A hefty price for moral capital

Award-winning documentary tells the story of Chinese family business that became a scapegoat for global crisis

When the US Academy of Motion Picture Arts and Sciences announced its nominees for its 90th Oscar awards, presented on March 4, the lineup for Best Documentary Feature included Abacus: Small Enough to Jail.

It's a film about a tiny Chinese-American community bank indicted for fraud during the 2008 United States mortgage crisis which triggered a financial crisis worldwide.

Its Academy Award-winning director Steve James, best known for the basketball documentary Hoop Dreams, says: "I gravitated toward documentaries because I wanted to tell stories, but I wanted to tell true stories about people in pivotal situations, at a crossroads in their lives. This is such a story."

This small story has had a big impact. It won Best Documentary at the Critics Choice and the National Board of Review awards. Movie City News called it "one of the best documentaries in recent years", while The Hollywood Reporter asserted it was "both an affirmation and an indictment of the American Dream".

In 2012, in the aftermath of the crippling 2008 mortgage crisis that sent the United States and world economies into a devastating tailspin for half a decade, New York District Attorney Cyrus Vance filed multiple charges of fraud against Abacus Federal Savings Bank, a small, privately owned bank that served New York's Chinatown community.

The trouble began when Jill Sung, CEO of the bank founded by her father, Thomas Sung, noticed an anomaly in the bank's loan department and discovered one of the bank's lower-level employees had been falsifying mortgage applications.

Did they cover it up and incur a simple fine, like the big banks did? No. They immediately reported it to the banking authorities and fired the employee. What happened next is what director James calls "a wrongful persecution" and "an unequal application of justice".

Despite Sung's blowing the whistle on the employee's illicit activities and firing him the same day they were discovered, the bank itself became the target of a federal investigation into mortgage fraud.

"Big banks that engaged in damaging actions that caused so many people to lose their life savings and their homes were not punished. Yet here is a small community bank doing what banks are supposed to do - lend to their community - and this is the only one indicted," says James.

"That was mind-boggling to me," says the film's producer, Mark Mitten. "Because no other bank had been indicted and, knowing it was just a small community bank, the 2,651st largest bank in America, with one of the lowest default rates on record, it was a head-scratcher. Why them?"

During the early 2000s, in the largely unregulated subprime mortgage industry, the biggest banks in America, like Citibank, Goldman Sachs, JP Morgan, Chase, Lehman Brothers and many others, provided billions in risky mortgages to millions of unqualified applicants who were unable to afford them.

Bitter controversy arose when the US government determined that the multimillion-dollar banks were "too big to fail" - and, some would complain, too big to indict, when not a single financial institution was brought to justice.

"Going after a big bank would have been a formidable undertaking for the DA's (district attorney's) office, and probably wouldn't even have come to trial yet," James says.

Mitten adds "So the big banks just had their wrists slapped. They were fined, but never charged with felonies, after we bailed them out with $700 billion of taxpayer money."

So, if the big banks were too big to indict, which ones were small enough? This is the question James and Mitten were compelled to ask in their insightful documentary.

The film shows the impact of the case on Thomas Sung, his wife Hwei and their four daughters, Vera, Jill, Chanterelle and Heather.

"The Sung family is revered by the Chinese community they serve," Mitten says. "He started a bank to help people get mortgages and loans to expand their businesses when no other bank would, so he has always been looked up to."

He adds: "Whenever you walked down the street with Mr Sung, whether you met first generation, second-generation or third-generation Chinese immigrants, they were all honored to know him."

When asked if he feels Sung and his daughters were singled out because of their ethnicity, the director says, "I want to believe it was (the DA's) sincere belief that fraud reached up into the highest levels of the bank, but what clouded his judgment was a belief that there was an opportunity...to be a heroic DA and be the only one to bring a bank connected with the mortgage crisis to its knees."

"This was the perfect type of banking community for Cyrus to target, because he wouldn't have any concerns about political fallout. It's well known in New York that the Chinese immigrant community is not very politically engaged," James says.

"The DA thought they would be submissive because (the Chinese) don't stand up for themselves and wouldn't have the resources to fight back," Mitten says.

But, Sung and his family, determined to prove their innocence, decided to fight back. Sung told the press, "From a social justice point of view, it is our belief that our case should be an awakening call to the community that there are injustices in our society, even though we profess to be fair, democratic and just."

James was moved by the Sung family's plight when he met them. "Their decision to fight back, to save their bank and save their family name was inspiring. They were just such a compelling family: courageous, principled, funny and lively - ideal subjects to follow."

"It cost (the Sungs) $10 million and five years of their lives, plus the toll it took on the family and particularly how Thomas aged over that time," he says.

"Now that it turned out the way it did, you can see a very different spirit about them," James says. "There is a huge sense of relief, and joy."

The filmmakers have plans to distribute the documentary in theaters and via streaming online in China.

James visited China in 2009 as a VIP guest of the Beijing Film Academy at its International Documentary Conference in Beijing. "It was a great trip. Our hosts were lovely and we had some really great master classes for Chinese documentarians and students who wanted to get into the field."

He adds, "There is such a rich tradition of filmmaking in China and the Beijing Film Academy is such a fertile birthplace for a lot of incredible filmmakers, including some incredible documentaries set in China that tell extraordinary stories that are highly regarded in this country, whether they are nominated for Oscars or not."

"It's important that everybody worldwide knows what happened. How the Sungs fought back, and how they won," Mitten says.

Xinhua

(China Daily European Weekly 03/16/2018 page21)