Crisis of Confidence in U.S. Justice Department Grows

By Pam Martens: May 6, 2014

Eric Holder, U.S. Attorney General

It appears that U.S. Attorney General Eric Holder would like to change the subject from “stock market’s rigged” by our own U.S. stock exchanges and U.S. banks as asserted by bestselling author Michael Lewis on 60 Minutes on March 30 to a different subject involving “tax evasion” by Swiss and other foreign banks.

In a clear sign that the Department of Justice and Holder plan to launch a public relations offensive with a trail of crumbs leading away from U.S. banks, yesterday the DOJ released a video of Holder asserting that no bank is too big to jail. That comes on the heels in the past few days of multiple media outlets reporting that Holder may be close to a guilty plea and more than a $1 billion fine against the large Swiss bank, Credit Suisse, over facilitating tax evasion by Americans.

That Holder might be willing to hold foreign banks to a higher standard of “justice” than U.S. banks has apparently entered the mind of Switzerland’s Finance Minister Eveline Widmer-Schlumpf. According to Bloomberg News, Widmer-Schlumpf traveled to the U.S. last week and met with Holder to ensure that Swiss banks are going to receive even-handed treatment by the Justice Department.

More than a few global finance ministers, along with Wall Street On Parade, have noticed that when it comes to meting out justice, as in the case of the Libor interest-rate rigging prosecutions, for example, the long arm of the law seems to lose its grip when it comes to Wall Street banks. Thus far, the Justice Department has yet to prosecute a U.S. bank over Libor, despite email evidence of serious wrongdoing. It has, however, charged multiple foreign banks.

Since 2012, Wall Street On Parade has been drawing focus to the revolving door between the top criminal posts at the Department of Justice and the law firm of Covington & Burling. On September 20, 2012 we called attention to the history of that law firm, writing:

“And there’s one more common bond that should deeply trouble every American. The law firm that fronted for Big Tobacco for four decades, Covington & Burling, has its former lawyers ensconced in three of the top slots at the U.S. Justice Department. Now Covington & Burling has become Wall Street’s go-to guys for legal counsel in a growing roster of alleged crimes.”

After the PBS program Frontline pointed out on January 22 of last year that insiders at the Justice Department were alleging that Lanny Breuer, then head of the Criminal Division (who had come from Covington & Burling along with his boss, Eric Holder) had never seriously tried to indict any Wall Street bank, Breuer announced he was stepping down the very next day. The exchange was as follows between Frontline producer and interviewer, Martin Smith, and Breuer:

MARTIN SMITH: We spoke to a couple of sources from within the Criminal Division, and they reported that when it came to Wall Street, there were no investigations going on. There were no subpoenas, no document reviews, no wiretaps.

LANNY BREUER: Well, I don’t know who you spoke with because we have looked hard at the very types of matters that you’re talking about.

MARTIN SMITH: These sources said that at the weekly indictment approval meetings that there was no case ever mentioned that was even close to indicting Wall Street for financial crimes.

Last Wednesday, Covington & Burling announced it was hiring Mythili Raman, the woman who became head of the Justice Department’s Criminal Division when Breuer stepped down. Raman will be getting something of a “welcome home” greeting at Covington. In addition to Breuer, according to the American Bar Association Journal, Raman will be joining former Justice Department colleagues Steven Fagell, former deputy chief of staff at the criminal division; Jim Garland, former deputy chief of staff to Attorney General Eric Holder; and Dan Suleiman, former deputy chief of staff to Breuer.

Raman is said to have intimate knowledge of the Justice Department’s criminal investigations of Wall Street banks for Libor wrongdoing as well as its more recent investigations over the rigging of foreign currency exchange rates. That knowledge is a valuable commodity at a law firm representing Wall Street.

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