Inside Job Page #3

01:
15:17.28

MAN:
Mr. Keating, you got a word?

NARRATOR:
In 1985, when federal regulators began investigating him, Keating hired

an economist named Alan Greenspan. In this letter to regulators, Greenspan praised

Keating's sound business plans and expertise; and said he saw no risk in allowing

Keating to invest his customers' money. Keating reportedly paid Greenspan 40,000

dollars.

01:
15:45.01 Charles Keating went to prison shortly afterwards. As for Alan Greenspan,

President Reagan appointed him chairman of America's central bank, the Federal

Reserve. Greenspan was reappointed by presidents Clinton and George W. Bush.

01:
16:01.00 During the Clinton administration, deregulation continued under Greenspan

and Treasury secretaries Robert Rubin — the former CEO of the investment bank

Goldman Sachs — and Larry Summers, a Harvard economics professor.

01:
16:15.26

NOURIEL ROUBINI:
The financial sector, Wall Street being powerful; having lobbies,

having lots of money; step by step, uh, captured the political system; you know, both on

the Democratic and the Republican side.

01:
16:28.00

NARRATOR:
By the late 1990s, the financial sector had consolidated into a few gigantic

firms, each of them so large that their failure could threaten the whole system; and the

Clinton administration helped them grow even larger.

Inside Job transcript – Sony Pictures – September 2010

15

In 1998, Citicorp and Travelers merged, to form Citigroup, the largest financial services

company in the world. The merger violated the Glass-Steagall Act, a law passed after

the Great Depression, which prevented banks with consumer deposits from engaging in

risky investment banking activities.

01:
17:02.00

{ROBERT GNAIZDA

FORMER DIRECTOR:

GREENLINING INSTITUTE}

ROBERT GNAIZDA:
It was illegal to acquire Travelers. Greenspan said nothing. The

Federal Reserve gave 'em an exemption for a year; and then they got the law passed.

NARRATOR:
In 1999, at the urging of Summers and Rubin, Congress passed the

Gramm-Leach-Bliley Act, known to some as the Citigroup Relief Act. It overturned

Glass-Steagall, and cleared the way for future mergers.

01:
17:30.02

{ROBERT RUBIN WOULD LATER MAKE $126 MILLION

AS VICE CHAIRMAN OF CITIGROUP.

HE DECLINED TO BE INTERVIEWED FOR THIS FILM.}

01:
17:36.20

{WILLEM BUITER

CHIEF ECONOMIST, CITIGROUP}

WILLEM BUITER:
Why do you have big banks? Well, because banks like monopoly

power; because banks like lobbying power; because, um, banks know that when they're

too big, they will be bailed.

01:
17:48.10

{GEORGE SOROS

CHAIRMAN:

SOROS FUND MANAGEMENT}

GEORGE SOROS:
Markets are inherently unstable, or at least potentially unstable. An

appropriate metaphor is the oil tankers. They are very big; and therefore, you have to

put in compartments to prevent the sloshing around of oil from capsizing the boat. The

design of the boat has to take that into account. And after the, uh, uh, Depression, the

Inside Job transcript – Sony Pictures – September 2010

16

regulations actually introduced these very ti-, watertight compartments. And

deregulation has led to the end of co-, compartmentalization.

01:
18:27.21

NARRATOR:
The next crisis came at the end of the '90s. The investment banks fueled

a massive bubble in Internet stocks, which was followed by a crash in 2001 that caused

5 trillion dollars in investment losses. The Securities and Exchange Commission, the

federal agency which had been created during the Depression to regulate investment

banking, had done nothing.

01:
18:49.10

ELIOT SPITZER:
In the absence of meaningful federal action — and there has been

none — and given the clear failure of self-regulation; it has become necessary for others

to step in and adopt the protections needed.

01:
19:00.24

NARRATOR:
Eliot Spitzer's investigation revealed that the investment banks had

promoted Internet companies they knew would fail. Stock analysts were being paid

based on how much business they brought in. And what they said publicly was quite

different from what they said privately.

NEWSCASTER:
Infospace; given the highest possible rating; dismissed by an analyst

as a "piece of junk." Excite, also highly rated, called "such a piece of crap."

01:
19:25.14

{ELIOT SPITZER

GOVERNOR, NEW YORK STATE (2007-2008)

ATTORNEY GENERAL, NEW YORK STATE (1999-2007)

ELIOT SPITZER:
The defense that was proffered by many of the investment banks was

not, you're wrong; it was, everybody's doing it, and everybody knows it's going on, and

therefore nobody should rely on these analysts anyway.

NARRATOR:
In December 2002, 10 investment banks settled the case for a total of 1.4

billion dollars, and promised to change their ways.

{BEAR STEARNS $80 MILLION

CREDIT SUISSE $200 MILLION

DEUTSCHE BANK $80 MILLION

J.P. MORGAN $80 MILLION

MERRILL LYNCH $200 MILLION

Inside Job transcript – Sony Pictures – September 2010

17

MORGAN STANLEY $125 MILLION

UBS $80 MILLION

GOLDMAN SACHS $110 MILLION

CITIGROUP $110 MILLION}

01:
19:51.09

NARRATOR:
Scott Talbott is the chief lobbyist for the Financial Services Roundtable,

one of the most powerful groups in Washington, which represents nearly all of the

world's largest financial companies.

CHARLES FERGUSON: Are you comfortable with the fact that several of your member

companies have engaged in large-scale criminal activity?

SCOTT TALBOTT:
I, you'll have to be specific.

CHARLES FERGUSON: Okay. Uh –

SCOTT TALBOTT:
And first of all, criminal activity shouldn't be accepted, period.

01:
20:14.13 {MUSIC CUE}

01:
20:23.26

NARRATOR:
Since deregulation began, the world's biggest financial firms have been

caught laundering money, defrauding customers, and cooking their books; again and

again and again.

{JP MORGAN – BRIBED GOVERNMENT OFFICIALS

RIGGS BANK – LAUNDERED MONEY FOR

CHILEAN DICTATOR AUGUSTO PINOCHET

CREDIT SUISSE – LAUNDERED MONEY FOR IRAN

IN VIOLATION OF US SANCTIONS}

01:
20:45.14 Credit Suisse helped funnel money for Iran's nuclear program, and for the

Aerospace Industries Organization of Iran, which builds ballistic missiles.

MAN:
Any information that would identify it as Iranian would be removed.

NARRATOR:
The bank was fined 536 million dollars.

Citibank helped funnel 100 million dollars of drug money out of Mexico.

01:
21:05.17

Inside Job transcript – Sony Pictures – September 2010

18

WOMAN:
Did you comment, tch-, that she should, quote, lose any documents

connected with the account?

{NOVEMBER 9, 1999}

{ALBERT MISAN

VP, CITIBANK PRIVATE BANK (NY)}

ALBERT MISAN:
I said that in a kidding manner. It was at the early stages of this. I did

not mean it seriously.

01:
21:18.28

{FREDDIE MAC

ACCOUNTING FRAUD – FINED $125 MILLION

FANNIE MAE:

ACCOUNTING FRAUD – FINED $400 MILLION}

NARRATOR:
Between 1998 and 2003, Fannie Mae overstated its earnings by more

than 10 billion dollars.

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