 2003.

The Pennsylvania Turnpike Authority was paying out at a rate of $26.4 million a year to the mega-banks, in interest rate swaps deals, as of 2010.

HARRISBURG. The state capital remains under an impossible condition — in state receivership — to be able to serve its residents and state functions, after decades of erosion of its former agro-industrial base, and looting through interest rate swaps by Royal Bank of Canada and others. On Aug. 9, the City Council announced the postponement, until further notice, of a planned meeting for Aug. 14, at which it had been going to review proposals by the state-appointed receiver, William Lynch, for handling some $600 million in debts. Lynch may submit his proposals to the Commonwealth Court by the end of the month; the ideas include dismembering the city, by, for example, leasing off its public parking garages, selling assets, and further cutting its vital services.

READING. On Aug. 14, the Reading School District became the fourth in the state, to be placed “on watch” by state education officials, because it is classified as “financially distressed.” A state oversight official will be appointed to make cuts. If the District is still considered “distressed” after a year, it will go into state receivership. The City of Reading, a former heavy industry center, has 88,000 residents, of which 37% live in poverty, with a median household income of barely $27,000.

PHILADELPHIA. The City was paying out at the rate of $94.4 million a year, as of 2010, to a host of banks, which had foisted interest rate swaps on the City in connection with some $871 million in variable-rate interest bonds floated in 2004. The city filed suit on July 26 against nine banks: Bank of America, Barclays, Citigroup, RBS, Credit Suisse, Deutschebank, JPMChase, RBC, and UBS, as U.S. dollar LIBOR panel members, for the “violations of federal and state law (below), amounting to “naked price fixing in contracts.” Citigroup, Morgan, and RBC are additionally “counterparty defendents”, which sold Philadelphia the swaps, and from which the City claims damages and punitive damages.

The City of Philadelphia asserts claims for (i) breach of contract; (ii) breach of the implied covenant of good faith and fair dealing; (iii) common-law fraud; (iv) aiding and abetting fraud; (v) unjust enrichment; (vi) tortuous interference with contract; (vii) tortuous interference with prospective business relations; (viii) civil conspiracy; and (ix) violations of the Sherman Act, 15 U.S.C. § 1, et seq., and the Clayton Act, 15 U.S.C. § 12, et seq.



BALTIMORE. The City was paying out at a rate of $18.5 million a year, in interest rate swaps, to the mega-banks, as of 2010. In 2012, the city became the lead plaintiff in a lawsuit against JPMorgan Chase, Royal Bank of Scotland, Bank of America, Barclays and others, over the swaps and interest rate rigging through LIBOR. In March, 2013, a New York Southern District Court judge dismissed most of the charges, causing a legal brick wall, but throwing an even brighter spotlight on the truth of the Wall Street looting practices, and collusion of Federal authorities, to let it happen.


CHARLOTTE. The City was paying out at a rate of $22.7 million a year, in interest rate swaps, to the mega-banks, as of 2010.

TEXAS British Petroleum has been fined for physically holding up transit of natural gas, in order to drive up its derivatives bets. The Federal Energy Regulatory Commission (FERC) on Aug. 5, gave BP 30 days to pay up $28 million, for its conduct in Fall-Winter 2008, in using its transport capacity connected to the Houston Ship Channel, to suppress the flow of gas and create loss-making gas prices so that it could make a killing on gas derivatives.

Since energy deregulation has been imposed by Wall Street through state and Federal law changes over the past 20 years, creation and manipulation of shortages and pricing is the norm. JPMorgan Chase was levied a $410 million fine by FERC last month, for electricity manipulation in California and Michigan. Barclays has so far refused to pay a $470 million FERC fine for manipulating California electricity supply and pricing.


CALIFORNIA The rate of annual payments being made on interest rate swaps to the mega-banks, as of 2010 was $135.2 million by the state; and $229.5 million by local governments.

STOCKTON. In this city, which declared bankruptcy in 2011, a court settlement this month forced its 1,100 retirees to accept a one-time only sum of $5.1 million, to be regarded as compensation for the retirees having had the city cancel their previously guaranteed medical insurance. An equal share to each retiree of less than $5,000 will barely buy health insurance for even a couple years.


DENVER. The rate of annual payments being made on interest rate swaps to the mega-banks, as of 2010, was $33.9 million by the city; and separately, $34.7 million by Denver Public Schools.

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