04/15/14 04/15/14 [captioning made possible by democracy now!] >> from pacifica, this is democracy now! do real time in jail for america for ridiculous offenses, for taking up to dub subway seats in new york city. people go to jail for that all-time in this country, for having a marijuana stem in your pocket. the 50,000 cases in a year alone. here we have a bank that wandered $800 million of drug money and they can't find a way to put anyone in jail for that.

that sends an incredible message not just to the financial sector, but everyone. >> matt taibbi on, "the divide: american injustice in the age of the wealth gap." fileas millions race to their taxes today, we will speak with one tax resistor about why she's refusing to pay her federal income tax. all of that and more coming up. this is democracy now!, democracynow.org, the war and peace report. i'm amy goodman. launched an it has operation to retake government buildings from pro-russian separatists in the country's east, despite the announcement it appears no troops have moved in so far. on monday, the separatists seized even more buildings after flouting ukrainian governments deadline to lay down their arms. the russian government is warning the crisis could spark a civil war. the u.s. is threatening new sanctions against russia. in a phone call on monday,

president obama told russian president vladimir putin to rein in the separatists, but putin denied interfering. jay carney said the u.s. is prepared to take new steps against russia. yasuo confirmed a visit to ukraine by cia director john brennan, but played down its importance. >> i can assure you russia's aovocations will come with cost. senior-level visits of intelligence officials are the standard means for including u.s.-russian intelligence collaboration going back to the beginning to the post-cold war era. u.s. and russian officials met over the years to imply that u.s. officials meeting with her counterparts is anything other than in the same spirit is absurd. >> the ukrainian government asked the united nations to authorize a peacekeeping force for their breastive east. -- restive east. the death toll from monday's

bombing of a bus station in nigeria has topped 70 with over 100 21 dead. the station is just on the outskirts of the capital. the nigerian government has blamed the militant group boko haram. prosecutors say the suspect in this week instead the shootings at two jewish centers in kansas will face hate crimes charges. fraser glenn miller is unknown white supremacist with ties to neo-nazi groups and the ku klux klan. he previously served time in prison on weapons charges and plotting to assassinate the founder of the southern poverty law center, touch monitors extremist groups. miller is accused of shooting three people dead at a jewish community center and retirement home. on monday, family members remembered 14-year-old reat underwood and his grandfather william lewis corporate who died in the attack. proxy was with us for wonderful 14 years.

blessed.ry i have heard from his friends and talk to his best friend and they love him, too. >> everyone wants to know how we're doing. to varying degrees, we are muddling through. thinks they're going to and no onels planned believes this will happen to you, to your family. box at the white house on monday, president obama also paid tribute to the victims and spoke out against hate crimes. >> as a government we will provide whatever assistance is needed to soup for the .nvestigation as americans, we not only need to open our hearts to the victims families, we have to stand united against this kind of terrible violence which has no place in our society. we have to keep coming together across faiths to combat the ignorance and intolerance, including anti-semitism, that

can lead to hatred and violence. >> a nevada rancher is declaring victory after hundreds of armed supporters pakistan not with the federal government. the bureau of land management bundy's zing cliv caddell this month oversell your to pay over $1 million in owed costs. he said he doesn't recognize the federal government's existence. to his side last week. many were armed over the weekend they shut down interstate 15 leading to a standoff that ended the government backing down and releasing the seized cattle. the local police officials of the bureau of land management wanted to avoid violence and public arm. individuals being shot, being run over on the highway. it took a lot of resources for

the taxpayers associated with this. urged state, bundy sheriffs nationwide to join his cause and "take away the guns from the united states bureaucrats." the southern poverty law center, which tracks right-wing extremists, has warned the standoff could encourage other antigovernment groups to stage similar actions. an army general has denied the clemency bid of chelsea manning and upheld her 35 year prison sentence. manning was seeking leniency for leaking a trope of classified u.s. documents to wikileaks, arguing it was done for the public good. with the generals denial, manning's request will go to the army court of criminal appeals. of fivetary trial alleged 9/11 conspirators has been put on hold over allegations of fbi spying on their attorneys. the defense lawyers say the government has used a member of one of the suspects legal team as a confidential informant.

the allegation follows previous claims by the attorneys that guantánamo bay prison officials have monitor their communications. the justice department meanwhile has announced it will not contest a court ruling that granted hunger striking guantánamo prisoners the right to challenge their force-feeding and other harsh conditions. the move clears the way for a number of pending challenges from guantánamo prisoners and could lead to even more being filed. activists and landowners in nebraska have unveiled a massive crop art opposing the keystone xl pipeline. using tractors, organizers dug into the cornfields and image of a rancher and a native american with the inscription "heartland equals no keystone xl." the image is said to be the size of 80 football fields. a new report says the killing seven terminal activist defending land rights worldwide

has surged over the past decade. the group global witness has 140 seven activists were killed in 2012 impaired a 51 in 12,002. the death rate is now an average of two per week. brazil was the world's deadliest country for environmental defenders with 448 deaths between 2002 in 2013. honduras was second with 109 deaths over the same period. "theguardian" and washington post," have won a pulitzer prize for the stores exposing nsa surveillance. handing out the award for public service journalism, the pulitzer committee said the disclosure of mass spying -- the reporting was based on the leaks of whistleblower edward snowden who shared nsa files with journalist laura poitras, glenn greenwald, you and

mccaskill, and barton gelman. the group also won a george polk journalism award last week. in a statement, snowden honored the journalist involved saying -- and those are some of the headlines. this is democracy now!, democracynow.org, the war and peace report. i'm amy goodman with aaron maté. >> welcome to all our listeners and viewers from around the country and around the world. today we dedicate much of the hour to a conversation with award-winning journalist matt taibbi, who you may know from his reporting on financial crimes. now he is back with an explosive new book that asks why these crimes have gone unpunished, as an unequal justice system targets the most vulnerable. the gap between what the poorest make and the wealthiest bring home has reached levels not seen since the great depression, and the drug war has fueled the mass incarceration of the poor and

people of color. >> earlier this month, attorney james kinney, who is retiring from the securities and exchange commission, gave a widely reported speech at his retirement party. he said his bosses were to "tentative and fearful" a hold wall street accountable for the 2008 economic meltdown. kinney, who joined the sec in 1986, had tried and failed to bring charges against more effective than the agencies 2010 case against goldman sachs. he said the sec has become -- well, for more we turn to our guest, matt taibbi, award-winning journalist, formally with "rolling stone" magazine and now with "first look media." his book is called, "the divide: american injustice in the age of the wealth gap." matt, we welcome you to democracy now!

it is remarkable, certainly needed book in this day and age. talk about the thesis. what is the divide? >> this book grew out of mike's prince covering wall street. i have been doing it since the crash in 2008. over and over i would cover these very complex and often socially destructive capers committed by white collar criminals. the punchline that all of these stories were basically the same. nobody would get indicted or go to jail. after a while, i started to become interested specifically in the phenomenon. why was there no enforcement of any of this? around the time of the occupy protest, i decided to write this book. then i shifted my focus to try to learn a lot more for myself about who does go to jill in this country, because i thought you really can't make this comparison accurately and to you learned about both sides of the equation. it is much more grotesque to consider the nonenforcement of

white-collar criminals when you do consider how incredibly aggressive law enforcement is with regard to everybody else. with the poorime and vulnerable, people of color, who have been targeted by the system. there is one case of a man in new york who was standing outside his home. >> i was in a law office in brooklyn and i was waiting to speak to a lawyer about another case when i met this 35 world african-american man, a bus driver. i asked him what he was there for. he told me he'd been arrested for "obstructing investor in traffic." i thought he was kidding. i did not know what that meant. i asked him to show me a summons and he pulled out a little piece of paper and there it was. pedestrian traffic. it means he was standing in front of his own house at 1:00 in the morning and the police did not like the way he looked,

and arrested him. this is part of the disorderly conduct statute in new york, but one of these offenses that people get roped in for, part of what city councilman in another city called an epidemic of false arrests. basically, these new police strategies -- the whole idea is to roped in as many people as you can, see how many have guns or warrants, then basically throw back the innocent ones. the problem is, they don't throwback everybody. they end up sweeping up a lot of innocent people and charging them with really pointless crimes. >> there's a comic scene where he goes to court and has a hard time convincing his public defender what he does want to pay a fine for standing in front of his home. >> this is something i encountered over and over and over again. people who are charged with offenses,r, harassing when the state discovers the case against them is not very good, they start offering deals to the accused. when people protest that i'm not

going to plead because i did not do anything wrong, they keep offering better and better deals. no one can understand why they won't plead guilty. in reality, most people do. they will end up with-- >> like the bankers. >> it is the complete opposite on the other side of the coin. guy could not convince his lawyer he was innocent. it took a long, long time before they got the judged as the policeman on duty if there was actually anybody else on the street to obstruct. it wasn't until that moment that they dismiss the case. it just took that long. >> let's talk about the other side. i want to go to attorney general eric holder, his remarks before the senate judiciary committee last may in which he suggests that some things are just too big to jail. >> i am concerned that the size of some of these institutions becomes so large that it does become difficult for us to

prosecute them when we're hit with indications that if you do prosecute and bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. and i think that is a function of the fact that some of these institutions have it come to big. -- have become too large. i think it has been inhibiting influence or impact on our ability to bring resolutions that i think would be more appropriate. >> that was attorney general eric holder testifying before congress. his remarks were widely criticized. this is federal judge jed rakoff speaking last november. >> to a federal judge who takes notes to apply the law equally to rich and poor, this excuse sometimes labeled the too big to jail excuse, is, frankly,

disturbing for what it says about the apparent disregard for equality under the law. >> matt taibbi, if you could respond? then talk about the history of eric holder, where he came from. >> first of all, this idea that some companies are too big to makes some sense in the abstract. in a vacuum, of course it makes sense. if you have a company that may ,ave existed for 100-150 years that employees may 100,000 people, you may not want to criminally charge that company willy-nilly and wreck the company and cause lots of people to lose their jobs. if there are two problems you use that over and over again. no reason you can proceed against individuals in those companies. it is understandable to maybe not charge the company, but in the case of a company like hsbc

-- which admitted to laundering money for drug cartels. somebody has to go to jail in that case. if you're going to put people in jail for having a joint in the pocket or slinging dime bag's on the corner on the city street, you cannot let people who laundered $800 million for the worst drug offenders in the world walk. be ais can't parenthetical. explain what you're talking about. >> this is one of the world's largest banks, hsbc, europe's largest bank. a few years ago, they got caught , swept up for a variety of offenses, minor elong -- money laundering officials. they admitted they laundered $850 million for two drug cartels, when a mexico and one in south america. including the notorious drug cartel in mexico that is suspected in thousands of murders. in that case, they paid a fine, $1.9 billion.

some of the executives had to do further bonuses for five years. not give them up, deferred them. there were no individual consequences for any of the executives. nobody had to pull money out of their own pockets permanently. nobody did a single day in jail and that case. was an incredibly striking case. i ran that very day to the courthouse in new york and asked around to the public defenders, what is the dumbest drug case you had today? someone had been thrown in rikers for 47 days are having a joint in his pocket. >> is that even illegal? >> no, it's actually not illegal. it was decriminalized back in the late 1970's. but with the stop and frisk, what they do is they would stop you and then search you and force you into your pockets. when you do so, now it is no longer concealed and now it is illegal. in that year, they had 50,000 marijuana arrest, even though

having marijuana was technically decriminalized at the time. my point was, here someone at the bottom of the consumer of illegal narcotics business, and he's going to jail. then you have people at the very top of the illegal narcotics business and they're getting a complete walk. that is totally unacceptable. >> the doctrine that you can finish an entire company for the misdeed of a few because you might hurt shareholders, the economy, you know, some which are pension holders are pension funds and so forth. how do you get from hurting -- how do you equate hurting an entire company to just not jailing a couple of executives? >> that is the whole point. to answer the second part of your original question, where does this doctrine come from? in 1999 when eric holder was a deputy attorney general in clinton's administration, he wrote a memo that is now come to

be known as the holder memo. in it he outlined a number of things. it was originally considered a get tough on corporate crime because he gave prosecutors a number of new tools of which they could go after corporate criminals. at the bottom of it, there was this thing he laid out called the collateral consequences doctrine. and what that meant, if you are a prosecutor and you're targeting one of these big corporate offenders and you're worried you may affect innocent victims, shareholders, or innocent executives may lose their jobs, you may consider other alternatives, other remedies assigns criminal prosecutions. -- other remedies besides criminal prosecutions. it was a completely sensible thing to lay out at the time. of coarse it make sense to not always destroy a company if you can avoid it. what they have done is conflated policymetimes sensible

with a policy of not going after any individuals for any crimes. that is totally unacceptable. >> is not the case that some of these cases are just too complex to explain to a jury? >> yes. well, they are complex and juries do have a difficult time with them, but they are not impossible to explain to a jury. thetended a trial involving municipal bond markets where they obtained convictions. that case could not have been more complicated. that was as heart ache -- as a case gets. i watched some of the jurors fighting off sleep in the early days of the trial. that is how difficult it was. in that case, amusingly, one of the attorneys for the banks got up initially and try to defend his client's behavior by saying, when you call up -- if you're washing machine breaks and you call the repair man and he tells you how much it costs, you just have to trust him what the

prices because you don't understand how to fix her wash machine and we do. in other words, this stuff is so complex, you just have to take our word for it that we did not commit a crime. thathat excuse -- i think is a weak excuse the prosecutors get out. it is a copout for not taking on difficult cases. rich or poor, black or white, if someone has broken the law, you should want to go after wrongdoers no matter who they are. the fact it is a difficult crime to prove should just be more of a challenge for you. >> i want to turn to remarks by lanny brewer in 2012 about prosecuting large companies. at a time, he was assistant attorney general and spoke before the new york city bar association. my duty to consider whether individual and place with no responsibility for or knowledge of misconduct committed by others in the same company are

going to lose their livelihood if we indict the corporation. a large multinational companies, the jobs of tens of thousands of employees can literally be at stake. and in some cases, the health of an industry or the markets are very real factor. those are the kinds of considerations in white-collar cases that literally keep me up at night. and which must, must play a role in responsible enforcement. bruer. is lannty >> he is basically the top cop in america at the time. >> respond to what he said and then talk about covington and berlin. >> the whole thing about white-collar employers perhaps

losing their livelihood keeping them up at night, i want to know what his responses to the idea that maybe a single mother on welfare is going to lose her kids because she's going to lose custody in an $800 welfare fraud case. sawany of these cases i that it was just overwhelming to me. those are the kinds of things that would keep me up at night, thinking about the consequences that ordinary people feel or suffer when they're caught up in the criminal justice system. for instance, going back to welfare fraud, your relatives can lose their section eight housing. if you are on welfare and you get caught in a fraud case, it may just involve checking the wrong box or having one of your neighbors say you have a boyfriend living in your house when you really don't. your mother or your grandmother can lose their housing because of something like that? that would be the stuff that would keep me up at night. i would not be worried about millionaire and billionaire

executives working at these banks if i were lanny breuer. bruer andout lanny eric holder, where they came from and where they go back to. >> they both worked at a law firm that basically represented every one of the too big to fail banks. they were also -- involved also in the setting up of the electronic mortgage registries so they played an enormous role in the subprime mortgage crisis. but here's the key thing about the presence of these two people at the head of the attorney or the justice department. prosecutors by and large, and i interviewed a lot for this book, they basically all have the same personality. the old-school prosecutors. if you think of someone like eliot spitzer, they're all like bulldogs. they just want to get their target by hook or crook. it doesn't really matter. they have this ferocious aspect

to their personalities. it is an admirable quality in a prosecutor. the 2000's, that kind of person started to be replaced in the regulatory system by new kind of figure, who tended to come from the corporate defense community. , getheir attitude was not their target at all cost, it was more, let's bring a bunch of people in a room and hammer out a solution where all of the sides will end up walking out happy. that is how we end up with settlements like the $13 billion chase some blaster or the $1.9 billion hsbc settlement instead of prosecutions. >> covington and berlin represented jpmorgan chase. -- and ast host of other banks. you have a whole bunch of people sort of at the top of the regular tour agency whether it cftc, maybethe fcc,

the enforcement division who all came from these big banks or from law firms that represented these big banks. it is a very incestuous commodity. just like you talked about with james kidney, the sec official who left, as a result of this kind of merry-go-round of people who all work for the same companies and they're going to go to government for a while, then go back and make millions of dollars, they are very reluctant to be aggressive against these companies because, culturally, they are the same people as their targets. there isn't a sense of how to go with the 4 -- there isn't the same simpatico with the four. >> you also suggest holder and lanny breuer are perhaps overly concerned with her conviction rate. >> that is something heard over

and over again from people within the justice department, came in, those two k the edict came down that we're only going after cases that were absolutely sure we are going to win. you can never guarantee a victory in any criminal case. often time, the cases are difficult to prove or the evidence may not be 100% there, but the state has a moral obligation to proceed with an investigation against people who are guilty. the fact it is difficult should not be a limiting factor. that is why instead of cases against these big banks, you so ridiculously large amounts of resources devoted to things like prosecutors and barry bonds or roger clemens, cases where there are only a couple of pieces of evidence and it was hard to screw up. evendid not always exceed in those cases. it was a terrible, terrible thing for the justice department. >> we will take a break and come back to this conversation with the award-winning journalist

matt taibbi. his new book is called, "the divide: american injustice in the age of the wealth gap." in the government does go after banks, what banks do they go after? we will talk about that in a minute. ♪ [music break]

>> this is democracy now!, democracynow.org, the war and peace report. i'm amy goodman with aaron maté. >> we are spinning with matt taibbi, award-winning journalist now with "first look media." his book is, "the divide: american injustice in the age of the wealth gap." turning to the bank that was prosecuted, abacus bank. last may he became the first thing to be indicted in manhattan in over two decades. and had district attorney cyrus thee, junior announced

diamond. >> today we are announcing the indictment or guilty pleas of 19 individuals on charges including mortgage fraud, securities fraud, and conspiracy as well as the indictments of abacus federal savings bank from a federally chartered bank that is been catering to the chinese immigrant community since 1984. these defendants, the bank, and former employees and managers from its lone department, are charged with engaging in a systematic scheme to falsify and fabricate loan applications to the federal national mortgage association commonly known as fannie mae. so that borrowers who would otherwise not legally qualified for the fannie mae mortgages, could obtain them unlawfully. this is a large-scale mortgage fraud case that we estimate to include hundreds of millions of dollars worth of falsified loan applications. if we have learned anything from the recent mortgage crisis, it is that at some point, these schemes unravel and taxpayers

can be left holding the bag. financial institutions in short have to obey the law and follow the rules. our financial system is predicated on this basic concept. >> that is manhattan da cyrus vance, junior. matt taibbi, you are at the trial. you heard prosecutors vance suggesting some link to the financial crisis, but that wasn't the case. >> i mean, it's on the steamers. humorous.most here he is holding this grand press conference. they had a chain gang were they chained 19 defendants together and hold them in the court for this exercise. >> all working for applicants? >> yes. these are working-class chinese immigrants, basically, the highest-ranking official in this entire case made $90,000 a year. many did not speak english. this is a small bank wedged between two noodle shops in

chinatown. this was the target they chose to go against as a symbol of the financial crisis? the chain gang incident, three of the defendants had actually already been arraigned, but they asked them to volunteer to come down to the courthouse for the photo op that day. rock them in, chained them to the rest of the defendants so they could be re-arraigned for the benefit of the cameras. the point is, abacus federal savings bank, small community, my nordea bank in manhattan, this was the sole target of any reprisal by the government in the wake of the financial crisis. they are a stone's throw from these gigantic skyscrapers housing these other major banks that committed crimes that were hundreds of times worse than abacus was even accused of. it was such a visually striking

contrast for me, that is where i wanted to start the book because here you have this bank being arraigned in downtown manhattan, and they looked northward toward chinatown for their target as opposed to a few blocks south where they could have found -- walked in any direction and found an appropriate target. >> contrast that with jamie dimon testifying before the senate judiciary committee, the head of jpmorgan chase. talk about what his bank was fined for him what he ultimately, what happened to him. is the ceo of jpmorgan chase. laster that bank a $20 billion in fine, which is an extra ordinary number if you think about it. i think it beats by a factor of five a record for the largest amount of regulatory fines in a single year which was previously held by bp for the deepwater horizon incident. they were accused of extraordinary array of things, everything from being bernie

madoff's banker and not raising flags are early enough, to manipulating energy crisis in michigan and california, to failing to disclose to investors extent of losses in the london quayle episode, to abuses during the subprime mortgage period of some of their subsidiaries. the list of things goes on and on and on. translated into common criminal law, this is sort of replacing hundreds of years in prison for many different people. >> absolutely. i made a point where there was another case involving a company called general reinsurance where executives were charged with stock fraud, that that amount of fraud that year was more than the total value of all the cars

stolen in the american northeast that same year. you think about everybody doing time for stolen car that year, and these guys ultimately got off on a technicality. chase, they paid $20 billion in fines and with the government always says in response to the question of, why aren't these guys in jail, they would say, we don't have enough evidence in these cases are hard to make. my question is, over and over they seem to have enough leverage to get billions of dollars in fines out of these companies, but not enough leverage to get even a day in jail for any of their executives? it doesn't add up. logically, it is a total non sequitur. there's no way can have a company paying that much money not have somebody guilty of the crime. it's just not possible. >> jamie diamond is a 74% raise. >> that is the punchline to this whole thing. if you're the head of any other , one made the point, if

he were a restaurant about the biggest fine in the history of restaurants, there is no way he would be kept on the job as the head of the company. or notnot only not fired prosecuted, but he was kept on a job and got a 74% raise. they essentially a the $20 billion fine by laying off 7500 lower-level workers that year. that is where the pain came from. >> let's go to richard fuld from the final chair and chief executive officer of lehman brothers. in 2008, who spoke over the house of representatives oversight committee and was grilled about his own exorbitant earnings as the bank went under. this is committee chairman henry waxman questioning fuld. >> you have been able to pocket close to half $1 million. my question to you, a lot of people ask him is that fair for

the ceo of the company that is now bankrupt to have made that kind of money? it is unimaginable to so many people. >> i would say to you, the 500 number is not accurate. i would say to you that, although it is still a large number, i think for the years you're talking about here, i believe my cash compensation was close to $60 million, which if indicated here. and i believe the amount i took out of the company over and above that, i believe, a little less than $250 million. >> your response to the last head of lehman brothers talking about his salary? >> first of all, there was a whistleblower within lehman brothers who wrote to the sec before lehman brothers collapsed, talking about how fuld had earned a significantly

larger amount of money than he represented there in congress. it is quite possible if the sec had followed up on some of those complaints by that whistleblower, they might have uncovered some of the corruption of lehman brothers ahead of time and maybe, possibly even headed off the disaster. but what is interesting or symbolic about richard fuld is that here's a guy who nearly blew up the planet by loading up his company with deadly leverage in making a string of irresponsible decisions to over invest in subprime mortgages, and the collapse of the company resulted in all of us having to pay these enormous bailouts. count,lked away, by his 300 million dollars, but by the count of some others, poster to half $1 billion. and he kept the money. that is a consistent theme of the financial crisis. not only were these guys not prosecuted, they got to keep all of the ill-gotten gains they made during these periods. >> you call that chapter "the

greatest tank robbery you never heard of." >> there was something that happened at the lehman brothers when the company went out of business. they're essentially was a merger with the british tank parkways -- british bank barclays. there was an episode where a series of lehman brothers insiders agreed to take upwards of $300 million in compensation -- and future compensation from barclays before they did the process of evaluating for the sales at barclays. took jobs atey barclays and basically marked on the price of barclays so the lehman creditors got less money in the end. if you lost money in the lehman debacle, you can probably lay some of the blame at the feet of those executives. >> and so shady, didn't most of this happen in the middle of the

night? >> they struck many of the deals with the lehman insiders before dawn on the day of the last board meeting. there were e-mails going back and forth between some of these lehman brothers executives saying, how much did you get? i got $15 million, etc., etc. media covers it and the prosecutors don't go after these institutions, it is all from the perspective of those who would be or should be charged. when it comes to people on the street, it's always from the perspective of the victim. which, by the way, it should be. if someone is raped or murdered, you should hear their story, their name, and a person should be held responsible. in in this case, you are identifying with those who are -- they have families, there really a wonderful person. talk about the victims of these crimes that jpmorgan chase was

fined for. >> we are all victims of these crimes. that is the difficult thing about this new era of financial corruption is that these crimes are executed on such a massive scale that we can all be victimized and basically not know it. if you think about something like the libor scandal, the world's biggest banks got together and colluded to monkey around with world interest rates. well, it is -- if that crime affected anybody who held a variable rate investment of any kind. if you have a floating rate credit card or mortgage, if you are a town that has swaps, you may be paying more or you may be paying less. you don't know, but they have been affecting the amounts of your holdings. recently there have been charges that some of the banks have been monkeying around with the prices of things like metals. so if you go to buy can of soda,

you may be paying more than you would have othwise. the subprime mortgage crisis, typically, the victims were people who held pensions. what often happen is the banks would create these gigantic masses of essentially phony subprime loans, they would describe them -- disguise them as aaa rated and sell them to an investor like a pension fund. your some working stiff, tollbooth operator minnesota with the state pension, and you wake up one morning and 30% of your pension fund is gone. well, you are a victim of the stuff. it is very hard to trace that back to these people. journalists don't want to do the work of identifying who the victims are in the scandals, because it is too complicated. and that is why you often see these crimes described from the point of view of the perpetrator and not from the victim, because we are all the victims. these crimes are real. their existential. they are on such a gigantic

scope that it is difficult for us to get or wrap our heads around. that is a very good question to ask. books you mentioned earlier people who are targeted for welfare fraud. in one case, in san diego, profile the woman who was targeted by this program key 100, a very invasive action in her home. can you talk about that case? >> that this program in san diego were if you apply for welfare, the state is to creatively search her house to make sure you're not lying, for instance, having a boyfriend. so you're a single mom, you go to the welfare office for financial assistance. formepresent on the you're not cohabiting with anybody. just to check, they take to sit tight in your house -- i've heard stories of people who literally waited sitting in the house for a week come in not knowing when the inspectors going to,. if you're not there when they come, you don't get your welfare. the person comes finally. it is not a social worker.

it is a law enforcement official. they search your house. i talked to a number of women who recounted the experience of having her underwear drawers rifled through. one woman talked about in inspectors sticking a pencil end into the underwear drawer picking out a pair of sexy panties and saying, who do you need these for if you don't have a boyfriend? this is the kind of thing people have to go through. i understand too many middle americans, welfare recipients are perhaps not the most sympathetic people. but it is very striking that, for instance, the recipients of bailouts, we don't have the right to check their books, but somebody who applies for federal assistance to feed their kids, we have the right to go through their underwear drawer. i thought that was a striking comparison. book, "ther of your divide: american injustice in the age of the wealth gap."

it is very striking. you have this artwork throughout your book. explain who did this. >> this is molly crabapple. she is a great artist. i met her during the occupy protests. we have a mutual friend, and molly had done these amazing posters for the occupy protests that were -- some were based on my work, because there was a vampire squid thing. >> explained. >> i referred to woman sacks as a vampire squid -- i referred to goldman sachs as a vampire squid. and she ended up becoming sort of famous as a semi-official artist of occupy. we decided to work together on this project. what is so perfect about her is that she really specializes in doing these kinds of grotesque,

horrifying portraits of dysfunction. looks quite beautiful from a distance, but if you look at the cover closely, it is horrifying image of people being ground up in this mindless justice machine. it is beautiful stuff and molly gets all the credit in the world i think. they are incredible images. >> sometimes you have family members coming to plead to the judge for leniency at hearings. you can track this in your book. you have executives bringing in hundreds of people. can you compare what happens there to what happens to people on the bottom? >> this is interesting. this is the 750 lane dollar stock fraud case where these guys all got off will stop what was so interesting about that is if you go to court, the judges almost never from the same

neighborhoods as the accused. when you do have a case where somebody from the suburbs lives in connecticut and the judge is also somebody who is from the suburbs and lives in connecticut, and he has members of local pta come out and say, this guy somebody who would not even jaywalk come and he is a god-fearing person. committed he $750 million stock fraud, but he is a decent person. bail is never an issue for this kind of defendant, which is very, very important. be on that, in a particular case , after they were convicted, all of these defendants were allowed to remain free pending appeal. removed all of the leverage the state might have had to roll up these defendants into higher targets. whereas that is exactly the opposite of what happens to poor defendants were frequently thrown in jail -- who are frugally thrown in jail, they'll is set at a higher level they can afford.

while you're in jail waiting for trial, you start to do the math and you realize that you could stay in jail longer on bail then you would do if your sentence. that is one of the reasons why people plead out, even when they're innocent. themath just works in state's favor. they have all these tricks to keep you in jail longer than you're supposed to be. >> who is tougher on corporate america, president obama or president bush? >> bush, hands down. this is an important point to make. if you go back to the early 2000's, think about the high-profile cases. adelphia ,enron, arthur andersen -- all of these companies were swept up by the bush justice department. what is interesting about this, you can see a progression. if you go back to the savings and loan crisis in the late 1980's, which was an enormous fraud problem but paled in comparison to the subprime mortgage crisis. we put about 800 people in jail

in the aftermath of that crisis. fast forward 10 or 15 years to the scandals like enron and tyco, we went after the heads of some of those companies. it was not as vigorous as the snl, but at least we did it. at least george bush recognized the symbolic importance of showing americans that justice is blind. fast forward again to the next big crisis, and how many people have weak put in jail -- have we actually put in jail? zero. and this is a crisis that was .uch future in scope it wiped out 40% of the world's wealth and nobody would to jail. we are now in a place where we don't even recognize the importance of keeping up appearances when it comes to making things look evil -- equal. >> in the story with patrick. saxophonist named patrick ocean jewel who was assaulted by police in new york

city. they mistook him -- mistook a rolled cigarette for a joint. cooksey brought his girlfriend to the subway. he walked with her every morning. he did not know who attacked him. >> woollies can be anyone these days. people don't know who's coming in uniform. they don't always come in the unmarked plymouth are used to drive. they can drive fancy cars or beaters, dressed in plainclothes . you don't even know who the cops are. this guy was just sitting at a train station smoking a hand rolled cigarette and all of a sudden, he's been beaten up by all of these people. he only later figured out later they were cops -- >> when he called to a police officer, started crying for help. >> a uniformed police officer comes and tells them to shut up. that's when he realized they were cops. and is sort of stop targets.anding even if you're white and

middle-class, you, too, can be part of this process. >> and your point in putting this in "the divide"." >> this is beginning to affect everybody. one problem with the increasing wealth gap is bringing to us, there is a smaller and smaller group of untouchables and there's the sort of widening group of everybody else and we all have the same lack of respect from law enforcement. >> matt taibbi, thank you for being with us, award-winning journalist. his book is called, "the divide: american injustice in the age of the wealth gap." this is democracy now! when we come back, it is tax day. what is one young medical student doing? why isn't she paying her federal taxes? stay with us. ♪ [music break]

>> this is democracy now!, democracynow.org, the war and peace report. i'm amy goodman with aaron maté. to look atntinue issues of finance and justice, we turn to taxes. today's april 15 and many americans are rushing to file their federal income taxes by the midnight deadline. others are using the data protest the use of tax dollars to fund war.

the war resisters league estimates at least 45% of the 2015 federal budget would be used for current and past military expenses -- including drones and bombs, as well as interest on the national debt. to voice their opposition to this, some americans, like our next guest, are taking a stand by personally refusing to pay their federal taxes. lida shao has been a war tax resisters for three years and had support from the national war tax resistance cordoning committee and been active in working with youth and currently is premed at columbia university. we welcome you to democracy now! so you are not going to be mailing your taxes in today, at least her federal taxes. >> i am so honored to be here. no, i'm not going to be. just printed the peace return this morning. you can file it instead of the 1040, the national war tax

resistance cordoning committee. you can submit that instead of your 1040 and explains the reasons why you're resisting taxes to the federal government. >> what consequences could you face? >> you could face a bunch. some people get threatening letters and calls. there have been a few cases of fraud, but i mean, really it is a handful of irs agents trying to control three hundred million people. the chances of getting audited are very low. i personally have not felt any risk or received any threatening calls. asked why are you war tax resistor? >> my father was born the year before [indiscernible] haunted his whole life about what the war did to his city. i think of my war tax resistance as a practice i can cultivate throughout my life.

>> what about the people decided they did not like certain policies of the government, so they would not pay their taxes, either? great.ink that would be then you can divert your taxes toward things you actually do agree with. is going toaxes war, you could take 45% of your annual tax refund and donated to organizations that you support in your neighborhood. >> so if somebody wanted to follow suit, what is your ties to them? how do they go through the process? >> be really clear about your reasons why and how war has impacted your life, then pick something you know you will be passionate about for the rest of your life and just learn as much as you can, stuff your brain and do it. >> to someone who things, i did not cut my taxes together, i'm not going to get them in by midnight tonight so i'll just say i'm a war tax resistor compact what do you say to them? talk about how you arrived at this. be viable that could

as well. or has touched all of us in so -- war hasbut touched all of us in so many ways, and it might make sense if someone arrived at that decision. but for me, i just thought about how war has marked my life. in theraduating class shadow of the twin towers in 9/11. i saw people jumping out of the towers from my early morning biology class. i guess at that moment i realized u.s. would retaliate, and i did not want more people to die. so just thinking about how to cultivate peace in your life and end war, and that is really a hard skill and i think something courageous. so learning how to do that because i don't think we learn how to do that. then i discovered the national war tax resistance cord mating committee -- cordoning committee. it was a responsive group of people. it was a lovely community. me out tonally took tea and explain things about taxes that i had no idea when i

was just barely legal to drink alcohol. >> how to spin war tax resistor fit in with your desire to be a doctor? >> i think of it in a broader context of the resistance and how in the u.s. i think a lot of the doctors have become very fearful because of the debt they come out of med school with. i would love to see a system that creates doctors that can be courageous along with their patients and the victims of the health-care system. i guess i think of it in terms of the larger economic control over people and how they help one another. >> i want to thank you for being with us, lida shao, i know you have a paper due today. you better get back to school. she has been a war tax resistor for three years with the