For all the fiery rhetoric against Wall Street, you might think the Obama administration has taken down a record number of financial white collar criminals. The Department of Justice however, lead by Attorney General Eric Holder, has not prosecuted any major Wall Street executives. This failure is abnormal even for a Democratic President, as Bill Clinton’s DOJ prosecuted over 1800 savings and loan executives, 1000 of whom went to jail. Then when Republican George W. Bush took office, his DOJ prosecuted over 1300 CEO’s, Vice Presidents, and other executives for corporate fraud. So what is different about the Obama administration that makes them unlikely to prosecute financial criminals, especially coming off of the financial crisis of 2008?
First let’s look at who is currently in the Department of Justice, and the big picture will start to come together. The number 1 in charge at the DOJ is Attorney General Eric Holder who came from the prominent Washington law firm Covington and Burling, which represents financial firms including J.P. Morgan Chase, Goldman Sachs, Wells Fargo, Bank of America, Citibank and others. It was also strange to appoint a defense attorney instead of a prosecutor to the position of Attorney General, and even stranger that Obama filled the DOJ with former defense attorney’s who mostly represented financial firms. Assistant Attorney General Lanny Breuer had worked for the same law firm as Holder, Covington and Burling, before coming to the DOJ. Deputy Attorney General James Cole came from the firm Bryan Cave LLP which earned $20 million between 2004 and 2008 representing AIG–AIG was the central focus of the corruption behind the 2008 financial crisis.
The third ranking official at the DOJ, Associate Attorney General Tony West, worked for the firm Morrison and Foerster which is “is currently providing legal representation to MF Global. Holder and Breuer’s old law firm — Covington & Burling — provided legal services to MF Global too, before MF Global sought bankruptcy protection.” Another Obama fundraiser, former New Jersey Governor John Corzine was the CEO of MF Global at the time of its collapse, perhaps the reason the Obama administration did not appoint an independent council to investigate the scandal, despite the request by 60 members of Congress. So America got a DOJ with leaders who used to work for and make money off of the very financial institutions they should be investigating. The revolving door of politics is usually not so blatant in the Justice Department.
Something that Presidents have generally steered clear of is appointing big campaign fundraisers to positions in the Department of Justice, yet Holder raised $50,000 for Obama’s 2008 campaign. “Perrelli [Associate Attorney General], West, and Mason [Deputy Associate Attorney General] all bundled $500,000 for the campaign. West also helped Obama raise an estimated $65 million in California.” Along with Tony West, Eric Holder Co-chaired Obama’s 2008 campaign for President. While it is not abnormal for campaign staffers to be rewarded with jobs, the conflict of interest created by filling every leadership position in the Department of Justice with political donors is appalling. Is it any wonder that the DOJ has barely prosecuted any financial criminals, when the top DOJ officials have a financial stake in the companies that would be investigated?
Obama filled the Department of Justice with defense attorneys instead of prosecutors. He gave these jobs to people who had raised money for his campaign, and worked to get him elected. These people had defended big name financial institutions in the past, and will probably have a job waiting for them at these same institutions after their time at the DOJ is up. This Department of Justice has failed to prosecute any major financial criminals, and has failed to investigate the firms from which they came. And, despite rhetoric to the contrary,
“By the fall of 2011, Obama had collected more donations from Wall Street than any of the Republican candidates, and employees at Bain Capital had donated more than twice as much to Obama as they did to [Mitt] Romney, the firm’s founder,” GAI wrote in its report.
“In the weeks before and after the Senate report on Goldman Sachs, several Goldman executives and their families made contributions to Obama’s Victory Fund and related entities and some contributors maxed out at the largest individual donation allowed, $35,800.”
“Five senior Goldman Sachs executives wrote more than $130,000 in checks to the Obama Victory Fund,” GAI continued. “Two of these executives had never donated to Obama before and had previously only given small donations to individual candidates.”
This administration reeks of corruption and cronyism. But what can we expect from Chicago politics? (Original Article).