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Report: Cronyism, political donations likely behind Obama, Holder failure to charge any bankers after 2008 financial meltdown
12:34 AM 08/07/2012
ADVERTISEMENT A new report from the conservative Government Accountability Institute (GAI) finds that President Barack Obamas and Attorney General Eric Holders failure to criminally charge any top Wall Street bankers is likely a result of cronyism inside the Department of Justice and political donations made to Obamas campaign.

Despite Obamas and Holders heated rhetoric against Wall Street (in 2009, Obama blamed the 2008 financial collapse on reckless speculation of bankers while Holder charged that unscrupulous executives, Ponzi scheme operators and common criminals alike have targeted the pocketbooks and retirement accounts of middle class Americans), they havent filed a single criminal charge against any top executive of an elite financial institution, GAI wrote in its report, exclusively obtained by The Daily Caller. GAI argues that the Obama administrations decision to not go after Big Finance is due to senior DOJ leadership Holder, 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 who 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 details how Holder and Breuer both came to the DOJ from Covington & Burling, a top-tier Washington law firm with a client list that includes financial firms like Wells Fargo, J.P. Morgan Chase, Bank of America, CitiBank, Deutsche Bank, Goldman Sachs, ING, Morgan Stanley, UBS and Wilmington Trust. GAI said that President Obamas 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 isnt going to actually do anything, despite the harsh words. Cole, the report outlines, was with Bryan Cave LLP a white-shoe firm with A-list clients before becoming Holders right-hand man at the DOJ. One of Coles clients while at Bryan Cave LLP, the GAI report shows, was insurance and financial giant AIG. Cole had done $20 million worth of work for AIG between 2004 and 2008, but his close ties with the company which was at the heart of the financial crisis largely because of its noncompliance in regulatory and compliance issues didnt stop Obama or Holder from welcoming him aboard their administration. The Obama administrations decision to not appoint an independent counsel to investigate the MF Global scandal, despite more than 60 members of Congress demanding it, also reeks of cronyism, the GAI report

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details. Obama bundler and former Democratic New Jersy Gov. Jon Corzine was at the center of MF Global. GAI points out how West the DOJs no. 3 official worked as a white-collar defense attorney for Morrison and Foerster before he came to the DOJ. Morrison and Foerster is currently providing legal representation to MF Global. Holder and Breuers old law firm Covington & Burling provided legal services to MF Global too, before MF Global sought bankruptcy protection. GAI adds that the appearance of MF Global cronyism is further complicated by how Reid Weingarten an attorney at Steptoe & Johnson was selected to be MF Global treasurer Edith OBriens lawyer. Weingarten previously served as Holders attorney following the controversial pardon of Marc Rich in the Clinton Justice Department, the GAI report reads, adding that the blog Main Justice points out how Weingarten is one of Holders best friends. In addition to those officials potential personal financial interests were they to return to their old firms after their time at the DOJ ends in avoiding investigating those big banks, GAI points out how Obamas top DOJ officials played prominent roles in his 2008 campaign. Holder, the nations top DOJ official, co-chaired the campaign with Tony West, the DOJs third highest official. No other modern administration has staffed the DOJ with big money fundraisers, GAI wrote. Holder bundled $50,000 for Obamas 2008 campaign, while Perrelli, West, and Mason all bundled $500,000 for the campaign. West also helped Obama raised an estimated $65 million in California. GAI president Peter Schweizer told TheDC that cronyism appears to be infiltrating the halls of the DOJ with the Obama administration, and that it appears Holders team has no interest in fighting for accountability when it comes to Wall Street because he, Obama and the rest of the DOJ team have a financial interest in not enforcing those laws. When we think of cronyism and the problems of cronyism and crony capitalism, we think in terms of economic loss and gain, Schweizer said in a phone interview. What were showing here is that cronyism is now permeating our justice system. So, its not just a question of dollars and cents, its a question of whether youre going to face legal jeopardy or not on what youre doing. The issue of a revolving door people who go in and out of, for instance, the Department of Energy who go work for energy companies then come back to the Department of Energy is always there, Schweizer added. But, were not used to associating the top leadership of the Justice Department with the revolving door. And, I think thats what makes this so troubling because you cant trust them. All their financial interests are tied up with these large firms that do an enormous amount of business with Wall Street. In the report, GAI details how the George W. Bush and Bill Clinton administrations both actually took down financial criminals unlike the Obama administration. Between 2002 and 2008, for instance, GAI points out how 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. Clintons 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, GAI adds. But, despite having promised more of the same, especially in the wake of the 2008 financial crisis, the

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Obama administrations DOJ has not brought criminal charges against a single major Wall Street executive. The Bush and Clinton administrations track records on prosecuting white-collar crime, and the Obama administrations failure to do so, Schweizer said, is evidence that this has less to do with some sort of partisan or philosophical issue. I think it has to do with the fact that, previously, under Clinton or under Bush, you had senior people who were prosecutors who not only had previous experience, but were actually active prosecutors, Schweizer said. The problem that you have at the Obama Justice Department, particularly bizarre at this time and place where we were coming off the financial crisis, is that they really have no recent prosecutors at the top of the Justice Department. Theyre all white-collar criminal defense attorneys. Thats whats so troubling. One would think that, given the financial crisis, and the widespread conduct, they would have at least carved out some senior positions for prosecutors who could really drill down on this. Thats what Clinton did, and thats what Bush did. As one of many examples of where Holders DOJ could have gone after Wall Street but failed, GAI cites how Michigan Democratic Sen. Carl Levin proposed that the DOJ criminally investigate Goldman Sachs for its handling of the Abacus 2007-AC1 transaction in an April 2011 Senate Permanent Subcommittee on Investigations report. In that 635-page report, Levin and his staff who are Democrats recommended that Holders DOJ investigate potential crimes committed. Levins subcommittee and the Federal Financial Crisis Inquiry Commission both made formal referrals to the DOJ for investigation and Forbes magazine ran an article with the headline, Criminal Charges Loom for Goldman Sachs After Scathing Report. Nothing happened. But, over the course of the rest of 2011, Obama went on a massive fundraising drive down Wall Street. By the fall of 2011, Obama had collected more donations from Wall Street than any of the Republican candidates, and employees at Bain Capital had donated more than twice as much to Obama as they did to [Mitt] Romney, the firms founder, GAI wrote in its report. In the weeks before and after the Senate report on Goldman Sachs, several Goldman executives and their families made contributions to Obamas Victory Fund and related entities and some contributors maxed out at the largest individual donation allowed, $35,800. Five senior Goldman Sachs executives wrote more than $130,000 in checks to the Obama Victory Fund, GAI continued. Two of these executives had never donated to Obama before and had previously only given small donations to individual candidates. While GAI said in the report that it would be a reach to conclude that the Department of Justice dropped its criminal investigation of Goldman Sachs solely in response to large campaign contributions from its executives, it certainly doesnt pass the smell test and calls for investigations continue. Follow Matthew on Twitter
Justice Inaction Report

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