Attorney General Has Been Lobbying for a Get-Out-Of-Jail Card for Big Banks and their Bosses for 14 Years
Everyone knows that Eric Holder – the head of the Department of Not-Much Justice – has said that the big banks are too big to jail.
And many people know that – prior to becoming the Attorney General – Holder was a partner at a big firm which did some despicable things to represent the big banks and MERS.
But Holder’s see-no-evil act actually started more than a decade ago.
Specifically, in 1999, as Deputy Attorney General, Holder wrote a memo arguing against prosecuting large financial service companies:
Prosecutors may consider the collateral consequences of a corporate criminal conviction in determining whether to charge the corporation with a criminal offense.
One of the factors in determining whether to charge a natural person or a corporation is whether the likely punishment is appropriate given the nature and seriousness of the crime. In the corporate context, prosecutors may take into account the possibly substantial consequences to a corporation’s officers, directors, employees, and shareholders, many of whom may, depending on the size and nature (e.g., publicly vs. closely held) of the corporation and their role in its operations, have played no role in the criminal conduct, have been completely unaware of it, or have been wholly unable to prevent it. Further, prosecutors should also be aware of non-penal sanctions that may accompany a criminal charges, such as potential suspension or debarment from eligibility for government contracts or federal funded programs such as health care. Whether or not such non-penal sanctions are appropriate or required in a particular case is the responsibility of the relevant agency, a decision that will be made based on the applicable statutes, regulations, and policies.
Virtually every conviction of a corporation, like virtually every conviction of an individual, will have an impact on innocent third parties ….
Matt Taibbi points out that – when the Department of Justice subsequently prosecuted accounting giant Arthur Andersen for covering up Enron’s fraudulent schemes – Anderson ran with Holder’s argument, and threatened the DOJ “using their employees as human shields”.
Specifically, Andersen said that – unless the DOJ dropped the prosecution – innocent Andersen employees would lose their jobs.
Andersen was prosecuted and convicted, and some innocent employees – as well as the big time fraudsters – lost their jobs. Since then, the Justice Department has gotten so gun-shy that we basically haven’t had any criminal indictments against a large financial services company since then.
In the wake of the recent revelations that the big banks manipulate virtually every market in the world, and that HSBC blatantly laundered drug cartel money, Holder has said that we can’t indict big companies because that might harm the U.S. or world economy.
And Matt Taibbi notes that – for the first time - Holder is now saying that not only can’t we indict the companies, but we can’t even indict any of the individual criminals at the companies. In other words, Holder is implementing a permanent shield for employees and executives at large institutions.