Prosecuting Financial Crimes: Will Anyone Bunk with Bernie?

Dick Fuld of Lehman Bernie Madoff is lonely.

Eighteen months after the collapse of the financial system, not one Wall Street Titan has joined the Ponzi King in the federal pen.

For a moment there, he thought maybe Countrywide’s Angelo Mozilo might join him, but alas the Securities and Exchange Commission (SEC) decided to give him the slap. Then those Bear Stearns guys were taken to court over those crazy emails that indicated they knew that the funds they were peddling were chock full of toxic swill, but the Feds screwed that one up too. Then Bank of America’s Ken Lewis came under fire from the New York Attorney General (AG) for not telling his shareholders the truth about that merger with Merrill Lynch. Since the AG has launched a civil and not a criminal case, Lewis too may face the slap. Now a bankruptcy examiner has revealed that Dick Fuld and team were busily cooking the books over at Lehman Brothers before its collapse, but the FBI apparently didn’t read these news stories. It can’t be stirred enough to even issue subpoenas.

Poor Bernie. Apparently no one at the Department of Justice (DOJ) or the FBI really cares about the greatest white-collar crime wave in the history of the world -- even if it did rob average American of some $14 trillion dollars in lost wages, savings, and housing wealth. After eighteen months, it is difficult to point to one CEO from a major Wall Street bank, hedge fund, or fraudulent mortgage company who is behind bars.

But wait. Someone does care. Marcy Kaptur, the Ohio Congresswoman who represents Toledo, one of the hardest-hit districts in the nation, is fighting to make sure that Bernie has lots and lots of friends during his long stay in the pokey.

Kaptur is authoring a bill, H.R. 3995 the “Financial Crisis of 2008 Criminal Investigation and Prosecution Act of 2009,” that gives the FBI 1,000 more agents and forensic experts and tells them to get cracking.

Kaptur remembers the Savings and Loan (S&L) crisis of the late 1980s. In the wake of the S&L crisis, Congress pushed regulators to investigate and prosecute. Congress also provided them with the resources to do the job. A series of strike forces based in 27 cities were staffed with 1,000 FBI agents and dozens of federal prosecutors.

The result? According to government statistics, no less than 1,852 S&L officials were prosecuted and 1,072 were jailed. Over 500 of these were top officers.

Bernie is lonely. I am sure the federal penitentiary can squeeze in hundreds of more bunk beds to accommodate his friends and colleagues from Wall Street. But it’s not going to happen until the FBI and the DOJ are given the resources they need, and a kick in the pants by Congress.

Americans for Financial Reform, a coalition of over 200 groups working to hold Wall Street accountable announced today that it was backing the Kaptur bill. With your help H.R. 3995 could get us a long way. Tell your member of Congress to cosponsor the bill. Justice delayed is justice denied. And while you are at it, send a message to the FBI. Tell them its time to “Book the Crooks” at BanksterUSA.org.