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Richard (RJ) Eskow
Published: Saturday 11 August 2012
“Holder was on the defensive yesterday, a sign that the mounting criticism of his inaction is getting his attention.”

Attorney General to US: Nothing to See on Wall Street, Folks, Just Move Along

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Yesterday the Justice Department announced that once again it's not going to pursue evidence of Wall Street crimes which has 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 that "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 State 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 Blind 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 "Blind 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 US 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:

The AIG allegations: We used the Levin/Coburn Report to review the list of potential criminal activity in that case here.

GE Capital deceptions: That's the company whose politically-connected CEO was given a Presidential appointment. Referring investigators were stunned to find that no criminal charges would be filed over its fraudulent deception of investors, even though they had identified specific individuals in the accounting department who had cooked GE's books. GE Capital has also been implicated in fraudulent mortgage practices.

Wells Fargo drug-money laundering: That's the case in which bankers laundered money for the Mexican cartels that have killed tens of thousands of people. You know the gangsters we mean - they're the guys who decapitate people.

JPMorgan Chase's "London Whale": With particular concern about the cover-up of billion-dollar losses, with special concerns about CEO Jamie Dimon's statement to investors that its London losses were "a tempest in a teapot." Dimon later admitted he already knew that those losses would be at least two billion. (Making false statements to investors is stock fraud, a crime.)

And there are others, too numerous to mention all of them here: Countrywide. Citigroup. HSBC. The list goes on and on.

The Justice Department's argument for inaction seems to come down to this: Bank cases are complicated. They're hard to win. We don't want to try. And it has repeatedly used an argument that's also been made by the President and Treasury Secretary as well, as they've tried to explain away the inactivity: that bad banking behavior isn't necessarily criminal behavior. That claim's been repeated many times, especially in the context of "ABACUS" and other Goldman Sachs misdeeds contained in the Coburn/Levin report.

But it's not true. It's already illegal to lie to clients, to knowingly conceal important information from in order to get their money under false pretenses, or to withhold materially important information from shareholders. And yet that flimsy argument seems to lie at the core of the DOJ's explanation for once again declining to pursue the evidence wherever it may lead.

Here's what really happened in this case: Goldman was selling its clients "crap" investments (A Goldman employee's word), and which it knew to be "crap," while at the same time betting against those investments. And it concealed the fact that these investments were selected, not by the people it told investors were doing the choosing, but by somebody who was well-known for betting against the "crap" - and who would make a fortune if they failed.

Under the massive civil settlement for ABACUS, the parties acknowledged that it was a "mistake" for Goldman marketing materials to claim that "the reference portfolio was ‘selected by’ ACA Management LLC without disclosing the role of Paulson & Co. Inc. in the portfolio selection process and that Paulson’s economic interests were adverse to CDO investors.”

"Mistake"? That's more of the linguistic evasion that's used when crooked bankers pay hundreds of millions to settle criminal and civil charges while "neither admitting nor denying wrongdoing." Goldman paid a record amount - more than half a billion dollars - to settle this case. The total settlement came to 550 million dollars. That's 550 million admissions of wrongdoing.

As they say: Money talks.

We're not into speculating about the motives for the Justice Department's inaction. But it's not surprising when others who do come to unflattering conclusions, and not just about Holder. This is an issue which the President himself will ultimately have to address - for his campaign, and ultimately for his legacy.

Meanwhile, the cases the Justice Department hasn't prosecuted have led to billions of dollars in settlements. Eric Holder says that his department and this Administration are doing everything they can to prosecute Wall Street fraud and make sure it doesn't happen again. There's only one thing that makes that statement hard to believe: It's a troublesome little thing called "facts."

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ABOUT Richard (RJ) Eskow

Richard (RJ) Eskow is a well-known blogger and writer, a former Wall Street executive, an experienced consultant, and a former musician. He has experience in health insurance and economics, occupational health, benefits, risk management, finance, and information technology.



Eric Holder is the figurehead of a selectively oppressive machine named “The Injustice Department”. On July 17th, a letter was sent to United States Attorney General Eric Holder detailing federal government corruption in Albany, New York. The appointment of a Special Prosecutor was requested, but the request was ignored. The letter can be accessed at the following web-site: Also, a condensed version of the story can be viewed on YouTube by typing in the name Kirsten Gillibrand.

This is dereliction of duty

This is dereliction of duty right in our face. Isn't Fascism wonderful?

Gee, this decision was

Gee, this decision was announced the same day it was announced that Romney was getting 70% of Wall Streets money for the election. These people are bought and payed for. Holder is the worse AG in my lifetime. Man was I suckered last election cycle. I say let the crazies in. The faster we go down the sooner we can rebuild.

That's what we said about

That's what we said about Nixon. Didn't get us anywhere.

Wouldn't want to jeopardize

Wouldn't want to jeopardize that position waiting for him on Wall St. as the door revolves at the end of his term

Since selling money (usury;

Since selling money (usury; 'capitalism') automatically devalues the money itself, the goods bought and labour used to pay for it all, it should still be illegal.

Charging interest in advance is NOT valid investment (where you wait until after real economic activity to determine the results); so: interest IS inflation!

Finally, since there can be no greedy impulse buying without fear, banksters are extortionists. Besides, they not only advertise fear to sell the greedy hope of relief from their own initial threats, but they also only issue checks they can't actually back up (fractional reserve lending). And that's always been called FRAUD.


Norman Allen's picture

Romney/Ryan is total

Romney/Ryan is total disaster. Keep Obama for another four and begin to eliminate these gangsters one by one if still possible. If not possible I see little else but marching in the streets doing whatever it takes to win back what is left of America.

What a sorry excuse for an

What a sorry excuse for an Attorney General (and human being)! Sure it is hard to prosecute financial crimes. However during the Savings and Loan crisis (which was 1/70 the size of the 2008 crisis), William Black had thousands of successful felony prosecutions. IT CAN BE DONE!

However, if you decide you want the money contributions, then we give these Wall Street criminals a free pass. Our country is screwed. This next SELECTION (not election) will be between Romney who is Mr Wall Street, or Obama is a Wall Street tool. This looks more like the old Soviet selections of the past.

I have learned my lesson and will no longer vote Republican or Democrat. The lesser of 2 evils is still evil. I would rather vote for what I want and not get it, than vote for what I don't want and get it.

A third party is the way to go.

Holder and the federal

Holder and the federal prosecutors are doing much work for the People, they have thrown American environmental hero Tim deChristopher in prison for 2 years and they threw the UBS Bank whistleblower bradley Birkenfeld in prison for 40 months for exposing one of the largest tax evasion schemes in recent memory. BTW, none of the billionaire tax cheats went to prison, just the UBS Bank employee who blew the whistle.

Obama has betrayed the 99% at

Obama has betrayed the 99% at every turn, and this is yet another of a long list of examples that cannot be attributed to Repubs. It's time for Dem loyalists to stop bleating that Romney/Repubs are the greater evil, and holding the rest of us hostage to their perpetuation of lesser evil.


Obama...Romney...Biden...Ryan, they're all just "bag men." The elite cadre of individuals "really" calling the shots remain immune to criminal prosecution and media scrutiny. My Dad used to tell me as a kid "never do anything half-ass." That's what the country did, (myself included) in electing Barack Obama. We got a "half-ass Republican." Reality is often the best and most effective medicine. Should "Field Marshall Romney" and "SS Captain Ryan" win the election, America will get a full dose of what many have grotesquely sought for decades. A nascent and horrifying Fascist state is forming beneath our noses. Don't be seen without your flag lapel pin.

He failed to support the

He failed to support the Wisconsin union memers, he lied about EFCA outright as he lied about renegotiating NAFTA. But go on over to the Huffington Post and just try to explain to the very many brainwashed Obama supporters how bad this miscreant really is and you will be skinned alive. Obama has the corporate media propagandizing for him. And it seems to be working. He says something leftwing in a speech and the media advertise his left wing lies on the front page. He does something draconian that benefits fascists and the corporate msm pretty much ignores it.

the person who gave info on

the person who gave info on was armitage [colon powell buddy] big question why is corzine not in jail stealing other people money

I recently watched FAIR GAME,

I recently watched FAIR GAME, the bio-drama about Valerie Plame and Joe Wilson. Plame's boss told her, don't do it, don't speak out and go public. See that building over there? (the white house) The most powerful men in the world are in there. You are going up against them? The Wilsons ultimately sued and lost. So maybe Holder was taken to the woodshed because he was doing something: coming down on voter ID laws in several states. Maybe that was his warning to shape up or ship out. They almost destroyed him. Not that this excuses him at all, but worth thinking about how things work. Joe Wilson said, "The responsibility of government doesn't lie in the hands of the few, but of us all." (Not a direct quote but close.) If the Wilsons hadn't fought back, if Valerie Plame hadn't come forward on the record, who knows what might have happened to them and their children? They lost almost everything. But they are alive and not in jail. Scooter Libby was the fall guy for Cheney and Rove. He spent a whole two and one-half years in "prison" before Bush commuted the rest of the sentence. His fine was $250,000, chicken feed to the big guys. Power corrupts and absolute power ...

Just whose side are you on,

Just whose side are you on, Mr. Holder, the people of the United States or Wall Street? We'd like an answer very soon.

Eric Holder and the DOJ have

Eric Holder and the DOJ have proven to be an utter waste of oxygen; at least if they weren't breathing any, the clean air regulations they refuse to enforce would prove to be slightly statistically more effective. I'm particularly distressed that Holder let the GOP Congress so easily frighten him away from enforcing voter rights laws. I suppose the poetic justice there will be that it will be votes for Obama that are lost, so Obama has no one but himself to blame for not selecting an Attorney General with some semblance of spine.

"Bad banking behavior isn't

"Bad banking behavior isn't necessarily criminal behavior..." It used to be criminal behavior until the special banking interests, with legislators drooling at their feet, were instrumental in legalizing their brand of criminal behavior. So, basically, Holder is upholding the law of the land. It's a big crock and we ignoramuses a.k.a. U.S. Voters, smug and happy in our cozy lifestyles, have allowed this to happen along with the incredible gutting of the education of our children.

They come from both sides of

They come from both sides of the aisle with their highly developed propensity for inactivity. The lines are so blurred between the inefficacy of the Legislative and the Executive branches of the government that one would be hardpressed to know to what ideologies they swear their loyalties, if there indeed is any distinction. Yet these people manage to get through their day unscathed, attend social gatherings and get a good night's sleep. Then, recharged from the previous days inactivity, they move seamlessly into another day and another....totally unaware of the vagaries of their inactions and more oblivious of the responsibilities of their office. Performance through detachment....there is promise of a whole new professional endeavor for the likes of Mr. Holder, et al. when their tentative tenure comes to an end. That this should be sooner than later is the wish of reasonable people everywhere.

Sorry to be crude....but does

Sorry to be crude....but does the term "Chicken Sh#t", ring a bell regarding Eric Holder?

He's not afraid to prosecute

He's not afraid to prosecute these people. He doesn't want to because he is one of them.

You can have a nation that

You can have a nation that sanction the bribery of public officials, or you can have a representative democracy. The one will always preclude the other.

What, in the name of common

What, in the name of common decency can Mr. Holder be thinking? If the Wall Street bandits were poor, non-white, and carrying a personal supply of marijuana, each one would spend the next ten years in prison.

Whether or not the cases can be successfully prosecuted is hardly the issue. Americans need to see an unequivocal demonstration of the government's commitment to justice. Unsuccessful prosecutions would spotlight the power of money over justice which, in itself would be a public benefit.

Whose payroll is Holder on? Clearly not the majority of Americans'.

If it is not actually written

If it is not actually written into law that it is illegal to sell securities as an investment while secretly betting against those securiteies (it doesn't matter if you know they will fail or not) then, it should be. It certainly seems to me that many bankers broke many laws. But, what do I know? I'm just a schmuck living on SS and a pension.

Between Geithner and Holder,

Between Geithner and Holder, Obama has really failed us utterly. That is why I will not vote for him again, not that Romneyhood is better! But I am not only deeply disappointed but ashamed of Obama. It is the same deal with the IRS: they concentrate on smaller cases, an employee told me, because the big ones have tougher legal representation and more complications. And fines or settlements simply become the cost of doing business. Hey, are we truly now a banana republic ruled, or at least over lorded, by a plutocracy of the 1 percent, their corporations and the all the power and influence their money can buy? If there is not justice at the top there can be no justice below.

"...with liberty, and justice

"...with liberty, and justice for all..."

In the 1960's, these were the last words we all said, with hand on heart, before sitting down to learn and become the next great generation. We need leadership - not just in the White House, but in Congress and Community, too - to restore this ideal. I cannot vote for Romney, until I can see he has the ethics to lead. Not ethics founded in greed and gluttony (two of the seven deadly sins that allegedly are front-topic with today's conservative right), but ethics founded in responsibility and sustainability (the core elements of past American conservativism).

Justice only at the top does not cut it.

My initial reaction on this

My initial reaction on this piece was to generally agree with Holder's position, simply from the perspective that whatever DoJ tries to do will doubtless be more than matched by the defendant banksters. It is similar to the defense offered for Romney, by those who trust he broke no laws but instead used existing laws to maximum advantage (and, in a showing of ethical-deficiency-disorder). It is our Congress, and our recent administrations on BOTH sides of the aisle, that amended the laws (e.g., the critical repeal of Glass-Steagall), creating a new legal environment in which banksters could thrive, to the detriment of many smaller people (and eventually, in a way that nearly toppled the entire economy).

We should try not to lose sight of the fact that this is not new. In our Democracy, we have elected officials and lobbyists and just as importantly, career civil servants who apply new laws while attempting to regulate and serve ... in reality, they all these players are subject to manipulation by corporations, narrow private interests, money, etc. Out of these manipulations come changes in laws, with cronyistic benefits. That is how our system works; it evolved this way. No doubt, in the early eighties, there were law changes that enabled leveraged buyouts and other predatory financial activities, called by some "vulture capitalism". These resulted in grotesquely oversized profits at private equity firms, the export of American jobs, the closure of vast portions of American industry, and an ever-widening wealth gap that increasingly implies the end of the Middle Class as we knew it. And, eventually, even our Supreme Court added a nail to that coffin, giving corporations greater standing than individual people.

The SU TRAC Project graph is interesting. It appears that prosecution levels were steady just above 3,000 annually under the Elder-Bush and Clinton administrations, then decayed by half under W. The decay continued into the Obama administration, but it is too early to tell if it is leveling or even reversing ... and we all know, inertia has a powerful effect, delaying meaningful change. Plus, prosecutions are an application of existing law, and until Congress amends the laws to support prosecution, it is not likely to increase.

So, perhaps Holder is saying no more wasted effort on what we cannot win. Yeah, Spitzer or others might be more aggressive, but ultimately this problem needs to be fixed by a broken Congress. Which may not happen if, as it may turn out, a new reality crystallizes, revealing that the system itself is broken.

What choice did he have if he

What choice did he have if he wants to keep the yacht?

I'll bet that Eliot Spitzer

I'll bet that Eliot Spitzer could win criminal convictions of Obama's thieving Wall Street "Savvy Businessmen" buddies in his sleep.

Holder is Wall Street's whore and needs to go, and Obama too.

Vote Green Party (Jill Stein).

Holder, Geithner and

Holder, Geithner and militarism are the true faces of this administration. Sorry, Michelle, you seem like a good person but I won't be returning your envelopes with my donations this time around. I learned my lesson in 2009 and 2010.

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