Blog on the Run: Reloaded

Friday, September 13, 2013 7:10 pm

Dean Baker on why the Wall Street criminals walked


Shorter Dean: Because the Justice Department let them:

[In a real investigation] [t]he people who put together some of the worst mortgage backed securities would be asked if they were really dumber than rocks and had no idea that many of the mortgages being put into the packages were fraudulent. If the prosecutors could demonstrate evidence of intelligent life at Goldman Sachs and Morgan Stanley they would then ask the lower level people whether they wanted to spend years in jail or would rather explain why they thought it was a good idea to put tens of millions of dollars of fraudulent mortgages into mortgage backed securities. This would presumably lead to testimony against higher ups at these investment banks. …

There is no guarantee that these sorts of efforts would have landed top executives of financial firms behind bars. However there is no evidence that the Justice Department even began this sort of investigation. At the least, such an investigation would have resulted in prosecutions of lower level actors who clearly violated the law in issuing and passing on fraudulent mortgages.

As [Neil] Irwin said [link added — Lex], bad business judgement is not a crime. However, it is a crime to allow bad business judgement to lead to fraud. Clearly fraudulent mortgages were a major factor in propping up the housing bubble. No one went to jail for this crime.

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4 Comments »

  1. Richard Cohen WAS RIGHT !!

    Comment by Fred Gregory — Thursday, September 19, 2013 1:00 pm @ 1:00 pm | Reply

  2. Hey, even a blind pig finds an acorn once in awhile. But, yeah, Holder has been an awful AG.

    Comment by Lex — Thursday, September 19, 2013 2:15 pm @ 2:15 pm | Reply

  3. It was not only Cohen. Voices from the left and right warned us about Holder. As a freshman in 1970 at Columbia U. he participated in an armed takeover of the ROTC office on that campus, later rernmaed, as demanded by the BSO, the Malcom X lounge.

    George Lardner , NY Times also got it right

    His post confirmation critics have been proven prescient. I am not going to list all of them or his many sins since assuming office but Debra Burlingame’s testimony against Holder was the the most poignant

    Chairman Leahy, Ranking Member Specter and Members of the Senate Judiciary Committee:

    I am writing to share my views about the nomination of Eric Holder to the position of United States Attorney General.

    For the last seven years, I have taken a keen interest in the workings of my government. After the widespread institutional failures of the U.S. government to protect the lives and property of its citizens from terrorist attack on September 11, 2001, it was no longer acceptable to me to be a passive observer, to accept at face value what public officials tell us about the policies and decisions they make. 9/11 reminded us all that the decisions made in Washington have real world consequences for those far removed from the center of power.

    On September 11, 2001, my brother, Captain Charles F. Burlingame, III, was murdered in the cockpit of his hijacked commercial airliner which was then crashed into the Pentagon, killing all 59 of its passengers and crew, and 125 men and women working at the Department of Defense. After that difficult day, I made a personal vow to become a better citizen, which starts with becoming better informed. Since then, I have contributed in the best way I know how, sharing what I have learned with others. It is in that spirit which I write to you today.

    I am well aware of Eric Holder’s academic credentials, his record of accomplishments and the high regard in which he is held by some of his colleagues and associates. His qualifications for the position to which he has been nominated are plainly evident. However, Mr. Holder’s record is clouded by actions which even his supporters admit constitute serious errors in judgment, most notably, the role he played in a series of highly controversial Presidential pardons which issued while he held the position of deputy attorney general at the Department of Justice (DOJ).

    I believe the facts surrounding Mr. Holder’s conduct with respect to these pardons seriously call into the question his judgment, character and independence, and cast doubt about his willingness or ability to serve both the President and the American people with equal dedication and vigor.

    The pardons to which I refer were those of fugitive Marc Rich, wanted for racketeering, fraud and illegal trade with Iran while it held 52 American embassy personnel hostage; the commuted sentences of Weather Underground terrorists Susan Rosenberg and Linda Evans who were implicated in the killing of two New York state troopers and a Brinks security guard; and the clemency for 16 unrepentant terrorists of the Puerto Rican separatist groups, the FALN and Los Macheteros (“The Machete Wielders”), a clandestine “people’s army” responsible for more than 130 bombings which killed six people and injured scores of others in Chicago and New York.

    All of these pardons stunned and outraged the U.S. Attorneys who prosecuted these cases. The pardons undid years of effort to bring these people to justice, including that of the federal marshals who chased Marc Rich all over Europe, of the FBI agents who dedicated years of their lives to stopping the carnage wrought by the FALN, of the prosecutors who tried the cases and wrote thousands of pages of responses to the motions and appeals filed on behalf of the accused by their lawyers.

    Additional fury arose over the fact that the pardon process itself grossly departed from standards and procedures that had been in place at the Justice Department for more than 150 years. The pardons were carried out in secrecy. A review of the record clearly reveals Mr. Holder’s role in circumventing the Justice Department by steering lawyers for potential clemency recipients directly to the White House, effectively preventing the U.S. Attorney’s offices and those who had a personal stake in the President’s decision from being heard at all, including the three New York City police officers who were permanently blinded or maimed by FALN bombs planted at One Police Plaza and the families whose lives were shattered when their loved ones were murdered in the Fraunces Tavern bombing. None were given an opportunity to be heard and no one — prosecutors, FBI, presiding judges, Bureau of Prisons, or victims — found out about the clemencies until they were announced to the public.

    Unforgivably, the victims learned about the imminent release of these violent criminals through the media. It must have been excruciating for the victims in that one month period, after President Clinton announced his “conditional clemency offer,” as they waited for the FALN prisoners to decide whether the renunciation of violence was worth the price of freedom. They never renounced violence. They never expressed remorse for their crimes. They were released anyway. One can only imagine the magnitude of that betrayal.

    The circumstances surrounding Mr. Holder’s intervention on behalf of Marc Rich was described by a federal prosecutor as “one of the most disgraceful chapters in the history of the Justice Department.” To be sure, the Rich clemency tarnished the reputation of all those who played a role in it. The pardon diminished respect for the Office of the Presidency and shook public confidence in the Justice Department’s ability to administer equal justice under the law.

    But the FALN pardons were distinctly a far graver matter because they represented a serious threat to public safety and national security. What is most disturbing when reading the record tens years later is Mr. Holder’s inability or refusal to recognize, in the first instance, the threat to the public that releasing these terrorists posed. FBI Director Louis Freeh wrote in a letter to House Judiciary Committee Chairman Henry Hyde that six weeks before the pardons were announced “the FBI pointed out to the DOJ that as active members of Puerto Rican terrorist groups, these individuals sanctioned, supported and/or directly or indirectly participated in activities resulting in no few than nine fatalities, hundreds of injuries, millions of dollars of in property damage, and armed attacks on U.S. government facilities.”

    Freeh further noted that “DOJ was advised the FBI had reason to expect the release of these individuals would ‘psychologically and operationally enhance’ the ongoing violent and criminal activities of Puerto Rican terrorist groups.” He emphasized to DOJ that “any such pardons of the ‘currently incarcerated terrorists would likely return committed, experienced, sophisticated and hardened terrorists to the clandestine movement.’”

    To this day, Mr. Holder has never publicly taken a position on the FALN pardons with any particularity, except to say that the President had absolute power to give them. Citing Executive privilege more than a dozen times during his appearance before the Senate Judiciary Committee in 1999, Mr. Holder declined not only to discuss the pardons, but also the facts of the underlying FALN cases “which are inextricably woven into the facts of the clemency.”

    Even the committee’s questions as to whether he suggested to the President that the pardons be conditioned on the prisoners’ assistance in open FALN cases, including giving information leading to the arrest of an FALN confederate on the FBI’s Ten Most Wanted List, was thought by Mr. Holder to be something “the President doesn’t have to consider.” He declined to say whether the issue of cooperation in ongoing cases is, as a general matter of DOJ policy, requested of clemency petitioners. The record of his testimony is truly embarrassing to read.

    Mr. Holder not only failed to oppose the President in what was widely regarded as a travesty of justice, we now know that he improperly facilitated the pardons themselves, then aided and abetted the President’s refusal to be publicly accountable for them by gagging the entire Justice Department using the claim of Executive privilege.

    The FALN pardons were one of the most egregious examples of the abuse of raw presidential power that occurred during Bill Clinton’s presidency. The pardons advanced no public policy, acknowledged no sincere expression of remorse or evidence of rehabilitation. They corrected no miscarriage of justice and, most significantly, they were not requested by the prisoners themselves. While it is true that the Constitution gives the president plenary power to confer pardons without review, it does not require that the Justice Department assist the President in his recklessness and conspire with him in endangering the public.

    Mr. Holder could have let the original 1996 Justice Department recommendation against clemency stand. He could have publicly opposed the clemencies. He could even have threatened to resign if the clemencies went forward. These are kind the principled stands an independent attorney general with honesty and integrity must be prepared to make on behalf of the American people when the situation calls for it.

    Today, an Obama transition team spokesman has defended Mr. Holder by saying the FALN sentences were excessive. Whether the statement represents Mr. Holder’s position is not clear. It does not advance his cause. It merely refutes the claim that he has “learned from his mistakes.” Ten years ago the Sentencing Commission was consulted—not by Mr. Holder—but by members of Congress, and it was learned that the sentences for all the FALN prisoners were not only in line with other crimes of that magnitude, but that they would be harsher if sentenced under current guidelines, which provide for no parole.

    In considering Mr. Holder’s nomination for Attorney General, it is imperative that the committee consider the parallels between the FALN and the terrorist threats we face today. The FALN was a highly organized, clandestine organization with a command structure that coordinated its violent operations with other Puerto Rican nationalist groups. Its members were trained in countersurveillance, counterinfiltration and identity disguise. They were highly trained and motivated.

    At the time Mr. Holder was pushing for the release of these terrorists in September of 1999, the suicide pilots for the 9/11 attacks had been selected and were already here or on their way here. Domestic and transnational terrorism was ramping up, as illustrated by the 1993 World Trade Center bombing, the 1995 Tokyo subway Sarin attack, the 1995 Oklahoma City bombing, the 1995 “Bojinka” conspiracy to hijack airplanes and crash them into buildings, the 1996 Khobar Towers bombing, the 1996 Summer Olympics bombing, Osama bin Laden’s 1996 and 1998 “Declarations of War” on America, the 1998 East African embassy bombings, the 2000 USS Sullivans bombing attempt, the 2000 USS Cole bombing, and the 2000 Millennium bombing plot. It is within this context which the FBI stated that “the release of these individuals will psychologically and operationally enhance the ongoing violent and criminal activities of terrorist groups, not only in Puerto Rico, but throughout the world.”

    None of that appears to have made a difference in Mr. Holder’s decision to push for the release of 16 unrepentant FALN terrorists with American blood on their hands.

    As I write this, five “high value” detainees currently held at Guantanamo Bay, Cuba stand accused under the Military Commissions Act of conspiring in the 9/11 attacks, but the future of that trial is in limbo. Likewise, the disposition of 250 detainees classified as unlawful enemy combatants, 100 of whom have pending habeas corpus petitions, remains in question. The issues surrounding the detainees at Guantanamo Bay are extremely complicated, legally unprecedented and emotionally charged. They have also become so highly politicized that whoever accedes to the position of attorney general will no doubt be severely tested. Whoever is confirmed as attorney general will surely fail both President Obama and the American people if his lodestar is political expedience and personal ambition

    Mr. Holder is an intelligent, talented and skilled attorney whose lifetime of experience as a prosecutor who specialized in official corruption, as a champion of victims rights, as a Superior Court judge and as an advisor to the U.S. Sentencing Commission provided him with everything he needed to determine that the pardons and the process that the President of the United States was asking him to support as deputy attorney general was a gross affront to the principle which Mr. Holder maintains has guided his career — that the Department of Justice first and foremost represents the people of the United States.

    I respectfully submit that the nomination of Eric Holder for Attorney General should not be put forward.

    Sincerely,

    Debra Burlingame
    Mount Vernon, NY

    Comment by Fred Gregopry — Saturday, September 21, 2013 1:55 pm @ 1:55 pm | Reply

  4. Prosecute this. Not while Holder is still AG

    Comment by Fred Gregopry — Saturday, September 21, 2013 8:16 pm @ 8:16 pm | Reply


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