Building the Perfect Beast: How the Political Class & Their Cronies Rig the System

The Political Class has honed a dangerous skill, building the perfect undetectable fraud machine. Americans need to learn to spot these scams for their own protection and realize that the perpetrators can come from either political party and often work in cahoots with attorneys or big business.

Think about three seemingly unconnected news stories, all examples of costly or dangerously indictable fraud machines…

• The economic collapse of 2008 was caused in part by relaxed mortgage rules that allowed borrowers to get a home loan without a down payment or even proof of income in some cases.
• In the Pigford settlement, claimants were able to get $50,000 checks by asserting without proof that they had “attempted to farm.”
• In a move strongly supported by the NAACP and other liberal advocacy groups, the Obama Department of Justice just stopped South Carolina’s plan to put in place some minimal ID requirements for voting. Currently voters in a number of states don’t need to show any photo ID or other identity checks in order to cast a ballot.

All three stories are examples of systems that have been intentionally set up with such low standards that they invite fraud. But ingeniously, they have also been set up in a such a way that makes them almost critic-proof because the lack of standards makes detection of fraud nearly impossible. When the system is questioned, the defenders, creators and beneficiaries then point to the lack of “proof” of fraud as a reason to keep the status. Thus, a self-perpetuating fraud scheme is kept alive as long as possible.

Make no mistake, these scams are costly….

• In the mortgage crisis, politicians got to claim they were helping the poor become homeowners, thus helping to shore up their voter base. Meanwhile the politicians made insider trading profits and eventually bailed out the too-big-to-fail financial institutions. The cost of this one is almost too large to calculate; it helped trash the entire economy.
• In Pigford, politicians (mostly Democrats and the Congressional Black Caucus but some Republicans as well) got to claim they were helping black farmers in order to help them win elections. The USDA was able to claim victory without ever solving the underlying problems of racism. Attorneys made tens of millions of dollars. Taxpayers shelled out billions in fraudulent claims
• In the voter ID clashes, both sides seem to agree that having lax voter ID laws favors the Democrats. Ironically, though, the law that allows the Obama Department of Justice to stop South Carolina voter ID law was forced through by a Republican who wanted to keep gerrymandering to protect GOP seats.

I first recognized the existence of the fraud machine while working on the Pigford story. Defenders of the Pigford settlement would sometimes ask for proof of the fraud, as though I were going to pull out a long list of names with red circles around them and say, “See! Bill Johnson committed fraud! Here’s right here on the list!”

No such proof exists, and I quickly realized the scam; it can’t exist. The system is set up so that almost nobody gets caught. The whole purpose is for nobody to get caught. In the case of Pigford, $50,000 checks were given out to people who claimed that they went to USDA and were sent home with no paperwork. There’s no possible way to prove or disprove such a claim but in Pigford, that’s enough to get you a nice fat check and to get your lawyer a nice fat cut of that check. Who set up the system? The lawyers and politicians who benefit the most from it, that’s who.

Defenders of the system weasel out of arguments by claiming “there is no proof” while ignoring the fact that the very nature of the systems don’t allow for any proof. Sometimes, the proof comes later after the entire system has collapsed (as in the mortgage crisis) or when large disparities are shown in collected data (such as the fact that there are three times more Pigford claimants than there were black farmers) that are impossible to for rational people ignore.

But we’re not dealing with disinterested rational people. We’re dealing with multi-billion dollar scams that keep the establishment firmly in place.

Any system with no reasonable checks is indefensible on its face. The actual incidents of fraud aren’t what need to be proven in order for the system to be criticized. A system that clearly invites lying, cheating and stealing will probably prove to have plenty once they are exposed but the regular folks falling prey to the temptations of a corrupt systems shouldn’t be the main focus of inquiry. It’s the people who built the indefectible fraud machines who need to be exposed and prosecuted. The small time fraudsters are the grease that keeps the Political Class’s money engine pumping. It’s time for citizens to throw wrenches in these scam systems once and for all.