(5) Prologue

Over hoe ze bij de FED kwam te werken. Ze was iemand met veel ervaring bij allerlei grote organisaties.

"But nothing I had seen during my decade of legal work had prepared me for what I witnessed in just a few short months at the New York Fed. In those months I discovered a disorienting world full of hidden clues, where people said one thing but meant another. Beneath the public face of the Fed laid a web of incompetence, corruption, rampant mismanagement, secrets, and lies. In the “fake work” culture of the Fed, where supervision was a job title, not a job, the most important thing was to control the process to serve the ultimate master. The New York Fed was not simply failing to stop the banks; it was actually enabling their bad behavior." [mijn nadruk] (13)

(13) Chapter 1 - Special Team. Different Training

"My position would be the type of plum job typically reserved for more connected alpha males. If this was a plum job that led to promotions, no one at the New York Fed would give it to a woman, much less a minority like me. Another mystery to be solved."(21)

[Het is een wereld die ik totaal niet ken. In feite ken ik het hele bedrijfsleven niet. Ik heb altijd alleen maar in het onderwijs gezeten, in de wereld van hogere beroeps en academische opleidingen, van scholen op allerlei niveaus. Dat is maar goed ook, geloof ik. Segarra beschrijft een wereld van overambitieuze witte mannetjes in dure nette pakken en ook wel vrouwtjes met de duurste modieuze schoenen. Die blijkbaar standaard foto's van hun gelukkige vrouw / man en kinderen op hun bureau hebben. WTF? Zodat iedere alleenstaande of non-hetero meteen opvalt? Akelig stijve wereld, alles om de schijn op te houden.]

"“Conflicts of interest” is an old, well-known issue in banking. If you have a vested interest in the outcome of something, you have a conflict. US banks have divisions dedicated to performing conflicts checks and monitoring both banking divisions and bank employees.Investigations into the 2008 financial crisis had laid bare widespread malfeasance by both Goldman divisions and employees." [mijn nadruk] (25)

"It became clear that delaying my official training was but one of the many strategies in an unspoken but well-thought-out plan among some New York Fed employees to improve the New York Fed’s rating of Goldman Sachs."(30)

(30) Chapter 2 - The Regulator Floor

"As an experienced attorney, I was well aware of the extensive surveillance systems big banks had in place. Such measures had increased exponentially over the years as technology advanced. By 2011 the big, complex banks I had worked for were not just keeping logs of every telephone number you dialed on their phones; they were also recording every single computer keystroke, email, voicemail, telephone conversation, and swipe of your entry badge. The ones who took surveillance most seriously had cameras everywhere.Special teams of ex-CIA and -FBI agents worked in dedicated units performing surveillance and monitoring tasks as needed. An ordinary day might be filled with background checks and fingerprint scans of incoming employees. Occasionally they would perform special investigations and enhanced surveillance of suspicious or potentially troublesome customers and employees, sharing the results with the legal department or law enforcement as needed. Given the trillions of dollars at stake and the ease with which a rogue employee could deploy numerous tactics against the bank and its customers from within, these measures made good business sense. As I thought back to some of my past experiences at other banks, I wondered where Goldman’s surveillance fell on that spectrum." [mijn nadruk] (43)

[Het zou dus niet mogelijk moeten zijn dat iemand van binnen uit rare dingen zou doen, laat staan dat iemand van buitenaf de zaak zou kunnen hacken. Maar natuurlijk is dit soort security niet voldoende om corruptie, slechte beleidskeuzes, vriendjespolitiek, en dergelijke te ontdekken of tegen te houden. Dat is juist het gekke. Het is weer het bekende verhaal: de instrumentele rationaliteit was subliem, de normatieve rationaliteit helaas onuitgewerkt.]

"As is customary in the industry, I was on probation for the first six months. It was very important that I, as a new employee, keep my mouth shut as much as possible until I had the opportunity to figure out who was who and what was really going on."(52)

[Ja, al die tijdelijke aanstellingen zijn ook heel geschikt om mensen monddood te maken.]

(55) Chapter 3 - We Want Them to Feel Pain, but Not Too Much

"Back at the Goldman regulator floor I learned that the New York Fed regulators shared our busy office space with two other regulatory agencies, also charged with supervising Goldman: the New York State Department of Financial Services (NYSDFS) and the Federal Deposit Insurance Corporation (FDIC). Physically, there was no clear separation between the employees of the three agencies on the Goldman regulator floor. The open layout, glass walls, and rows of tables with work stations in close proximity to each other ensured a complete lack of privacy."(66)

[Wat betreft de ruimtelijke indeling: ook zo'n manier om mensen monddood te maken, want wat je zegt kan door iedereen gevolgd worden. Een ander eeuwig terugkerend ding: instanties die langs elkaar heen werken, belangenverstrengeling, 'conflicts of interest'. En even opvallend: mensen die een bedrijf moesten controleren en corrigeren en die dan een paar jaar later een belangrijke functie binnen dat bedrijf hebben.]

(73) Chapter 4 - The Shadow

"Johnathon brought the conversation to my role, and Chuck intimated that he viewed my role as monitoring the legal and compliance systems within Goldman so as to ensure they were in compliance with the rule of law. This made complete sense to me."(93)

(94) Chapter 5 - The Goldman Lawyers

"A big global bank without a conflicts-of-interest policy was, simply put, not acceptable.(...) It struck me that this was it: after more than thirty minutes of trying to talk around the issue in circles, they finally admitted that Goldman did not have a firm-wide conflicts-of-interest policy."(96-97)

"Before that day’s meeting with the Goldman lawyers, I was aware of their reputation. Word on the street was they were on the average side of the bell curve technically, regularly producing shoddy paperwork. They also tended to lean toward the more disagreeable, arrogant, and condescending side of the personality spectrum."(102)

"To the regulators in the room it was a clear signal that Goldman’s lawyers were not going to push the company to get its act together with respect to conflicts. The BSC was a smoke screen to appease the public. This was a lot to digest: situations like this seemed to be the reason Connor had brought in new people like me. We would look into all of this, for sure. Johnathon, Analisa, Lily, and I silently walked out of the meeting and headed back to the Goldman regulator floor."(116)

(116) Chapter 6 - You Should Not Have Come

"With respect to the meeting itself, Johnathon indicated he was going to press Goldman on their risk-assessment methodology and framework. Risk assessments are the method and documents by which a bank catalogues all the laws and regulations they need to comply with, broken down by area and product, together with the steps they take to comply with them and the risks associated with each. The bank will periodically select samples of transactions and check to see whether the employees are complying with the prescribed steps. Johnathon and I had both come from banks that sold just as many, if not more, products than Goldman. When it is printed out, the typical big-bank risk assessment fills several binders."(118)

[Kortom: dat is allemaal zo veel en zo ingewikkeld dat niemand die stukken ooit leest ... Niet erg geruststellend.]

"I left the meeting feeling a bit more grounded, thinking I had a better grasp of how things were supposed to work in theory. Just how far theory deviated from practice would become painfully clear over the ensuing months."(136)

(140) Chapter 7 - The UK FSA

"There it was again: delay, delay, delay."(142)

"Translated into plain English, he was saying that Goldman had anti–money laundering issues around the world. He was raining on Mila’s parade, and her deflated look made it plain he had succeeded."(150)

"But there it was: the order to look into some of the issues but not all of them."(164)

(164) Chapter 8 - Fly Paint

"Meeting after meeting, delay tactic after delay tactic, it seemed increasingly clear that many of my colleagues believed that “later would be better.”"(165)

"In sum, I was supposed to review each of these MRAs and, if I determined Goldman had fixed them, close them. But Johnathon had not yet transitioned the MRAs that had been issued to Goldman in prior examinations to me. Because he had not shown me the list, I had no idea how long it was or what the issues were.
On top of that, I still did not have the systems training, so I couldn’t get into the system and see the issues for myself. This also meant I could not document my work reviewing them, update the New York Fed data systems with my observations, or even close the issues if I determined they were fixed.
Until that day I hadn’t worried much about not having access, as Johnathon had indicated this was not important to the legal and compliance risk group. But here was Koh saying that closing MRAs was the priority—rather than staying focused on all the issues bubbling up at Goldman and the New York Fed that had not yet been caught and documented."(174)

[Ook een bekende truc: neem mensen aan voor taken die ze niet kunnen uitvoeren zodat je ze daarna kunt verwijten dat ze hun werk niet goed deden. Past ook goed in het uitstellen-straatje.]

(188) Chapter 9 - You Didn’t Hear That

"It would not be until several months later, while talking to other current and former Fed employees, that I was told the new supervision structure had apparently been Sarah Dahlgren’s idea and that Bill Dudley blessed and supported it. Inexplicably, Dudley had kept Dahlgren on as head of the supervision function, despite criticism from both within and outside the New York Fed about the performance of the supervision teams she led both in the run-up to and during the 2008 financial crisis. Dudley protected Dahlgren, and she could do no wrong."(194)

[Ook een bekend verschijnsel: vriendjespolitiek.]

"Meanwhile his team [de relatiemanagers bij Goldman] was not being helpful as I strived to prepare for the meeting. In fact, they were the opposite of helpful: they constantly interrupted me with inane questions and unprompted discussions on irrelevant subjects."(196)

(215) Chapter 10 - Gaslighting

"Gaslighting is psychologically manipulating someone into questioning their own sanity. I was intimately familiar with the many ways a perpetrator goes about weaving that web ..."(215)

"The internal pushback had become palpable. People inside the Fed were defending the interests of Goldman Sachs to the point of obstruction."(238)

(239) Chapter 11 - How Do You Think They Are Getting Ahead?

(261) Chapter 12 - Record Tampering

"The team listened silently and nodded here and there, seemingly in agreement. When it came to nodding, Silva’s team flew paint to perfection."(264)

[Kenmerkend voor bepaalde hiërarchische verhoudingen en een angstcultuur. Wat een ellende krijg je als niemand eerlijk is. ]

"Mila and Koh got promotions. So much for getting rid of the old guard. So much for implementing a new supervisory structure. So much for changing a culture that was rotten to its core."(265)

[Uiteraard vormen promoties de plek waar vriendjespolitiek een grote rol kan spelen.]

(287) Chapter 13 - The Spy Store

Een one-to-one-gesprek met de baas maakt duidelijk dat hij bijv. notulen uit de werld wil helpen. Ze doet dat niet, maar weet meteen dat het nu erg mis kan gaan als ze geen advocaat heeft. Ze praat met mensen en besluit dan tot het gebruik van onopvallnde opnameapparatuur die in New York eenzijdig gebruikt mag worden.

(310) Chapter 14 - Counting to Twenty

"If it wasn’t clear earlier, everything was obvious now: Silva and Koh’s team was looking to raise Goldman’s ratings, and they were targeting the legal and compliance rating as a means to do it. Though they had not come out in the open to admit this, it was, to me, the only logical explanation. I need to tell Johnathon about this as soon as I get to his office, was all I could think. This went way beyond pushback. This could be obstruction."(334)

(334) Chapter 15 - The Fed’s Way of Doing Things

"On Sunday night I finally checked my work emails—to see if anything had come in. Goldman’s legal counsel had sent an email late on Friday, when no one would be expected to pay attention to it. Its purpose was to alert the New York Fed supervisors to a “fast moving transaction” Goldman was about to close with Banco Santander, Spain’s largest and most international bank. By the time I had checked my email that Sunday night the transaction had already closed. I noticed that neither Silva nor anyone else copied from the New York Fed appeared to have responded to the email Goldman had sent the New York Fed before the transaction closed."(351)

[Ook zo'n truc.]

(360) Chapter 16 - Santander

"On this particular day Michael Koh stepped up to answer Elizabeth’s question. For about three minutes he wove partial phrases with acronyms and left out verbs, spinning artless nonsentences with each other. In other words: he didn’t know."(362)

"But we had little time to ponder how to handle all this toxic combination of political maneuvering and obfuscation."(363)

"And then another person agreed, suggesting that the New York Fed step in to make sure Goldman did not get upset about how the New York Fed was questioning the transaction. And then he offered the twisted logic behind this: “I think we don’t want to discourage Goldman from disclosing these types of transactions in the future, and therefore, maybe, you know, we can include some comment that says don’t mistake our inquisitiveness and our desire to understand more about the marketplace in general as a criticism of you as a firm necessarily.” I couldn’t believe what I was hearing."(383)

(383) Chapter 17 - The Ambush

(407) Chapter 18 - Plowing in the Sea

"It was as if Silva and his team were putting pressure on Johnathon to put pressure on me just as I was about to receive a data dump of documents from Goldman and we were about to begin work on the annual ratings and report. But Johnathon was supposed to protect me and my work.
So I decided to push back, openly suggesting that it would be unfair for me to be fired from that team if I was indeed doing the good job he had just said I was doing. I remembered all the conversations we had had in which we both agreed that, from a legal and compliance standpoint, Goldman was a house on fire. We both had been hired as experts. We both knew this was true. The legal and compliance risk leadership knew this was true. Goldman knew it was true — they had even admitted to it."(432)

(433) Chapter 19 - The Dog and Pony Show

"The two men kept looking at each other, smiling and nodding. The rest of the room watched the exchange in complete silence. It’s really difficult to convey the range of emotions that competed for my attention as I witnessed this exchange. Did I just see Goldman Sachs give orders to Michael Silva? Did I just see Michael Silva willingly accept them, without question or pushback? This is not supposed to be happening! Why is this happening?"(447)

"So the cochair of Goldman Sachs’s BSC was trying to get the New York Fed to accept that illegal or shady transactions just die a natural death. That they just fade away. This was priceless. But Jerry wasn’t done."(450)

"I found out through the grapevine that Emma had gone on extended medical leave. As a result, leadership of the legal and compliance risk team was changing yet again. Supervision of my team would now be shared among Johnathon, Riley, and Judy Adelson—three very different people. More experienced colleagues told me that the three of them did not get along. Great! Just what we needed! I thought — right as the annual review process was kicking into high gear."(454)

"While my management wanted me to assign ratings based on work I had been doing since November, the SSO team wanted me to assign ratings based on something altogether different they just came up with. Silva wanted to take responsibility for the ratings away from the risk specialists. And they were deliberately giving us orders as if they had the power to do so."(455)

"There it was again: Koh was saying that the SSO team would have the last word on the annual report—brazenly going against what Connor, Johnathon, and everyone else in my management had said. Forget SR 08-8, they were saying. Forget all our evidence and findings against Goldman. They would take it from here."(457)

(457) Chapter 20 - Sarah Dahlgren

"He then outlined what the template would look like and what his expectations were with respect to supporting evidence. Next Johnathon outlined his vision for the template and supporting evidence — which was completely different from Riley’s. Finally Judy stepped in, with yet another completely different — and irreconcilable — message.
They never argued directly with each other. They never raised their voices. They simply spoke to us as if the other two were not present. This went on in different variations throughout the morning meetings — and would repeat itself for the next couple of months. All of us risk specialists watched in stunned silence."(464)

[En alle ondergeschikten houden hun mond daarover? Niemand die die drie daar op wijst?]

(481) Chapter 21 - The Annual Ratings Report

"The following week brought more scandals for Goldman — this seemed routine by now. The New York Times published a couple of op-eds revealing that Goldman had what turned out to be a 16 percent stake in the biggest sex trafficking forum for underage girls in the United States."(494)

"The process seemed to be focused on determining whether the investment would be profitable for Goldman, not the nature of the company they were investing in or the legality of its business."(495)

"A close reading of the material they did provide was written in doublespeak for business selection, not conflicts of interest. For Goldman, business selection revolved around figuring out how to make the most money. This often involved simultaneously participating in as many sides of a deal as possible. This approach is the opposite of conflicts-of-interest regulations. These regulations revolve around a firm and its employees only representing one party in a deal so as to act in the client’s best interest."(500)

[Het draait dus weer eens allemaal om zo snel mogelijk een hoop geld verdienen ook al is het niet in het belang van de klant. ]

"One day not long after, I took a break from the conference room to check my email. Riley’s assistant had finally finished transcribing the notes from the legal and compliance vetting session and circulated them to the team. I opened the document—and my jaw dropped. The meeting minutes had barely anything to do with the vetting session. It was as if the assistant hadn’t been in the room and had come up with meeting minutes based on what other people who had not been in the room had told her they believed the legal and compliance risk specialists had said during the meeting. On top of that, she had inserted notes on Wells Fargo, a bank that was supposed to be supervised by John C. Williams and the Federal Reserve Bank of San Francisco. The notes made it seem as if our New York Fed team had been supervising Wells Fargo."(504)

[Ook een bekende truc.]

(509) Chapter 22 - Look in the Dictionary

"He then instructed me to put together an email and circulate my questions to the New York Fed team prior to the meeting, but I was to leave out the other regulators from my email. With Johnathon out sick and literally unable to speak, I could not escalate or bring him in to push back. I had no choice but to agree. I had barely an hour to put the email together."(514)

[Echt wonderlijk dat elk bevel maar opgevolgd wordt. Waarom weigert ze niet te doen wat die Silva haar instrueert ook al is het haar baas? ]

(528) Chapter 23 - We Made a Deal

"Misrepresentations and lies — the cornerstone of Silva’s gaslighting process. It was clear that he wanted me to do something, but what that was he would not put in writing. What was it? Was Silva asking me to drop the examination? Was he asking me to produce a fake report? Was he asking me to lie by saying he was right? Or all three?
One thing was certain: this was Silva’s opening move — creating a paper trail for my HR file. It was also clear that I’d need to spend most of the coming week drafting detailed responses and figuring out the ideal time to send them, which, in theory, would be soon after Silva revealed his true intentions."(544)

(545) Chapter 24 - I Didn’t Start the Fire

"I walked into the conference room and was greeted by Silva’s joyful face. He quickly introduced me to the man sitting next to him — Michael Reynolds, from Human Resources. “Nice to meet you,” I said and took a seat right in front of Silva. I placed the recorder on top of the table, right in front of me and in plain view of his face. I stole a quick glance at Johnathon, who took a seat to my left. He looked straight down at an invisible spot on the table.
Silva, eyes beaming with pleasure, promptly began: “Carmen, I am here to tell you you’ve been released from the bank.”"(561)

(563) Chapter 25 - Let This Cup Pass from Me

Ze vat voor zichzelf samen:

"I began much like a lawyer would—making a dispassionate assessment of the situation.
A lawyer goes to work for the New York Fed. She is assigned to supervise a bank, verifying whether said bank is complying with the law. In the process the lawyer discovers that numerous laws, rules, and regulations are being violated and disregarded. And not just by the bank the lawyer supervises—but also by some of her fellow New York Fed regulators.
The laws, rules, and regulations being violated have a purpose: to guarantee the proper functioning of the US banks and the US monetary system. Taxpayers pay a lot of money to supervisors to make sure they work in the taxpayers’ best interest to protect the financial system and ensure banks are complying with said laws.
Instead of working to ensure these laws, rules, and regulations were being equally and equitably enforced against the banks they supervised, those New York Fed regulators, it seemed, were busy breaking the law and helping a supervised bank break the law, rigging the system and playing favorites."(564)

Ze besluit haar ontslag aan te vechten en daarbij de misstanden aan de kaak te stellen.

"I had been fired for refusing to go along with their behavior. I had been harmed. I could try to do something about it.
Next, I took stock of my “assets.”
First up: I had evidence.
That evidence could be used in a legal proceeding to try to convince a judge to put aside the US common law convention that he who controls the process usually wins and instead focus on the underlying facts and evidence to get at the truth. This would signal that the US legal system could be trusted to step in with transparency and enforcement, ensuring that billions of people around the world who directly and indirectly use the US banking system could continue to safely rely upon it.
Second: I had my brain, which, although small, had a pretty good track record of punching above its weight due to its willingness to work hard.
I then turned to my “liabilities.”
First and second: I was a woman with limited financial resources. As a seasoned American-trained lawyer, I was well aware that the US court system is a forum for men of means to settle their differences instead of turning to guns. The general population turns to the courts in the hopes it’s something more than that. And sometimes it is — just enough times to keep hope alive. But I knew better and was under no such illusions. This was unlikely to be one of those times. Having said that, this was a fight against the Federal Reserve. No billionaire in the world had enough money to take them on.
Third was my longstanding aversion to real-life drama. To move forward I would need to be able and willing to withstand the strain that the highly personalized and adversarial US legal process would cause. Beneath the surface there was a lot at stake, but on the surface the lawsuit would look like a simple, personal grievance — something akin to: “I was wrongfully fired for refusing to lie on the record.” Then again, a lifetime of not caring what other people thought was a huge plus.
I did not know what to do." [mijn nadruk] (566-567)

"In practical terms, in the United States the underlying assumption that governs how the legal system operates is that whoever controls the process wins. Two things are key to controlling the process: money and access to the judge assigned to the case. Facts and evidence are of tertiary consideration."(569)

[Wat een vreselijk land toch ... ]

"In practical terms, in civil law courts the underlying assumption that governs how the legal system operates is that whoever can prove the facts wins, and whoever cannot prove the facts usually loses. To prove the facts, you need one thing: evidence."(570)

"Most law firms were afraid of alienating Goldman Sachs and the New York Fed. They could make much more money representing them than they would ever make representing me, especially as the unique statute applicable to my case likely would have capped the monetary damages at back pay."(582)

Het wordt een zaak met een klokkenluidersinsteek, waarbij ook de media betrokken worden.

(584) Chapter 26 - Carmen’s Way of Doing Things

"In an attempt to intimidate me, they also falsely accused me of engaging in criminal behavior — the theft of the evidence my attorneys during the settlement process had told the New York Fed lawyers on multiple occasions I possessed, had offered to return, and had indicated I would use to prove they had wrongfully fired me."(601)

(606) Chapter 27 - Gagged by the Judge

"Judge Ronnie Abrams had a conflict of interest with the New York Fed. It turned out she had worked with one of the New York Fed’s lawyers a few years earlier. Because she had this conflict of interest, she disclosed it to lawyers on both sides. And then she decided not to recuse herself — she would still preside over my case."(606)

[Dat mag daar zo maar.]

"We moved to request additional information on the judge’s conflict via a letter that makes it to the public docket—a necessary step in obtaining enough information to file a recusal motion—before Judge Abrams issued her ruling on the motion to dismiss. I got wind of the letter and published a story on her conflicts with Goldman.
Judge Abrams never sent us the additional information. Instead, a few days after the I article she granted the New York Fed’s request and dismissed the case."(614)

"But Judge Abrams’s dismissal had a big silver lining: the gag order was no longer in place. It was time for my recordings to see the light of day. So it was that from late April until September we worked furiously with ProPublica and This American Life, day and night, under incredible stress and great secrecy, so the story would not leak before we were ready. The journalists successfully sought out additional sources with personal knowledge of the events to corroborate my story, including individuals who had been present at various meetings."(616)

"One day in October, while I was on a break from work, I received the news that the US Senate would hold a hearing on improving financial institution supervision at the Federal Reserve. Bill Dudley would be testifying. My elation was tempered somewhat when, a few days later, I was informed that I would not be invited to testify at the hearing and that Congress would not subpoena my evidence. Still, I wasn’t going to let that stop me from attending the hearing.(621)"

"During that time we decided to file the appeal. Hendrik’s belief in the US legal system was diminished, but we decided to give it one more chance to prove its worth. A further appeal to the Supreme Court was highly likely to be denied. Besides, we could not afford the expense."(625)

[Elke keer weer die kwestie dat je - vooral in de VS - geld moet hebben om je recht te halen. Dan is er geen recht of rechtvaardigheid, dat is duidelijk.]

"Janet Yellen, then president of the Federal Reserve, responded to the congressional hearings by leading the fight against change at the Fed. She refused to hand over important documents to Congress in the case of the Fed Board Leaks and continued to advocate in Congress for less oversight, less accountability, and less transparency over the Fed."(628)

(630) Epilogue

Alle genoemde personen werden er beter van door promoties etc. Er is bitter weinig veranderd in het systeem.