Yves Smith: On Wall Street’s Private Police in NYPD Uniforms

On Wall Street’s Private Police in NYPD Uniforms

by Yves Smith, Naked Capitalism, October 11, 2011

We reported a bit more than a week ago on how JP Morgan had given a troublingly large donation of $4.6 million to the New York City Police Foundation. As we recounted, that foundation was established in 1971, which was when the city was sliding into its fiscal crisis, as a way for companies and individuals to bolster the NYPD’s budget. And even though in theory contributions go into a general coffer, one has to suspect in practice that big donors will get more attention from the cops. Even though this donation was the biggest the police foundation had ever received, it was still peanuts relative to the total NYPD budget. Nevertheless, as Richard Kline pointed out, the gesture was significant:

To me, the telltale with the JippyMo ‘donation’ is that it was _publicly_ announced. Jamie the Demon and his top heads want the public to know that the banksters LIKE the police, as opposed to those daft, sloppy, protestors.

The bankster/Kochster assault on unions was excruciatingly badly timed. It aims directly at public service unions. At their pensions. At their staffing levels. At their equipment. One of the most cogent remarks coming out of the intitial Wisconsin action (before the org-heads diverted it into failing to elect more Democrats) came from the police there, to the effect that lower staffing levels threatened _their_ safety. The local police were markedly sympathetic to the capitol building occupation in Madison. Some of this has clearly been whispered in the ear of the financial oligarchs by their paid consultants to the effect that alienating the police is not in the interests of the 1%. I don’t think that the sum of money is especially relevant or substantial. What matters is that it is a public demonstration that the banksters _like_ the police, with the implication that they will be prepared to drop a little more loose change on them if they’ll clap the rabble into Rikers like good fellows.

And it turns out that big financial service firms have also been buying protection via the NYPD. Literally.

Pam Martens in Counterpunch (hat tip reader 1sk) describes a program which allows private firms to pay the city to put a cop on the street to police for them. I am not making this up. Oh, and the white shirted cops that seem to be more aggressive in going after protestors (most notably, the one that infamously maced a group of women?) The assumption has been that they are supervisors. Martens suggests they are in the employ of businesses:

If you’re a Wall Street behemoth, there are endless opportunities to privatize profits and socialize losses beyond collecting trillions of dollars in bailouts from taxpayers. One of the ingenious methods that has remained below the public’s radar was started by the Rudy Giuliani administration in New York City in 1998. It’s called the Paid Detail Unit and it allows the New York Stock Exchange and Wall Street corporations, including those repeatedly charged with crimes, to order up a flank of New York’s finest with the ease of dialing the deli for a pastrami on rye.

The corporations pay an average of $37 an hour (no medical, no pension benefit, no overtime pay) for a member of the NYPD, with gun, handcuffs and the ability to arrest. The officer is indemnified by the taxpayer, not the corporation.

New York City gets a 10 percent administrative fee on top of the $37 per hour paid to the police. The City’s 2011 budget called for $1,184,000 in Paid Detail fees, meaning private corporations were paying wages of $11.8 million to police participating in the Paid Detail Unit. The program has more than doubled in revenue to the city since 2002.

The taxpayer has paid for the training of the rent-a-cop, his uniform and gun, and will pick up the legal tab for lawsuits stemming from the police personnel following illegal instructions from its corporate master. Lawsuits have already sprung up from the program.

If you assume a policeman works 48 weeks a year, that equates to 166 private goons masquerading as law enforcement. And remember, the corporate sponsors don’t pay for any benefits. The rule of thumb I’m used to is 25% to 30% of cash comp. And that’s before, as Marten stresses, training and litigation costs.

Lehman failed and owed the NYPD for 21 Paid Detail policemen. Goldman, the New York Stock Exchange, and the World Financial Center have all used Paid Detail. Martens points out that the New York Stock Exchange used its force to act under its direction (rather than the city’s):

On September 8, 2004, Robert Britz, then President and Co-Chief Operating Officer of the New York Stock Exchange, testified as follows to the U.S. House Committee on Financial Services:

“…we have implemented new hiring standards requiring former law enforcement or military backgrounds for the security staff…We have established a 24-hour NYPD Paid Detail monitoring the perimeter of the data centers…We have implemented traffic control and vehicle screening at the checkpoints. We have installed fixed protective planters and movable vehicle barriers.”

Military backgrounds; paid NYPD 24-7; checkpoints; vehicle barriers?..In his testimony, the NYSE executive Britz states that “we” did this or that while describing functions that clearly belong to the City of New York.

I found this report to be very troubling. Even though I’ve written how the US is moving towards becoming a Mussolini-style corpocracy, we are further down that path than I realized.

Martens also describes how the suit over the arrest of 700 OWS protestors on Brooklyn Bridge 30 members of the NYPD and 10 “law enforcement officers not employed by the NYPD.”

http://www.nakedcapitalism.com/2011/10/on-wall-streets-private-police-in-nypd-uniforms.html