The New York Times tried to figure the source of the virulent E. coli that wrecked the life of a 22 year old woman, but failed. Meatpackers get the ingredients for their hamburger from several sources. Many of them have agreed not to inspect products from suppliers because if they find E. coli or salmonella, the meatpackers would have to report and that might interfere with profits. This way, no one knows whose supplies caused the outbreak. Meatpackers treat their production techniques as trade secrets, and the Food and Drug Administration respects that. So, it’s little wonder that neither the FDA nor the NYT could figure out where the E. coli came from. That means no enforcement.
After the outbreak, the department threatened to withhold the seal of approval that declares “U.S. Inspected and Passed by the Department of Agriculture.”
In the end, though, the agency accepted Cargill’s proposal to increase its scrutiny of suppliers. That agreement came early last year after contentious negotiations, records show.
Contentious negotiations? That’s just pathetic. Jail? Nope. Fines? Silly. Lawsuits? Foolishness. Let’s just write some ugly letters and have a couple of arguments.
We have another example of this kind of wimpy response to law-breaking in the SEC’s response to the failure to disclose the Merrill Lynch bonuses: a $33mn fine to be paid by BAC, or more accurately, by its shareholders. The SEC sees no need to find the perpetrators and punish them. Judge Rakoff begs to differ.
We have other hints that the Obama Administration isn’t fixing this problem. This is from the NYT, and describes a meeting from late May:
… John C. Dugan, comptroller of the currency, blasted a proposal to impose stiff new insurance fees on banks as unfair to the largest banks, which he regulates. The financial crisis stemmed in part from problems at small banks, he insisted.
Sheila C. Bair, chairwoman of the Federal Deposit Insurance Corporation and the regulator for many smaller, community banks, could barely hide her contempt. The large banks, she said, had wreaked havoc on the system, only to be bailed out by “hundreds of billions, if not trillions, in government assistance.” She added, “Fairness is always an issue.”
Sheila Bair is tough. The NYT tells us that she pushes to enforce the law and to protect the FDIC and its assets, instead of playing nice with FDIC money. Here’s a bit of biographical information about Dugan:
Dugan, a more low-key regulator, has also worked as a lawyer representing some of the largest banks.
He derives much of his influence from his close relationship with Mr. Geithner, reinforced when they worked on the banking crisis last year under the Bush administration.
So, here’s a story.
In 1974, I went to my first continuing legal education course, a seminar on Securities Law. The featured speaker was Stanley Sporkin, then chief of enforcement for the SEC. The hotel ballroom was crowded with top-ranking securities lawyers from New York, and there were plenty of us heartlanders, too. As I recall, he entered from the back of the banquet room and walked to the dais through the center aisle. He had a heavy five-o’clock shadow at 10 am, and was wearing a black suit, a black shirt, a black tie, and, as heaven is my witness, I remember a black beret. There was a murmur in the crowd, and no one would look directly at him as he passed. He scared the living crap out of that crowd.
That is how regulation works: fear of prosecution inspires a deep desire to do right. White collar criminals are easy to deter; they know they can’t do the time. Sporkin was aggressive, a real enforcer. When I became securities commissioner of my state, I wanted to be like him. The guys from Massachusetts and the guys from New York were just as serious, and I wanted to be like them. Those people have been replaced by a lesser breed.
We need two-fisted enforcement. Promote Bair. Find more like her, people with fire in their bellies. Dump the soft-handed old boys like Dugan and the week-kneed enforcers for the FDA and the SEC. The government has lost its courage. It needs to get tough on white-collar crime.
Related posts:
Spotlight
Support this site!
Subscribe to the newsletter
Advertise on Firedoglake
Send
us your tips
Make us your homepage
About Firedoglake
Advanced search
USDA inspection is another one of those enforcement areas where, IMHO, Congress’s refusal to allocate funds has had an effect. Seems like revitalizing the SEC, FDA, and USDA inspection ought to be a big part of a progressive agenda. It’s getting short shrift right now, but at this point it strikes me as being a good way to help boost the economy. People are more likely to spend money when they know their securities are honestly valued, their drugs are safe, and their food isn’t tainted.
In short, enlightened regulation helps assure the rest of us that we’re getting honest value for our money.
I agree wholeheartedly. A side benefit is that adding new blood will dilute the moles and weaklings that the prior adminstration hired to do nothing.
hi thing come up
Hi
We got through sorry FDL my phone recepation is bad I’m talkin to my bro!
Say something
Are you getting through?
I still think Loki god of Fire and Mischief was a better handle Bwahahaha (evil Laugh) Mischief gods are gods of creativity:)
This new, stringent control of the big banks is more of obama’s “change we can believe in.” It really heartens me to think that someone as tough as dugan is riding herd on the banks.
BTW, just a small nit-picky: you mean “weak-kneed,” not “week-kneed.”
hey is that your neighbor you are taking too.
Are you getting this.
Yeah anyway I’m glad you finally got here I’m hoping you can meet my friends:)
hey i got to cut this short Kincaid just got home and the other two kids a stiring. I will log on tonight.
masaccio Sorry I want to try and get My Bro here his comments if he thinks this place is cool should be I think a good voice to add to the lake.
Give me an estimated time?
Still alike in some ways total opposite others he might not like it still all you can do is try right?
between 10 & 12
Kool I’ll tell the Kurt Steniken story where you almost got my ass kicked!
For starters, why would agreements not to test be enforceable or even permitted?
If you purposely maintain incomplete financial records, because complete ones might be embarrassing, and you are a public company, you have still violated accounting and disclosure rules. Or is the difference that you’ve harmed sacred investors and not the eating public?
As with health care and pension plans, the solution starts with Congress having to live by the lowest common denominator it permits in the marketplace. Health care for Congresscritters? Buy it in the “free” market in DC with your own cash. Pension? Enjoy your Social Security. Meats and veggies in the Capitol Cafeteria? The best that Sam’s Club sells.
Later Bro
Amen.
I can’t fathom how this nation can have a ‘real recovery’, or a ‘green industry’ without a complete, thorough cleanup of regulatory culture, standards, and incentives.
Thank you, masaccio.
Although this suggests that most people younger than 45 have never actually seen a ‘real enforcer’ up close; at least, not unless they worked under Bair.
Masc I assume pig farmers are doing this with swine flu?
Chickens in Chile also got the Swine flu I assume they are inspected by the same rules. (trying to make up for being off topic before)
Bush or Obama choice on that?
If corporations are People under the law how come they never get charged with murder? This is reckless homicide
this is a drunk killing people he did not mean to but its still 10 years right?
But the CEO and board of Directors get a pass?
God I got teach some crooks the law next time I go away:)
I have a dream where I can eat meat that was not grown up walking in its own poo!
Where the meat did not get more antibiotics than I have for the last 20 years
Where the meat ate things they were supposed to eat and made them healthy instead of fat.
Where the meat saw sunlight and ran in the sun.
Is that to much to ask?
Immigrant workers at turkey farms are they getting Swine flu shots or a week after thanksgiving will the Swine flu strike? How many cases of e coli happen on Thanksgiving because the bird was not cooked all the way?
To be honest my first bird I washed my hands once then I stuck my hands in its butt and kept on cooking.
I’m worried about morons like me cooking!
When China’s tainted wheat glutin ended up killing over 4,000 cats and dogs and sickening at least 8,000 I found out a lot about the USDA and the FDA. Did you know that with the exception of baby formula the FDA has no ability to mandate a product recall? They have to request the companies to recall the products. Did you know that the public can’t know the names of companies that received tainted beef? It’s proprietary information. This was part of a deal that ConAgra cut with the USDA after a previous e.coli outbreak.
Because of that deal some folks in Truckee got to eat some mad cow tainted food. Enjoy losing your mind!
Change will come if the right people die. Valuable people. Movie stars or sports stars. Or the children of valuable people.
And we can’t just have a few die, a LOT of people would need die for change. Five thousand already die each year so it needs to be MORE than five thousand, it needs to be the right kind of deaths too, it needs to be tied to a very specific traceable case, like the Jack in the Box burgers. (If you want to eat safe hamburgers today, Jack in the Box is the place to go. They have the best systems in place for the fast food industry.)
And then, after the deaths someone needs to keep on the industry because otherwise they will slip out of changing. I watched the hearings on the spinach e.coli cases. It was really pathetic. They couldn’t really find the problems, the causes weren’t really known, but they needed to get back to work selling spinach since it was hurting business. Did they talk about the agribusiness that was losing money? No. The poor migrant farm workers were the ones the mean old congress people were hurting!
Basically they aren’t enforceable, I don’t think. However, if the suppliers find out that a packer is testing their products, they quit selling to that packer. What Spocko says is true and disgusting.
Sounds like the behavior of a monopoly supplier. That would be illegal too, if the government hadn’t stopped enforcing anti-trust laws.