Yesterday the Justice Department announced that once again it's not going to pursue evidence of Wall Street crimes which have been sent its way. It has already failed to act on information sent to it by sources whose investigators are apparently more dogged than its own, including several other government agencies and the Financial Crisis Inquiry Commission. Now the bipartisan committee which was led by Senators Carl Levin and Tom Coburn can be added to the list of sources whose leads weren't pursued by Attorney General Eric Holder and his staff.
Holder was on the defensive yesterday, a sign that the mounting criticism of his inaction is getting his attention. He was also scornful of that criticism, saying that it's belied by "a troublesome little thing called facts."
There's something troublesome here, all right, but it isn't the facts.
A Justice Department press release announced that there will be no prosecutions based on the Levin/Coburn report:
"After a careful review of the information provided in the report and more than a year of thorough investigation, the Department of Justice... the FBI and the Special Inspector General for the Troubled Asset Relief Program (and other agencies) have determined that, based on the law and evidence as they exist at this time, there is not a viable basis to bring a criminal prosecution with respect to Goldman Sachs or its employees in regard to the allegations set forth in the report."
The press release goes on to say:
"The department and its investigative partners conducted an exhaustive review of the report and its exhibits, independently gathered and scrutinized a large volume of other documents, and tenaciously pursued potential evidentiary leads, including conducting numerous witness interviews."
The DOJ also boasts that, "Since FY 2011, the Department of Justice's financial fraud enforcement efforts have resulted in at least $185 billion in civil and criminal forfeitures, restitution, civil settlements and other penalties." (Bankers have continued to collected huge salaries and bonuses, however, so the lack of criminal prosecution gives them no reason to stop committing crimes.)
The statement goes on to describe DOJ's "aggressive" pursuit of bank fraud, adding that "The Department of Justice has not hesitated to investigate and take enforcement action when the evidence and facts support doing so."
Holder himself was considerably more testy:
"There have been, I guess, 2,100 or so mortgage-related matters that we have brought here at United States Department of Justice. Our state counterparts have done a variety of things. The notion that there has been inactivity over the course of the last three years is belied by a troublesome little thing called facts."
Unfortunately, the Holder Justice Department has had a troublesome relationship with facts. That dates back to its ginned-up and ultimately discredited claims about something called "Operation Broken Trust," in which it claimed credit for dozens of mortgage-related convictions that it said had resulted from a coordinated operation of that name. As the New York Times noted, many of those investigations had actually concluded before the 2008 election, Holder's appointment, and the creation of "Broken Trust." The Columbia Journalism Review gave its review of the fiasco the headline "Obama Administration's Financial-Fraud Stunt Backfires."
Then there's the graphic evidence of inactivity since the election of President Obama and the confirmation of Attorney General Holder, courtesy of Syracuse University's TRAC project:
(On the other hand, prosecution of immigration cases has soared under this administration.)
Most tellingly of all, there are the insider comments which suggest that the Justice Department has been dragging its feet in providing the mortgage fraud task force with the extremely modest resources it was promised (roughly 100 staff members to investigate a trillion-dollar fraud that involved all of the major U.S. banks, as opposed to 1,000 for the much smaller savings and loan scandal of the 1980s).
And despite Holder's claims, the convictions obtained over the least three-and-a-half years have been strictly for small fry. The Justice Department hasn't even tried any cases against major financial executives, despite seemingly overwhelming evidence which includes: