Cross posted from The Stars Hollow Gazette
Financial Fraud Enforcement Task Force is the umbrella group for the RMBS (Residential Mortgage-Backed Security) Task Force. Remember that task force that was so gleefully announced by President Obama in his State of the Union address in January, appointing New York State Attorney General Eric Schneiderman to participate? Yeah, that one. It’s been under the radar for the most part and as yet has inadequate staff no office space or even a phone number.
The gang at FireDogLake has been relentless in tracking down what he FFETF and the RMBS have and haven’t done. My FDL contributor massacio has been a wizard at uncovering new releases that claim the groups are making progress when in reality the Obama DOJ is refusing to go after the big fish:
Like every one else who is following the refusal of the Obama Administration and its cowardly prosecutors to investigate Wall Street for crimes in the run-up to the Great Crash, I figured this was just a name given to a collection of prosecutors around the country who were already working on fraud cases.
The official website of the FFETF confirms this. [..]
I’ve gone back through February looking at the press releases, and this is a fair sample of the work of the FFETF. There is not a single case related to fraud in the creation, sale or operation of real estate mortgage-backed securities, the frauds that led to the Great Crash. The FFETF is a random collection of people working on cases that can be tied to financial fraud.
The FFETF and its 20 subpoenas and its 50 or more personnel and whatever else we hear from them are a sham. Wall Street has nothing to fear from the FFETF and its co-chair, Eric Schneiderman.
Richard (RJ) Eskow points out that Wall St. has nothing to fear from these task forces or for that matter from Attorney General Eric Holder:
Confidential sources say that the President’s much-touted Mortgage Fraud Task Force is being starved for vital resources by the Holder Justice Department. Political insiders are fearful that this obstruction will threaten Democrats’ chances at the polls. Investigators and prosecutors from other agencies are expressing their frustration as the ever-rowing list of documented crimes by individual Wall Street bankers continues to be ignored. [..]
A growing number of people are privately expressing concern at the Justice Department’s long-standing pattern of inactivity, obfuscation, and obstruction. Mr. Holder’s past as a highly-paid lawyer for a top Wall Street firm, Covington and Burling, is being discussed more openly among insiders. Covington & Burling was the law firm which devised the MERS shell corporation which has since been implicated in many cases of mortgage and foreclosure fraud. [..]
But there’s no evidence that Mr. Holder’s Justice Department has mounted a serious effort to investigate bank crime. Its first, much-touted “coordinated effort” to crack down on mortgage fraud turned out to be a PR trick, not a law enforcement effort, which the Columbia Journalism Review described with the headline, “The Obama Administration’s Financial-Fraud Stunt Backfires.” That’s not the kind of press a President wants to see repeated in an election year.
“Democrats have been having good luck painting Romney as the candidate of the one percent,” said one observer. “But that could change quickly with a few bad headlines.”
While nobody we spoke with was willing to raise the subject of a Holder resignation, they did insist that time was running out for the Attorney General to show concrete results.
Without criminal investigations and indictments, bankers will continue to commit crimes. The LIBOR scandal, which implicates a number of leading banks, proves that. The Justice Department’s inaction is putting the world economy at risk by allowing bankers to continue their reckless and illegal behavior.
The clock is ticking on many of these case since there is a five year statute of limitations under federal law for civil charges. There is now mounting evidence that Obama administration is letting that statute of limitations expire on the criminal charges, too. David Dayen at FDL News reports that he spoke with Rep. Brad Miller (D-NC), a member of the House Financial Services Committee, concerning the Justice Department stonewalling prosecutions of securitization abuses. He asked Miller about the coalition of housing advocates charging the Justice Department with stonewalling the investigation and denying it critical resources:
Miller, who at one point was a potential choice to be the executive director of the working group, said that he had not personally spoken with anyone involved in the task force since he missed out on the position in late February/early March. But as an interested observer, he made a few points. “It does appear that the task force is really not doing anything that the various agencies weren’t doing already,” Miller said. “They’re just saying they are doing it as part of this task force.”
And Miller added something else, that members of the various agencies associated with the working group have acknowledged this in conversations with members of Congress. Miller cautioned that he hadn’t heard this from agency officials personally, but that other members have. [..]
Miller also noted that the statutes of limitations, at least on criminal fraud claims, have almost certainly run out. “I said a few weeks ago that the clock on the statute of limitations was ticking like Marisa Tomei’s biological clock in My Cousin Vinny,” Miller said. “If there have not been extensions worked out in private negotiations, and if the law is that the statute runs from occurrence rather than discovery, it’s probably the case that most statutes have expired.”
And unless we forget our erstwhile Treasury Secretary Timothy Geithner, maybe up to his ears in the multi-trillion dollar LIBOR fraud:
The flames of the Libor scandal have been creeping up under the feet of Treasury Secretary Timothy Geithner. Evidence showed that the New York Fed found out about the rate-rigging from Barclays and other banks in 2007, when Geithner was still the bank President. This appeared to display regulatory impotence in the face of massive fraud. Geithner had to respond. And he did with a classic version of CYA. [..]
Geithner passed the documents around to anyone who wanted them last night. If there can be something less than the bare minimum, a two-page document to the Bank of England – not the banks implicated in the rate-rigging over which the NY Fed has control, but some other regulator – would be it. He didn’t speak out publicly, he didn’t use his regulatory power over the banks he had authority and in defense of the stateside financial products calculated using the Libor benchmark rate, he just wrote a memo.
The memo says that the Bank of England should “eliminate the incentive to misreport” Libor on the part of the banks. So there’s no doubt in the minds of the regulators that there was misreporting going on.
Timmy’s excuse for doing nothing now is that he did nothing then
The Federal Reserve Bank of New York will release on Friday documents showing it took “prompt action” four years ago to highlight problems with the benchmark interest rate known as Libor and to press for reform, an official at the regional U.S. central bank said on Wednesday.
As early as 2007, the New York Fed may have discussed problems with the setting of the London Interbank Offered Rate with Barclays Plc, the British bank currently at the center of the Libor scandal and investigation
Well, Timmy did send a memo.