This was the big question after the financial crash of 2008 that ruined the lives of so many people. The public radio program Marketplace had a detailed examination of this question. While banks were named in indictments and plea deals reached with them for fines, no top bankers were named or prosecuted. Indeed the government bailouts enabled them to reward themselves with big bonuses. The analysis lasted about 45 minutes but was spread over three days as follows: Part 1 lasts from 0-19 minutes, Part 2 was from 4:50 to 15:30, and Part 3 lasted from 0 to 15:30 minutes.
I found the series made for compelling listening for anyone who wants a quick overview of the history of financial fraud and the actions that were taken and, more importantly, not taken. Unlike the earlier Savings & Loan and Enron cases where thousands of criminal prosecution were brought, many convictions obtained, and top people went to jail, nobody was prosecuted in the 2008 crash. In fact, career prosecutors were discouraged from bringing criminal cases against the top bankers. As one analyst interviewed said, you have to metaphorically punch these wrongdoers in the face by throwing the full force of justice against them even if you do not win all the cases. By not doing so, the net result was that public rightly felt that the big banks and the top bankers got away scot free.
Why? The report essentially fingers the justice department and its top two people, Barack Obama appointees Eric Holder and Lanny Breuer, who discouraged and effectively blocked US attorneys from bringing forward criminal prosecutions, pressuring them to pursue civil cases that only resulted in fines that the banks, and not the individuals, paid. The report says that Preet Barara, then US Attorney for the Southern District of New York where many of the banks are headquartered, did not pursue cases either, preferring to after the low-hanging fruit of lower-level financial crimes and ignore the big ones. Holder, Breuer, and Bharara all declined to be interviewed for the series, which is not surprising. Obama also refused to be interviewed and he has to be held responsible as the person who appointed Holder and Breuer.
The report did not mention one key fact, that Holder and Breuer came to the Justice Department from, and then returned to, the big law firm of Covington and Burling. This firm has the big banks as clients and in fact said while Holder was still in office that they had reserved a fancy corner office for him for when he returns. Obama and the rest of the Democratic party establishment have long been cozy with the big banks, drawing their treasury secretaries and other top officials from them, and the banks have returned the favor by giving them huge fees for speeches. Hillary Clinton did so as did Obama. It is impossible to avoid the implication of quid pro quo at work. Another person who was not mentioned in the series but also shares responsibility is Treasury Secretary Timothy Geithner.
They are all one happy oligarchy, scratching each other’s backs while pretending to care about the rest of us.