Sen. Ted Kaufman was one of the great heroes in the fight for financial reform. He was a brilliant, articulate, and stalwart fighter for the rights of the American people to be free of Wall Street fraud, criminality and abuse. He attempted to restore the old Glass-Steagall restrictions on bank trading through an amendment he cosponsored to the Dodd-Frank financial reform bill. He cosponsored the Fraud Enforcement and Recovery Act of 2009 (FERA), which helps prosecutors nail financial crooks.
Now that he’s out of the United States Senate, Ted Kaufman teaches and writes a biweekly column. His latest column doesn’t pull any punches.
Kaufman reviewed a recent report by the Justice Department Inspector General that concludes that there was, shall we say, a lack of zeal in prosecuting Wall Street foreclosure fraud. Here’s a sample from Kaufman’s column:
“Angry? You bet I am. Even more angry than I was back in 2009 when, as a U.S. senator, I saw shocking paper trails that I believed would have convinced juries to convict some crooked CEOs if there were aggressive efforts to prosecute them.”
But the Justice Department chose not to prosecute, despite the preponderance of evidence against bank CEOs. Some of those bank CEOs are now quoted prominently in the papers, opining on how Social Security should be cut in order to make up for the shortfall caused by (although they don’t mention this) the financial crisis brought on by their own fraud and greed.
Here’s some more of what Kaufman had to say:
“In the years since I left the Senate in 2010, fines, which are paid by shareholders not managers, have been levied against Wall Street banks, but not one employee of a bank been indicted … The audit confirmed that the Justice Department had never made investigating mortgage fraud cases a top priority or, for that matter, any priority at all.”
That would be Eric Holder’s Justice Department. President Barack Obama’s Justice Department. Your Justice Department, at least in theory.
As Sen. Kaufman notes, “The statute of limitations on fraud committed before the financial crisis is running out. It is safe to assume that no one who committed mortgage fraud will be prosecuted.” He concludes that “the lack of action on mortgage fraud takes us a perilous step closer to a two-tiered system of criminal justice – one for the poor and one for the rich.” His column is worth reading in full.
Meanwhile, in related news, an heir to the DuPont fortune was not sentenced to jail time after admitting to raping his infant son. The judge gave the 6-foot-4-inch convicted child rapist probation and treatment instead, stating his belief that the privileged defendant “will not fare well” in prison.
Very few people do. But that fact is rarely considered when sentencing less wealthy defendants.
That two-tiered system of criminal justice is already upon us. So is the free pass for Wall Street fraud and criminality. There’s no need to wonder why Ted Kaufman is angry. The only question worth asking is, why isn’t everybody?