Barney Frank: “As Well as To Financial Regulators”

When I first read about this letter from retiring Financial Services Committee Ranking Member Barney Frank to Eric Holder, I thought it akin to what retiring Homeland Security Chair Joe Lieberman did on the Sunday shows when he aggressively called for gun control: a PR stunt by an outgoing top Committee member, addressing a problem in all-but retirement that he didn’t address while he had the authority to do so in Congress.

Dear Mr. Attorney General:

I note several instances recently in which Administration officials have proceeded civilly against blatant violations of our important financial laws, in part because of the difficulty of proving cases beyond a reasonable doubt, especially where the law may have been somewhat uncertain, but also because of a concern that the criminal conviction—and even indictment—of a major financial institution could have a destabilizing effect. This latter consideration does not apply, similarly, to individuals. It is, of course, the case that no corporation can have engaged in wrongdoing without the active decision of individual officers of that entity. I believe it is also the case that prosecuting individuals has more of a deterrent effect than prosecuting corporations.

I am writing to you as well as to financial regulators, understanding that the decision to pursue criminal proceedings rests with the Justice Department, so I ask that there be a series of consultations involving law enforcement officials and regulators with the goal of increasing prosecution of culpable individuals as an important step in seeing that the laws that protect the stability and integrity of our financial system are better observed.

BARNEY FRANK

And that may well be what this is: an effort to pile on all the calls for prosecuting the banksters.

But I am fascinated by that second paragraph, the mention of the financial regulators. Consider this NYT account of HSBC’s wrist-slap that Bill Black highlighted.

Despite the Justice Department’s proposed compromise, Treasury Department officials and bank regulators at the Federal Reserve and the Office of the Comptroller of the Currency pointed to potential issues with the aggressive stance, according to the officials briefed on the matter. When approached by the Justice Department for their thoughts, the regulators cautioned about the effect on the broader economy.

“The Justice Department asked Treasury for our view about the potential implications of prosecuting a large financial institution,” David S. Cohen, the Treasury’s under secretary for terrorism and financial intelligence, said in a statement. “We did not believe we were in a position to offer any meaningful assessment. The decision of how the Justice Department exercises its prosecutorial discretion is solely theirs and Treasury had no role.”

Still, some prosecutors proposed that Attorney General Eric H. Holder Jr. meet with Treasury Secretary Timothy F. Geithner, people briefed on the matter said. The meeting never took place. [my emphasis]

DOJ went to Treasury and the Fed and OCC and asked for permission to get HSBC to plead guilty to Bank Secrecy Act violations. According to Cohen, Treasury said they had no meaningful assessment. According to NYT, the regulators–the Fed and OCC–raised concerns about the broader economy.

And Barney Frank says he is writing financial regulators (in addition to Holder himself) about bank immunity, but this appears not to be the letter to financial regulators, because they are not CC’ed on the letter. Yet he has not released a separate letter to regulators to the press (though if my attempts to get this letter this morning are any indication, Frank’s staffers have already moved onto look for new jobs).

This suggests there’s another letter to the people who told DOJ to let HSBC skate.

It’s worth noting that one of these regulators–OCC–was broadly implicated by the Permanent Subcommittee Investigation of HSBC.

In any case, there seems to be more to what Frank is doing. It may be he’s just trying to push Holder to meet with TurboTax Timmeh and the financial regulators, as Holder’s prosecutors attempted to make happen. Or he may be doing something else here, potentially even coaxing regulators to embrace individual indictments to stave off the larger anger about the HSBC wrist-slap.

It may well be this is a show. But it appears that we’re only seeing half the show.

Twitter4Reddit0Facebook5Google+0Email

3 Responses to Barney Frank: “As Well as To Financial Regulators”

  • 1
  • 2
  • 3

Emptywheel Twitterverse
JimWhiteGNV Because we know for a fact these poorly targeted JSOC drones in Yemen certainly stir up anti-US feelings afterwards.
8mreplyretweetfavorite
JimWhiteGNV So please explain to me one more time just exactly how a group of "possibly" AQAP types in Yemen pose a direct threat to the US.
9mreplyretweetfavorite
emptywheel @SteveNixonIP Remember counterpart at DHS used to get called a terrorist.
2hreplyretweetfavorite
emptywheel @SteveNixonIP Apparently write bland uninformative reports that don't even lay out what the privacy officer does, or her name.
2hreplyretweetfavorite
emptywheel @nickmanes1 Hell of a day for a walk. Pup has been known to take us north to 6th St bridge from there, for old time's sake.
2hreplyretweetfavorite
emptywheel @FrancisJeffrey7 It's pretty devoid of useful information, with a few exceptions. Really depressing they'd think this helped.
2hreplyretweetfavorite
emptywheel @nickmanes1 We walked all the way to Ahnabawen. For some reason my Labrador Retriever thinks it's too early too swim.
2hreplyretweetfavorite
emptywheel Haha. NSA Privacy Officer, in first outing, is less honest that Raj De back in November on key issue. http://t.co/zqQvOnPNCH Not impressive
2hreplyretweetfavorite
emptywheel RT @lawfareblog: Kenneth Anderson: "Readings: NSA Report on the 702 Program" http://t.co/ZkjIvx5mqn
2hreplyretweetfavorite
emptywheel Is it a good or a bad omen if you roll over a snake on Easter? I didn't kill it or even hurt it much. Spouse says I get St. Pats credit.
2hreplyretweetfavorite
emptywheel @nickmanes1 Yes, provided you say "right oh" and speak in a funny accent while eating it.
2hreplyretweetfavorite
bmaz @kevinjonheller @lyssophobe @MaxBlumenthal Some sympathetic friend you are!
2hreplyretweetfavorite
December 2012
S M T W T F S
« Nov   Jan »
 1
2345678
9101112131415
16171819202122
23242526272829
3031