Corruption in the Administrative State

Corruption in the Administrative State. By Doomberg.

Imagine being Robert Kaplan. Imagine graduating from Harvard Business School and making it to the top levels of Goldman Sachs over a period of 22 years. Imagine being adorned with the prestigious title of President and CEO of the Federal Reserve Bank of Dallas with an estimated net worth approaching one billion dollars. …

Above the law

According to the excellent reporting of Wall Street on Parade … Kaplan was effectively front running the country from his highly privileged perch inside the Federal Reserve.

Dallas Fed President, Robert Kaplan, wasn’t just trading like an aggressive hedge fund kingpin in 2020, he’s been doing the same thing for five years at the Dallas Fed while simultaneously having access to non-public, market moving information from the Federal Reserve’s interest-rate setting FOMC meetings and other confidential communications.

Each of Kaplan’s financial disclosures forms dating back to when he first became Dallas Fed President on September 8, 2015 … show that Kaplan was trading in and out of S&P 500 futures, a highly speculative form of trading used by hedge funds and day traders. …”

Predictably, Kaplan tried to cover up his outrageous behavior through obfuscation:

Unlike other regional Fed bank presidents and all Federal Reserve Board Governors, Kaplan did not list the dates of his transactions for any year of his financial disclosures. He simply placed the word “multiple” where the specific dates should have gone on his financial disclosure forms.

What should have happened, but didn’t:

In a country with true equal protection under the law, Kaplan would have been fired from his job and his activity referred to the authorities for further investigation.

Instead, he was allowed to resign while defiantly claiming no wrongdoing. In accepting Kaplan’s resignation, Fed Chair Jerome Powell heaped praised on him, thereby tipping future investigations in Kaplan’s favor. …

But it happened to this peon:

Compare all of this to how the Securities and Exchange Commission (SEC) routinely cracks down on small-time offenders. In a press release dated August 9, 2021, the SEC proudly announced the filing of settled charges against an accountant at Domino’s Pizza..

According to the SEC’s complaint, filed in the U.S. District Court for the Eastern District of Michigan, [Leonard R. Barr] used confidential financial data he obtained through his role as an accountant at Domino’s to trade ahead of two Domino’s earnings announcements in 2016 and 2020 and obtained illicit profits of $34,180.

I’m not here to defend Mr. Barr, who had to pay back twice the amount of his illicit gains, lost his job, and can’t work as an accountant for at least five years. Instead, I want to point out this exception that proves the rule.

Our authorities have the capability to detect fraud at the smallest of levels. Clearly, they must know what is going on at the top and have proactively decided to look the other way.

Politically appointed “experts” rule unchecked. What did you think was going to happen?

What is the future of a country in which the top 1% hoard a combined net worth 16 times greater than the entire bottom 50%? What is the future of a country in which minor offenses by “everyman” individuals are prosecuted, and major offenses committed by powerful figureheads are permitted?

Not satisfied with mere good fortune, America’s elite are indulging in an orgy of staggering self-enrichment, the scale of which would make even Bacchus blush.

We’re cool with that, aren’t we? If not, when are we going to do something? Do what, precisely?