BLOG VIEW: If you've been following this blog, you will recall that I recently posed 10 questions for Sen. Elizabeth Warren and Consumer Financial Protection Bureau (CFPB) Director Richard Cordray. This week, the spotlight is aimed at the U.S. Department of Justice (DOJ) and its embattled leader, U.S. Attorney General Eric Holder.
If Holder has a few minutes, I would love to get his input on these questions.
1. Since you took office in January 2009, the only financial institution that has received a criminal indictment for mortgage fraud in the run-up to the 2008 meltdown is Abacus Federal Savings Bank, a $232 million-asset community bank serving New York City's Chinese-American population. Are we to believe that Abacus Federal Savings Bank was the only financial institution that committed criminal-level mortgage fraud in the years prior to the 2008 crash?
2. Before a Senate hearing earlier this month, you made the following statement on why no Wall Street executive has faced criminal prosecution by your department: ‘If you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.’ Can you please explain how the world economy would collapse if a Wall Street executive is brought up on criminal charges? And, for that matter, can you please identify which specific executive could create such a scenario if he or she was arrested and indicted?
3. Last month, the DOJ brought a civil lawsuit against Standard & Poor's Rating Services (S&P), charging the company with fraud in regard to its ratings on certain collateralized debt obligations during 2007. However, S&P's ratings were identical to input offered by the nation's other rating agencies, but those companies have not been taken to court by your department. Of course, S&P was the only rating agency to downgrade the U.S. credit rating following the 2012 debt ceiling debacle. Is it a coincidence that the only rating agency to be sued by your department is the one that embarrassed the Obama administration by downgrading the U.S. credit rating last year?
4. Also in regard to the S&P case – why did the DOJ leak the news of its intention to file the lawsuit against the rating agency to the Wall Street Journal prior to the filing of the lawsuit?
5. In January, a U.S. district court ruled that President Obama violated the Constitution with a series of recess appointments made one year earlier while Congress was still in pro forma session. However, you claimed that the president acted properly with these appointments, which included the insertion of Richard Cordray into the directorship of the CFPB. Can you please explain why you believe that your decision on the recess appointment was right and that the district court ruling's was wrong?
6. Also in January, Lanny Breuer, assistant attorney general for the DOJ's Criminal Division, abruptly announced his resignation right after the broadcast of a PBS documentary in which he claimed that the department was unable to pin criminal charges on the Wall Street executives at the center of the 2008 crash. Was Breuer forced out of his job because of the comments he made in the documentary, or was his sudden resignation just a timing coincidence?
7. In July 2012, the Government Accountability Office (GAO) issued a report on abuses related to the Servicemembers Civil Relief Act (SCRA), in which it found ‘at least 15,000 instances of financial institutions failing to properly reduce servicemembers' mortgage interest rates and over 300 improper foreclosures have been identified by federal investigations and financial institutions in recent years.’ However, the GAO added that the DOJ only brought three SCRA-related cases against mortgage servicers for SCRA violations between 2007 and 2012. In view of the GAO report, do you believe that the DOJ – both under your stewardship and under your predecessor, Michael Mukasey – has done a sterling job in investigating SCRA-related abuses?
8. In December 2011, Reps. Brad Miller, D-N.C., and Walter Jones, R-N.C., sent you a letter calling for a federal investigation of financial services institutions that allegedly violated SCRA by illegally foreclosing on active duty servicemembers' homes while some served in the war zones of Iraq and Afghanistan. Nothing ever came from the representatives' request for assistance. Can you please explain why your department ignored this letter and refused to investigate the alleged SCRA abuses cited by the representatives?
9. In a December 2011 interview with the New York Times, you stated that the only reason your DOJ record has been called into question is because you are an African-American. Are we to seriously believe that any person who raises concerns about your record is acting solely out of racist malevolence?
10. In the aftermath of the aforementioned December 2011 interview, Washington Post columnist Charles Krauthammer called you ‘one of the most incompetent attorneys general in U.S. history.’ Do you believe that Krauthammer's opinion of your work rooted in racism, or are you willing to admit that this might be an accurate description of your job performance?
– Phil Hall, editor, MortgageOrb
(Please address all comments regarding this opinion column to hallp@mortgageorb.com.)
