Progressive groups threw a one-two punch at the nation's richest banks on Monday. A coalition of watchdogs and activists released a new report revealing how the wealthiest bailed-out banks have caused the current economic crisis by dodging taxes, and hundreds of demonstrators rallied in Washington, DC, to demand the attorneys general of all 50 states file criminal charges against banks that are suspected of committing foreclosure fraud during the nation's housing crisis.
At least 600 demonstrators gathered outside the National Association of Attorneys General (NAAG) spring meeting to demand tough settlements on foreclosure fraud cases resulting from a NAAG investigation into several banks' practice of signing foreclosure documents without checking for accuracy – a practice the NAAG calls “robo-signing.”
NAAG launched the investigation in October 2010, but has yet to take action against banks like Bank of America and JP Morgan Chase that were suspected of systematically robo-signing foreclosure documents before the scandal made headlines.
Outside National Association of Attorneys General meeting. (Photo: National People's Action (NPA))
Iowa Attorney General Tom Miller led the investigation, and the National Peoples Action (NPA) and other groups have since met with Miller to demand state attorneys general file criminal charges against banks guilty of robo-signing foreclosure documents and secure restitution for Americans who have already lost their homes in illegal foreclosures.
NPA affiliated activist Keya Hicks said that, in earlier meetings with activists, Miller agreed to file criminal charges against banks that issued illegal foreclosure documents. During the rally, Hicks and other community activists entered the NAAG spring meeting in hopes of talking with Miller about the results of the robo-signing investigation, but the activists were told several times that Miller was not available.
A NAAG spokesperson did not respond to an inquiry from Truthout, but Hicks said NAAG representatives have signaled that the results of the investigation should be available soon.
Rounding out visits to the Corrections Corporation of America, Bank of America, Comptroller of the Currency, and the spring conference of the National Association of Attorneys General, National People's Action visited the office of House Speaker John Boehner at lunchtime Monday, March 7. (Photo: National People's Action (NPA))
The rallies outside of the NAAG meeting and outside nearby bank branches coincided with the launch of the Make Wall Street Pay campaign. The campaign released a new report detailing how the nation's richest banks dodged taxes and caused $300 billion in tax revenue shortfalls in federal and state governments that could have helped average Americans during a time when politicians are aggressively cutting funding to the public sector.
Delivering bill to Bank of America. (Photo: National People's Action (NPA))
The report, released on Monday by the NPA and the watchdog group the Public Accountability Initiative, reveals startling figures on the same super-rich Wall Street firms that received billions in federal stimulus monies when the economic crisis began.
Among the report's key findings:
- Bank of America operates 371 tax-sheltered subsidiaries, more than any other big bank studied, and 204 subsidiaries in the Cayman Islands alone, according to its latest regulatory filings. Seventy-five percent of Goldman Sachs's foreign subsidiaries are incorporated in offshore tax havens.
- This year, Bank of America is receiving the “income tax refund from hell” – $666 million for 2010, according to its annual report filed in late February 2011. This is following a $3.5 billion refund reported in 2009. Bank of America's federal income tax benefit this year is roughly two times the Obama administration's proposed cuts to the Community Development Block Grant program ($299 million).
- Wells Fargo reportedly received a $4 billion federal income tax refund on $18 billion in pre-tax income in 2009, and paid 7.5 percent of its pre-tax income of $19 billion in 2010 in federal taxes. Its net federal income tax benefit for 2009 and 2010 combined, $2.5 billion, is equal to the Obama administration's proposed cuts of 50 percent to the Low-Income Home Energy Assistance Program.
- Six banks – Bank of America, Wells Fargo, Citigroup, JPMorgan Chase, Goldman Sachs and Morgan Stanley together paid income tax at an approximate rate of 11 percent of their pre-tax US earnings in 2009 and 2010. Had they paid at 35 percent, what they are legally mandated to pay, the federal government would have received an additional $13 billion in tax revenue. This would cover more than two years of salaries for the 132,000 teacher jobs lost since the economic crisis began in 2008.
- The banks' private banking arms protect the wealth of rich clients from taxation through offshore investment strategies. Bank of America's wealth management arm encourages clients to register their yachts in foreign jurisdictions for tax reasons.
- Closing special tax loopholes on the financial sector and implementing sensible revenue-raising initiatives such as the Financial Speculation Tax could generate over $150 billion in federal tax revenue each year.