S2:E11 The Pecora Files: Systemic Corruption is the Point

The New Untouchables: The Pecora Files
S2:E11 – Systemic Corruption is the Point
September 19, 2021

 

[00:00:08.480] – Dennis Kucinich [intro/music]

This idea of homeownership and being able to grow your own sphere of activity within a physical structure in a way is a fundamental aspiration not only in a Democratic society but everywhere and banks prayed on that.

[00:00:26.920] – Dennis Kucinich [intro/music]

The media knew full well the kind of skullduggery that was going on that the Cleveland Electric Illuminating Company, a private utility monopoly was committing against the city of Cleveland and its municiple utility. But they didn’t care because they were getting advertising revenue.

[00:00:53.060] – Eric Vaughan [intro/music]

In a world of elite criminals, only people of elite character can protect our system. This is The New Untouchables.

[00:01:03.620] – Patrick Lovell

Well, welcome to our podcast of The New Untouchables. And as we have explored whistleblowers throughout our process, I find it incredibly honorable to invite former Ohio Congressman Dennis Kucinich to our discussion. And congratulations to you, Dennis, on a terrific effort in your book, “The Division of Light and Power,” which is right up our alley, you might say.

And as we get started, I do want to kind of ask you this from this perspective because I’ve been watching so many of your interviews as of late. But when Eric and I started this journey years ago, the question that kept coming back to both of us was the notion of integrity in our system.

And it just didn’t make sense to us that in the wake of the 2008 great financial crisis, that things just didn’t seem to be adding up in a sense that any of us would understand by way of the law and regulation and so forth. Can you give us some sort of introspection in terms of how important it is given your book and the times that we actually live in the purpose of integrity and a system of democracy?

[00:02:10.310] – Dennis Kucinich

We live in a culture where anything goes, where integrity is seen as passé, where if you stand for something, it’s to be ridiculed, actually. It’s a very cynical culture. And when you see what I’m doing, just the underlying assumption is well who are you? Everybody’s in on it. And what’s your complaint? I’ve just seen that in institution after institution.

One is almost accused of a certain naivete to raise a question about spending of funds, of corporate corruption. It’s the way of the world. But integrity is the way of the world, too. Without integrity, the world falls apart. Integrity is the trust which binds us together. It’s a glue that holds society together. Without integrity, you can’t put an airplane in the air.

Without integrity, you can’t go to a drug store and buy a product. Without integrity, you have to be afraid of eating your food. The unseen power of integrity is that compelling force which binds us all. And without it, all things fall apart.

[00:03:32.960] – Lovell

Eric, we went on a journey where we discovered Miss Addie Polk. She was a 91- year-old African American woman, of course, who resided in Akron, Ohio. And we were just amazed to discover Dennis Kucinich on the floor of the House of Representatives bringing her name to the floor of the People’s House. Eric, can you provide a sort of framing for Mr. Kucinich of what Addie Polk means to us?

[00:04:01.790] – Vaughan

Well, Addie became the face of what we believe to be the quintessential victim of fraud or a system that is fraught with corruption. And it was so important that as we came to realize that she clicked so many boxes. She was not wealthy. She was a woman. She was a widow. She was African American.

All these different things. And it seemed to me that whenever our own, our neighbors, fellow citizens are in trouble, it is always the most vulnerable that seem to be the ones that are targeted. And I think that in your book that we see very similar circumstances where the first and most hard-hit victims are the people who can afford it the least.

And so I was wondering if maybe you could talk about that, about vulnerable communities and how they are always seem to be the first in the radical, you know, so to speak, of these schemes.

[00:05:09.260] – Kucinich

The aperture of vulnerability widening here.

[00:05:12.920] – Vaughan

Yes.

[00:05:15.010] – Kucinich

There’s a greater degree of vulnerability today for more and more people. Economic vulnerability, social vulnerability, mental health vulnerability, physical health vulnerabilities. We’re society which has lost the plot when it comes to a almost militant consumerism, which doesn’t have the moorings and ethical values.

You take Addie Polk, for example. Everyone wants a better home. Everyone wants to be able to afford a decent place to live. Banks in 2007, well 2006, 2007 and 2008 went into black communities and sold no doc, low doc loans knowing full well, people couldn’t pay. Banks didn’t care. They booked them into mortgage backed securities, collateralized debt obligations.

And before you know it, couple months pass. People couldn’t pay. They’re forced out of their homes. This idea of homeownership and being able to control your own sphere of activity within a physical structure in a way is a fundamental aspiration not only in a Democratic society, but everywhere.

And banks preyed on that. They preyed on it. And the most vulnerable people were often those who didn’t have the financial literacy to be able to defend themselves against crooks with a contract in front of them.

[00:06:53.900] – Steve Grumbine

Mr. Kucinich, you presented in your book, and I’ve heard in other interviews where you talked about living in your car and growing up in extreme poverty. And as we talk about frequently in our work, it’s incredibly expensive to be poor. Poverty is the most expensive place to be in society.

And yet at the same time, it seems like all the laws and regulatory environments protect banks and protect the institutions while leaving us to live in our cars. I’m just curious if you could take a minute to discuss maybe why that is and going back to Obama saying, “Hey, what the banks did, it may have been unethical, but it wasn’t illegal,” when clearly we can show fraud after fraud after fraud.

Talk to me a little bit about that because you’ve experienced life in a car. I’ve experienced that too. Tell us about that because the chasm between unethical and illegal is very different for the people living in a car and very different from the people that are making you live in a car.

[00:08:14.090] – Kucinich

Well, first of all, my family, I was oldest of seven. My family never owned a home. And as the family expanded, it was very difficult to find a place to live. In the 50s, there’d be ads showing up in newspaper saying, no children, two children, three children. And we always had more than any of the ads offered.

In some cases, we just took whatever we could, even with more children than the landlord permitted. Landlord found out. We were evicted. Sometimes we end up living in the car. When you’re a kid, and that happens it’s just all part of the great adventure of life. I can’t imagine what my parents went through. And today it’s less common.

Now our circumstances were that we had a fast growing family and just no place because we didn’t have home ownership was very difficult to find a place. Today there’s a lot of reasons for homelessness. In some cases, people lost their source of income. In other cases, there’s mental health issues that are at work. The society is very tough on people.

The society is an exploitative society generally speaking. It makes money off of people in a way that PT Barnum expressed brilliantly. So one of the reasons why Ralph Nader becomes so important in American history is that he led a movement to challenge our consumer practices and the chasm that you speak of, it doesn’t occur for individuals overnight.

People can suddenly find themselves falling into it because of bad luck, bad choices. And the society isn’t the society that says, “Come on, we’re going to lift you up and bring you back.” You really are. More and more people are on their own and this kind of social safety nets which other countries have, in America, we don’t necessarily have.

If people lose their home, there’s not necessarily going to be a place for them to live. If people are without electricity because they can’t pay their bill, they’re out of luck. If they can’t afford food, well, maybe there might be a food bank down the street. Maybe not.

The basics that people need to survive are often not available to people because we have a society which is basically the economic structure of it creates an underclass and the whole idea that we have a meritocracy that’s enshrined in a financial structure.

[00:11:05.070] – Lovell

That’s a brilliant way to articulate it. And you’ve been in the trenches forever. We’ve noticed through this growing sort of interest in your book. And again, I can’t say enough about the title, “The Division of Light and Power,” because that’s really at the heart of this madness.

Mr. Kucinich, Eric and I have been on a journey from hell to try to put this into perspective in a way that the regular American people can understand. And what we’re talking about we’re talking about the great financial crisis. You’re talking about utility and corruption and so on and so forth. But we’re in media, right?

So we’ve encapsulate this five part series, soup to nuts revelation of the largest criminal conspiracy and cover up in history, of which you stood on the floor of the House proclamating Addie Polk’s name, and she led us to the only RICO conviction in the entire country. And we’re trying to get this truth out to the American people.

But what we have discovered in media is they don’t want to reveal that Goldman Sachs and Chase and all of the rest of the triumvirate that basically sits at the apex of our system, which you just framed to tell the truth. They think the story is dated.

Meanwhile, your book goes back decades, and it’s just as relevant now is as our story was going back 13 years. Can you give us some perspective from where you’re sitting about the power of media to basically confuse the issue?

[00:12:26.610] – Kucinich

Well, who owns the media? The media has become more and more corporatized. There’s more constraints on getting a message out that would compete with the economic interests of those who own the media. It’s just axiomatic. In the case of Cleveland and my book, “The Division of Light and Power,” but by the way, that was the name of the city’s electric company at that time was called The Division of Light and Power.

But in the case of the Division of Light and Power, the media knew full well the kind of skullduggery that was going on that the Cleveland Electric Illuminating Company, a private utility monopoly was committing against the city of Cleveland and it municipal utility, but they didn’t care because they were getting advertising revenue and that advertising revenue became their life blood.

Why would they care? Now you extrapolate that to a national level. And these big corporations depend on Wall Street. They depend on investors. They depend on Goldman Sachs and whatever kind of deals can be put together. How is it that we end up with a secret history that emerges of a time when trillions of dollars were evaporated in an economy just boom gone in this casino economy of wealth, imaginary wealth being pyramided and people betting on the imaginary wealth and betting against it.

Betting it’s going to go down. And sometimes betting both sides, whether it goes up or down, you’re making money. Look, this economy, the financialization of our economy has left us vulnerable to we’re still vulnerable to it. We could see another crash anytime. The valuability of the investments in cryptocurrency was another example of the financialized economy of value being created out of nothing.

And as long as it’s consensually affirmed for a period of time, it has some underlying value to certain people. But how many of us are in that kind of a game? We’re not. So what happens is when it’s linked to some dimension of the economy outside of that, and one of the problems is with financialization is drawing all of these other investments in, mixing them in, a lot of tangible stuff.

And they mix into things that are intangible that are imaginary. And after a while, the vulnerability of the entire system increases. That’s where we are. There’s minimal regulation, there’s virtually no antitrust enforcement. And we’re in a condition where monopolies themselves are in trouble because they’re swept up into this infernal financial machine.

We’ve got to make things. There has to be some underlying value expressed. It’s not there, though. So we’re on a wild casino ride. Good luck. And by the way, I was chairman of the congressional investigative subcommittee that investigated the subprime meltdown. I did that in our committee. We had Bank of America and Countrywide and all these people come in front of our committee and we saw the games that were played.

And we saw they lied. They knew, they knew exactly what was going on, and they just hoped they didn’t get caught at it until they cashed out. And then, of course, the taxpayers, suckers we are, always there to bail them out. Right. We bail out the banks. We bail out these financial institutions, keep them in operation. And what did they learn? Well, they learned how to do it again.

[00:16:10.260] – Vaughan

So a little bit more on regulation, whether it’s financial, whether it’s utilities regulation or almost anything you can imagine, it seems like the discussion is always framed in terms of if somebody’s trying to regulate you, it’s the government trying to control you.

If we deregulate, it’s going to be the best thing ever for every individual citizen. And it seems like no matter where, that’s how the discussion tends to go. How do we change that conversation? Because the regulatory situation back while you were Mayor compared to now, I can’t say I necessarily understand like exactly how that’s all changed, but we certainly know how it’s all changed in the financial system based on our work in The Con.

And it just seems like it was this constant drive to deregulate, no matter what it was and that it was always supposed to be like the best thing ever for the markets and the economy. And everybody’s going to get rich because we deregulate, that has proven to be completely false.

[00:17:16.760] – Kucinich

Well, that’s what happened when they took down, you know, the barrier between commercial investment banking, the repeal of those laws put us on a track to, there’s a direct path to the meltdown that occurred in 2007, 2008. Deregulation is as old as repealing the Ten Commandments. I mean, whatever happened to thou shalt not steal, right?

In order for society to function, if you don’t have at least a dynamic tension that forces people to achieve some level of ethical conduct, the society is in trouble. And what happens in that kind of anything goes is not just financial crimes, but crimes against humanity, wars that are based on lies that somebody’s cashing in on.

This story, “The Division of Light and Power” is one where I had this journey as a young Councilman, 23 years old, discovering the corruption that was happening around me and going, “Whoa! Why isn’t anybody saying anything about this? Why isn’t somebody challenging?

Why are people looking the other way when this private utility, The Cleveland Electric Illuminating Company is doing everything it can to undermine our city’s utility – corporate espionage, sabotage actually interfering with the finances of the government.” The kinds of things that went on there cried out for justice. But I looked at it and it was like I was the odd man out.

Why don’t you just shut up and go with the program, Dennis? And yet that program was about ultimately forcing people to pay more for their utility bills, which the right of utility franchise is vested in the people. Most people don’t even know that that cities have an inherent right to establish their own utility.

And they have a right to have a municipal electric system. More than a hundred years ago, the Mayor who is responsible in Cleveland for the formation of Muni Light, said that I believe in public ownership of all municipal service facilities, because if you do not own them, they will in time own you. They will corrupt your politics, rule your institutions, and finally destroy your liberties.

I saw his admonition come to life in the corrupt activities on political, on institutional and on a societal basis within our community, where the book ends up inevitably about taking a stand for democracy for corporations, for challenging the rule by corporations and the corruption of a government by and for corporate interests.

So I was an insider and fought that. That’s what I talk about at the beginning of the book. I said I was the Mayor and I fought city hall. And I was only 31 years old by the way. I suppose they thought they had somebody young. They could just roll over him and he would be happy to be Mayor and they could run the city while I cut ribbons. Nope.

[00:20:38.080] – Intermission

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[00:21:31.770] – Grumbine

Mr. Kucinich, one of the things that jumps out at me is you have been a warrior against corruption your entire career. I know you worked across the aisle with guys like Ron Paul to point out things. Didn’t matter where because corruption is not a partisan issue. It is a criminal issue. And I look at the work that you did on the meltdown of the housing market.

And you just broke this down very well. We work with gentlemen like Bill Black who I’m sure you know, from the savings and loan crisis. We work with folks like Michael Winston, Art Wilmarth, so many really important people that we’re trying to bring these stories out. And we had Richard Bowen on recently as well. We’re not playing around. This is such an important thing.

We’re trying to find a way to get a new Pecora hearing. We’re trying to find a way to get the energy and the muscle and people like yourself who have the ear of others. How do we take this horrific element of corruption that is so baked in with the 24 hour propaganda news cycle that we deal with?

How do we take this and build energy ala Occupy Wall Street? How do we bring that kind of focus back? How do we make this matter? Your story about the power utilities in Cleveland is absolutely epic, and it is a microcosm of a million other moments in, moments in crime. What a slip. Moments in time.

I think that if we took a step back and we thought about it, having a civil rights based anti-corruption revolution. And that word revolution gets sparked around quite a bit. In fact, Bernie Sanders talked about leading a political revolution. You have been on the forefront of trying to lead a political revolution. I think the time has come for an anti-corruption revolution.

[00:23:36.920] – Kucinich

These things do run in cycles in American history. You have to go back a hundred years to when more than a hundred years to when Teddy Roosevelt became President upon the unfortunate death of William McKinley. And the financial interests were always concerned about Roosevelt because he didn’t have any particular sympathy for the way capital was being amassed at the time.

And he became known as the Great Trust Buster because he saw the dangers that existed in the economy to the various areas, whether it’s railroad or energy, oil or transportation the importance of breaking them up. In the history of this country there is a place today where we take our understanding of what it was like 110 years ago and move it into present day and take that kind of thinking to make the present challenges in some ways.

I did that building on the philosophy of Tom L. Johnson that came out of that so called progressive era of American politics and bringing those values into the present day. And those values are immutable, time can’t cheat these values, should not. So what you can do, I think. And I’ve always felt where the greatest vulnerability of this whole system has been from my own investigation of subprime meltdown was in the failure of the Federal Reserve and then later on the banks to have to atone for the wreckage.

They left a neighborhood after neighborhood in the city Cleveland. There were tens of thousands of people who were caught up in the maw of this financial machine for no doc, low doc loans. There should have been a major civil rights suit filed on behalf of African Americans who were cheated out of their lives investment because they rolled their equity from previous property into another one to upgrade a home or put their savings into purchasing a house, which they needed more than luck to be able to make the payments.

But I’ve often felt that that was territory that needed to be revisited, that the public officials during that time were so close to the banks. They would not have dared to raise the question because to me, the whole neighborhoods were destabilized and wrecked, and it still has not been resolved. These banks come up and the successor banks, they say that they’re going to loan a few more dollars into a community that has been traditionally red lined.

See, that’s where I think my feeling has always been the neighborhoods on the East Side, in particular of Cleveland that were really devastated by those loans. The records are still there, and I think the claims could still be made because at the heart of it was fraud. And I think that you probably could still find some plaintiffs. But unfortunately for years and years the of City of Cleveland was not congenial to that kind of action, but that could change.

[00:27:18.860] – Lovell

Mr. Kucinich, I know that we’re running out of time, so I’m going to just kind of put this corner on it unless you’re willing to give us some more time. But in respect to your Sunday afternoon and things that you have on your calendar. Look, we’ve gone the distance in Ohio. We went to Ken Bracatelli, and we know the devastation that took place that you refer to in Cleveland.

It seemed to us to be ground zero, quite frankly, where a lot of these insane mortgage products were unleashed and a lot of unwitting people literally years before it made its way to Arizona and California and Florida and the sand states, and that sort of thing. And it was off the heels, of course, of this country getting rid of the golden goose, right, which was manufacturing and what the industrial Midwest represented.

I don’t want to take too much time in this, but I was struck by your moral clarity in your book and everything that you have been able to discuss, given your upbringing and what it’s all about. The way I’ve always interpreted this is I know Moses didn’t get to the tablets at the top of Sinai and have one set of rules on the front for the people and a separate set of rules on the back for the powerful who could game the people.

Can you leave us with some understanding, particularly within this last idea. We know that the only RICO conviction in this entire fraud took place because of Marc Dann’s work on a smaller level fraud that represented the entire Con from soup to nuts, whether it was Chase, Goldman Sachs, whomever. They were all playing the same game that your state was able to nail with a racketeering and corrupt organizations tag which this was.

Can you try to pull together the integrity of morality of ethics and then also governance as you send us away from this to inspire a group to move forward in the civil rights like revolution to purge corruption?

[00:29:07.640] – Kucinich

People have a right to expect that government is going to stand up for them. That government is going to tell them the truth, that government will not cheat them. That government will not conspire with other interests to be able to relieve people of everything they’ve ever worked for. They have a right to expect that. Unfortunately, the control that we have a right to expect over our government is lacking.

Things like Citizens United has made it more difficult to be able to control the levers of power because money is coming in from places people don’t even know and influencing the outcome of elections. We have the form of a democracy, but certainly not the substance. So the first thing that’s called for is an alert citizenry, that people should care enough about what’s happening in their society and in their community, at least be able to study it.

And if you have some things that don’t make sense, I can promise you that at the root of it is corruption. The idea that government doesn’t work is false. Government works. The question is, who is it working for? And we have to learn who it’s working for, and the government gives away massive amounts of dollars to this group or that group.

In return, public officials start getting contributions. We have to ask questions about that. So part of this is our responsibility as citizens to watch what’s going on. And the other part of it is to not be afraid if you see something that’s wrong, blow the whistle. You know, it’s funny how we’re told in the post 911 world, “If you see something, say something.”

Okay, well, that might be widened to apply to cheating that we see in the marketplace. It might be applied to the workings of a major corporation that need to be scrutinized by government officials. It may apply to government officials who are refusing to act upon the request of people for discovering for action.

Look, we’re talking about the human condition here, but we’re also talking about our system, which is a product of the human condition of some enlightened people as imperfect as it is, still represents the potential for democratic small D control. And what “The Division of Light and Power” has done is it raises those fundamental questions about do you have a democracy if the corporations are making the decisions?

Is it possible to stand up and challenge that? The answer yes. Can young people get involved and take their talents and abilities into a system and try to transform it? Yes. Does everyone have to be coopted? No. And can you somehow chart your way through the treacherous waters of political corruption and still stand for something that’s right and clean and pure? Yes, you can.

Is there a price? Well, my wall here. There was a mark where the bullet came through it when I was starting my campaign to save Muni Light and it just missed my head by a fraction. It’s not that these things are without risk, but I think it was [inaudible 00:32:42]  said that a man is not meant for safe havens. We have to have some courage and the least bit of courage changes outcomes.

I will tell you that. I found that out from my own experience. So I hope that you and your listeners will have a chance to read “The Division of Light and Power,” and you recognize this, I’m sure you have, how that process, as you said, it’s a microcosm what goes on everywhere.

But it gives people a chance to actually see it work and to get the granular details of it, because that may spark in some readers somewhere, “Oh, hey, there’s something going on in our town.” And when that happens, the purpose of the book is fulfilled.

[00:33:28.640] – Vaughan

And where can people get your book?

[00:33:32.160] – Kucinich

Anywhere. Go to a bookstore, order it, go to Amazon, Barnes and Noble. There’s dozens of different places that you can get it. And I’m just happy after 40 years to have finally finished it.

[00:33:51.090] – Grumbine

The timing couldn’t be better for us anyway. You’ve been a hero to me for many years, so this is a great honor to even be talking with you right now.

[00:34:00.250] – Kucinich

You’re very kind. And I thank you for saying that. But let me tell you, that kind of heroism resides in a lot of people. They just need some encouragement. I hope the book will encourage people. You just don’t be afraid to stand up. You may not see the results immediately, but let me tell you, when you challenge this kind of entrench power, which is not used to being challenge, things start to change.

So thank you so much for this opportunity. And I’d like to stay in touch, because I think that the questions that you raised about further investigation of the effects of that 2007, 2008 financial crash, there still may be some legal paths to being able to open this up again.

So I just want you know, I’m sure interested in doing that with you. I’ve got a little project coming up in Cleveland right around the corner, but as that works its way I think I might have some bandwidth to work with you on this.

[00:34:59.260] – Vaughan

That’d be great.

[00:35:00.630] – Lovell

That’s music to our ears. And I’ll tell you with alongside of Eric, we’ve assembled some of the greatest heroes within our system from William Black to Paul Pelletier, who was calling for a Manhattan-like Project to purge corruption. He was at the DOJ. Just wrote an Op Ed in The Atlantic. And then Chris Swecker, former director of investigations for the FBI. We’ve assembled The New Untouchables.

[00:35:21.710] – Kucinich

Great.

[00:35:22.000] – Lovell

We consider you that from politics. Eric, please close us out.

[00:35:25.860] – Vaughan

I was just going to say once again from an Akronite, somebody who’s not too far from you, that personally, a lot of what you’ve done has affected me and people that I know and love. And I have a profound amount of appreciation for that and our work, our documentary series, The Con, I think, comes from a similar spirit that your book comes from.

[00:35:51.000] – Kucinich

Right.

[00:35:51.640] – Vaughan

So I hope that storytellers like yourselves and storytellers like Patrick and myself and Steve can continue to tell these stories to help do that inspiring of others and giving people the opportunity to have something to emulate or have something to give them some sort of inspiration to do something when they see something.

[00:36:12.640] – Kucinich

Eric, thank you. Thank you. And thank you, Patrick and Steve, for this opportunity to engage in what I consider a colloquy on these matters that are so important to our society. Thank you for understanding the relevance of the book to today and whatever you can do to pass the word about it to people who you work with, I think would help all of us in our endeavors. Let’s stay in touch. Will you be able to send us a link on this?

[00:36:42.360] – Grumbine

In fact, let me just jump in. On our website, we’ll not only have full transcripts of this discussion, but we also have a bookstore that everyone that we bring on to our shows that has a book we promote it.

[00:36:57.060] – Kucinich

Can you do that? Can you put some links up? That would be fantastic.

[00:37:00.580] – Grumbine

You better believe it. We have an entire extra section that will be full of supporting things that will go with this.

[00:37:09.120] – Kucinich

Let’s stay in touch because our best work may still be ahead of us.

[00:37:14.050] – Grumbine

I love the way you think. Yes, sir.

[00:37:15.870] – Vaughan

I agree.

[00:37:17.130] – Lovell

All the best. Take care.

[00:37:19.520] – Kucinich

Thank you, everyone. Bye now.

[00:37:20.580] – Grumbine

Thank you so much. Bye bye.

[00:37:25.600] – Ending credits

The New Untouchables is produced by Andy Kennedy, descriptive writing by Rose Ann Rabiola Miele, and promotional artwork by Cristina of Paradigms and Revolutions Design Group. The New Untouchables is publicly funded by our Real Progressives Patreon account. If you would like to donate to The New Untouchables, please visit patreon.com/realprogressives