William K. Black

William Kurt Black(born September 6, 1951) is an American lawyer, academic, author, and a former bank regulator.Black's expertise is inwhite-collar crime,public finance,regulation, and other topics in law and economics. He developed the concept of "control fraud",in which a business or national executive uses the entity he or she controls as a" weapon "to commit fraud.

William K. Black
Personal details
Born	William Kurt Black (1951-09-06)September 6, 1951 Dearborn,Michigan,U.S.
Alma mater	University of Michigan, Ann Arbor University of California, Irvine

Background

Black earned a J.D. from theUniversity of Michigan Law Schooland a Ph.D. from theUniversity of California, Irvine.Black is currently an Associate Professor of Economics and Law at theUniversity of Missouri-Kansas Cityin the Department of Economics and theSchool of Law.He was the executive director of the Institute for Fraud Prevention from 2005 to 2007 and previously taught at theLBJ School of Public Affairsat theUniversity of Texas,and atSanta Clara University.

Black was litigation director for theFederal Home Loan Bank Board(FHLBB) from 1984 to 1986, deputy director of theFederal Savings and Loan Insurance Corporation(FSLIC) in 1987, and Senior VP and the General Counsel of theFederal Home Loan Bank of San Franciscofrom 1987 to 1989, which regulated some of the largestthriftbanks in the U.S.

Savings and loan scandal

Black was a central figure in exposing Congressional corruption during theSavings and Loan Crisis.He took the notes during theKeating Fivemeeting that were later published in the press, and brought the event to national attention and a congressional investigation.

According toBill Moyers,

The former Director of the Institute for Fraud Prevention now teaches Economics and Law at the University of Missouri, Kansas City. During the savings and loan crisis, it was Black who accused then-house speakerJim Wrightand five US Senators, includingJohn GlennandJohn McCain,of doing favors for the S&L's in exchange for contributions and other perks. The senators got off with a slap on the wrist, but so enraged was one of those bankers,Charles Keating— after whom the senate's so-called "Keating Five" were named — he sent a memo that read, in part, 'get Black — kill him dead.' Metaphorically, of course. Of course.

2007–2008 financial crisis

Bill Moyers Journalappearances

On April 3, 2009, Black appeared onBill Moyers JournalonPBSand provided critical commentary on the2007–2008 financial crisis.Black asserted that the2007–2008 financial crisiswas essentially caused by a bigPonzi scheme;that the "liar loans"and other financial tricks were essentially illegal frauds; and that the triple-A ratings given to these loans was part of a criminal cover-up. He said that the"Prompt Corrective Action Law"passed after theSavings and loan crisismandated that ailing banks should be put intoreceivership.Black also stated that trying to hide how bad the situation is will simply prolong the problem, as happened in Japan and resulted in Japan'slost decade.Black stated thatTimothy Geithnerwas engaged in a cover-up, and that the administration did not want people to understand what went wrong or how bad the banking situation was.On April 23, 2010, Black was again interviewed by Moyers to update the public's understanding of the2007–2008 financial crisis.

Testimony before Congress on the bankruptcy of Lehman Brothers

On April 20, 2010, Black testified before theHouse Financial Services Committeein a hearing titled "Public Policy Issues Raised by the Report of the Lehman Bankruptcy Examiner."He testified about the role thatAlt-Amortgages, what he called "liars' loans," on residential real estate played in the downfall ofLehman Brothers.His testimony was that "Lehman's failure is a story in large part of fraud. And it is fraud that begins at the absolute latest in 2001, and that is with their subprime and liars' loan operations."As explained in his prepared statement, his reference was to Aurora Loan Services, Inc., which was a subsidiary of Lehman: "Lehman's principal source of (fictional) income and real losses was making (and selling) what the trade accurately called 'liar's loans' through its subsidiary, Aurora. (The bland euphemism for liar's loans was 'Alt-A.') Liar's loans are 'criminogenic' (they create epidemics of mortgage fraud) because they create strong incentives to provide false information on loan applications. "

On the same page in hisprepared testimonyBlack referenced an article from theDenver Postdated September 16, 2008, the day after Lehman filed for bankruptcy. The article reported on the uncertain fate of Aurora Loan Services, which was based nearby, and quoted Lehman's chief financial officer as saying the previous week that, "The majority of our write-downs were in Alt-A driven by an increase in... delinquencies and loss expectations." The article also said that Lehman was "among the first of its peers to originate home loans and securitize them for sale across the globe, and it fueled the growth of the Alt-A loan."

Testimony before Irish Banking Inquiry

Black was invited to testify before the Irish parliament's banking inquiry in February 2015. In his testimony, he described the broad September 2008Irish bank guarantee,as "the most destructive own goal in history".

Works

• "The U.S. Banking Industry in Transition in Real World Banking", eds. Dan Fireside & Amy Gluckman (Dollars & Sense2008)
• "When Fragile Become Friable: Endemic Control Fraud as a Cause of Economic Stagnation and Collapse",White Collar Crimes: a Debate,K. Naga Srivalli, ed., Hyderabad, India, The Icfai University Press (2007: 162–178)
• "Corruption Kills",International Handbook of White-Collar Crime,Henry Pontell & G. Geis eds. (Springer 2007)
• "Control fraud v. the protocols",Crime, Law & Social Change,45(3) (April 2006: 241–258)
• Black, William K. (2013).The Best Way to Rob a Bank is to Own One: How Corporate Executives and Politicians Looted the S&L Industry(Updated ed.). University of Texas Press.ISBN978-0-292-75418-8.Retrieved11 May2021.
• Black, William K. (December 2005)."'Control frauds' as financial super-predators: How 'pathogens' make financial markets inefficient "(PDF).Journal of Socio-Economics.34(6): 734–755.doi:10.1016/j.socec.2005.07.026.Retrieved11 May2021.
• "Control Fraud as an Explanation for White-Collar Crime Waves: The Case of the Savings & Loan Debacle",Crime, Law and Social Change43(1) (February 2005: 1-29)
• "The Dango Tango: Why Corruption Blocks Real Reform in Japan",Business Ethics Quarterly14(4) (October 2004: 602–623)
• "The Imperium Strikes Back: The Need to Teach Socioeconomics to Law Students",San Diego Law Review,No. 1 (Winter 2004: 231–256)
• "Beware of Geeks Bearing Gifts: Enron Uses Its High Tech Information System to Defraud",CISIC 2003 Conference Symposium(McGraw-Hill 2003)
• "Re-examining the Law & Economics Theory of Corporate Governance",Challenge46(2) (March/April 2003: 22–40)
• "A Tale of Two Crises",Kravis Leadership Institute Leadership Review,fall 2002
• "Why do the Non-Heathens Rage?",Journal of Criminal Justice and Popular Culture,8(3) (2001: 225–276)
• "The Savings and Loan Debacle of the 1980's: White-Collar Crime or Risky Business?" (with K. Calavita & H. Pontell)Law and Policy17(1) (January 1995: 23–55)
• ' "Ending Our Forebearers' Forbearances: FIRREA and Supervisory Goodwill",Stanford Law & Policy Review102 (Spring 1990)
• Black, William K. (March 2009). "Those Who Forget the Regulatory Successes of the Past are Condemned to Failure".Economic & Political Weekly.XLIV(13): 80–86.SSRN1536531.
• Black, William K. (May 25, 2011)."The Two Documents Everyone Should Read to Better Understand the Crisis".HuffPost.Retrieved11 May2021.
• Black, William K. (May 25, 2011)."How the Servant Became a Predator: Finance's Five Fatal Flaws".HuffPost.Retrieved11 May2021.

External links

• AppearancesonC-SPAN
• William K. Black Criticizes the Bailout Plan—Might Destroy the Obama PresidencyonYouTube,The Young Turks (talk show),April 6, 2009
• "Dollars and Sense, several articles"
• 2013 TED talk at TEDxUMKC: How to rob a bank (from the inside, that is)
• Roberts, Russ(February 6, 2012)."William Black on Financial Fraud".EconTalk.Library of Economics and Liberty.
• "Americans can do anything,..." Black inHuffpost
• "Adam Smith Was Right About Corporate CEO's Incentives Absent Effective Regulation"... William Black