New Day at the Department of Justice Needed Now

Dear Friends,

In the last couple of days I have read several articles about the Justice Department, Eric Holder and Loretta Lynch (President Obama's nominee to succeed Eric Holder).  We need a clean start at the Justice Department. While Eric Holder has done many good things, he has also been misleading and an advocate for covering up the wrongdoings of the banks and blocking true accountability for causing the great recession through a combination of greed and illegal activities.

Matt Taibbi published a new article in Rolling Stone a couple of days ago entitled "The Nine Billion Dollar Witness; Meet JP Morgan Chase's Worst Nightmare" (here).  It is an incredible indictment of Eric Holder and the political wing of the Department of Justice.  It also lays out in clear and logical detail the crimes of JP Morgan Chase and the coverup that they have been engineering with the help of Eric Holder.  You really should take the time to read the full article or you could listen to the detailed interview on Amy Goodman's Democracy Now show (here) with Matt Taibbi and Alayne Fleischmann (the witness).

Ms. Fleischmann was an attorney at Chase who blew the whistle on the inappropriate and illegal activities at Chase with respect to securitizing bad mortgages.  She first went through appropriate internal channels and then was a key witness for the DOJ.  The career attorneys at the DOJ were very interested in truly pursuing the banks and holding them accountable, but they were blocked by Eric Holder and the political appointees.  Ms. Fleischmann is the kind of person that we should hold up as a hero.  She is risking everything by speaking out against the big banks and the political elite.

The settlement with Chase (and similar ones with other banks) are simply the banks paying lots of money to keep their illegal activities secret.  The amounts that they are paying are large but have no negative impact on the banks.  Most of the Chase settlement is tax deductible.  That means that we are paying part of the settlement.  By the way do not try to deduct that fine you got for speeding or you will go to jail.  Another big chunk is debtor relief which is really nothing when you read the small print.  To prove that the settlement did not hurt Chase, the stock price rose by far more than the settlement (although a bunch of lower paid workers were laid off) and Jamie Dimon (Chase CEO) got a 74% increase in pay.  How can it be that the CEO of a company that has recorded about $20 billion in fines in the last few years rewards the CEO that oversaw all that with a 74% raise?  The truth is the illegal activities make far more money for Chase than the cost to Chase of those illegal activities.

Not one person has been charged with illegal activity in connection with the Chase mortgage settlement.  How can that be?  Eric Holder holds some interesting beliefs that make it impossible for him to seek true justice and accountability in these cases.  In a speech this fall, Eric Holder said,

Responsibility remains so diffuse, and top executives so insulated, that any misconduct could again be considered more a symptom of the institution's culture than a result of the willful actions of any single individual.

As Matt Taibbi writes, "In other words, people don't commit crimes, corporate culture commits crimes!"

In his testimony before the Senate Judiciary Committee in the spring of 2013, Eric Holder said,

I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. And I think that is a function of the fact that some of these institutions have become too large.

Mr. Holder recently walked that statement back,

There is no such thing as too big to jail. No individual or company, no matter how large or how profitable, is above the law.

This statement made in connection with some current negotiations leaves open the hope that there may be some admission of criminal activity.  For more information I suggest an article by Josh Gerstein at Politico (here).

Fortunately, there is hope that Chase, the other big banks and the individuals responsible will still be held criminally accountable.  The criticism of Eric Holder's handling of the past settlements seems to be having an impact on him, hence his change on too big to jail.  Also the settlements do not block further criminal actions in connection with the same activities, even though there apparently is a tacit understanding that such actions will not be brought.  There is pressure from well regarded editorial pages such as The New York Times. The last sentence of one of the editorials today (here) reads,

In short, there is, as yet, no indication that the real goals of law enforcement — reform and justice — will be met.

And last but not least, President Obama's nominee to succeed Eric Holder at first glance looks much more like a very competent career prosecutor who wants to see justice done than a political appointee close to President Obama.  For more about Loretta Lynch, I recommend an article in Time by Charlotte Alter entitled "Who is Loretta Lynch?" (here).

If Eric Holder fails to hold the banks and their leaders accountable for their crimes, we can only hope that Ms. Lynch will.

Thanks for reading and please comment,
The Unabashed Liberal