Holder Defends Record of Not Prosecuting Financial Fraud

After he stepped down as attorney general, he went back to his job at a big D.C. law firm whose clients include many of the big banks he chose not to prosecute.

Photo: Covington & Burling

Former attorney general Eric Holder was the honored guest at a Reporters Committee for Freedom of the Press reception on Wednesday (leading investigative reporter Murray Waas to reasonably wonder: How’s that again?).

And while I was primarily interested in hearing whether Holder regretted whiffing on torture prosecutions during his tenure (see story: “Holder, Too Late, Calls for Transparency on DOJ Torture Investigation”), I also asked him about whiffing on financial fraud prosecutions.

Specifically, I noted his failure to hold accountable the people responsible for the wide-scale financial fraud that led to the massive economic recession of 2007-2009.

And I noted that after he stepped down from his post in April, he went back to his job at Covington & Burling, the gigantic D.C. law firm whose clients have included many of the big banks that Holder chose not to prosecute. (The reception was actually held at Covington & Burling’s swanky new building downtown. While it was being built — while Holder was still attorney general! — the firm actually kept an 11th-story corner office reserved for his return. He was making over $3 million a year from the firm before his sojourn at the Justice Department; his current salary has not been disclosed.)

Holder bristled at my suggestion that there might be a connection between his current employer and his conduct at Justice, saying that many top prosecutors at Justice had pursued cases as best they could. “We were simply unable to do it under the existing statutes that we had, and given the ways the decision-making worked at those institutions,” he said.

However, Holder had all the statutory authority he needed to prosecute straightforward crimes such as robosigning fraud, perjury in front of Congress by Goldman Sachs executives, or for that matter, HSBC’s money laundering for Mexican drug cartels. He simply chose not to. (In response to another questioner, he denied that any of his decisions not to prosecute were based on the massive legal teams that were fielded against the government.) Moreover, he actively waved off offers of additional help such as the suggestion from Sen. Sherrod Brown, D-Ohio, that Congress give him more staff for his Residential Mortgage-Backed Securities Working Group, or extend the statute of limitations on some crimes.

At Wednesday’s event, Holder continued: “It’s an easy thing for people who are not a part of the process” to “ask questions,” he said. “It pisses me off, on the other hand,” for people “not conversant” in the process to “somehow say that I did something that was inconsistent with my oath or that I’m not a person of integrity.”

“I’m proud to be back at the firm,” he said. “It’s a great firm. And I’m proud of the work I did at the Justice Department.”

Holder’s comment was only the most recent in a series of pronouncements from formerly powerful government officials that they were in fact powerless — while talking tough once they no longer have the ability to do anything about it.

See, for instance, my colleague David Dayen’s recent article, “Bernanke Talks Tough But Was Weak When It Mattered,” about former Federal Reserve chair Ben Bernanke saying that more Wall Street executives should have gone to jail for criminal misconduct that led to the financial crisis.

As Fed chair, Beranke could have initiated criminal referrals to the Justice Department, but chose not to.

As attorney general, Holder could have made pursuing financial fraud a top priority. And he did not.

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