AMY GOODMAN: I want to turn to remarks by Lanny Breuer in 2012 about prosecuting large companies. At the time, he was the assistant attorney general. He spoke before the New York City Bar Association.
LANNY BREUER: I personally feel that it’s my duty to consider whether individual employees, with no responsibility for or knowledge of misconduct committed by others in the same company, are going to lose their livelihood if we indict the corporation. In large multinational companies, the jobs of tens of thousands of employees can literally be at stake. And in some cases, the health of an industry or the markets are a very real factor. Those are the kinds of considerations in white-collar cases that literally keep me up at night, and which must, must play a role in responsible enforcement.
AMY GOODMAN: That’s Lanny Breuer in 2012, who was like number two in the Justice Department.
MATT TAIBBI: He was the head of the Criminal Division, so he’s basically the top cop in America at the time.
AMY GOODMAN: He was at the Justice Department; of course, Eric Holder is the attorney general—both from the same company. Respond to what he said, and then talk about Covington & Burling.
MATT TAIBBI: Well, first of all, his—that whole thing about the innocent white-collar employees perhaps losing their livelihoods keeping him up at night, I want to know what his response is to, you know, the idea that maybe a single mother on welfare is going to lose her kids because she’s going to lose custody in an $800 welfare fraud case. You know, I saw so many of these cases that it was—that is was just overwhelming to me. Those are the kinds of things that would keep me up at night if I were the attorney general, thinking about the consequences that ordinary people feel—suffer when they are caught up in the criminal justice system.
People—for instance, again, going back to welfare fraud, your relatives can lose their Section 8 housing. So, you know, if you’re—again, if you’re on welfare and you get caught in a fraud case, that may just involve checking the wrong box or having somebody, one of your neighbors, say that you have a boyfriend living in your house, when you really don’t, your mother or your grandmother can lose their housing because of something like that. That would be the stuff that would keep me up at night. I mean, I wouldn’t be worried about millionaire and billionaire executives, you know, who are working at these banks, if I were Lanny Breuer. So that tells you a lot about the priorities of somebody like him.
AMY GOODMAN: And talk about Lanny Breuer, Eric Holder, where they come from, where they go back to.
MATT TAIBBI: So they both came from a law firm called Covington & Burling, which in the 2000s represented basically every single one of the too-big-to-fail banks. They were also involved in the setting up of the electronic mortgage registry, so they played an enormous role in the subprime mortgage crisis.
But here’s the key thing about the presence of these two people at the head of the attorney—of the Justice Department. Prosecutors, by and large—and I interviewed a lot of prosecutors for this book—they basically all have the same personality, the old-school prosecutors. They’re just—if you think of somebody like Eliot Spitzer, they’re all like bulldogs. They just want to get their—you know, get their target; by hook or crook, it doesn’t really matter. They have this ferocious aspect to their personalities. And it’s an admirable quality in a prosecutor. They’re all kind of the same, in a certain way. Cops are the same way. But in the 2000s, that kind of person started to be replaced in the regulatory system by a new kind of figure who tended to come from the corporate defense community. And their attitude was not, you know, get their target at all costs; it was more: "Let’s bring a bunch of people in a room and hammer out a solution where all the sides are going to end up walking out happy." And that’s why we end up with settlements, like the $13 billion Chase settlement last year or the $1.9 billion HSBC settlement, instead of prosecutions.
AMY GOODMAN: Covington & Burling represented JPMorgan Chase.
MATT TAIBBI: They did, yeah, and a host of other banks that also were involved in nonprosecutions during this time. So, I mean, it’s—you have a whole bunch of people sort of at the top of the regulatory agencies, whether it’s Justice, the SEC, the CFTC, maybe the Enforcement Division of the SEC, who all came from these big banks or from law firms that represented these big banks. And it’s a very incestuous community. And just like you talked about with James Kidney, the SEC official who left, as a result of this kind of merry-go-round of people who all work for the same companies—and they’re going to go to government for a while, then they’re going to go back to the corporate defense community after they leave and make millions of dollars—they’re very, very reluctant to be aggressive against these companies, because it’s their—culturally, they’re the same people as their targets, whereas there isn’t that same simpatico with the very poor. And I think that’s a very—it’s an important distinction to make, and people don’t understand it.
AARON MATÉ: You also suggest that Holder and Breuer are perhaps overly concerned with their conviction rate—
MATT TAIBBI: Oh, yeah.
AARON MATÉ: —and that’s why they don’t go after these banks.
MATT TAIBBI: Again, that’s something I heard over and over again from people within the Justice Department, that once those two came in, the edict came down from above that we were only going to go after cases where we were absolutely sure we were going to win. Now, you can never guarantee a victory in any criminal case, and oftentimes the cases are difficult to prove or the evidence may not be 100 percent there, but the state has a moral obligation to proceed with investigations and, in many cases, criminal cases against people who are guilty. You know, the fact that it’s difficult shouldn’t be a limiting factor. And that’s why you saw—instead of cases against these big banks, you saw ridiculously large amounts of resources devoted to things like prosecuting Barry Bonds or Roger Clemens, you know, cases where there are like only a couple of pieces of evidence and it was hard to screw up. And yet, you know, they didn’t always succeed even in those cases. So, it was a terrible, terrible thing for the Justice Department during that period.
