The US Justice Department is out of control. Underlying the wildly overzealous prosecution of Aaron Swartz is the abject failure of a single bankster to be indicted, let alone convicted and jailed for much more heinous and dangerous crimes. Surely we can all agree that bringing the nation’s — perhaps the world’s — economy to the brink is much more serious than liberating information. Looking closer, it’s quite clear that the Obama Justice Department has been absolutely brutal against anyone except the banksters.
On 22 January, the Public Broadcasting System (PBS) aired the long-anticipated Frontline documentary, “The Untouchables,” investigating how and why the banksters managed to avoid prosecution for their crimes related to the sale of bad mortgages. The short answer: “The FBI wasn’t aiming high enough… and the [Department of] Justice backed off.”
One name keeps coming up as central to the failure: Lanny Breuer, chief of the criminal division at the US Justice Department. “I am personally offended by much of what I’ve seen. I think there was a level of greed, a level of excessive risk-taking in this situation that I find abominable and I find very upsetting. But that is not what makes a criminal case. What makes a criminal case is that I can prove beyond a reasonable doubt every element of a crime,” Breuer tells Frontline correspondent Martin Smith in the opening moments of the piece.
Oh really? Breuer doesn’t believe he could have proved fraud (or anything else for that matter) in a case that could have been easily handled by most any first-year law student. Among those finding that implausible is Eliot Spitzer, New York’s former attorney general 1999-2006 and governor 2007-08, who tells Smith “the Justice Department failed; they have not done what needed to be done. They didn’t ever try to bring together in one coherent narrative the laying out the entirety of the story against one of the major players and demand sanctions that are meaningful. That to me is what has been fundamentally lacking.”
John Pistole, the deputy director of the Federal Bureau of Investigation (FBI) 2004-10, testified before the Senate Judiciary Committee that the law enforcement agency had “moved almost two thousand criminal investigative resources over to national security matters.” That left only about 240 FBI agents available for other issues. By way of comparison, during the savings and loan crisis of the 1980s and 1990s there were a thousand agents working on bank fraud and the Justice Department convicted more than one thousand banksters — fully a third of them top executives.
That sounds more like a plan — a strategy — to avoid prosecuting the banksters at all costs than a failure to anyone paying even a modicum of attention. Smith had no problem finding independent contractors who worked as due diligence underwriters for the banksters and even banksters themselves, including Richard Bowen, former senior vice president and business chief underwriter in the commercial lending group at Citigroup, who told him that fully 60 percent of the US$90 billion loans he was overseeing didn’t meet the bank’s credit policy. Bowen whistleblew, twice, to top Citigroup management including then-board chair and former Secretary of Treasury, Robert Rubin, requesting an external investigation.
In the fall of 2009, a week before former Senator Ted Kaufman‘s (D-Delaware) oversight hearing within the Senate Judiciary Committee was scheduled to begin, the Obama administration’s Justice Department announced the establishment of the Financial Fraud Enforcement Task Force to “investigate and prosecute fraud and financial crime.” Breuer and his cronies at the FBI and Securities and Exchange Commission (SEC) pledged to prosecute the banksters as appropriate.
In January 2010, the Financial Crisis Inquiry Commission, established and funded by the Fraud Enforcement and Recovery Act, began public hearings with the banksters. They all claimed that gosh, golly, gee, mistakes were made but were unknown (and unknowable) at the top levels. During one of these 19 public hearings, Richard Bowen, the former Citigroup bankster testified as to his email to Citi’s top management. Citi board chair and former Treasury Secretary Robert Rubin testified that he or someone else had forwarded the email to the “appropriate people” and that actions were taken to improve due diligence “but his recollections were vague.” Citigroup subsequently admitted wrongdoing in a civil fraud lawsuit, and acknowledged it failed to perform basic due diligence between 2004-10. The commission made several referrals to the Justice Department for investigation and prosecution, as did Senator Carl Levin‘s (D-Michigan) committee hearing with Goldman Sachs chief executive Lloyd Blankfein held later that year.
Lanny Breuer, chief of the criminal division at the Justice Department, responded with the thud of nothingness.
Martin Smith, the Frontline correspondent, spoke with two sources — high-level prosecutors within the criminal division at the Justice Department — who told him, “Breuer was overly fearful of losing” and that “when it came to Wall Street, there were no investigations going on, there were no subpoenas, there were no document reviews, no wiretaps.”
In September 2010, Kaufman held a second oversight hearing within the Senate Judiciary Committee, calling Breuer and his FBI and SEC cronies on the carpet. Breuer’s testimony made it clear that there would be no bankster prosecutions.
Meanwhile, more than a dozen major civil lawsuits alleging fraud — including the case brought against JP Morgan Chase by New York Attorney General Eric Schneiderman, based largely on casework done by a private law firm — have been filed against the banksters and are presently moving forward.
Last September, Lanny Breuer gave a speech to the New York Bar Association outlining his rationale for declining to prosecute a single bankster. In the speech, Breuer revealed his broad concerns regarding the ramifications of even a single bankster prosecution. “Is that really the job of a prosecutor to worry about anything other than simply pursuing justice?” asked Smith.
A day after “The Untouchables” aired, Danielle Douglas writing for the Washington Post reported that Lanny Breuer was leaving his position as head of the Justice Department’s criminal division.
The petitions currently circulating that call for the removal of US Attorney Carmen Ortiz and Assistant US Attorney Stephen Heymann (and the ones sure to follow calling for the retroactive removal of Assistant Attorney General for the Criminal Division of the US Justice Department, Lanny Breuer) are sentimentally spot on, but strategically misguided. Heymann, for example, is most likely immune under civil service law. Moreover, US attorneys are presidential appointees, confirmed by the US Senate.
That leaves two alternatives, as I see it — one fairly obvious; one a little more nuanced but perhaps more effective.
It’s up to the citizenry to demand that the Senate Judiciary Committee regain control of an out-of-control Justice Department, reigning in the unprecedented and unaccountable brutally hallucinogenic prosecution of whistleblowers and public-interest hackers and getting to the bottom of the failure to prosecute a single bankster. In 1975, the US Senate formed the Senate Select Committee to Study Governmental Operations with Respect to Intelligence Activities (popularly known as the Church Committee after its chair, Senator Frank Church (D-Idaho)). The Church Committee investigated allegations of illegal investigation and surveillance activity by the US Central Intelligence Agency (CIA) and FBI during the Watergate scandal.
A similar committee must be formed to immediately and fully investigate the behavior and culture of the Justice Department and bring it to heel as quickly and efficiently as possible.
Specifically, Lanny Breuer, individually — and the entire criminal division, collectively — must be thoroughly investigated for wrongdoing. Even more specifically, Breuer and the criminal division should be immediately investigated and, if warranted, prosecuted under the Racketeer Influenced and Corrupt Organizations Act (RICO).
As Glenn Greenwald, writing for the Guardian notes, instead of prosecuting the banksters, the Obama justice officials did “exactly what they did in the face of high-level Bush era crimes of torture and warrantless eavesdropping: Namely, acted to protect the most powerful factions in the society in the face of overwhelming evidence of serious criminality.” Seems to me that meets the criteria of a corrupt organization involved in racketeering.
That Lanny Breuer was allowed to resign is inexcusable. That Lanny Breuer’s behavior extended well beyond ineptness and incompetence is unquestionable. Let’s find out if his actions were that of a racketeer within a corrupt organization. Then, let’s use the same law to go after the banksters — and their abettors — in earnest.
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Time for pitchforks, torches, and heads on pikes — investigate Lanny Breuer under RICO was originally published by ARTS & FARCES internet on Monday, 28 January 2013 at 10:19 AM CDT. Copyright © ARTS & FARCES LLC. All rights reserved. | ISSN: 1535-8119 | OCLC: 48219498 | Digital fingerprint: 974a89ee1284e6e92dd256bbfbef3751 (64.237.45.114)