When I first read this article in the Times, it brought to mind Anatole France’s observation that
“[t]he law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.”
Charlie Engle (who, though not exactly poor, was definitely not rich) was recently sentenced to 21 months in jail for taking out a liar’s loan from Countrywide. Meanwhile, Angelo Mozilo, the former head of Countrywide will not face prosecution, though he knew the loans he was making to folks like Engle, and reselling to anyone stupid enough to buy, were fraudulent. He paid a sizable (by my standards or yours) civil fine, but it hardly made a dent in his huge fortune. He certainly did not take as big a hit as Mr Engle will take when he makes a court ordered $260,000 restitution payment to Countrywide when he finally emerges from prison. That’s right. Our government indulges in the fiction that Countrywide was a victim of it’s own fraudulent business plan.
What Anatole France neglected to say is that while the rich are indeed prohibited from sleeping under bridges, if a rich man chose to do so he would surely escape punishment. Angelo Mozilo will never see the inside of a cell, though he helped destroy the economy, though mortgage fraud laws, the last time I looked, were supposed to apply with majestic equality to everyone.
Engle’s story is interesting for another reason, in addition to the disparity between his treatment and Mozilo’s. The investigation into his “crime” (there were millions of liars loans, and nothing special about his) was initiated by an IRS agent who saw him in a movie about long distance running, and decided he must be a crook. He had neither evidence nor reasonable suspicion. After finding nothing in his trash, he put an attractive female agent on the case, who formed a friendship with Engle, who then told her about his nefarious misdeed. The story is a bit reminiscent of the Starr investigation of Clinton. Starr, after no evidence could be found of Whitewater misconduct, decided to keep investigating until something, anything, could be found. The entire investigation appears to have been a gross misuse of power.
By the way, the article in question was written by Joe Nocera, who will be leaving the business section for the Op-Ed page. Bob Herbert will be missed, but judging by his work in the business section, Nocera will be a good replacement.