Attorney General Holder Will Say Justice Dept. Is Using ‘Every Tool’ to Fight Financial Crime
January 14, 2010 - 5:28 AMEric Holder will tell a panel investigating the financial crisis that the fight against economic crime is part of a broader strategy to "foster confidence in our financial system, integrity in our markets and prosperity for the American people."
According to prepared remarks, Holder will say the fight against economic crime is part of a broader strategy to "foster confidence in our financial system, integrity in our markets and prosperity for the American people."
Holder will highlight the work of a new, interagency Financial Fraud Enforcement Task Force created by President Barack Obama to coordinate efforts between the Justice Department and other agencies.
The task force will focus on mortgage and securities fraud, theft of federal stimulus money and financial exploitation of minority communities, Holder has said. He has said it will help restore confidence in the financial markets.
The Financial Crisis Inquiry Commission, a 10-member bipartisan panel, will also hear from FDIC Chairman Sheila Bair and Securities and Exchange Commission Chairman Mary Schapiro, as well as state regulators.
Illinois Attorney General Lisa Madigan, an aggressive prosecutor of mortgage fraud, will say that the pre-crisis mortgage system profited everyone except homeowners.
She will say state attorneys general already were pursuing mortgage fraud before the crisis, and will continue to do so, according to prepared remarks.
The financial crisis panel began its yearlong inquiry amid public fury over bailouts, bankers' pay and financial fraud -- notably Bernard Madoff's Ponzi scheme, a fraud estimated at as much as $50 billion.
At the first hearing Wednesday, top Wall Street bankers apologized for risky behavior that led to the worst financial crisis since the Great Depression. But they still declared it seemed appropriate at the time.
The bankers -- whose firms collectively received more than $100 billion in taxpayer aid to weather the crisis -- offered no regrets for executive pay that's now likely to increase as a result of their survival. They did say they are correcting some compensation practices that could lead to excessive risk-taking.
The hearings come amid growing calls in Washington to hold banks and financial executives accountable for their bad bets rather than merely compensating them for good ones.
House Financial Services Committee Chairman Barney Frank, D-Mass., said he will hold a hearing next week on bank compensation, looking to expand legislation that has passed the House. And Sen. Bill Nelson, D-Fla., wrote to Obama on Wednesday to suggest legislation that would use banks' tax breaks as incentives for pay based on performance.
On Thursday, Obama is expected to announce a new fee on the country's biggest financial firms to allow taxpayers to recover up to $120 billion from bailouts.
Besides Holder, Madigan, Bair and Schapiro, also scheduled to testify to the panel Thursday are Assistant Attorney General Lanny Breuer; Colorado Attorney General John Suthers; Denise Voigt Crawford, commissioner of the Texas Securities Board; and Glenn Theobald, chief counsel of the Miami-Dade County Police Department.
The commission is chaired by former California Treasurer Phil Angelides, a Democrat. His vice chairman is Republican Bill Thomas, a former California congressman who chaired the House Ways and Means Committee.
The commission is modeled on the panel that examined the causes of the Sept. 11, 2001, terrorist attacks. But its prototype could be the Pecora Commission, the Senate committee that investigated Wall Street abuses in 1933-34. It was named after Ferdinand Pecora, the committee's chief lawyer.
Congress instructed the commission to explore 22 issues, ranging from the effect of monetary policy on terms of credit to bank compensation structures.
Associated Press Writer Devlin Barrett contributed to this report.
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