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Un-Jailed Americans

Un-Jailed Americans

John Reich, Former Director of the Office of Thrift Supervision (OTS) 

So much more than just another failed regulator, Reich actively oversaw the demise of major financial institutions like IndyMac, AIG, WaMu, and Countrywide. 

He generally allowed large companies to choose which rules they might, now and again, try to pretend to follow. Reich led the charge both to eliminate burdensome regulations and to ignore all warnings about bad behavior and imminent doom.  He had a habit of blaming the act of reporting regulatory problems for the financial collapses those problems caused.  In other word, he didn't shoot the messenger, he pushed to messenger onto the subway tracks and then blamed it for stopping the train.

OTS admitted it didn't take appropriate action with AIG, OTS knowingly allowed IndyMac's misconduct, and Reich even accused an FDIC commissioner of "audacity" for considering downgrading Washington Mutual (two weeks before it collapsed). Audacity!  That should be reserved for things that don't prevent financial misdeeds, things like Hope. 

As for Countrywide, Reich was frequently warned about its problems, but he told underlings not to investigate.  In what is surely a coincidence, he's a friend of Angelo Mozilo. Was he "Friend of Angelo"?  That's unclear.  What is clear is that he's definitely a friend of not going to jail.