On May 5, 2010, I open up the Wall Street Jour­nal and I could puke. There was this pho­to of a man on fire, just a bunch of flames with a leg stick­ing out. Two oth­ers burnt with him on a pret­ty spring day in Athens.

The ques­tion is, who did it?

If you read the U.S. papers, the answer was obvi­ous. A bunch of olive-spit­ting, ouzo-guz­zling, lazy Greek work­ers who refused to put in a full day’s work, and retired while they were still teenagers on pen­sions fit for pasha, had gone on a social ser­vices spend­ing spree using bor­rowed mon­ey. Now that the bill came due and the Greeks had to pay with high­er tax­es and cuts in their big fat wel­fare state, they ran riot, scream­ing in the streets, bust­ing win­dows and burn­ing banks with peo­ple inside.

Case closed.

I didn’t buy it. It wasn’t just a feel­ing in my gut, it was the doc­u­ment in my hand, marked, ​“RESTRICT­ED DIS­TRI­B­U­TION. ITS CON­TENTS MAY NOT BE OTH­ER­WISE DIS­CLOSED. MAY BE USED BY RECEIP­I­ENTS (sic) ONLY IN THE PER­FOR­MANCE OF THEIR OFFI­CIAL DUTIES.”

Well, it’s my offi­cial duty as a jour­nal­ist to dis­close it. The fire­bomb­ing, the mobs in the streets of Athens, mass unem­ploy­ment, the emp­ty pen­sion funds and the angry despair that would sweep across Europe in 2010 began with a series of bank­ing trans­ac­tions craft­ed in the Unit­ed States and Switzer­land. The plan was 18 years old, and here it was played out in the streets of Greece, then Spain and Por­tu­gal, and before that in Latin Amer­i­ca and Asia. The riot was writ­ten right into it.

When I ask, Who did it? I don’t mean the dam­aged fool who threw the Molo­tov cock­tail into a crowd­ed bank. I’m look­ing for the men in the shad­ows, the very big make-the-mon­key-jump men who turned economies into explo­sive kin­dling, lit the fuse, then stood first in line at the fire sale.

I have their phone numbers.

The phone num­bers came from a memo about a so-called ​“end-game.” The omi­nous note (shown above), also marked con­fi­den­tial, was writ­ten by Tim Gei­th­n­er and addressed to Lar­ry Sum­mers. Over time, Sum­mers and Gei­th­n­er each would take a turn as U.S. Sec­re­tary of the Trea­sury, but in Novem­ber 1997, they had high­er posts, as Mas­ters of the Finan­cial Uni­verse. Unfor­tu­nate­ly these notes were just a bunch of paper not worth both­er­ing with unless I could get con­fir­ma­tion they were legit. And that would require an expen­sive trip to Gene­va to meet with World Trade Orga­ni­za­tion Direc­tor-Gen­er­al Pas­cal Lamy.

Before work­ing for the WTO, Lamy ran Le Crédit Lyon­nais, the French mega­bank. The fit and spark­ly French­man, com­fort­able with him­self and con­fi­dent, dressed down for our meet­ing in a pow­der blue sweater vest.

I spread my cards and doc­u­ments on the table, fanned them out like a Texas pok­er play­er who’d drawn an inside flush. Across the cov­er of the thick one on top was a clear­ly inef­fec­tive note:

“Ensure this text is not made pub­licly available.”

He smiled. Lamy is too smart to ask how I got them, too smart to defend them and excel­lent at explain­ing why they don’t actu­al­ly exist. ​“The WTO was not cre­at­ed as some dark cabal of multi­na­tion­als,” the banker insist­ed. But the meet­ing notes of this non­ca­bal made for some pret­ty inter­est­ing read­ing. It took an hour and a half to go over each, espe­cial­ly the one you could call the Magna Car­ta of Globalization.

‘ Risk, shmisk’

You know what the per­fect crime is?

It’s the one that’s not illegal.

San­ford ​“Sandy” Weill must have thought John Dillinger was schmuck.

Weill didn’t both­er with a few green­backs in the bank vault. Weill stole the whole bank. In April 1998, Weill’s com­pa­ny, Trav­el­ers Group, an agglom­er­a­tion of invest­ment banks and oth­er hot finan­cial oper­a­tions, took over Citi­corp. Weill, now run­ning the fresh­ly mint­ed Cit­i­group, made mil­lions off the deal. The merg­er was bril­liant – and against the law.

While Dillinger, the fool, used fast get­away cars and Tom­my guns to avoid the law, Weill sim­ply had the law repealed.

The law was the Glass-Stea­gall Act, signed by Pres­i­dent Roo­sevelt in 1933. Glass-Stea­gall pro­hib­it­ed banks that take deposits (“com­mer­cial” banks) from merg­ing with ​“invest­ment” banks. Invest­ment banks, despite the upright name, are finan­cial casi­nos, which can make high-stakes, high-risk bets on stocks, bonds, cur­ren­cies, deriv­a­tives, weath­er, whatever.

Glass-Stea­gall was based on a deal FDR made with banks dur­ing the Great Depres­sion: The gov­ern­ment would guar­an­tee sav­ings accounts, but the banks could not then use those gov­ern­ment-backed deposits to finance load­ing up a pok­er table with chips to play a two-pair bluff.

Of course, the world would be a much hap­pi­er place today, and Greece would not have burned, if Weill and his fel­low banksters had sim­ply tak­en a tril­lion dol­lars and blown it on a week­end in Vegas.

I’ve done a quick calc on Weill’s deal that broke the law (I mean, lit­er­al­ly shat­tered it). The stock of the com­bined Weill com­pa­nies popped up by $24 bil­lion on the day of the announce­ment. Nice. The fools and the fleeced were told the com­bine ​“cre­at­ed val­ue.” The hell it did. It cre­at­ed a gov­ern­ment guar­an­tee for Sandy’s casi­nos. The Amer­i­can pub­lic, in effect, put up insur­ance val­ued at $24 bil­lion of Citigroup.

Weill’s bank heist was an inside job. Remov­ing the law that formed the rock-sol­id foun­da­tion of America’s finan­cial struc­ture would require a lot of demo­li­tion work by U.S. Sec­re­tary of the Trea­sury Robert Rubin, who rec­om­mend­ed that Con­gress repeal Glass-Stea­gall and over­saw the Trea­sury as it helped to relax sim­i­lar glob­al finan­cial reg­u­la­tions. Bob Rubin’s jack­ham­mer on Glass-Stea­gall was effec­tive – the law’s demo­li­tion was signed on Novem­ber 12, 1999, just four months after Rubin left Trea­sury and just two weeks after he joined Sandy Weill to help run Citigroup.

Rubin picked up $126 mil­lion in pay­ments from Sandy’s now-legal oper­a­tion. That was not a pay­off. That was com­pen­sa­tion. There’s a dif­fer­ence: six let­ters. Count ​‘em.

When Rubin left the Trea­sury for Citi, he put his pro­tégés Sum­mers and Gei­th­n­er in charge; Sum­mers to take Rubin’s post, and Gei­th­n­er sent to Gene­va on a very spe­cial assignment.

Soon Gold­man Sachs et al. were crank­ing out new deriv­a­tive ​“prod­ucts” faster than bed sheets from a whore­house laun­dry. Some gray-hairs wor­ried about the risk. Risk, shmisk. With explic­it and implic­it gov­ern­ment guar­an­tees, the bankers were ready to go dou­ble-or-noth­ing on inse­cure securities.

Sum­mers, like Rubin before him, body-blocked all attempts to reg­u­late the deriv­a­tives market.

Arson inves­ti­ga­tion

So, who lit the fires in Greece?

Luck­i­ly, some birdies flew over our office and dropped sev­er­al papers through the tran­som. One memo, dat­ed Novem­ber 24, 1997, was writ­ten by Assis­tant Trea­sury Sec­re­tary for Inter­na­tion­al Affairs Tim Gei­th­n­er to Deputy Sec­re­tary Lar­ry Summers.

Gei­th­n­er wrote:

As we enter the end-game of WTO finan­cial ser­vices nego­ti­a­tions, I believe it would be a good idea for you to touch base with the CEOs of the major U.S. bank­ing and secu­ri­ties firms which have been close­ly fol­low­ing the WTO finan­cial ser­vices nego­ti­a­tions. I sug­gest you con­tact, via phone call, the fol­low­ing firms individually.

Gei­th­n­er advised Sum­mers to call Bank of America’s David Coul­ter, Citibank’s John Reed, Chase Manhattan’s Wal­ter Ship­ley, Gold­man Sachs’ Jon Corzine and Mer­rill Lynch’s David Kamansky.

But what did Gei­th­n­er mean by ​“the end-game” that this list of illus­tri­ous mon­ey man­ag­ing CEOs should be con­sult­ed on? Let’s piece togeth­er how the game began. In 1997, there were two burn­ing ques­tions for Sum­mers, Gei­th­n­er, Rubin, Weill and the gang.

The first was, ​“What if shit hap­pens?” What if the decrim­i­nal­ized trade in weird secu­ri­ties goes bad? Where can the Unit­ed States dump its tox­ic assets?

Rubin’s deputy sec­re­tary, Sum­mers, would apply the same solu­tion he had sug­gest­ed ear­li­er, in 1991, regard­ing chem­i­cal tox­ins. Then chief econ­o­mist of the World Bank, Sum­mers wrote a memo stat­ing that poor nations are ​“UNDER-pol­lut­ed” (his own caps), so the West should dump more tox­ins there. When the memo leaked, Sum­mers said it was a joke. It was cer­tain­ly a joke, but it was also, under Sum­mers, World Bank pol­i­cy. Sum­mers would make the rest of the plan­et swal­low tox­ic finan­cial assets. Let Ire­land, Brazil, Por­tu­gal and Greece pay cash mon­ey to take on the U.S. bankers’ risk.

The sec­ond ques­tion for the bankers was, ​“How do we bust down finan­cial rules across the plan­et?” It was not enough to erase the laws against spec­u­lat­ing with bank deposits in the Unit­ed States if it was still a crime to do so in Brazil, India, Spain and Greece. In most nations, bet­ting gov­ern­ment-guar­an­teed sav­ings accounts on funky secu­ri­ties remained verboten.

What to do? You can’t engi­neer enough coup d’états and install Gen­er­al Pinochets every­where. So then, how to change the laws of 152 nations with a sin­gle coup? Trea­sury called a meeting.

From the mem­os, it appears there were lit­tle gath­er­ings of Trea­sury with the five CEOs men­tioned above whom Gei­th­n­er had urged Sum­mers to con­sult. How could they make 152 nations bust apart their bank­ing laws and allow pur­chas­es of U.S. tox­ic assets?

The answer was to take a minor trade treaty, the Finan­cial Ser­vices Agree­ment (FSA), and turn it into the new finance law of the plan­et. In their closed lit­tle gath­er­ings, this bankers’ round­table rewrote the FSA, with pro­to­cols forc­ing every nation to remove restric­tions and old-fash­ioned safe-bank­ing reg­u­la­tions. The rewrit­ten agree­ment would require every nation to allow trade in new finan­cial prod­ucts, whether mag­i­cal or tox­ic. It would blow apart any nation’s laws restrict­ing for­eign bankers.

The agree­ment, once signed, would trump any attempt by any Con­gress or Par­lia­ment to restore pro­tec­tions. The agree­ment also dic­tat­ed that, once demol­ished, the bar­ri­ers could not be rebuilt. Return to reg­u­la­tion, called ​“claw-back,” would be severe­ly pun­ished. Any resist­ing nation would be put on the eco­nom­ic wheel and broken.

In 1997, Assis­tant Trea­sury Sec­re­tary Gei­th­n­er was sent to Gene­va, to WTO head­quar­ters, with this new law in his diplo­mat­ic bag. He was assigned to inform the ambas­sadors of all 152 nations, no excep­tions allowed, that they would have to sign it. Or else.

Or else what?

Some­times, peo­ple – and nations – have to eat shit. But no one orders it from the menu. The wait­er has to hold a gun to your head.

If a coun­try want­ed to trade with the Unit­ed States, it would have to buy the bankers’ finan­cial ​“prod­ucts.” It was a bril­liant idea. If a nation want­ed to sell Amer­i­can goods, they would have to swal­low Amer­i­can bads – the deriv­a­tives, swaps and all the oth­er exot­i­ca com­ing out of the mad bankers’ lab­o­ra­to­ries. Fur­ther­more, Citibank, JP Mor­gan and oth­er banks would be allowed to jump into these nations’ mar­kets and suck out cap­i­tal at will. Local banks would be deregulated.

Gei­th­n­er head­ed off to the WTO in Gene­va, and when I was passed a copy, it was still smoking.

The Friedmans (Thomas, and before him, Milton) are very useful to bankers. They take the spotlight off the perpetrators of the crimes and blame financial ruin on the victims.