More and more Washington insiders are asking a question that was considered off-limits in the nation's capital just a few months ago: Who, exactly, is Attorney General Eric Holder representing? As scandal after scandal erupts on Wall Street, involving everything from global lending manipulation to cocaine and prostitution, more and more people are worrying about Holder's seeming inaction -- or worse -- in the face of mounting evidence.
Confidential sources say that the President's much-touted Mortgage Fraud Task Force is being starved for vital resources by the Holder Justice Department. Political insiders are fearful that this obstruction will threaten Democrats' chances at the polls. Investigators and prosecutors from other agencies are expressing their frustration as the ever-rowing list of documented crimes by individual Wall Street bankers continues to be ignored.
Meanwhile the scandals and revelations go on. The new LIBOR rate-fixing scandal led the bank-friendly and conservative magazine The Economist to run a cover about "Banksters" and to publish a piece entitled "The rotten heart of finance." People like Robert Reich are saying this could be the story that finally brings down the banks.
Where are the indictments?
But there have already been stories -- lots of stories, terrible ones -- about corruption, bribery, perjury, forgery, and a dozen different kinds of fraud. There have been stories about laundering money for the Mexican drug cartels, including a new lead that surfaced this week. There's already ample evidence that Wall Street bankers have defrauded cities, deceived investors, and cheated their own clients.
Some of the bankers even rewarded themselves in that time-honored tradition of gangsters everywhere: with hookers, blow, and orgies.
The problem isn't a shortage of scandalous stories. We've seen a lot of those. What we haven't seen, at least here in the United States, is a single indictment of a senior Wall Street banker from the United States Department of Justice. And that's what has these political insiders concerned.
A growing number of people are privately expressing concern at the Justice Department's long-standing pattern of inactivity, obfuscation, and obstruction. Mr. Holder's past as a highly-paid lawyer for a top Wall Street firm, Covington and Burling, is being discussed more openly among insiders. Covington & Burling was the law firm which devised the MERS shell corporation which has since been implicated in many cases of mortgage and foreclosure fraud.
Nobody we talked to wanted to publicly demean a public official's reputation. Few of the people who are criticizing Holder privately want to fuel the right-wing witch hunt against him, which recently led to in the Republican House's shamefully politicized contempt citation. But more of them expressed concerns about Holder, and expressed them strongly, than we expected.
The Attorney General is the nation's chief law enforcement officer. But when it comes to Wall Street, they note that there's not a lot of Federal law enforcement going on.
Obstructing the task force?
The Mortgage Fraud Task Force stands at the heart of the latest controversy. In January's State of the Union address, the President said that "This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans."
And yet there have been no concrete results since that announcement. One source familiar with the task force said that other Federal agencies were actively participating in the process, but that the Justice Department was preventing the group from getting even the relatively meager resources promised to it by the Justice Department.
While nobody provided precise numbers, several sources said the Task Force could show concrete results with 20 or 30 more staff members. Yet Holder's Justice Department won't make them available, said one source. By contrast, Republican officials allocated more than 1,000 people to investigate the savings and loan scandal.