We hold these Truths to be self-evident...
Tim Madden is an economist with expertise on credit and banking. Tim and I are colleagues in lobbying government for public banking, with concentration in the US for state-owned banks (and here). The good news is that structural solutions to our economic controlled demolition are obvious and simple; and explained beautifully by many of America’s brightest historical minds. The bad news is that we’re still mired in oligarchic looting of our economies.
Tim’s following article explains collusion of government and judicial “leadership” to facilitate criminal looting through parasitic credit practices. This four-part article explains the principle and law, details a legal example of criminal looting with “official” collusion, and applies this to our international economy.
I also recommend Tim’s previous article, “Economist Tim Madden: U.S./Canadian consumer interest calculation method a monstrous fraud.”
Tim can be reached at: email@example.com
Tim's Canadian, but the rigged-looting is the same here. For a US face to what Americans are discovering as rigged-casino economics, also consider Fred Burks’ work, like this one.
Hell claims his right, and with a roaring voice
Says, “Faustus, come; thine hour is almost come!”
- Christopher Marlowe, The Tragical History of the Life and Death of Doctor Faustus
The PIIGS Brief
By Timothy Madden
Portugal, Iceland, Ireland, Greece and Spain can sue Canada for damages from global financial crisis
The PIIGS nations, scandalously so-called, of the European Union (EU) appear to have a genuine cause of action and means of remedy against the Canadian state and its commercial court system, secured in part by the aggregate bonds/liability-insurance of members of the various provincial and federal bar associations and law societies in Canada, as well as those of the courts themselves. Provable damages globally appear to be in the range of several trillions of dollars.
The underlying issue is malfeasance of office, gross negligence, reckless disregard and endangerment, and the proximate cause of the global financial crisis, with respect to damages experienced and yet to be experienced by the people and institutions of the PIIGS nations.
The means of remedy is/are either or both of an action in tort (equity) and/or in law pursuant to certain several international treaties referred to generally as anti-money-laundering and anti-financing-of-terrorism treaties, of which the PIIGS nations are common signatories with Canada, and under which Canada agreed not to do what it then did, and continues to do, which is to allow its courts to wilfully and knowingly enforce financial securities that constitute “enterprise crime/racketeering/RICO” offences under the Criminal Code of Canada. The specific anti-organized-crime sections at issue are expressly attached to the aforesaid treaties under which Canada agreed to treat any such civil action as laundering of proceeds of crime, and to seize whatever proceeds are within its jurisdiction.
Additional special, punitive, or exemplary damages are supported by the egregious nature of the means by which Canada violates the treaty or treaties directly, and of the means by which Canadian courts are converting financial securities contrary to the Criminal Code and in concealment (from international financial markets) of the known and admitted underlying criminality and vastly increased risk-in-fact.
Canada’s banks have escaped the global financial meltdown because Canada’s courts illegally granted them licence to operate, both in fact and in law, as “criminal organizations” within the meaning of domestic and international law. These same private banks used their criminal capacity to make themselves into de facto holding companies (and redirectors) for the illegal profits of the global system. They siphoned off the gravy and stuck the rest of the world with the bones.
Fact of the offences not at issue
In 1980 when the government of Canada was in the process of amending its Criminal Code to provide for a criminal rate of interest, it was brought to the attention of the senate banking committee (Senate Select Standing Committee on Banking, Trade and Commerce (SSCBTC)) that the new law (as then proposed/written and ultimately passed/enacted) would be routinely violated by mainstream financial institutions which would then be liable for criminal prosecution. One specific discussion addressed a “standby fee” which is a device used by financial institutions to, among other things, falsify securities.
The practice is caught by the criminal interest rate law because the fees, payable in advance, are legally defined as interest (and treated internally as such by the banks) which are converted/capitalized into principal on the face of the security, and in fact, at time zero (in advance), and therefore at an infinite and therefore criminal rate (above an effective 60% per annum).
The question/answer and nominal solution ultimately adopted was as follows, in material part (emphasis added):
Mr. Wong: Senator Buckwold, in one of the submissions made to the department [of Justice] at an earlier stage, the question was raised whether or not a standby fee, being a fee, would be included in the definition of "interest", and if it were, how would the interest be calculated, because, being infinite, it would certainly be above 60 per cent,....
Senator Buckwold: Is that illegal?
Mr. Wong: As the section stands, that would be illegal, yes.
Senator Buckwold: Then....the bank, theoretically, could be prosecuted for charging a criminal rate of interest for a standby fee...
Mr. Wong (Department of Consumer and Corporate Affairs):...theoretically, yes. That is one of the reasons this section is unusual, in that it requires the consent of the Attorney General before prosecutions are initiated, thus preventing the application of the section to commercial practices to which it was not intended that it apply. It then becomes a question of the Attorney General’s discretion. (SSCBTC transcripts; 4-11-1980, 24:28)
The solution is both logically and legally absurd, and of itself a manifestly incompetent and egregiously wrongful and illegal act by the Crown/government of Canada.
The amendment to the Criminal Code, however, had been tied to the repeal of the existing Small Loans Act (more on this below) which the private banks were desperate to get rid of so that they could radically increase credit card interest rates in order to remain solvent. A detailed study of the history and lobbying that went on reveals that the banks essentially used the criminal amendment as bait to get the government to repeal the Small Loans Act. They likely intended to separate the two components such that the Small Loans Act would have been repealed and then some reason would have been found not to amend the criminal law. But events began unfolding rapidly and as the clock ran down on the then current session of Parliament the banks were stuck with an all or nothing package. Hence the bizarre solution to the mainstream criminal problem.
The combined bill was then rammed through all three readings in the House of Commons over the final two days of the session (July 21/22, 1980) without any debate. The essential point for future reference is that this was not an innocent oversight but rather a desperate gamble by covert legislative manipulators who knew exactly what they were doing.
Flawed and absurd reasoning
The government’s nominal solution was and remains logically and legally absurd because the fact of criminality, directly or indirectly attached to a commercial contract, automatically precludes recovery or enforcement in a civil court.
And before it can even otherwise consider the criminal contract, per se, the courts have no capacity in law or in equity to grant standing (locus standi in curia) to an offender or to any party to an offence. A criminal contract is not and cannot be within the jurisdiction of a civil court. That is why, for example, one illegal-drug dealer cannot sue another, and why a contract-murder cannot be litigated for payment in a civil court. Few, if any, legal limitations on a court are as clear and unambiguous.
It is also a separate and distinct enterprise-crime/organized-crime/racketeering offence, under ss. 462.3(c) of the Criminal Code, to counsel or otherwise aid or abet (help or encourage) another to commit an offence under s. 347. So the solicitors who prepare the subject standby fee related securities, also, are prima facie guilty of advising/counselling their bank clients to commit the offences.
Further, any subsequent dealing “in any way and by any means” with any proceeds obtained contrary to s. 347 (or any “designated offence”) also automatically defines a separate and distinct offence under ss. 462.31(1) of the Code (laundering proceeds of crime) and which is also expressly joined with the aforementioned international treaties. The anti-racketeering provisions of the Code and the anti-money-laundering treaties were deliberately designed to cause a falling domino effect with the commission of a designated (enterprise crime) offence.
In every case, with the making of the contract contrary to the criminal law, the financial-liability-in-fact-and-in-law attaches itself to the bond(s) of the solicitor(s) who draw(s) up the securities.
But far from representing anomalous behaviour or confined to this particular example before the SSCBTC , the same actual and legal technicality applies to virtually every loan, advance, and security made or issued by a financial institution in Canada (and in multiple independent ways), as does the financial consequences of it.
As the Ontario Court of Appeal explained the liability aspect in terms of a civil case involving mere non-compliance with a civil disclosure statute that resulted in a $177,000 loss to the lender, and holding the solicitor liable for the loss:
Very simply, a solicitor who practices commercial law is responsible, if he undertakes to draft a promissory note, to see to it that it expresses the interest rate in a form that is enforceable. (Elcano Acceptance Ltd. v. Richmond, Richmond, Stambler & Mills; 1991, 68 O.R. (2d) pp. 165-189).
That is also why lawyers, and especially solicitors, must have professional malpractice insurance/bonding. The same applies to the private Crown commercial courts.
Crown has regardless no such power of non-prosecution
The subsection (347(7)) nominally requiring the permission of the Attorney-General to prosecute is also a constructive and asserted right of dispensation – a scandalous and illegal practice of the Crown formally associated only with civil statutes, but now brazenly attached to a criminal law. Dispensation means that the Crown grants a waiver of the law (literally to dispense with the law) to certain “high-born” people/favourites of the Crown. The practice was, and remains, outlawed-in-perpetuity under English law (and which still applies to Canada) by the English Bill of Rights (1689).
At this point the Crown in Canada becomes liable also (independently) in tort (a tort is an actionable wrongful act) to the PIIGS nations because its unlawful and illegal scheme of dispensation under the criminal law gave, and continues to give, constructive and actual licence to private financial institutions in Canada to systemically exploit, entrench, and expand long-recognized criminal practices, and to export them internationally under the colour of commercial normalcy.
Despite clear and repeated warnings, in at least certain several specialized (but otherwise mainstream) banking and financial-law publications, of the potentially catastrophic legal defects, including criminalization of solicitors, in the government’s scheme for avoiding the criminality of “commercial practices”, no concerted or apparent effort was made by the legal profession in Canada to rectify the defects. Instead the broadly-defined profession took clear and calculated steps to conceal the technical violation/criminality and its consequences from the public.
(see for example: Zeigel, Jacob, S. “Bill C-44: Repeal of the Small Loans Act and Enactment of a New Usury Law” (1981), 59 Can. Bar Rev. 188; also the follow-up article in Canadian Business Law Journal, [Vol. 11 1986] “The Usury Provisions In The Criminal Code – The Chickens Come Home to Roost”, by Jacob S. Zeigel, pp. 233 to 246; and National Banking Law Review, Vol. 9, No. 3, p. 43 (Part I), No. 4 (Part II)), PARTICIPATORY LOANS: THE CRIMINAL PROBLEM, by Alison Manzer and Rose Marie Ip of Robins, Appleby & Taub).
We will deal firstly and briefly with the criticality of interest that is illegally and unlawfully capitalized-in-advance, by whatever label, and then continue with the offences committed by the Canadian courts against the People of Iceland and the other PIIGS nations.
Part 2 is here.