President Barack Obama and Attorney General Eric Holder have failed to criminally charge top Wall Street bankers for the 2008 financial crisis is likely because of cronyism within the U.S. Justice Department and of political donations made to Obama’s campaign, a report from an independent conservative watchdog agency concludes.
The Government Accountability Institute, based in Tallahassee, Fla., released a report on Tuesday that concluded that Obama and Holder have not “filed a single criminal charge against any top executive of an elite financial institution” linked to the Wall Street collapse, The Daily Caller reports.
The GAI, which is not affiliated with the any governmental agency, seeks to “investigate and expose crony capitalism, misuse of taxpayer monies, and other governmental corruption or malfeasance,” according to its website
. The site says the institute employs “investigative researchers and journalists committed to fairness and fact-driven reporting” in its efforts.
In the report released on Tuesday, the GAI contrasts Obama’s and Holder’s actions in the crisis with their “heated rhetoric.”
In 2009, for instance, the president blamed the meltdown on the “reckless speculation of bankers” – and Holder said that “unscrupulous executives, Ponzi scheme operators, and common criminals alike have targeted the pocketbooks and retirement accounts of middle-class Americans.”
The administration’s failure to not pursue senior Wall Street executives is because senior Justice Department leadership “all came to the DOJ from prestigious white-collar defense firms where they represented the very financial institutions the DOJ is supposed to investigate,” the report said.
Besides Holder, these top Justice officials include Associate Attorney General Tom Perrelli, Associate Attorney General Tony West, Assistant Attorney General Lanny Breuer, Deputy Attorney General James Cole and Deputy Associate Attorney General Karol Mason, according to the GAI.
For instance, the report describes how Holder and Breuer came from Covington & Burling, a “top-tier Washington law firm” whose clients include Wells Fargo, J.P. Morgan Chase, Bank of America, CitiBank, Deutsche Bank, Goldman Sachs, ING, Morgan Stanley, UBS, and Wilmington Trust.
President Obama’s decision to choose Holder, “a white-collar defense attorney from Covington,” as his attorney general, over a “more fiery prosecutor,” appears to have sent “a subtle signal to the financial community” that this administration would – in reality – take no real action regarding the collapse despite the tough talk, the report said.
In other information in the report, Cole was with Bryan Cave LLP — “a white-shoe firm with A-list clients” — before becoming Holder’s top lieutenant. AIG, the insurance and financial giant, was one of Cole’s clients while at the Bryan Cave firm.
Cole also had obtain $20 million in work for AIG between 2004 and 2008, but his ties with the insurer – which was “at the heart of the financial crisis largely because of its noncompliance in regulatory and compliance issues” – did not prevent Obama or Holder from hiring him at Justice, the report concludes.
In addition, the Obama administration’s refusal to appoint an independent counsel to investigate the MF Global scandal, over the demands of more than 60 members of Congress, also smelled of cronyism, the GAI report said. Former former Democratic New Jersey Gov. Jon Corzine and Obama contributor was at the center of MF Global.
According to the GAI report, West – the third-highest-ranking official at Justice – worked as a white-collar defense attorney for the Morrison and Foerster firm before he came to the department. Morrison and Foerster is currently representing MF Global.
Holder and Breuer’s former employer, Covington & Burling, also represented MF Global too, before MF Global sought bankruptcy protection.
The appearance of MF Global’s cronyism is “further complicated” by how Reid Weingarten, an attorney at the Steptoe & Johnson firm, was selected to be the lawyer for the company’s treasurer, Edith O’Brien.
“Weingarten previously served as Holder’s attorney following the controversial pardon of Marc Rich in the Clinton Justice Department,” the GAI report said, adding that the blog Main Justice points out how Weingarten is “one of Holder’s best friends.”
The report also notes that both the administrations of George W. Bush and Bill Clinton actually took down financial criminals, unlike the Obama White House.
Between 2002 and 2008, for instance, the report said that a Bush administration task force “obtained over 1,300 corporate fraud convictions, including those of over 130 corporate vice presidents and over 200 CEOs and corporate presidents.”
“Clinton’s DOJ prosecuted over 1,800 S&L [savings and loans] executives, senior officials, and directors, and over 1,000 of them were sent to jail,” the GAI report said.
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