Smell Test Failed But “Nothing Happened”

…In the report, GAI details how the George W. Bush and Bill Clinton administrations both actually took down financial criminals — unlike the Obama administration. Between 2002 and 2008, for instance, GAI points out how a Bush administration task force “obtained over 1,300 corporate fraud convictions, including those of over 130 corporate vice presidents and over 200 CEOs and corporate presidents.”

“Clinton’s DOJ prosecuted over 1,800 S&L [savings and loans] executives, senior officials, and directors, and over 1,000 of them were sent to jail,” GAI adds.

But, despite having “promised more of the same,” especially in the wake of the 2008 financial crisis, the Obama administration’s DOJ has not brought criminal charges against a single major Wall Street executive.

The Bush and Clinton administrations’ track records on prosecuting white-collar crime, and the Obama administration’s failure to do so, Schweizer said, is “evidence that this has less to do with some sort of partisan or philosophical issue.”

“I think it has to do with the fact that, previously, under Clinton or under Bush, you had senior people who were prosecutors — who not only had previous experience, but were actually active prosecutors,” Schweizer said. “The problem that you have at the Obama Justice Department, particularly bizarre at this time and place where we were coming off the financial crisis, is that they really have no recent prosecutors at the top of the Justice Department. They’re all white-collar criminal defense attorneys. That’s what’s so troubling. One would think that, given the financial crisis, and the widespread conduct, they would have at least carved out some senior positions for prosecutors who could really drill down on this. That’s what Clinton did, and that’s what Bush did.”

As one of many examples of where Holder’s DOJ could have gone after Wall Street but failed, GAI cites how Michigan Democratic Sen. Carl Levin “proposed that the DOJ criminally investigate Goldman Sachs for its handling of the Abacus 2007-AC1 transaction” in an April 2011 Senate Permanent Subcommittee on Investigations report. In that 635-page report, Levin and his staff — who are Democrats — recommended that Holder’s DOJ investigate potential crimes committed. Levin’s subcommittee and the Federal Financial Crisis Inquiry Commission both made formal referrals to the DOJ for investigation – and Forbes magazine ran an article with the headline, “Criminal Charges Loom for Goldman Sachs After Scathing Report.”

Nothing happened. But, over the course of the rest of 2011, Obama went on a massive fundraising drive down Wall Street.

“By the fall of 2011, Obama had collected more donations from Wall Street than any of the Republican candidates, and employees at Bain Capital had donated more than twice as much to Obama as they did to [Mitt] Romney, the firm’s founder,” GAI wrote in its report.

“In the weeks before and after the Senate report on Goldman Sachs, several Goldman executives and their families made contributions to Obama’s Victory Fund and related entities and some contributors maxed out at the largest individual donation allowed, $35,800.”

“Five senior Goldman Sachs executives wrote more than $130,000 in checks to the Obama Victory Fund,” GAI continued. “Two of these executives had never donated to Obama before and had previously only given small donations to individual candidates.”

While GAI said in the report that it would be a “reach to conclude that the Department of Justice dropped its criminal investigation of Goldman Sachs solely in response to large campaign contributions” from its executives, it certainly doesn’t pass the smell test — and calls for investigations continue.

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