The Divide: American Injustice in the Age of the Wealth Gap

by Matt Taibbi

Forced to answer questions about the LIBOR incident in Congress, Geithner was presented with a transcript of conversations between a Barclays employee and a Fed official in which the Barclays employee admitted to fixing LIBOR rates.

  “Is there any element of criminal fraud that isn’t admitted to in this transcript?” North Carolina Democrat Brad Miller asked Geithner, wondering aloud how someone could openly admit a crime to a government official, a regulator no less, and not face charges for it.

  Geithner avoided the question, saying that lawyers were working on the issue. By then, four years had elapsed since the scandal.

  Many of the private lawsuits filed in search of payback for LIBOR manipulation have stalled, or wound up in dead ends and purgatories like the Lehman bankruptcy case. As of this writing, the chief LIBOR “relief” efforts stem from publicity stunts like the one dreamed up by Santa Clara County, California, which claimed it lost as much as $54 million thanks to LIBOR manipulation. The county was reduced to trying to sell muffins for a million dollars a pop at a “Big Bank Bake Sale,” making the last note in this monster aristocrat conspiracy a macabre joke, as inspired as Judge Peck’s “shit happens” ruling.

  You can examine the Lehman collapse and the LIBOR scandal and see the same glaring enforcement problems in both narratives. Major regulators like the Fed and the SEC knew of frightening problems within both companies and elected (a) not to launch criminal investigations and (b) not to tell the investing public. You see the state making moves like warning other banks of problems within a firm like Lehman, or using public funds to help protect other banks from damage caused by Lehman’s collapse. But the public, in the end, gets nothing. No justice, and not even a bake sale.

  * * *

  *1 “Some of the most damaging behavior on Wall Street, in some cases, some of the least ethical behavior on Wall Street, wasn’t illegal.” Reporters took the quote to mean that what Wall Street professionals had done wasn’t illegal, but that’s not quite what Obama said. Like an Escher painting, the statement has more meanings the more you look at it.

  *2 Like any business, an investment bank is just a pile of assets and liabilities, whose collective profile is commonly summarized by the term “balance sheet.” This is a statement of a company’s net worth, with all the stuff the bank counts as equity (like cash) in a financial win column on one side, and liabilities (all the money it owes) on the other. An investment bank that, say, suddenly went on a massive borrowing-and-gambling spree, betting heavily on subprime, would be “expanding its balance sheet.”

  Just after dawn in Gainesville, Georgia. I’m in the front seat of a big green-and-white taxicab, cruising toward a factory that packages frozen chicken parts. The cabbie is a moon-faced young Mexican named Jose Rico, the passenger an anxious-looking woman in her late twenties who gives a first name of Alma but doesn’t offer a last name.

  Jose is a resident, and that’s why he’s driving. He’s got a license. Alma is undocumented, and that’s why she’s the passenger. Three years ago, she says, she got picked up by the police for driving without a license. As she tells the story, Jose peers at her querulously in his rearview mirror, clearly surprised that she’s still around to tell the tale.

  “You didn’t get deported?” he asks.

  “No,” she says. “They just gave me a ticket.”

  Jose shrugs, as if to say, Whatever. We turn a corner. A patrol car, occupants hidden behind darkened windows, is parked on a median strip. Jose eases past it with deliberate calm, like a man trying not to startle a watchdog by running away.

  Gainesville has 34,000 people and eight taxi companies, all of them Latino owned, despite the fact that the majority of the town is white. The company Jose drives for, Fiesta Taxi, owned by a local resident named Jose Diaz, is a functioning, profitable business. But this Latino cab company is a political act in its way, too, an echo of the private taxi services Martin Luther King Jr. and the Montgomery Improvement Association set up back in 1955, during the famed bus boycott.

  Back in King’s day, black men and women rode black-owned taxis to escape a segregated white bus system. In Gainesville, Latinos ride Latino-owned taxis to escape brutally punitive immigration laws that have created a disturbingly similar apartheidlike system. This small Georgia city is ground zero for enforcement of a ferocious federal immigration rule called 287(g) that essentially deputizes any and all state and local law enforcement officials to arrest undocumented aliens on behalf of the U.S. Immigration and Customs Enforcement agency (ICE). Today every local official with a badge—every cop, sheriff, ranger, or even game warden—has the power to instantly separate children from mothers, husbands from wives. All America, from the smallest town on up, has become a dragnet.

  Initially there was some confusion about whether 287(g) and a related Obama-era initiative bearing the Bush-Orwellian catchphrase “Secure Communities” were mandatory, or whether states could opt out. Under Secure Communities, law enforcement officials are required to fingerprint all detainees in custody for criminal offenses and run checks on their immigration status. After the plan was announced, two states, Massachusetts and New York, decided in the spring of 2011 to opt out of the program, which was thought to be voluntary.

  A year later Obama administration officials sent an icy email to police officials in both states, informing them that they’d been opted back into the program. Secure Communities, they were told, was to be activated in “all remaining jurisdictions.”

  So the draconian policies were now law everywhere, meaning all police forces in all states were essentially deputies of ICE. Under 287(g), for instance, if you’re behind the wheel in Boss Hogg country, and you get stopped for the infamous broken taillight, you can be under federal detainment, in leg chains, and on a bus to Mexico within a few days. You fail to maintain your lane while driving: arrest, deportation. The Gainesville area in 2010 even had a man deported for fishing without a license. (The man, a Honduran named Josue Castro, was actually married to an American citizen.) The local police here have a particular fetish for the twin little lights that in most cars illuminate the rear license plate.

  “If you’re missing one of them, they pick you up,” says Arturo Corso, the attorney who represented the deported fisherman. “And you get deported.”

  And more than anything, if you drive without a license, watch out. Rule 287(g) gives local police in every state in the Union a giant hammer to swing at immigrant communities. In recent years, the residents of the ballooning Latino neighborhoods growing up somewhere on the other side of the tracks of your town—the places where factory workers and housecleaners and similar manual laborers live—awake in the mornings to find police checkpoints strategically placed on the major thoroughfares to and from the white-people sides of town. These are the main roads to the immigrants’ places of work, their schools, supermarkets, bus stops.

  The squad cars perch on the sides of the road like ticks on a vein, hauling in alien after undocumented alien and tossing them into the criminal justice/deportation hopper. From there, in a complex, arbitrary, and mindlessly cruel legal process that puts people literally in chains for the crime of going to work or taking their kids to school, the detainees get ground up into a rich financial and political meal, shared in nearly equal parts by state and federal authorities on the one hand and private prison companies on the other.

  On the local level, the police and the courts get to hit detainees with big tickets before they get chucked out of the country. In Georgia, the fees can be as high as a thousand dollars for driving without a license. The money is so good, police will show up anywhere where they’re likely to find an undocumented Mexican near a car.

  “They even used to camp out outside Hispanic churches on Sundays,” says Corso.

  “They’re easy prey,” concurs Victor Nieblas, a Los Angeles attorney who handles immigration cases. “For some police departments, these immigrants, they’re walking ATM machines.”

  Gainesville was the first stop on a tou
r I took of a vast archipelago of roadblocks, convoys, and detention centers built and maintained specifically for a certain kind of alien—the poor, non-European kind. The archipelago, which has grown at breakneck speed over the last two decades, is like a giant legal purgatory in which detainees don’t have any real rights or enjoy any real due process.

  People disappear into it, hundreds of thousands a year, and become less like prisoners with rights than like objects or packages to be crated and shipped out like cargo. ICE even has a UPS-style tracking system that allows immigrant families to punch in a number and see where their deported relative is in his or her serpentine journey through the detention system. In the real justice system, you get habeas corpus; in the shadow system, you get a tracking number to see where your familial “package” is.

  Many parts of the dragnet are like this, things that seem like shadows or echoes of real rights or real due process. You don’t have an absolute right to counsel the same way you do if you’re arrested in a regular criminal case. You have the right to hire an attorney, but one won’t be provided for you.

  In practice, the government will tend to tell you what the charges are and what the evidence is, but you don’t have an absolute right to discovery as you would in a regular criminal case. You get to buy phone cards in immigrant detention centers (for very high prices—more on that later), but “you don’t have a right to that ‘one phone call,’ the way we normally think of it,” says Melissa Keaney, an attorney for the National Immigration Law Center.

  The laws governing the rights of immigrants are overtly diluted, in a manner that would strike the average American as simply strange, if not outrageous. A natural-born citizen enjoys Fourth Amendment protections against unreasonable searches and seizures. Police can’t come busting into your home without a warrant, can’t wiretap your phone for no reason. Any evidence seized in an improper search is invalid. This basic principle, that evidence improperly obtained gets excluded, is called the exclusionary rule.

  But according to a recent federal court decision called INS v. Lopez-Mendoza, in cases involving immigrants, a Fourth Amendment violation must be “egregious” for evidence to be thrown out. Moreover, thanks to a more recent case called Gutierrez-Berdin v. Eric Holder, even “very minor physical abuse coupled with aggressive questioning” does not rise to the level of an egregious Fourth Amendment violation.

  The government’s rationale here is beautiful in its simplicity. American criminals have constitutional rights not because they are natural-born Americans but precisely because they are criminals. Deportations, however, are not part of the criminal justice system. “Removal proceedings,” wrote the circuit judge in the Gutierrez-Berdin case, “are civil, not criminal, and the exclusionary rule does not generally apply to them.”

  So the undocumented alien who kills a room full of Rotarians with an ax has a right to counsel, a phone call, and protection against improper searches. The alien caught crossing the street on his way to work has no rights at all.

  Strangest of all, immigration proceedings are run by immigration judges, who are not “Article III” judges—not members of the judicial branch, as described in the U.S. Constitution. Immigration judges are actually employees of the Department of Homeland Security. In other words, they work for the same branch of government that prosecutes the cases.

  “They’re all executive branch employees,” says Keaney. “The same people investigating the case are judging the case.”

  It all adds up to a system that has many of the features of a police state, right down to the nagging omnipresence of the police in the daily lives of the target community. Immigrants have to be thinking about the police every minute of every day. In towns like Gainesville, Hispanic immigrants hug and kiss one another every morning as they leave their homes, knowing that any of them can be snatched up at any moment and disappear down the rabbit hole, perhaps for good.

  One woman I met, whom I’ll call Ella, had been a doctor in Mexico but fled to the United States after she and her husband were victims of a violent crime there. Here in America two years ago, she found herself in jail after being rear-ended on the way home from a Gainesville grocery store.

  “I was just buying milk,” Ella says now. “I begged the woman in the other car, please, don’t call the police, I’ll be taken away from my children, please.”

  But the other driver (an Indian immigrant, incidentally) was a stickler for the rules and insisted, over a torrent of pleas, on calling the cops. The young doctor was quickly arrested. From the back of a squad car, she managed to call her local church, which sent some American members of the congregation to the accident scene. The churchgoers were able to take the woman’s American-born daughter home for her and alert her husband, but they couldn’t prevent an arrest.

  Ella is a soft-spoken, frail woman with rail-thin arms who wears thick glasses with fine wire frames. She came to America after a pair of masked men broke into her home in a rural Mexican town, savagely beat her and her husband, took everything they had (including all the pharmaceuticals for their medical practice), and threatened to kill her entire family if she went to the police.

  When she went to the police anyway, the authorities did nothing. They didn’t even visit the crime scene. She quickly realized that the police and the criminals, if not actively in cahoots, were not exactly adversaries. Frightened, she and her husband moved to Mexico City, but that turned out not to be far enough. “Because they wore masks, I could never be sure,” she says now. “I was looking at every man on the street and wondering. I stopped going outside.”

  Ella’s husband had a brother who had long before moved to America and was living in Gainesville, working construction. So Ella and her husband decided to come to see him. They came on a tourist visa but stayed, hoping to make a better life. Her husband, also a doctor in Mexico, began to work construction. She began cleaning houses. They were getting by. The brother-in-law moved to another city an hour away, then soon disappeared.

  It turned out later he had been caught in a car stop and deported. It was over a year before they heard from him again. That was on her mind as she sat in the squad car on the way to the Hall County Jail.

  She ended up spending two days in jail. While there, she was visited over and over by an ICE official, who repeatedly waved a paper at her to sign. The paper was a sort of rights waiver that, once signed, leads to extradited deportation. This is a favored ICE tool called a stipulated order of removal. The usual pitch of an ICE official waving a stip order in front of an immigrant is that the result, deportation, will be the same as it will be if you contest the case, only you’ll spend less time in ICE detention and get to your home country faster.

  This waiver of rights was used to deport 160,000 people between 2000 and 2010. Its use exploded after Obama’s election, moving from fewer than 5,000 orders a year in 2004 to more than 40,000 in 2008. Studies have shown that ICE officials routinely overestimate the amount of time detainees will spend in jail contesting their cases and that stips are mostly presented to people who have been detained on minor violations and don’t have lawyers.

  Documents released through FOIA requests show that ICE officials have been pushing stip orders as a way to get immigrants, even legal immigrants, out of the country before they somehow find a way to a lawyer.

  “Please, please, please … encourage the agents to work harder on the stipulated orders of removal,” wrote one ICE official in a circulated email. “Most of the [lawful permanent residents] who get out of jail are willing to take an order just to get out of jail sooner (that is until the judge encourages them to get a lawyer).”

  “Encourage to stip away!” wrote another ICE official. A third, an attorney in the ICE counsel’s office in San Francisco, commented on the amount of time agents should spend reviewing stip orders before presenting them to judges for final approval. He wanted the deportations to involve more speed and less thought. “Fifteen minutes is way too long,” he wrote. “Cut that in half!
”

  Ella, however, wouldn’t sign the stip. “I’m an educated person,” she told me. “I know not to sign a document that I don’t understand. He became very angry with me and kept coming back, acting like he was frustrated by my decision.”

  The decision turned out to be the right one, allowing her to stay in America pending a deportation hearing. Ella was fortunate after two days to find a clever lawyer, who scored for her the Holy Grail of immigration rulings, a deportation bond (“probably because she’s a doctor,” another lawyer told me), securing her release pending her immigration hearing.

  But the truth is, she’s likely to lose her case and will almost certainly be deported soon. Her seven children and her husband will almost certainly stay here in America. So she has a year left with her family. All because she got her fender nicked on the way to pick up some milk.

  The number of stories like this boggles the mind. Three hundred ninety-six thousand, nine hundred and six people were deported from the United States in 2011.

  Of those, just over a thousand (1,119) had records for homicide, and just under six thousand (5,848) had convictions for sexual offenses. Roughly 80,000 more had other, lesser convictions for offenses like DUIs.

  The overwhelming remainder were like Ella, people guilty of little civil infractions, what immigration authorities term Level 3 offenses: traffic violations, immigration violations, and so on. In some communities, like Georgia’s Cobb County, 60 percent of all detainees were caught for traffic violations. Many of those people were deported through rule 287(g), which is only supposed to target immigrants who are a “threat to public safety” and a “danger to the community.” The rule was supposed to make it easier to deport Mexican murderers, but the distinction got lost in the wash. Instead, the people we’re deporting are the ones who fled from Mexican murderers.

  “Obama has broken all the deportation records,” says Nieblas. “One million people in just a few years. Incredible.”