Bombshell Confession by Eric Holder: Big Banks are Above the Law
Thank you, Attorney General Holder, for finally being so blunt and definitive about DOJ's unwillingness to prosecute the biggest banks:
But I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute -- if we do bring a criminal charge -- it will have a negative impact on the national economy, perhaps even the world economy. I think that is a function of the fact that some of these institutions have become too large.
Again, I'm not talking about HSBC, this is more of a general comment. I think it has an inhibiting influence, impact on our ability to bring resolutions that I think would be more appropriate.
I rarely agree with Chuck Grassley, but when he calls this "stunning," he couldn't be more right. This is the ultimate Big F'ing Deal: the nation's top prosecutor openly admitting that some people and institutions are so big, wealthy, and powerful that it is the policy of the United States to hesitate to prosecute them no matter how terrible their crime. And it isn't just American banks, either: HSBC, while operating here, is a foreign-based bank.
Look, that this is the policy of the U.S. Justice Department has been pretty obvious for quite a while. The unwillingness to prosecute the big banks in spite of some of the most egregious and obvious financial fraud in American history in the run-up to 2008's financial collapse has become legendary. But the HSBC case, where thousands of emails over many years along with a great deal of other evidence proved beyond a shadow of a doubt that the bank was laundering money for some of the most murderous and evil drug cartels and terrorists on the face of earth, made it crystal clear that once your bank becomes a certain size, the DOJ considers you beyond prosecution. For anything. Too Big To Jail, to the hundredth power. And the penalty they did get? A fine worth approximately five weeks worth of profits -- after raking in massive profit from these drug cartels and terrorist-linked groups for many years.
So, yes, it has been obvious that this is the unspoken policy of the DOJ. Now, in front of a Senate committee, fully on the record, it is the official stated policy of the American government that if your bank is big enough, and the judgment is that prosecuting you will have a negative impact on the economy, DOJ will be "inhibited" in, and will find it "difficult," to prosecute you.
We have truly crossed the Rubicon here. This is a tragic moment in the history of our nation, that we are willing to say on the record to some of our richest and powerful people and institutions that no matter what you do, you will not be prosecuted. What kind of society have we become? How corrupt are we as a nation?
There are a couple of ironies worth noting here. The first is that not prosecuting bankers for fraud and corruption actually hurts the economy far, far more than whatever short term hit you might get from hurting a bank's stock price, or forcing it into reorganization, because when bankers have no incentive not to commit fraud, that puts the economy on far more shaky ground than a short term hit on a single bank would do, and it drains money out of productive investment in the mainstreet economy.
The second irony is that Eric Holder runs something called the Anti-Trust division of the DOJ. If these banks are this big and this dangerous to our core economy, why doesn't Anti-Trust come into play here? The whole idea of the Anti-Trust laws is to stop market manipulation and anti-competitive predatory business practices. That sure sounds like the Too Big To Fail (and Too Big To Jail) banks to me.
Thank goodness some politicians are standing up on this issue, in both parties. Grassley asked the right question at the committee hearing yesterday. Elizabeth Warren is on it. Sherrod Brown and David Vitter are making a major legislative to break up these Too Big To Fail and Jail banks. And a movement is building on the outside to take on the big banks, you can join it by signing this petition now.
This is a monumentally important issue. If a nation's official policy is that it will not (or, as Holder confessed, it will "hesitate" to) prosecute certain institutions and people because they are too wealthy and powerful, we are lost.