It's about time someone with some clout in Washington started asking the Department of Justice the tough questions...
On May 20, 2009, the Fraud Enforcement and Recovery Act (FERA) was passed with overwhelming bipartisan support. The goal was simple: Fraud in mortgages and big banks, along with all types of massively destructive white collar crimes, would finally be addressed.
The Department of Justice received $165 million in additional funding to tackle this problem, and what have they done to hold the very few that have ruined the lives of countless millions?
They picked off some incredibly small mortgage brokers. That's it. Not a single Wall Street executive has seen the inside of a courtroom.
The last three years have seen the DOJ transformed into a complacent tool of complicity that's likely to have Thomas Jefferson rolling over in his grave.
At Least It's a Start...
The author of FERA is going back to the Justice Department with questions that should not be ignored.
Senator Chuck Grassley, along with Senator Sherrod Brown, sent a letter to U.S. Attorney General Eric Holder last week questioning whether the current “too big to fail” status of banks undermines the ability of the federal government to prosecute wrongdoing and impose appropriate penalties.
In addition, they want the Justice Department to disclose the names of all outside experts the DOJ may have consulted in the making of prosecutorial decisions about financial institutions with more than $1 billion in assets, what those experts were paid, and how the DOJ ensured they gave unbiased advice.
We're not just talking about mortgages now; we're talking about everything involving criminal activities for financial institutions.
And it's about time...
This is bigger than mortgages and bad loans. This is about a business culture that pumps Americans dry and walks away with a paltry fine.
A corporation isn't the same as a person now. If it gets big enough and burrows its poisonous roots deep into our society, it becomes better than a person. More important. Not subject to the same laws and regulations... in a sense, untouchable.
We are long overdue for the people who have an obligation to shed light and justice on crimes against American citizens to start giving us some answers. The lack of progress and effort on their parts is practically criminal in and of itself.
Have a look at one of the more recent stories in the headlines...
We know bankers at HSBC knew and actively worked to conceal the money they were laundering for known Middle East terrorists and South American drug traffickers. The knowledge belongs in a court — and anyone involved behind bars.
You'd think the draconian restrictions on aiding and financing known terrorist organizations would be a one-way ticket to an indefinite detention in Guantanamo Bay. After all, the government had no problem throwing bin Laden's driver behind bars... surely, aiding terrorists by shifting millions upon millions of dollars worldwide to fund violence warrants a far worse penalty for what was essentially a taxi service.
Instead, HSBC took a $1.9 billion fine and admitted "wrongdoing" under a deferred prosecution agreement. That is equivalent to less than 10% of the bank's $21.9 billion of pre-tax profits in 2011.
And no one, in spite of mountains of incriminating evidence, has even faced prosecution.
The whole situation panned out just like the mortgage and big bank travesties: a couple small fines that dented earnings statements (but never enough to hurt a company) and deferred prosecution agreements that protect executives who knowingly committed fraud.
Lanny Breuer gave a speech in New York in September 2012 lauding praise on the DOJ for using these slaps on the wrist for fraud investigations: “One of the reasons why deferred prosecution agreements are such a powerful tool is that, in many ways, a DPA has the same punitive, deterrent, and rehabilitative effect as a guilty plea.”
Is that so?
While HSBC was helping terrorists, rogue nations, and drug traffickers move hundreds of millions of dollars around to support their operations... one woman and one man were sentenced to eight and ten years of prison, respectively, for providing material support to a terrorist organization.
HSBC's employees committed crimes far beyond the $1,450 the woman gave to terrorists and “the same punitive, deterrent, and rehabilitative effect as a guilty plea” certainly isn't in effect here.
The double standard has reached an entirely new level.
At least the man with the liberal idea of parity isn't calling the shots.
Lanny Breuer spoke candidly about the fact that the DOJ may never prosecute HSBC's bankers in a scathing Frontline report called “The Untouchables.”
Following the report, he resigned from his position as the head of the criminal division of the Department of Justice.
The resignation announcement gave no details and the DOJ hasn't given a statement... and while I hope Breuer's resignation isn't the result of a sudden family crisis, as far as I'm concerned, that's one down and a whole lot left to go.
“Too big to fail” and “too big to jail” bank executives know their crimes will go unanswered.
They'll have no reason not to destroy lives and retirement accounts all over again.
Until the DOJ is cleaned out, we're only allowing big banks to make a mockery of our laws... and setting up something far worse for the future.
For Your Prosperity,
Adam English for Wealth Daily