Eric Holder Vows to Fight Economic Crime

(AP)  Attorney General Eric Holder told a bipartisan panel exploring the roots of the U.S. financial crisis that the Justice Department is using "every tool at its disposal" to fight the financial crimes that contributed to the meltdown and could cause another.

Holder said fighting financial crime will foster confidence in the system. He is appearing before the Financial Crisis Inquiry Commission in its second day of hearings.

Securities and Exchange Commission Chairman Mary Schapiro will tell the panel her agency has been reviewing its operations in light of crimes exposed by the crisis, according to prepared remarks.

The panel also is hearing from Federal Deposit Insurance Corp. Chairman Sheila Bair and other regulators and law enforcement officials.

Bair said the financial crisis exposed fundamental weaknesses in the financial regulatory system. The Obama administration has proposed a sweeping overhaul of that system. The House passed a version last year, and the Senate is working on a separate compromise.

Holder highlighted 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 regulators and officials are expecting to discuss investigations into crimes that became known during the crisis, including mortgage fraud and the large financial crimes like the landmark pyramid scheme perpetrated by Bernard Madoff. The SEC came under fire for failing to detect frauds by Madoff and others in the years before the crisis.

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.

Econwatch: Execs Offer Head-Scratching Answers

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.

[msjb1]

Just look around the next time you are in the white house and just pick anyone you see, proberly you will hit paydirt with first pick.

[sjc_1]

Money went from the banks to people flipping houses. Loan deals were made with NO documentation where they could not be repaid just to turn a quick profit. The Savings and Loans were destroyed in the 80s making way for companies like Countrywide that had no regulation and lowered the loan standards. They created a place were they could bundle and sell these bad loans all over the world. You could not think of a better way to cause a worldwide financial collapse than this.

[one4gipper]

Would that be the same Eric Holder whose law firm got the Gitmo detainees released to go abecome al Qaeda leaders in Yemen? The same Eric Holder that wants to try the Detroit bomber in civilian court? The same Eric Holder who refuses to apply enhanced interrogation techniques to the Detroit bomber? Oh yeah, we can trust this guy to look out for the interests of America.

[fctex]

don't you people see that this is just another part of the total dismanteling of capitalism in this country? taxing the banks to :get our money back" - most have already paid it back - with interest AND EQUITY! and Holder's definition of financial crime is what a lot here are saying - it's the rich people's fault. let's take it from them and give it to the poor (read unemployed, illiteral, illegal alien, etc. This administration is bringing change - change to socialism and they are doing it on every front and from every department in the government. and none of it is "transparent and open"!!!!!!

[jgg000101]

here's an economic crime for you:
taxpayers having to spend $400-600M to try KSM in NYC.

here's another one:
taxpayers having to fund ACORN

here's another one:
taxpayers having to pay for mortgages of people who couldn't afford them in the first place.

[libbcbs]

HAHAHAHA, what's this guy going to do about RANGAL, who hasn't paid his taxes in 10 years!!!!!! And GEITHNER, who didn't pay for two years!!!!!!!Shameful.......What is being done?

[r_mcdonald1]

Wow!

Does this mean Eric holder going to go after Barney Frank? Is he going to go after Bill Clinton for putting the deal together with Barney Frank? Is he going to go after Charlie Rangle for all of his corrupt dealings? Is he going to look into the House Bank scandal, where the members of Congress wrote checks on accounts that had no money in them? Is he going to go after the members of Congress who abused the Congressional Post Office? The ones who would go in with a check from a contributor and buy a book of stamps, then take the balance in CASH!

Is Eric holder going to go after Tim Geithner for his failure to pay income tax?

Nah - didn't think so.

He's only going to go after Republicans and the Independents who don't kiss the feet of his highness, or swear the allegiance to the anointed one.

[rightbehind]

He needs to start with those, "Most Desired" former enron employees that goldman sachs and morgan stanley hired. The same speculators that caused rolling blackouts in California and drove gas to 4 dollars a gallon.

[stn_sage]

OH PUH-LEEZE! Stop the sanctimonious promises of fighting business crime to protect the American public! BLAH...BLAH...BLAH...BLAH!

This attorney general and this government IS NOT going to do that because 'they're in bed with the bad guys'!

Everyone knows where the bad guys are, too!

Most of America's business crime is emanating from Wall Street, so if you're serious, then do something to stop them!

If you're not serious, then shut the heck up, and stop wasting our time pretending you're going to do something when you know you're NOT!

[Justaneocon]

This is the liberal motto all the problems of the world are the riches fault. If you are poor it's not your fault it is the rich fat cats holding you back. If you are middle class and not rich it?s not your fault it is the "rich" holding all the money why you can't get ahead.

The liberals actually believe terrorist deserve more rights then the American top 5% of wage earners. It is disgusting how liberals think they deserve handouts.