The chairman of President Obama's Financial Crisis Inquiry Commission has called on the U.S. Department of Justice (DOJ) to ratchet up its efforts in pursuing criminal cases against the executives of the Wall Street firms at the heart of the 2008 financial meltdown.
In an opinion column published on the website Politico, Phil Angelides questioned the DOJ's current pace of investigations and the absence of indictments. He unfavorably compared the DOJ's ongoing efforts to the federal government's response to an earlier financial meltdown.
‘When a much smaller and less complex scandal infected the savings and loan industry in the 1980s, a Republican president and a Democratic Congress supported a wide-ranging investigation fueled by ample resources – including a $50 million appropriation in 1989 alone to hire 450 more personnel,’ Angelides wrote. ‘More than 1,000 bank and thrift executives were convicted of felonies.’
Angelides – who is a former state treasurer of California and the former executive chairman of Mortgage Resolution Partners, the company behind the plan to seize underwater mortgages via eminent domain laws – argued that the DOJ must ‘marshal resources on a dramatically larger scale, including staff from bank regulatory agencies, like the Federal Deposit Insurance Corp. and the Federal Reserve Bank of New York, who know the banking industry inside and out.’ He added that the DOJ should focus on ‘criminal wrongdoing and not just civil prosecutions’ in order to prevent a reprise of the 2008 crash.
‘Deterring future crimes can't be accomplished simply through fines or negotiated financial settlements – which many banks regard as the cost of doing business,’ he wrote. ‘Senior executives need to know that if they violate the law, there will be real consequences.’
