Banking Expert Who Exposed Savings & Loan Corruption Joins Sanders Campaign

Reno Berkeley

An expert in banking corruption and finance has joined the Bernie Sanders campaign. William K. Black, an associate professor at the University of Missouri-KC, is Bernie Sanders' new economic advisor. Black was one of the central figures in exposing and prosecuting corruption in the savings and loan crisis from the late 1980s and mid-1990s. His addition to the Sanders campaign brings important knowledge in laws pertaining to finance and banking.

The savings and loan banking crisis resulted from a multitude of causes, one of which were two laws that helped deregulate them. The Depository Institutions Deregulation and Monetary Control Act of 1980 was signed into law by President Jimmy Carter. That law allowed credit unions and savings and loans to offer checking deposits, and to charge any loan interest rate they chose.

Among others, Black exposed the Keating Five, a group of five senators involved in doing favors for savings and loans in exchange for contributions. Charles Keating, the chairman of Lincoln Savings & Loan was deeply involved. Sen. John McCain was one of those senators Black exposed. He, along with the rest of the senators, was reprimanded but otherwise unpunished.

Black's tenacity in investigating the banking corruption angered so Keating, he wrote a memo ordering his death.

"…get Black -- kill him dead. If you can't you ought to retire."

In 2009, Black appeared on Bill Moyers to discuss the effects of the recession caused directly by Wall Street and the reckless lending of banking institutions. During the show, he claimed that these large corporations were engaging in a Ponzi-like scheme to make bad loans purposefully to "increase their own personal income."

"All of those checks and balances report to the CEO, so if the CEO goes bad, all of the checks and balances are easily overcome. And the art form is not simply to defeat those internal controls, but to suborn them, to turn them into your greatest allies. And the bonus programs are exactly how you do that."
"Lehman's failure is a story in large part of fraud. And it is fraud that begins at the absolute latest in 2001, and that is with their subprime and liars' loan operations."

Black lambasted the Dodd-Frank bill, which he wrote "failed to mandate fundamental change" within the banking industry.

"…prosecutors he appointed lack the will to use their new statutory powers to require fundamental change. The system remains rigged because those that have the gold (Wall Street), and those that accept their gold, make the rules the rig the system and they commit hundreds of thousands of felonies with impunity for Wall Street elites."

"They know how to engage the rage. Sure it has one city and one capital — it's easier. But the fundamental point is that they don't put up with it."

Most of all, maybe Bill Black can help Bernie Sanders' campaign "engage the rage," as well.