The Obama administration’s failure to prosecute any of the crimes which caused (or resulted from) the financial crisis has been a continuing source of outrage for voters across the country.
Last summer, Gretchen Morgenson of The New York Times earned a great deal of praise for her August 21 report, exposing the Obama administration’s vilification of New York State Attorney General Eric Schneiderman for his refusal to play along with Team Obama’s efforts to insulate the fraud-closure banks from the criminal prosecution they deserve. The administration has been attempting to pressure each Attorney General from every state to consent to a settlement of any and all claims against the banksters arising from their fraudulent foreclosure practices. Each state is being asked to release the banks from criminal and civil liability in return for a share of the $25 billion settlement package. The $25 billion is to be used for loan modifications.
The administration’s effort to push this fraud-closure settlement is ongoing. On January 21, David Dayen provided an update on this crusade at the Firedoglake website.
The American public is no longer content to sit back and do nothing while the Obama administration sits back and does nothing to prosecute those criminals whose fraudulent conduct devastated the American economy. On December 22, I discussed the intensifying wave of criticism directed against the President by his former supporters as well as those disgusted by Obama’s subservience to his benefactors on Wall Street. Since that time, Scot Paltrow wrote a great piece for Reuters, concerning the Justice Department’s failure to intervene against improper foreclosure procedures. Paltrow’s widely-acclaimed essay inspired several commentators to express their disgust about government permissiveness toward such egregious conduct. At The Big Picture, Barry Ritholtz shared his reaction to the Reuters article:
The fraud is rampant, self-evident, easy to prosecute. The only reason it hasn’t been done so far is that this nation is led by corrupt cowards and suffers from a ruinous two-party system.
We were once a great nation that set a shining example for the rest of the world as to what the Rule of Law meant. That is no more, as we have become a corrupt plutocracy. Why our prosecutors cower in front of the almighty banking industry is beyond my limited ability to comprehend.
Without any sort of legal denouement, we should expect an angry electorate and an unhappy nation.
Scot Paltrow wrote another great article for Reuters on January 20, which is causing quite a stir. The opening paragraphs provide us with some insight as to why our Attorney General deserves to be called Mr. Hold-harmless:
U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department’s criminal division, were partners for years at a Washington law firm that represented a Who’s Who of big banks and other companies at the center of alleged foreclosure fraud, a Reuters inquiry shows.
The firm, Covington & Burling, is one of Washington’s biggest white shoe law firms. Law professors and other federal ethics experts said that federal conflict of interest rules required Holder and Breuer to recuse themselves from any Justice Department decisions relating to law firm clients they personally had done work for.
Both the Justice Department and Covington declined to say if either official had personally worked on matters for the big mortgage industry clients.
* * *
The evidence, including records from federal and state courts and local clerks’ offices around the country, shows widespread forgery, perjury, obstruction of justice, and illegal foreclosures on the homes of thousands of active-duty military personnel.
In recent weeks the Justice Department has come under renewed pressure from members of Congress, state and local officials and homeowners’ lawyers to open a wide-ranging criminal investigation of mortgage servicers, the biggest of which have been Covington clients. So far Justice officials haven’t responded publicly to any of the requests.
The revelations in Scot Paltrow’s most recent report should create quite a scandal requiring significant damage control efforts by the Obama administration. Given the fact that this is an election year, Republican politicians should be smelling red meat at this point. After all, Obama’s Attorney General is being accused of conflict of interest. Nevertheless, will any Republicans (or their Super PACs) seize upon this issue? To do so could place them in a conflict-of-interest situation – as far as those banks are concerned. Dare they risk biting the hands that feed them? It could be quite a high-wire act to undertake. Will any Republicans rise to this challenge?