AG Eric Holder to Step Down

[bedstuy]

Holder has been one of the best Attorneys General in recent memory, sad to see him go.  I hope Obama will appoint someone along the same lines, rather than a politician. 

[bedstuy]

Does anyone have a criticism of Eric Holder that doesn't betray the fact that they have no idea what the DOJ does?  Does FOX think both that the DOJ has its own drones piloted around by a bunch of flabby lawyers in DC?  Does FOX think all terrorists in US custody should be denied any due process and their right to a fair trial?  And, how do you make both criticisms at the same time with a straight face?

And, remember, before Eric Holder we had a DOJ under Gonzo that was basically an arm of the RNC and fired people because they weren't prosecuting enough Democrats and charging enough people with voting fraud.  I guess Republicans are just irate that a black man would have the audacity to protect voting rights and competently run the biggest law firm in America. 

That's the real problem here.  The GOP wants the government enforcing neo-Jim Crow, stripping away voting rights, keeping blacks in prison for non-violent drug crimes and standing idly by while Wall Street rips off the country. 

[bedstuy]

Ah yes, such a great Attorney General, the one who came up with "collateral consequences" back in 1999 that helped lead to the financial crisis in 2008.

Yes, he's simply wonderful isn't he? After the Arthur Anderson accounting scandal and 28,000 lost jobs, Holder said the DOJ should take into account how many jobs would be lost, how markets would react, how bad the financial impact of prosecuting would be, etc. when prosecuting a corporation, and this has meant that instead of actually prosecuting companies and putting white collar criminals in jail, the government now settles with a small fine and the industry and criminals get off scot-free.

Here's the best part of this all: when taking into account the "collateral consequences" of prosecuting and destroying a Wall Street firm, who does the government go to for the assessment? Um, that would be Wall Street's own firms. With the guidance and blessing of Eric Holder, the government asks Wall Street about Wall Street before prosecuting Wall Street.

Then Holder goes into private practice defending companies, and when he becomes Attorney General the DOJ increasingly turns to settlements instead of prosecution (regulatory surrender, people). Wanna know why Obama has been such a disappointment when it comes to cracking down on white collar crime? Wanna know why so few financial firms have had the book thrown at them for their crimes? Wanna know why no one's in jail for the 2008 crisis?

You can thank Eric Holder for that, as well as Tim Geithner.

Good f**king riddance. Too bad they'll never get theirs.

That's insane, just insane.  You have no idea what you're talking about. 

Using those agreements is about using resources wisely and getting corporations to obey the law.  It's not a matter of not prosecuting 10 corporations and instead letting 10 corporations off the hook.  It's about instead of spending 4 years prosecuting 1 corporation and spending millions and millions of dollars, going after 25 corporations and getting them to correct their behavior, pay significant fines and implement new procedures to avoid criminal behavior.  If anything Holder's DOJ legacy is about making the DOJ significantly more active in policing Wall Street.

[bedstuy]

Ah yes, such a great Attorney General, the one who came up with "collateral consequences" back in 1999 that helped lead to the financial crisis in 2008.

That's insane, just insane.  You have no idea what you're talking about. 

Using those agreements is about using resources wisely and getting corporations to obey the law.  It's not a matter of not prosecuting 10 corporations and instead letting 10 corporations off the hook.  It's about instead of spending 4 years prosecuting 1 corporation and spending millions and millions of dollars, going after 25 corporations and getting them to correct their behavior, pay significant fines and implement new procedures to avoid criminal behavior.  If anything Holder's DOJ legacy is about making the DOJ significantly more active in policing Wall Street.

Why will corporations obey the law when the penalty is merely a tiny fine? If anything, that encourages them, because it puts a price on committing the crime and allowing them to assess the financial risks and gains of doing shady things. It becomes a cost of doing business.

Yes, resources for prosecuting white collar crimes are sorely lacking (especially when compared to how much we throw at poor people of color in our major cities for trivial offenses), but saying that giving companies that reap tens of billions in profits per year a fine that amounts to a few hours of revenue is going to "make them obey the law" is ridiculous. HSBC sponsored terrorism, laundered money, washed money for terrorists, dealt with sanctioned countries, and helped tax cheats. HSBC was fined $1.9 billion in 2012, and it made over $22 billion per year. That's nothing to the executives who made the bank billions in illegal transactions, and none of whom went to prison or got anything their record. UBS was fined $1.5 billion for the LIBOR scandal and didn't even have to admit anything. Where is the incentive to "obey the law" here???

"Significantly more active in policing Wall Street"? No, the goal has been to make examples of small banks (see: Abacus Savings Bank), while not losing big cases. In Obama's first term, a huge premium was placed on not losing high-profile cases (especially after the fiasco that was the Ted Stevens trial). It's really disappointing how the DOJ seized up at the worst possible time, when they were faced with massive financial fraud. Under Holder, the DOJ accelerated the sorting of the world into arrestable and non-arrestable cases. Politically connected banks and financial institutions get to walk, while the government makes examples of small banks.

Holder himself went on Frontline and talked about it in January 2013, and Senators Chuck Grassley and Sherrod Brown were so horrified by this that they got together and demanded an explanation, and Holder gave a speech in front of the Senate in March 2013 and explained that with collateral consequences, the potential negative impacts of prosecuting make it worth not doing anything . Barron's even wrote about this stuff. Sure, destroying a big company may have repercussions, but not prosecuting individuals who can hide behind their companies only encourages this behavior.

Holder doesn't give a crap about policing Wall Street. He was once a private corporate lawyer at Covington & Burling for many of the same banks we now hate.

Does this sound insane? Yes, it does and it should. But it's the truth. I'm not into deranged conspiracy theories about money controlling our government, but its influence is undeniable. There is no real penalty for being a white collar criminal on Wall Street. Holder's tenure has been a major miss of opportunity to take a big swing at white collar crime. And he doesn't care!

Giving me the great idea of instituting Elisabeth Warren into the office.

^^^ He gets it.

1.  Even a large bank is going to notice a billion dollar plus fine.  I think that's self-evident. 

2.  An NPA always includes a mandatory compliance system to prevent misdeeds in the future.  That system can ferret out future violations and keep corporations to their commitments to improve their corporate culture.  Plus, you can include conditions that create huge consequences for repeat offenders like debarment.

3.  I agree that we don't police Wall Street enough.  But, what is Holder supposed to do?   He can't change the statutes and he can't increase his total budget.  It's a question of resources and making strategic decisions.  Do you focus all your attention on getting scalps or do you concentrate on volume? 

4.  Tons of lawyers work for both the government and in private practice.  That's what lawyers do, represent people whether they're banks or murderers.  That doesn't make them pro-bank or pro-murder necessarily. 

5.  You need to think about the whole system of business crime in this country.  It's actually extremely difficult to prosecute these corporations.  Remember, these are incredibly complex financial transactions that Wall Street experts often barely understand.  Lawyers don't understand finance or accounting or math either, not to mention a jury.  So, it's not nearly as simple as you think.  I would agree that we need to fund our business crime prosecution far more and change the law so these banks are really being policed.  But, laying this whole mess at Holder's feet is extremely naive.

[bedstuy]

I don't think you appreciate how often it becomes a choice between using an NPA and doing nothing, as  opposed to a choice between winning a conviction and doing an NPA.  Would you rather we had 1 more criminal conviction at the expense of 100 NPA?  It's easy to just say, send the crooks to prison, but it's not that easy in practice and you need to make strategic decisions. 

[bedstuy]

I don't think you appreciate how often it becomes a choice between using an NPA and doing nothing, as opposed to a choice between winning a conviction and doing an NPA.  Would you rather we had 1 more criminal conviction at the expense of 100 NPA?  It's easy to just say, send the crooks to prison, but it's not that easy in practice and you need to make strategic decisions.  

Well when you create that kind of dichotomy with that ratio, of course I'm going to take the 100 NPA.

Right, so it's a strategic decision about how you split up resources.  How the DOJ makes those decisions is complicated, how are you educated enough to second-guess those decisions?

[bedstuy]

I don't think you appreciate how often it becomes a choice between using an NPA and doing nothing, as opposed to a choice between winning a conviction and doing an NPA.  Would you rather we had 1 more criminal conviction at the expense of 100 NPA?  It's easy to just say, send the crooks to prison, but it's not that easy in practice and you need to make strategic decisions.  

Well when you create that kind of dichotomy with that ratio, of course I'm going to take the 100 NPA.

Right, so it's a strategic decision about how you split up resources.  How the DOJ makes those decisions is complicated, how are you educated enough to second-guess those decisions?

Because we have different thoughts about what the outcome should be? More education doesn't mean someone is "right". There's no right or wrong answer, I'm arguing that keeping on the same path might not be the most effective way to deter future crimes.

You're missing the point.  You aren't examining each potential case and evaluating the resources of the DOJ.  It's easy to say, "get more people convicted!"  It's harder to actually achieve it, especially when you're juggling your resources and you have a variety of different goals.  Maybe you're right, I think that's completely possible.  But, it's also possible that your way would lead to the DOJ ending up losing a lot of cases, tying up their resources fighting with the world's best lawyers who work for white shoe NYC firms and actually hurting their cause.  If it's a choice between that and winning billions in settlements and forcing firms to change their behavior in the future, doesn't it seem at least possible that DOJ is making the best of their situation?

So, I would just be a little less strident in proclaiming that the DOJ is making bad decisions.

[bedstuy]

You're missing the point.

No, no one's missing any points. I hear you, and you hear me, and we disagree.

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We're not disagreeing about the DOJ needing more resources, but why should that stop any criticism? A lot of these cases actually are slam dunks, because they left a paper trail (e.g. we have emails of UBS people blatantly offering each other money for rigging LIBOR). It actually isn't so hard to set an example. What I'm arguing is that even though a convicted firm may change, the penalties are so mediocre that other firms who don't have these restrictions can decide to commit this fraud in the future, and that the individuals themselves will continue to do what they always do. That is the problem I'm getting at. The penalty the DOJ gives is a speed bump on the way to more money. It costs the government a whole lot more time and money to clean up the aftermath of a financial crisis than it does arguing in court.

What I'm arguing is that we need to make the penalties real and tangible to the individuals committing the crimes, and I'm saying that Holder missed a once-in-a-lifetime opportunity to reign in white collar crime that contributed to a once-in-a-lifetime financial crisis. The vibe I'm getting from your arguments is that since we don't know if they'll win, they should just take the easy way out that accomplishes something on paper for one firms but changes nothing in practice in the whole corrupt industry.

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Yeah God forbid we should question the actions of our government officials, the ones who are specifically tasked with protecting the public, and propose another solution. It's not like I'm the only one here, like those two U.S. Senators and multiple media outlets asking "WTF???" at what Holder has done/left undone. My bad.

You're just making these assumptions based on nothing as far as I can tell.  I understand the public outrage and grandstanding about this issue.  But, there's no real contradiction between using these alternative tactics and being tough on Wall Street.  After all, most of what we're talking about here is not securities fraud or insider trading.  That's handled by the SEC for the most part.  I would venture to guess most of these NPA/DPA situations are FCPA cases.  Those are important cases, but they're not really tied to financial crises. 

And, why are we assuming that business people are unaffected by potential billion dollar fines to their corporations and being forced to hire independent auditing teams for years into the future to prevent future crimes?  Sure, if you send Lloyd Blankfein to Sing Sing, that would be cool.  But, officers and the boards of these corporations do care about losing billions of dollars from their bottom line.

[bedstuy]

I guess the radical part was when he told the New York Times that an attorney general does not have to enforce any law with which he disagrees.

What did Holder say that you're translating to that statement?  I'm sure you're misunderstanding what he said.

[bedstuy]

I guess the radical part was when he told the New York Times that an attorney general does not have to enforce any law with which he disagrees.

What did Holder say that you're translating to that statement?  I'm sure you're misunderstanding what he said.

http://www.nytimes.com/2014/02/25/us/holder-says-state-attorneys-general-dont-have-to-defend-gay-marriage-bans.html?_r=1#

OK.  That's an misunderstanding on your part.  Arguing a case in court is not enforcing a law or obeying a law.  It's representing the legal opinion of the government.  There's no law or commandment that the government needs to argue that every law is Constitutional facially or as applied to any particular situation. 

[bedstuy]

Anything is possible, but he was very clear on ways to curb bans on gay marriage in the article Grumps posted, and that's what he was talking to NYT reporters about.  Rabinowitz actually pointed out several others--selective enforcement of voter intimidation, for example, and I can't remember the rest--but there may be some legal subtlety that I'm not appreciating.  

I assume that the AG takes the same oath of office as other public officials, and I assume that his argument is that some cases involve constitutional issues, or that the laws contradict higher laws.  I'm not saying that I agree with all the nation's laws either, but whether you agree with the laws, it seems to me that he is willing pick the ones he likes to defend.  

Well, you're conflating two issues: Selective enforcement and making arguments in court. 

Selective enforcement of laws sounds horrible, sure, but just think about it this way.  The government could never prosecute 100% of the cases of illegal activity.  They couldn't prosecute 50%.  So, the government needs to make judgements about where their resources go in law enforcement.  If you're angry that Holder didn't spend time prosecuting "The New Black Panthers" or whatever fake voter intimidation concerns Fox news has, I just have to disagree.  But, that's just what this is, a disagreement about policy, it's not corruption or misconduct just because the DOJ has different priorities than you do.

On making arguments in court, I just see the DOJ as the law firm for the US government.  Does a law firm always take every case to court and argue that their side is in the right on every legal and factual question?  Of course not.  A law firm looks at the strength of their clients' case, in this situation the US government, and they make a decision from there.  If they are clearly in the wrong, a law firm is going to try to settle a case or tell their client to take a plea bargain.  So, here if our government sees they're clearly in the wrong, they should have the discretion to refuse to defend certain laws.