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There’s a reason a big majority of the country approves of the Occupy Wall Street folks in spite of all the media derision and right-wing attacks, and a reason that demonstrators all over the country and world are organizing in their wake. The reason is that most people know what too many politicians in Washington don’t: that the big banks on Wall Street have a corrupt business model that recklessly assumes taxpayers will bail them out if their bets don’t pan out, and that their political juice will get them out of trouble if they violate laws and slide around regulations. There are three things in the news that remind us of this sorry story once again, and the American people need to raise holy hell about all of them: another sweetheart deal for Citibank on fraud charges, a new Bank of America maneuver that could turn into the biggest taxpayer bailout of all time, and a faction in the administration trying to ram through a new deal for all the big banks to have their legal issues related to foreclosure wiped away. First case in point: the astonishing (and so far mostly unnoticed) little slight-of-hand that Bank of America pulled when it switched over its Merrill Lynch-derived toxic assets to a federally insured program. Read this and weep: Bank of America is moving $75 trillion of highly risky derivative contracts “from its Merrill Lynch unit to a subsidiary flush with insured deposits.” The FDIC, which is the government agency that insures bank deposits, is screaming bloody murder, but the Federal Reserve wants to let them do it. This is a big f’ing deal, friends. Maybe the biggest swindle ever, certainly the biggest government bailout by far if the ship goes down. It makes TARP and Federal Reserve bailouts so far look like chump change. Remember, the Fed bailed out banks to the tune of a mere $16 trillion in 2008, and TARP threw in less than $1 trillion on top of that. Seventy-five trillion dollars is almost 5 times as much. Now, we don’t know how much of the $75 trillion us taxpayers would be responsible for in the end, because we don’t have access to Bank of America’s books, and the company hasn’t failed yet. But to allow taxpayers to be on the hook for this kind of exposure to even some part of a bank’s risky bets is an obscenity beyond belief. Then there is the latest Citibank settlement. Citibank agreed to pay $285 million to settle charges it defrauded investors in a billion-dollar mortgage security deal, and Citibank didn’t have to admit any wrongdoing. This kind of settlement happens all the time , and is yet another example of a corrupted system: mega-banks pay modest fines on massively fraudulent behavior; no one goes to jail, loses their jobs, or even has to admit wrongdoing. Breaking the law — stealing from and defrauding people— and then having your company stockholders pay one of these modest fines if you do get caught is just business as usual for these huge banks. And everyone in the industry knows it. When Hank Paulson, who was generally a great friend of the big banks as the Bush Treasury Secretary, wanted to force Wall Street banks to do something he considered urgent during the 2008 financial crisis, all he needed to do was to say he was going to have the FBI look at the banks’ books and emails. They would agree to anything he asked them to do, because they knew they all had plenty to hide. Bank of America and Citi are the two most wobbly banks of the Too Big to Fail crowd. The argument from 2008-on by Tim Geithner and other pro-Wall Street government officials is that we can’t do anything tough to these banks because it would cause system-wide risk. In fact, they say, we have to keep bailing them out, letting them off the hook for their legal transgressions, not be too tough on regulating them, not break them up, etc. because otherwise we will have another financial panic. But continuing to let them drain us dry isn’t working, and as Europe has discovered, at some point the bailouts get too big to take on. A $75 trillion bailout is too big a bailout number even for the U.S. government to contemplate dealing with, but Bank of America is trying to slide such a deal under our noses. Fortunately, Dodd-Frank did actually give us clear resolution authority for the Too Big to Fail banks. Banks have recapitalized themselves; the stress tests at least in theory gave government officials more knowledge of the banks’ asset holdings. Based on what Geithner himself has said, we should be in no danger of having to bail out Too Big to Fail banks. If they get in trouble, we can take them over just like the FDIC does, sell off their assets, and wind them down. And yet, we keep doing the bailing, as well as the winking and nodding at their fraudulent behavior. The BoA $75 trillion transfer to a federally insured subsidiary is the most egregious bailout yet. The Citibank wink and nod is the latest in a long line of letting crooks off the hook. And we may be on the verge of yet another massive sweetheart deal for the big banks, a deal that if it gets rammed through will not only absolve the biggest banks of all their legal violations, but a deal that would completely undercut any administration political claims that they are willing to take on Wall Street. Check this out : US state and federal officials plan to give the country’s largest mortgage servicers wider protection against legal claims in exchange for refinancing help for existing borrowers, as talks on a $25bn settlement of alleged foreclosure improprieties advance. The proposed agreement would settle allegations that Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial engaged in faulty mortgage practices, including employing so-called “robosigners” – agents who processed foreclosure filings en masse without examining the underlying paperwork – that abused homeowners’ rights and led to wrongful home seizures. The banks declined to comment. Now of course, reporters sometimes get things wrong, and I haven’t heard from the White House whether this story is accurate. What I suspect, in fact, is that there are two factions in the administration, one mostly from Treasury trying to get this done as quickly and quietly as they can, and one among the political staff at the White House who understand how insane it would be politically to give the banks yet another sweetheart deal after the President praised Occupy Wall Street and after David Plouffe told the Washington Post that they will be running against Wall Street in 2012. Understand that what’s spelled out in the Nasiripour story in terms of the legal release for the big banks sounds worse than what Tom Miller was trying to negotiate with them. Once again, big banks would get off with no legal accountability whatsoever for the crimes they committed, and the money they pocketed on fraudulent activities. And while $25 billion sounds like a lot of money, it is a mere fraction of what they made on activities that were clearly not legal, and it is an even smaller fraction of what is actually needed to help underwater homeowners maybe 5 percent of what is needed. Remember how bad HAMP was : this $25 billion program would be politically far worse, because administering a fund that inadequate to the problem would be a nightmare, and for every homeowner you helped, 19 would be ticked off because once again there was nothing to help them. This is a deal that I can absolutely guarantee to my friends in the administration will blow up in their faces badly if they go through with it. All those Occupy Wall Street demonstrators all across the country will be demonstrating against the White House. Labor unions and all the community groups doing bank actions will go crazy. Every economist and consumer group who has been working on the financial reform issue will react very badly. For Obama to run against Wall Street while handing the big banks another sweetheart deal, and getting the negative reaction it would cause, would be untenable. For all these reasons, I don’t think the President will go along with this deal. But as we know from the Suskind book , there are people in his administration who have a track record of acting on their own. Tim Geithner could well be (and from what some sources tell me, is) trying to ram this deal through while the President is dealing with getting our troops out of Iraq (thank you, Mr. President), and fighting with Republicans on taxing millionaires and billionaires. The RED ALERT in my headline is for the President as well as activists who care about this issue. We need to start reining in the big banks’ power to wreck our economy, and we can start by not giving them more sweetheart deals and bailouts.