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Its easy to reduce the stakes for any Election Day to the White House race. It feeds a billion-dollar campaign industry, draws the biggest headlines and turns even the most benign of venues, such as front lawns, into public squares for political signalling and thats during normal times without this years urgencies of pandemic, recession and racial reckoning.

But the vast majority of contests underway right now are at the state and local level. And thats actually where most Americans day-to-day interaction with government takes place. Want your towns bridge repaired? Thats probably your county engineer. Need your school district to better use learn-from-home technology? See your school board. Utility rates, transit schedules, senior-center hours? Probably more the purview of your local leaders than anything President Donald Trump or former Vice President Joe Biden will be yammering about tonight at their final debate. The person in the White House has the nuclear launch codes, but your zoning board determines if that deck you want to build next spring passes code.

State races are also pivotal to determining the future composition of Congress. Thats why the two major parties are spending tens of millions of dollars in key races there right now. In state legislature races, one Democratic super PAC this week announced it was doubling its investment to $12 million just to flip just the Texas statehouse. A swing of just nine seats in Texas 150-person chamber could put Democrats in control in a state that has been tantalizingly close for Democrats in every election in recent memory. More broadly, the Democrats main election arm for state legislatures has invested $50 million this cycle to help down-ballot lawmakers.

Their Republican counterparts arent publicly announcing their budgets, but in the third fiscal quarter alone, they raised an eye-popping $23 million for state legislative races and have no plans on keeping any of it as a nest-egg for 2022.Theres been at least $100 million in what we can see from national liberal groups on state legislative races, says David Abrams, the deputy executive director at the Republican State Leadership Committee, citing the organizations own tracking and publicly available information. While we have far out-paced our direct counterparts, were up against a huge galaxy of liberal groups that for the first time committed money down the ballot.

I can see you rolling your eyes at these massive sums of cash on what are largely seen as small-ball jobs. With a few exceptions, the pay for state legislators is lousy and the work is part-time. (New Mexicos lawmakers work for free, New Hampshires are paid $100 a year, Montana and Kansas pay about $90 per day the legislature is meeting.)

Their power, though, is far-reaching. In more than half of the states, the legislatures draw the U.S. House district lines. As I wrote last year, the battle for the battleground actually unfolds in statehouse races. Thats why big names like former Attorney General Eric Holder and former Wisconsin Gov. Scott Walker are leading their respective parties efforts to have control over House districts borders by securing partisan power in the state legislatures. If you want to take a marker to the borders of your states congressional districts, first you have to convince voters to hand your party the Sharpie.

This is the Democrats first shot since 2000 to have redistricting and a White House race coincide, says Jessica Post, the president of the Democratic Legislative Campaign Committee. District borders are pegged to the Census, which counts how many people live where and typically forces officials to tinker with boundaries as some areas gain neighbors and others shed populations. The goal, in the ideal, is to have every district have an equal number of people so that every member of Congress has the same number of constituents. The next time well have time this opportunity is in 2040, Post tells me by phone. Across the aisle, Republicans also acknowledge the stakes. If the Republican Party wants any chance of winning a congressional majority in the next 10 years, we have to win in some of these races, Abrams tells me, also by phone.

Both campaign committees recognize that local state legislative races could end up literally determining who the House Speaker is in Washington after 2022. Because so many states let their local lawmakers draw the maps, partisans can orchestrate idiot-proof districts that can protect their allies. In recent years, that has worked in Republicans favor. Democrats took their eyes off the ball for state races in recent decades and, as a result, were relegated to impossible-to-win maps. In 2010, Democrats lost almost 700 state legislative seats and gave Republicans the power to draw lopsided maps that gave the GOP a disproportionate number of U.S. House seats in 2012, 2014 and 2016. Only a blue-wave election of 2018 gave Democrats the opportunity to break Republicans smartly drawn firewalls in House races.

Republicans still control 59 out of the 99 state legislative chambers in the country and can still scrawl partisan battle lines on maps next year. (Nebraskas unicameral legislature is the lone that lacks a state house and state senate. Its state capitol also is one of my favorites and worth a visit if ever you find yourself in Lincoln.) If Democrats can net 48 seats in this election of the 600 races theyre watching they can flip 10 chambers and take back some measure of power.

Still, the Republicans have for years had the upper hand when it comes to state legislative races. Its how they dominated most of the 2010s. The state legislative races are relatively cheap and feed the pipeline of future talent. Democrats are playing catch-up. But with Trump in the White House and Biden pulling ahead in polls, theres a reason why Democrats are feeling better than they have in years. Then again, its 2020, and who knows whats going to happen?

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Write to Philip Elliott at philip.elliott@time.com.

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The Presidential Race Dominates Headlines. Heres Why National Parties Are Dumping Tens of Millions Into State Races - TIME

COLUMBUS (AP) Influential Republican strategist Karl Rove is soliciting donations for an Ohio Supreme Court candidates reelection bid, signaling the high stakes involved in controlling the battleground states high court when congressional maps are redrawn next year.

Roves fundraising plea focused on not wanting Republicans to yield power over redistricting to Democrats, whose own line-drawing effort has been joined by former President Barack Obama and his attorney general, Eric Holder.

A letter obtained by The Associated Press shows Rove, who served as President George W. Bushs chief political strategist, pleading with wealthy donors and various Ohio law firms to donate to Republican Justice Judith Frenchs campaign as the courts conservative majority is up for grabs on Nov. 3.

I dont often lend my name to statewide races, but Judi Frenchs race is too important, Rove writes.

The letter is the latest indication that local and state races, sometimes overlooked in a general election season, are seen as instrumental for both political parties this year.

The former Bush adviser lays out what he calls the high-stakes race between French and Democratic state appeals court Judge Jennifer Brunner, a one-time U.S. Senate contender and former Ohio secretary of state.

Rove tells potential donors well-funded left-wing interest groups from outside Ohio are vying to unseat French in order to redraw the lines of state legislative and congressional districts to benefit Democrats.

In an email, Rove said his pleas for donations to French are unrelated to his work for the Republican State Leadership Committee, a national group whose board he joined in April. The group, which focuses on electing Republicans in state-level races, has also taken an interest in Ohios Supreme Court races.

The group recently aired a TV campaign against Brunner, saying reckless judges like her risk our childrens safety, in reference to a February case she ruled on that involved a teacher convicted of voyeurism for recording videos of girls undressing.

The state Democratic Party defended Brunner, saying she followed the law in a difficult case, and called for French to disavow the ad and demand the RSLC take it down.

Records show the committee has been funneling donations to its two initiatives, the Right Lines Initiative and the Judicial Fairness Initiative, ahead of the 2020 election season, in an effort to dominate the legislatures and high courts in major battleground states like Ohio. Right Lines 2020 is a project intended to produce district maps that will help the GOP party over the next decade.

In his letter, Rove notes the more than $50 million the National Democratic Redistricting Committee has pledged to spend this election cycle, and he urges Republicans to fight back. The Democratic initiative, led by Holder and backed by Obama, has endorsed 200-plus state candidates and invested about $2 million into the contests.

This is a real threat to Ohio, and if Judi is defeated for reelection, it will have national ramifications, Rove writes.

On the other side of the aisle, the RSLCs Judicial Fairness Initiative is the project funding campaigns like Frenchs Supreme Court race, with at least $1.2 million funneled into the project in 2019 alone, according to the groups filings.

Other major funders of the initiative include the family of Education Secretary Betsy DeVos, who gave the RSLC around $950,000 between 2015 and 2017. The political group also got more than $250,000 from the for-profit tech education company K12 Inc., whose investors have included DeVos and Michael Milken, the convicted junk-bond king pardoned by President Donald Trump earlier this year.

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GOP's Rove asks donors to help French retain court seat - The Tribune - Ironton Tribune

On Wednesday, during a Collins campaign event in Elijay, House Speaker David Ralston sprinkled some gasoline on the fire.

I know Doug, said Ralston. I really dont know his opponent. I know shes got a lot of money. I know she married well. I know theyve got three or four jets. She was supposed to be getting the votes of suburban moms, but the ones I talk to say, She aint like me. Were still working on our first jet at our house.

The backlash has been bipartisan. Speaking up for Loeffler so far has been 14th District congressional candidate Marjorie Taylor Greene and U.S. Sen. Marsha Blackburn of Tennessee.

Loeffler is a strong conservative woman, and unfortunately because of that, shes no stranger to sexist comments like this. Especially, from career politicians, Blackburn wrote on Twitter.

Mara Davis, a prominent local Democratic activist, compared Ralstons remarks to senators who asked U.S. Supreme Court nominee Amy Coney Barrett who does the laundry or pretending you cant pronounce Kamala Harriss name.

And Loefflers campaign called Ralstons remarks sexist trash.

Pretty clear theyre terrified of losing to a strong conservative woman whos earned everything shes ever gotten, said her spokesman, Stephen Lawson.

***

If any of your friends wonder why Georgia is still in play with less than two weeks left in the 2020 presidential campaign, our AJC colleague Mark Niesse has your water cooler no, strike that Zoom ammunition.

According to the newspapers analysis of Georgias voter registration rolls, which closed earlier this month, 1 million new voters have been added since 2016, making the states electorate younger and more racially diverse.

Almost half of those new voters are under 35, and nearly two-thirds are people of color. White voters now make up 53% of all registered voters in Georgia.

The white electorate was 57% in 2016, and 59% in 2012.

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To hold Georgias Seventh Congressional District, Republicans need to appeal to the moderate and independent voters in Gwinnett County, an increasingly diverse, immigrant-heavy part of suburban Atlanta.

Rich McCormick, an emergency room doctor and former Marine with a degree from the Morehouse School of Medicine, appeared to fit the bill. Hes the GOP nominee.

But new support from north Georgia could complicate McCormicks efforts to build a broader coalition. On Tuesday, Marjorie Taylor Greene, the QAnon-supporting Republican running unopposed in the 14th District and known for posting racist and offensive videos on social media, endorsed McCormick.

She helpfully attached a picture of the two side-hugging at a recent GOP event in her Twitter post:

Rich McCormick is a Marine, ER doctor, husband, father, and has a huge heart for ALL people!, Greene wrote. Hes running against a radical communist college professor @Carolyn4GA7 shes horrible & has never accomplished anything.

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That college professor is Democrat Carolyn Bourdeaux, McCormicks opponent, who pounced immediately. As weve said all along, Rich McCormicks political views are aligned with the racist and anti-Semitic conspiracy theories of the far right, her campaign said.

CNN recently rated the Seventh District as the mostly likely U.S. House seat in the nation to flip in November. U.S. Rep. Rob Woodall, R-Lawrenceville, currently holds it.

Whats interesting is that McCormick isnt exactly celebrating the Greene endorsement. It wasnt retweeted onto his timeline or highlighted in a press release. But he isnt running from it, either.

Marjorie and Rich certainly dont agree on everything and he has condemned some of her comments, McCormick spokesman John Simpson said. The only thing to take from this picture is Rich and Marjorie both agree that he is the best candidate to represent GA 7 in Congress.

Simpson reminded us that McCormick condemned Greene in August after she falsely accused George Soros of assisting Nazis as a child. McCormick, who himself had criticized Soross support of Democratic causes, said Greene should apologize and accused her of spreading an anti-Semitic conspiracy.

McCormicks campaign is now hoping to shift the narrative by promoting a new ad that accuses Bourdeaux of extremist ties and supporting defunding the police. Her campaign says it is a deflection and full of inaccurate claims about her platform.

A new attack ad from Rich McCormick leans on racist tropes in a desperate, last-ditch scramble to save his flailing campaign, her campaign said this morning.

***

The latest TV attack on U.S. Senate candidate Doug Collins by Republican incumbent Kelly Loeffler serves up an image of her GOP rival as the perfect picture of a Washington career politician.

And who is pictured embracing Collins? Stacey Abrams.

The ad, airing on Fox News, comes as Collins batters his Republican rival over a portrait of former Chinese dictator Mao Zedong in her foyer. It also marks a return to the Abrams-bashing that both Republican candidates have engaged in throughout the grueling special election fight.

***

President Trump and his advisers have repeatedly contemplated the firing of former Atlanta attorney and current FBI Director Chris Wray after Election Day out of Trumps frustration that federal law enforcement has not delivered his campaign the kind of last-minute boost provided by the FBI four years ago, according to the Washington Post.

***

The Newnan Times-Herald tells us that theres a move afoot to have the city of Chattahoochee Hills remove itself from Fulton County and become part of Coweta County. The action would require a two-thirds vote by a grand jury in each county -- a process that has been tried in Georgia but never yet succeeded.

***

U.S. Secretary of Health and Human Services Alex Azar was at the Centers for Disease Control and Prevention on Wednesday, apparently for morale boosting purposes. Azar was asked about widespread reports that the Trump administration had improperly interfered with the publicly issued reports and recommendations by the CDC during the pandemic.

I think some of the people who comment are not having actually lived in or led this organization during this type of a crisis, fail to appreciate that, Azar said.

For the record, James Curran, the dean of Emory Universitys Rollins School of Public Health and former head of the CDC said this just last week, according to our AJC colleague Ariel Hart:

I was there with the Reagan administration, and Ronald Reagan didnt say the word (AIDS) in public for six years after the first cases were reported, Curran said. But CDC was never prevented from saying what we thought needed to be said. And we were never kept away from the press the way the CDC now is with COVID. With COVID, theres interference. Which is even worse than neglect in many ways. The money is flowing. But the thing that isnt flowing is the expertise and access to expertise.

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***

Senate Minority Leader Chuck Schumers super PAC is pumping another $3.4 million to help Democrat Jon Ossoff oust U.S. Sen. David Perdue as the challengers campaign rumbles about an outright win in November.

Ossoff released a memo this week with polling that showed him -- no surprise, given it was conducted by his campaign -- with a lead over the Republican and within striking distance of a majority-vote needed to avoid a runoff. Ossoff and other Democratic outlets have attacked Perdue on his stock trades during the pandemic, and on Republican efforts to have the Affordable Care Act declared unconstitutional. So these lines in the memo stood out:

Senator Perdue was recently forced to start running defensive ads to attempt to explain his position on both of these. He has even been forced to spend millions running ads bragging that the authorities have not yet indicted him.

By mocking Senator Kamala Harris' heritage at a Trump rally over the weekend, Perdue further undermined his standing with suburban women and minority voters already disgusted by the divisive and juvenile antics of Donald Trumps GOP.

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***

Our AJC colleague Eric Sturgis has a report on the potential impact young voters could have this year -- if they show up:

A key factor in this election cycle is whether young Georgians will vote in large numbers. About one in five active Georgia voters are younger than 29. Recent history shows that if they vote, they can decide elections.

Traditionally, 18 to 29-year-olds vote at lower percentages than any age group. More than 150,000 young Georgians have cast ballots thus far, state data shows.

-

***

In endorsement news: Former U.S. Attorney General Eric Holder is backing Democrat Jon Ossoffs bid to unseat Republican David Perdue.

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The Jolt: On the GOP side of a Senate race, a gender fight breaks into the open - Atlanta Journal Constitution

When Chief Justice John Roberts joined his three liberal colleagues on Monday to uphold Pennsylvanias Supreme Court decision extending the deadline for accepting absentee ballots, Democrats were ecstatic. It was the third time Republicans had unsuccessfully attempted to limit mail-in voting in Pennsylvania, and the ruling will likely result in thousands more ballots being counted. Thats a big deal in the crucial swing state that President Donald Trump won by just over 44,000 votes four years ago.

But Democrats excitement was tempered by a lingering anxiety that their victory may be short-lived. The ruling remains in place only because the U.S. Supreme Court is deadlocked. With the Senate poised to confirm Trump nominee Judge Amy Coney Barrett as the ninth justice, Democrats are well aware that a similar decision, regarding Pennsylvanias rules or any future election-related case, may not break in their favor.

While this decision was a victory for democracy it was a disturbing reminder of whats at stake if the Republicans have their way and fill this vacancy on the Supreme Court, Democratic Senate Minority Whip Dick Durbin said on a phone call with reporters Wednesday. With one more vote they would have succeeded [in halting the ruling]. With Amy Coney Barrett, they might have succeeded.

This past year, Democratic and Republican lawyers have filed hundreds of election-related lawsuits in state and federal courts, putting this election on track to become the most litigated in history. One reason for the deluge is COVID-19, which compelled most states to expand access to absentee and mail-in voting, add ballot drop boxes, or tweak deadlines and other requirements. Nearly every time states have implemented a change, its been followed by a lawsuit. There have been at least 380 election-related lawsuits solely stemming from the pandemic, according to the Stanford-MIT Healthy Elections Project. In 2016, there were 337 lawsuits total, according to data compiled by Rick Hasen, a law professor at the University of California-Irvine. Ned Foley, an election law expert at Ohio State University, has described this year as a litigation arms race.

Pitched partisanship has become a hallmark of most of the on-going litigation. Democrats, usually joined by voting rights groups, are fighting to make it easier for voters to fill out and send in mail ballots; to expand the amount of time election officials have to count ballots; and to reduce the number of reasons that mail ballots can be thrown out. Republicans are pushing for the opposite. They argue that making it easier to apply for, vote, deliver, and count mail ballots facilitates fraud, thereby diluting the votes of those who play by the rules. So far, the rival teams appear to be in a dead heat. Depending on the week, you may say its a very good Democratic week or a very good Republican week, says Nathaniel Persily, a Stanford Law Professor.

The majority of cases grapple with mundane details, like voting deadlines and ballot envelopes, but taken together they carry outsized importanceand not just because they determine how many ballots get tallied and whose votes count. In an election year defined by distrust of the electoral process. An NBC News/Surveymonkey poll this month found that just over half of Americans lacked confidence that this election will be conducted fairly. This is in no small part because of the President, who has insisted, without evidence, that there is widespread voter fraud; refused to commit to a peaceful transition of power; and suggested that the Senate has to move quickly to confirm Barrett, in case the election ends up before the Supreme Court.

If the final vote tally ends up being close, election experts say that both Democrats and Republicans will likely take the matter to courtincreasing the possibility of another Bush v. Gore-style stand-off in which lawyers and judges, rather than the voters, ultimately determine the next President. Both sides see the stakes as so high, says Foley, that they are likely to to try and fight over the outcome as long as they can.

To the extent that it can be simplified, this years election-related legal brawls can be distilled into two groups: a push to eliminate expanded mail-in voting policies on the basis that they would produce unprecedented fraud, and a push to ease the restrictions already in place.

The first battle, waged by the Trump campaign and the Republican National Committee, has largely failed. Lawsuits on this theme filed in Montana, Nevada, New Jersey, and Pennsylvania were all dismissed because of a lack of evidence. In Pennsylvania, federal Judge J. Nicholas Ranjan, who was appointed by Trump, dismissed the Trump campaigns case on the grounds that their allegations of fraud were speculativethe same word invoked by federal district Judge James C. Mahan, who was nominated by George W. Bush, in dismissing a similar case in Nevada. In Montana, federal district judge Dana Christensen described the Trump campaigns fraud allegations as a fiction.

The second battlethe fight over the weedy regulations governing voting by mailhas had more grist. Democrats have banked key victories in lower courts, while Republicans have gotten at least half a dozen of these decisions either reversed on appeals or put on hold pending further consideration. Its not the score at the end of the first quarter that counts, and there is a lot of game left in most of these cases, says an aide at the Republican National Committee.

Take, for example, a South Carolina case weighing a state regulation requiring those voting by mail to have a witness signature. The rule was waived during this years primary after Democrats challenged it in court. (The state legislature had left it intact). In late September, the Fourth Circuit Court of Appeals ruled that the provision should be eliminated for November, arguing that reinstating it would unconstitutionally burden the fundamental right to vote. Less than a week later, the U.S. Supreme Court reversed that decision. (The Court said the requirement did not apply to ballots that had already been mailed or would be received within two days of its ruling.) The decision marked a significant win for Republicans. On Wednesday, the Supreme Court overturned a federal district ruling in Alabama that would have allowed curbside voting, a practice where voters fill out their ballots in a vehicle and submit it to a poll worker.

Similar examples of litigation whiplash have played out across the countryeach time banking a victory for the GOP. In Wisconsin, a federal appeals court reversed a lower court decision to extend the states voter registration and ballot receipt deadlines. In Georgia, a federal appeals court reversed a lower court decision to allow the state to count ballots received by November 6. And in Arizona, a federal appeals reversed a lower court decision extending the number of days voters had to fix missing signatures on their ballots. While not every lower court decision has been overturned, its a pattern thats starting to emerge, says New York University Law Professor Rick Pildes.

Progressive watchdogs also point to another factor. Since taking office, Trump has appointed 53 appellate court judges, according to July data from the Pew Research Center, most of whom are reliably conservative and tend to sympathize with the Republicans legal positions. The two appellate judges who ruled to overturn the Georgia ballot receipt extension for instance, Britt C. Grant and Barbara Lagoa, were both nominated by Trump. (Lagoa was floated as a possible nominee to replace the late Supreme Court Justice Ruth Bader Ginsburg).

But its not clear cut along partisan lines. Judges nominated by Trump have ruled against the campaign, like Ranjan in Pennsylvania. And in several of these cases, dissenting judges, including those nominated by Republican presidents, have warned these decisions could disenfranchise voters. In Wisconsin, Judge Ilana Rovner, who was nominated by George H.W. Bush, wrote that as a result of her colleagues decision, many thousands of Wisconsin citizens will lose their right to vote, despite doing everything they reasonably can to exercise it.

Pildes says the spate of recent rulings and reversals has the effect of injecting uncertainty into an already-tense election. If youre telling voters on one day that absentee ballots have to be postmarked on such-and-such a day, and youre telling them the next day it can be postmarked on this day, it gets very difficult to communicate a clear messages to voters so they understand what their rights are, he says.

For both the Biden and Trump campaigns, the ideal scenario is for their respective candidates to win the popular vote and electoral college by such indisputable margins that post-Election Day litigation becomes moot. Current polling indicates it is much likelier for Biden to accomplish this objective than Trump. But polling suggests that there are plenty of ways that this one could be a squeaker. While Biden leads in national polls, the margins are much tighter in several swing states, and his campaign is openly saying the race is closer than the numbers indicate. The closer the outcome, the easier it is to litigate, says Foley, of Ohio State University.

Both Republicans and Democrats are actively preparing for the possibility of a pitched, multi-front court battle after Nov. 3. We have been planning for any post-election litigation and recounts for well over a year and are extraordinarily well-positioned, Justin Riemer, the Republican National Committees chief legal counsel said in a statement to TIME. With the help of our national network of attorneys, the RNC has been beating the Democrats in court for the last several months and that will continue should they attempt to sue their way to victory in November. The RNC also said they intend to train thousands of lawyers to handle litigation surrounding Election day, post-Election canvassing, and possible recounts. (The Trump campaign declined to comment when asked which lawyers would be involved; the RNC did not respond to a request for further comment.)

The Biden campaign is amassing its own team of lawyersa force it describes as the largest election protection program in presidential campaign history. We can and will be able to hold a free and fair election this November and were putting in place an unprecedented voter protection effort with thousands of lawyers and volunteers around the country to ensure that voting goes smoothly, said Dana Remus, general counsel for the campaign, in a statement. The team, led by Remus, includes former Solicitors General Donald Verrilli and Walter Dellinger, and former Attorney General Eric Holder. Marc Elias, who has led the pre-election fight for Democrats, will run any post-Election Day legal contests over state vote counts.

Any post-Election Day litigation is most likely to involve swing states, crucial to determining the Electoral College winner, that end up having tight vote counts. Pennsylvania, Michigan, Wisconsin, Florida and North Carolina are all high on the list of possibilities, and top election officials in these states are girding for battle.

In Pennsylvania, Attorney General Josh Shapiro says his office has a team of lawyers in place ready to beat back any attempt by the president and his enablers. On Nov. 3, the office plans on deploying attorneys and investigators in every region of the state in anticipation of possible legal action regarding intimidation, interference or fraud.

But for now, all eyes are on Election Day. If one candidate wins in a landslide, all of this could be moot. I tell the voters in Pennsylvania, Ignore the noise, dont worry about the lawsuits filed by the President Ive got your back,' says Shapiro. What you need to do is make a plan to vote.'

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'A Litigation Arms Race.' Why The 2020 Election Could Come Down To The Courts - TIME

Goldman Sachs has been fined $2.9 billion by the US Department of Justice (DoJ) in a deal announced yesterday that closes one of the biggest corruption cases in the history of Wall Street.

Together with a settlement reached with Malaysian authorities in July, Goldman Sachs will pay more than $5 billion for its involvement in the 1MDB scandal.

While the amounts are large, the settlement follows the pattern of earlier deals on corruption. In return for an agreement to pay fines out of corporate revenue, the company and its executives escape prosecution for criminal activity. The financial penalties are simply written off as a cost of making profit.

Besides avoiding prosecution, Goldman will also escape the appointment of a government monitor to oversee its compliance department which had earlier been put forward by officials involved in pursuing the case.

While the financial penalties amount to around two-thirds of its annual profits, Goldman had already taken them into account, as they had been mooted for some time. Company shares actually rose by more than 1 percent after a report earlier this week by Wall Street Journal about the expected action by the DoJ.

Following the DoJ announcement, the banks share price barely moved. This is already priced in. The stock price is already reflecting this kind of action, Sumit Agarwal, finance professor at Singapores National University told the Financial Times.

Goldmans involvement with 1MDB was in response to the situation it confronted in the wake of the financial crisis in 2008, as its earnings prospects in the US declined and it went in search of profitable opportunities. The Malaysian government had launched the 1MDB fund, supposedly to finance infrastructure development. Goldman stepped forward to organise the sale of $6.5 billion in bonds, with the aim of collecting large fees, in 2012 and 2013.

The whole operation saw the development of a vast corruption ring. According to the prosecution, around $2.7 billion was stolen from 1MDB and more than $1.6 billion was paid out in bribes.

Much of the money was stolen by an adviser to the fund, businessman Jho Low, who was aided by two Goldman bankers working for its Malaysian subsidiary as well as associates in the Malaysian government. It is claimed that the former Malaysian Prime Minister Najib Razak, now serving a 12-year jail term, received $700 million.

The DoJ said Goldman had played a central role in the looting of 1MDB and should have detected warning signs. The acting head of the DoJs criminal division, Brian Rabbitt, said: Personnel at the bank allowed this scheme to proceed by overlooking or ignoring a number of clear red flags.

The attempts to claim that one of the largest corruption operations in history was a matter of oversight simply does not pass muster. In court yesterday, Karen Seymour, Goldmans senior counsel, admitted its Malaysian subsidiary had paid bribes in order to obtain and retain business for Goldman Sachs.

According to court papers, when an employee told an unnamed senior executive he was concerned that a 1MDB deal was being delayed because one of the participants was seeking a bribe, he was told: Whats disturbing about that? Its nothing new, is it?

The deals were organised by two Goldman bankers, Timothy Leissner and Roger Ng. Leissner, the former head of Goldmans Southeast Asian business, pleaded guilty to his role in the 1MDB case in 2018. He received more than $200 million from 1MDB and paid bribes to government officials.

Goldman chief executive David Solomon, who took over from Lloyd Blankfeinauthor of the infamous comment in 2009 that big profits for banks meant they were doing Gods worksaid: We recognise that we did not adequately address red flags and scrutinise the representations of certain members of the deal team.

As details of the corruption began to emerge, Goldman sought to blame its involvement on rogue operators. In fact, their activities were encouraged. According to the Wall Street Journal, one of the 1MDB bond deals organised in 2012, won one of Goldmans most prestigious internal awards, praised for its spirit of creativity and entrepreneurial thinking.

In an effort to clean up its image, Goldman announced that four senior executives, including CEO Solomon, would forfeit $31 million in pay this year, and that it would attempt to claw back bonuses paid to Blankfein in the past. But the penalty imposed on current executives amounts only to about one-third of what they were paid in 2019.

The notion that Goldman was somehow the victim of rogue activity and that its involvement in massive corruption is simply the result of oversight is belied by its history, in particular, the role it played in the lead-up to the financial crisis of 2008.

The Senate investigation into the crisis, which found that the financial system was a snake pit rife with greed, conflicts of interest, and wrongdoing, singled out Goldman for special mention.

In 2006, Goldman determined that subprime mortgage assets it was selling to clients were destined to flounder. Goldman went short in the market in the expectation that it would crash and it would make a profit on the other side of the very trades it had been promoting. The sums were not small. At one point the firm held short positions amounting to $13 billion.

In an email, referring to an unsuspecting investor, a Goldman executive wrote: I think I found a white elephant, flying pig and unicorn all at once.

But the exposure of criminal activity did not bring any prosecutions, let alone jail terms, merely fines, which Goldman and others simply wrote off. In 2013, President Obamas attorney-general, Eric Holder, clearly recognising the extent of the malfeasance, said that prosecutions would impact on the stability of the US and global banking system.

Since 2008, notwithstanding claims by authorities that there would be a clamp down, the corrupt practices have extended, of which Goldmans involvement in 1MDB is only one expression.

Sunday, October 25, 1pm US EDT

International online rally: Welcoming the relaunch of the World Socialist Web Site

Last month, documents published by BuzzFeed News from the US Treasurys Financial Crimes Enforcement Network, known as FinCEN, showed that between 1999 and 2017, major banks has been involved in financial transactions of $2 trillion flagged as potentially involving money laundering. The banks involved were some of the biggest in the world including JP Morgan, HSBC and Standard Charter Bank.

Earlier this month, JPMorgan Chase was fined $920 million over spoofing activity involving the quick placing and withdrawal of buy and sell orders to create the impression there was a surge of activity around a particular financial asset in order to create a profitable opportunity.

According to one of the lead investigators in the case, a significant number of JP Morgan traders and sales personnel openly disregarded US laws that serve to prevent illegal activity in the marketplace.

But despite the fact that the practice was not only well known but was actively promoted, no one in the upper echelons was prosecuted, and the fine has been written off as an operating expense.

The issue which clearly arises is: what is the underlying cause of this system of corruption and illegality?

Commenting on the latest Goldman case, Seth DuCharme, the acting US attorney in Brooklyn, might have gone further than he intended when he remarked: This case is about the way our American financial institutions conduct business.

It certainly is. However, it would be wrong to simply ascribe it to the greed of the financial executives and others, and thereby able to be countered through tighter regulations.

Of course the greed of executives and others exists in abundance. But their activities are, in the final analysis, the expression of processes rooted at the very heart of the profit systemthey are the personification of objective tendencies.

While the aim and driving force of the capitalist system is the accumulation of profit the mode of accumulation has undergone profound changes, above all in the US. No longer is the chief source of profit investment and production in the real economy.

It occurs through operations in the financial system based on speculation, clever trades, the securing of fees for the passage of money (without questioning its source) and where the value of assets is determined by arcane algorithms and other forms of financial engineering.

Consequently, in conditions where profits are increasingly divorced from the underlying real economy, lies, deception, misinformation, corruption and criminality come to dominate the entire financial system.

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Goldman Sachs fined $2.9 billion over role in 1MDB corruption case - WSWS