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« Navy's New Attack Drone Ready For Carrier Trials | Main | TALEB: 'If I Were President, I'd Fire Bernanke!' »
Monday
Mar182013

WATCH: Eric Holder Questioned On Too Big To Jail

Stunning admission from last week's's testimony.

Holder explains why he doesn't prosecute Wall Street banks.

Attorney General Eric Holder responds to a question during Senate testimony on whether some banks are too big to jail.  At this point, this is the only video available from today's hearing.  We will add more highlights as we find them.

After the hearing, the panel’s top Republican, Sen. Chuck Grassley of Iowa, issued a statement calling Mr. Holder’s remarks "stunning."

"Mr. Holder recognized that in effect, the big banks and their senior executives have a get-out-of-jail-free card."

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Holder quote:

"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 you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.  And I think that is a function of the fact that some of these institutions have become too large."

 

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Full Transcript

Note - Includes more of the exchange than what was shown in the video.

Sen. Chuck Grassley, R-Iowa: In the case of bank prosecution. I'm concerned we have a mentality of 'too big to jail' in the financial sector, spreading from fraud cases to terrorist financing to money laundering cases. I would cite HSBC.

I think we are on a slippery slope and that's background for this question. I don't have recollection of DOJ prosecuting any high-profile financial criminal convictions in either companies or individuals.

Assistant Attorney General Lanny Breuer said that one reason that DOJ has not sought these prosecutions is because it reaches out to 'experts' to see what effect the prosecution will have on the financial markets. On Jan. 29, Sen. Sherrod Brown and I requested details on who these so-called 'experts' are. So far we have not received any information. Maybe you're going to but why have we not yet been provided the names of experts the DOJ consults as we requested on Jan. 29? We continue to find out why we aren't having these high-profile cases...

Attorney General Eric Holder: We will endeavor to answer your letter, Senator. We did not, as I understand it, endeavor to obtain experts outside of the government in making determinations with regard to HSBC.

Just putting that aside for a minute though, the concern that you have raised is one that I, frankly, share. I'm not talking about HSBC here, that would be inappropriate. 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 think that's something that we — you all [Congress] — need to consider. The concern that you raised is actually one that I share.

Grassley: Do you believe that the investment bankers that were repackaging bad mortgages that were AAA-rated are guilty of fraud or is it a case of just not being aggressive or effective enough to prove that they did something fraudulent and criminal?

Holder: We looked at those kinds of cases. I think we have been appropriately aggressive, these are not always easy cases to make. When you look at these cases, you see that things were done 'wrong' then the question is whether or not they were illegal. And I think the people in our criminal division... I think have been as aggressive as they could be, brought cases where we think we could have brought them. I know that in some instances that has not been a satisfying answer to people, but we have been as aggressive as we could have been.

Grassley: If you constitutionally can jail the CEO of a major institution, that is going to send a pretty wide signal to stop a lot of activity that people think they can get away with.

Holder: You are right, senator. The greatest deterrent effect is not to prosecute a corporation — although that's important — the greatest deterrent effect is to prosecute the individuals in the corporations that are responsible for those decisions. We've done that in the UBS matter and try to do that whenever we can. But the point that you make is a good one.

 

 

This is brilliant:

SATIRE: Lanny Breuer On Wall Street Fraud

 

 

 

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Reader Comments (15)

Notice that Holder isn't really capitulating to his critics here. He's not saying, "Yes, you're right, we at the Department of Justice have taken it too easy on law-breaking financial institutions, because we're scared that if we prosecuted big banks criminally, it would put them out of business and wreak havoc on the economy." He's saying, "If we prosecuted big banks criminally, it would put them out of business and wreak havoc on the economy. So we don't do it." The implication being that, Congress, not the DOJ, has the onus to act, by passing legislation that would make banks smaller and more prosecutable.

http://nymag.com/daily/intelligencer/2013/03/eric-holder-gets-pass-agg-with-senators-on-tbtf.html
Mar 6, 2013 at 10:59 PM | Registered CommenterDailyBail
When the Attorney General of the United States admits some banks are simply too big to prosecute, it might be time to admit we have a problem -- and that goes for both the financial and justice systems.

Eric Holder made this rather startling confession in testimony before the Senate Judiciary Committee on Wednesday, The Hill reports. It could be a key moment in the debate over whether to do something about the size and complexity of our biggest banks, which have only gotten bigger and more systemically important since the financial crisis.

http://www.huffingtonpost.com/2013/03/06/eric-holder-banks-too-big_n_2821741.html
Mar 6, 2013 at 10:59 PM | Registered CommenterDailyBail
My take on Holder's testimony is quite a bit different. Eric Holder told ordinary Americans to go fuck themselves in no uncertain terms today. He's not going to prosecute banks, no matter what they do, based on a pretext that's wrong as a matter of law and should have been an impeachable offense when it was trotted out to give HSBC a pass.

The too-big-to-prosecute bank is an more ridiculous fiction than the too-big-to-fail concept that's been repeatedly shown to be false. MF Global went bankrupt and it hardly cause a ripple beyond the account holders that Jon Corzine robbed blind. That example alone shows that Holder is wrong on the facts. He's wrong as a matter of logic, too, since it's completely insane to let admitted criminals continue to run banks so large that they'll supposedly crater the economy.

Since the serfs aren't paying attention, what Holder really did was send a signal to his Wall Street masters: don't worry, keep stealing and laundering drug money. It's exactly the same thing Breuer said, and got shitcanned for. But since Holder has said it, and since Holder isn't going anywhere, we now know that the Lanny Breuer/Frontline episode was just more Kabuki Theater.

The Senate hearing itself was Kabuki Theater, too, in which Sen. Grassley starred today as the outraged lawman. In many ways, this whole issue over prosecuting banks is a load of shit. A corporation doesn't have a mouth or eyes and can't be jailed. The bankers who commit crimes, though, are a different story.

And here's the lie that Holder rammed into Grassley's stupid face like Cagney's grapefruit in Public Enemy: "the people in our criminal division--I think have been as aggressive as they could be" in prosecuting individuals.

That's a bold-faced lie, as we know from the HSBC affair. In that case, HSBC ADMITTED that it had criminally laundered money for drug dealers, and said that it had removed most of the offending exeuctives. How long would it have taken to track down the individual perpetrators of HSBC's admitted crimes? Five minutes? Remember that these bankers were no longer with HSBC, so the too-big-to-prosecute argument is completely inapplicable. Was Holder "as aggressive as he could be" in prosecuting them? Of course not.

But Grassley was silent in the face of this blatant lie because Grassley, like every member of Congress, is part of the machine that gets paid shitloads of money so that the criminals can rob everyone blind with complete impunity. They all read from a script provided to them by Wall Street central casting.

The same is true of PBS and indeed all of media.

Look, I think now that $15 TRILLION has been stolen that it's fair to say that Wall Street removed its gloves a long time ago. Why are we the people still playing as if the rules prescribed by the Marquis of Queensbury govern our fight? These fucking assholes are all criminals: Obama, Holder, the Senate, the House, and the media. FUCK THESE LIARS UP THE ASS.
Mar 6, 2013 at 11:40 PM | Registered CommenterCheyenne
Oh, yeah, I almost forgot. Remember that letter sent by Senators Grassley and Brown to the DOJ demanding the names of the "experts" who told Holder not to prosecute the big banks no matter what crimes they commit? Holder's responding letter told the Senators to go pound sand.

Did Grassley follow up by demanding that Holder provide the names or face contempt charges?

Nope. And that's because it wasn't in the script that Grassley read from like the dutiful little Wall Street servant that he is.
Mar 6, 2013 at 11:56 PM | Registered CommenterCheyenne
If this is not a clear sign the US is now a corrupt third world country I don't know what is. This is the US Attorney General for heaven sake, sickening. Where is the outrage on this one? The financial industry is too big and bloated anyway, shrink downsize them, they are wrecking body politic and the economy.

Nobel prize winning economist George Akerlof has demonstrated that failure to punish white collar criminals – and instead bailing them out- creates incentives for more economic crimes and further destruction of the economy in the future.

Indeed, professor of law and economics (and chief S&L prosecutor) William Black notes that we’ve known of this dynamic for “hundreds of years”.

Nobel prize winning economist Joseph Stiglitz says that we have to prosecute fraud or else the economy won’t recover.
Mar 7, 2013 at 12:05 AM | Unregistered CommenterRuss Winter
"Where is the outrage on this one?"

It is ticking like a time bomb just beneath the increasingly degraded surface of Main Street. The powers that be are playing with fire, and ineptly so. They are more than a little dismayed that Sandy Hook occasioned a massive wave of firearm purchases. Their current rush to shred what remains of the constitution is no accident.

Speaking of which, Nancy Pelosi has said you have no right to know when the federal government murders one of your fellow citizens without due process...

http://www.huffingtonpost.com/2013/02/14/nancy-pelosi-drones_n_2685891.html
Mar 7, 2013 at 12:22 AM | Registered CommenterCheyenne
Cheyenne

Enjoyed reading your comments. Grassley did ask Holder about the 'outside experts' and Holder responded by saying they are still working on a formal response. Delay tactic I suppose. We'll see what comes of it.

Grassley quote from the transcript:

"Assistant Attorney General Breuer said that one reason that DOJ has not sought these prosecutions is because it reaches out to 'experts' to see what effect the prosecution will have on the financial markets. On Jan. 29, Sen. [Sherrod] Brown and I requested details on who these so-called 'experts' are. So far we have not received any information. Maybe you're going to but why have we not yet been provided the names of experts the DOJ consults as we requested on Jan. 29?"

And Holder responded:

"We will endeavor to answer your letter, Senator. We did not, as I understand it, endeavor to obtain experts outside of the government in making determinations with regard to HSBC."
Mar 7, 2013 at 12:31 AM | Registered CommenterDailyBail
Something else that Holder doesn't seem to understand. No one is specifically telling him to prosecute the banks themselves - like in the case of Enron. All he has to do is indict one CEO or a few top executives at one bank and his point will be made.

Then there's this story.

http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/untouchables/supreme-court-ruling-a-blow-for-future-financial-crisis-cases/

Supreme Court Ruling Means No More Prosecutions For 2008 Crisis

Mar 7, 2013 at 12:45 AM | Registered CommenterDailyBail
Crime does pay ...once your big enough !
Mar 7, 2013 at 1:09 AM | Unregistered Commentermick
DB--

I'm aware of the exchange over experts. The issue was teed up in the letters, well in advance of the hearing with Holder in the hot seat. Grassley simply let him go by pretending not to know how to frame a competent question. Hell, Grassley didn't even get Holder to commit to a date by which the experts will be identified. That's not a real hearing, it's show biz.

The difference between Rome and the U.S. is that our senators don't provide the circus animals, they are the circus animals.
Mar 7, 2013 at 1:36 AM | Unregistered CommenterCheyenne
Cheyenne-I would put The Fed as a co-conspirator with your group as well. Outside of Holder's grasp (which does not matter, of course), but THE important player in this theft, IMO.

For example, Dan Gilbert of the privately-owned Quicken loans and Cleveland Cavs was the largest %gainer in the Forbes list of billionaires (just 3 years ago, his net worth was ~$300 mil, now it's close to $5 BILLION!). Why? The Fed. By artificially lowering interest rates to historic lows to "stimulate" the economy, the Fed created an unbelievable demand for Quicken's products. Quicken now pretax net incomes ~$1bil/Qtr. Gilbert owns 98% of Quicken.

The process for these loans should sound familiar. Quicken originates loans, mostly online, takes an origination fee and then passes the loans off to Wall St. for packaging and selling to the public. Quicken carries nothing. It's all "just" origination fee revenue--a massive volume biz. The quality of these loans, you ask? Well, now Quicken offers loans through your iPhone. Surely the underwriting analysis is top notch!

What's past is prologue...we are awash in debt and money lenders like Gilbert are the beneficiaries...this should end well, don't ya think?
Mar 7, 2013 at 10:33 AM | Unregistered CommenterJosie
Josie--

The Fed is the queen bee at the center of the Ponzi debt hive.

Your Quicken example is excellent, and the phenomenon is everywhere you look. I walk by a name brand mattress store that offers 100% financing and no payments for over a year. It rarely has any customers, and I asked myself how they stay in business selling mattresses. The answer is that they're not selling mattresses, they're selling paper, i.e., loans.

As for the ending, Ponzi schemes conclude like Jenga games. QE is an effort to install brakes on gravity.
Mar 7, 2013 at 11:28 AM | Registered CommenterCheyenne
Yep, Cheyenne. Matresses, furniture (e.g., ValueCity), cars...it matters not...the end game is the same. Sell the paper, pass the trash...Depressing. I drink a lot now...
Mar 7, 2013 at 3:59 PM | Unregistered CommenterJosie
Look to The City of London and the 300+ year campaign to destroy the U.S.A. and absorb it back into Britannia. Now that England has lost most of their empire, white collar crime using Skull and Bones, Knights of Malta, freemasons, etc. is about all they can do to pay the extensive upkeep on the palaces, Lear jets, 747 jets. chalets, islands, limos, castles, etc.. Eric 'The Holder' Holder is doing his job EXACTLY as directed. The CFRtv and the Associated Press, who put Bush AND Obama in office, both owned and controlled by the Rothschild bank, do not give the American people the chance to develop data and reach logical conclusions on matters political. They treat the American people like mushrooms, feeding them bullshit and keeping them in the dark. Holder may have a job holding up the lamp outside Buckingham Palace after his term as AG is up. Or he might be in a plane crash.
Mar 19, 2013 at 2:32 AM | Unregistered CommenterHoward T. Lewis III

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