Why Can’t DOJ Investigate as Well as the Hapless Senate?

There’s a lot to loathe about the current incarnation of the Senate, that elite club of millionaires where legislation goes to either get rewritten to serve corporate interests or killed.

What does that say about DOJ, then, that the Senate is doing such a better job at investigating crimes? In just one month’s time the Senate has produced two investigations that have left DOJ–and the SEC and FEC–looking toothless by comparison.

First there was Carl Levin’s investigation of the banksters, released last month. Matt Taibbi does us the favor of outlining the case Levin’s investigators made.

Here is where the supporters of Goldman and other big banks will stand up and start wanding the air full of confusing terms like “scienter” and “loss causation” — legalese mumbo jumbo that attempts to convince the ignorantly enraged onlooker that, according to American law, these grotesque tales of grand theft and fraud you’ve just heard are actually more innocent than you think. Yes, they will say, it may very well be a prosecutable crime for a corner-store Arab to take $2 from a customer selling tap water as Perrier. But that does not mean it’s a crime for Goldman Sachs to take $100 million from a foreign hedge fund doing the same thing! No, sir, not at all! Then you’ll be told that the Supreme Court has been limiting corporate liability for fraud for decades, that in order to gain a conviction one must prove a conscious intent to deceive, that the 1976 ruling in Ernst and Ernst clearly states….Leave all that aside for a moment. Though many legal experts agree there is a powerful argument that the Levin report supports a criminal charge of fraud, this stuff can keep the lawyers tied up for years. So let’s move on to something much simpler. In the spring of 2010, about a year into his investigation, Sen. Levin hauled all of the principals from these rotten Goldman deals to Washington, made them put their hands on the Bible and take oaths just like normal people, and demanded that they explain themselves. The legal definition of financial fraud may be murky and complex, but everybody knows you can’t lie to Congress.

“Article 18 of the United States Code, Section 1001,” says Loyola University law professor Michael Kaufman. “There are statutes that prohibit perjury and obstruction of justice, but this is the federal statute that explicitly prohibits lying to Congress.”

The law is simple: You’re guilty if you “knowingly and willfully” make a “materially false, fictitious or fraudulent statement or representation.” The punishment is up to five years in federal prison.

When Roger Clemens went to Washington and denied taking a shot of steroids in his ass, the feds indicted him — relying not on a year’s worth of graphically self-incriminating e-mails, but chiefly on the testimony of a single individual who had been given a deal by the government. Yet the Justice Department has shown no such prosecutorial zeal since April 27th of last year, when the Goldman executives who oversaw the Timberwolf, Hudson and Abacus deals arrived on the Hill and one by one — each seemingly wearing the same mask of faint boredom and irritated condescension — sat before Levin’s committee and dodged volleys of questions.


Lloyd Blankfein went to Washington and testified under oath that Goldman Sachs didn’t make a massive short bet and didn’t bet against its clients. The Levin report proves that Goldman spent the whole summer of 2007 riding a “big short” and took a multibillion-dollar bet against its clients, a bet that incidentally made them enormous profits. Are we all missing something? Is there some different and higher standard of triple- and quadruple-lying that applies to bank CEOs but not to baseball players?

Then there’s the investigation of John Ensign. Scott Horton lambastes DOJ’s decision to indict Ensign’s cuckold but not Ensign himself.

Alarmingly, the Justice Department not only failed to act against Ensign, it actually indicted Doug Hampton, Ensign’s former senior staffer, who was clearly a victim of Ensign’s predatory conduct and who had blown the whistle on him. The new report does suggest that Hampton may have engaged in improper lobbying activities, with Ensign’s connivance. But it also makes clear that Hampton’s statements about what happened were truthful and complete, whereas Ensign’s were often cleverly misleading, and sometimes rank falsehoods. In this context, the Justice Department’s decision—to prosecute the victim who spoke with candor and against his own interests, and let the malefactor who lied about his conduct go free—is perverse. It is also completely in line with recent Justice Department pubic integrity prosecutions, which have displayed an unseemly appetite for political intrigue and an irrepressible desire to accommodate the powerful.

And the NYT writes a more sheepish article featuring both an FEC official who apparently wouldn’t go on the record with his shock–shock! that there was gambling going on in the casino someone lied to the FEC.

An election commission official, who asked not to be identified while the case was pending, acknowledged that the commission took the senator at his word, whereas the Senate dug deeper. This official expressed anger to learn the true circumstances behind the $96,000 payment.

“I hate it when people lie to us,” the official said, adding: “If somebody submits a sworn affidavit, we usually do not go back and question it, unless we have something else to go on. Maybe we should not be so trusting.”

The NYT also cites several legal experts attributing DOJ’s impotence to embarrassment over the Ted Stevens trial (without, at the same time, wondering why William Welch is still at DOJ acting just as recklessly, only this time against whistleblowers and other leakers).

Several of these reviews of DOJ’s failure to act wonder why the understaffed Senate Ethics Committee or Levin’s Permanent Committee on Investigations–again, this is the hapless Senate!–managed to find so much dirt that the better staffed DOJ and regulatory bodies did not.

But Taibbi really gets at the underlying issue.

If the Justice Department fails to give the American people a chance to judge this case — if Goldman skates without so much as a trial — it will confirm once and for all the embarrassing truth: that the law in America is subjective, and crime is defined not by what you did, but by who you are.

These two Senate committees did an excellent job mapping out the crimes of the powerful. But unless we see action from DOJ, the committees will also have, by comparison, mapped out the stark truth that DOJ refuses to apply the same laws we peons abide by to those powerful people.

  1. praisegodbarebones says:

    Well, I’d imagine that the Senate reports put Obama in a good position to shake the banksters down for some fairly sizeable campaign donations at least.

  2. PJEvans says:

    That was an interesting article to read.
    I doubt that the DoJ reads Taibbi – if they did, they’d be dying of embarrassment about now. I’d like to think that a lot of Taibbi’s readers would be willing to help them do so.

    • ffein says:

      I sent an email to [email protected] with links to the Taibbi article and to Marcy’s blog. Their “Contact” paragraph says that “E-mails will be forwarded to the responsible Department of Justice component for appropriate handling.” We’ll see….

      • PJEvans says:

        Don’t expect much. These days, having people ask questions apparently doesn’t require answering them. (I asked a manufacturer of turkey products if their turkey ham was kosher or neutral or what, and got a non-answer.)

  3. Katherine Graham Cracker says:

    DOJ too busy harassing local officials trying to provide legalized medical cannabis or busting dispensaries or generally supporting stupid, immoral and unsuccessful drug laws and policy

    Obama and Holder — both ridiculed the cannabis legalization movement as a bunch of stoners — they are clueless gits who are playing at being government officials we would be better off buying them a copy of sim city and getting them out of our hair.

  4. nick1936 says:

    Eric Holder is a big failure when it comes to protecting the public. We need a guy like Spicter even if he does fuck around he knew how to get the wall street crooks Obama should appoint him in charge of investigating the Banks.

    • bobschacht says:

      We need a guy like Spicter even if he does fuck around he knew how to get the wall street crooks

      I think you mean Elliot Spitzer, now on at primetime with CNN.

      Bob in AZ

  5. mswinkle says:

    everything that is going on is engineered. They are done with the experiment of freedom and the middle class, and democracy. Things so long as they continue to have power are not going to get better, in fact they are going to get a whole lot worse.

  6. tejanarusa says:

    FEC official: “maybe we shouldn’t be so trusting.” !!!!!

    Ay yi yi yi yi. People who are trusting shouldn’t be in oversight positions.
    Maybe??? They accepted Ensign’s word at face value? Jeebus H Christ, no wonder the FEC is so completely worthless.

    Now to read the rest. That’s as far as I got before outrage drove me to the keyboard.

  7. Winski says:

    The left-over chimpy-administration folks won’t approve the investigation going ahead. So Ensign skates off into the sunset…. Hampton goes to prison and Tommy C. says 50 prayers by morning…. That’s the Justice system in America for rich, white guys… ex. and sitting senators – this way please…too many checkpoints that way…

    They have PUBLIC, TAPED, REPRODUCIBLE EVIDENCE OF THE biggest crimes in the 21st century and won’t do anything… You expect them to even check this out?? NOT a chance….

  8. tejanarusa says:

    More and more I feel like I’m trapped in a novel, one from Eastern Europe of the fifties and sixties, or latin American in the same time period.

    The rich and powerful get everything, are never punished for anything, and the small and unpowerful (like Hampton, or even Clemens – who may be rich and famous but is not Goldman Sachs)take the public blame and get ruined.
    And public discussion becomes more and more surreal.

    • JohnLopresti says:

      OT, tejana rusa, in grad school one of the most arduous classes I attended was contemporary Latin America playwrights. Was it all symbol? Or were there some incisive writers?

      I think eastern europe at the time produced some pretty visionary voices; however, I defer to the esteemed emptywheel who studied the epoch.

      • emptywheel says:

        Oh, I definitely feel like reading Latin American and E European lit prepared me for this era in American history.

        The most chilling was realizing that I had taken up documenting my country’s torture. When I used to read ARgentines doing the same, it all seems

  9. TimWhite says:

    Even before Obama was elected, his response to the bailout (“everyone simmer down and listen to the experts”) demonstrated to me that he was just another Corporatist. At the time, it was just a hunch. But since then, it’s been plain as day.

    So there’s no reason to think Holder will do anything. Heck, this may be part of the reason he wants to keep Mueller. Obomba knows that Mueller won’t use his ten-year appointment to do anything “out of line.”

  10. JohnLopresti says:

    There was an interesting interview of a nomineee to FEC whose name was withdrawn. The article explains part of the stasis at FEC. The way I understand it, with the CU decision aftermath, and the expansion of 401(c)4 anonymous nonprofit donor money spilling into the 2010 election, inaction is seen as a nonsolution solution to getting FEC in gear to perform 2012 electoral cycle oversight. Even **Democracy21** expressed some ire at the passiveness of FEC described in an article just prior to last November*s elections. I am not sure whether FEC is fully populated; however, I believe the Republicans have produced a standoff that prevents FEC from having 5 members, leaving a partisan divide of 2 dems 2 republicans to assure continued inertness.

  11. Kassandra says:

    It’s true. I mean just as an example, the gas prices go up, so it’s an automatic green light for more disastrous drilling in sensitive ecological areas and the go-ahead for more life-killing nuke plants.

    I could almost wish that America had never become so powerful, we’ve really f*cked up the whole wide world.

    I can;’t believe there are still people who think Obama is better than Bush, or Holder is anything but an extension of Gonzales. You’d never even know we HAVE Justice Dept ( if crimes have been committed…….)

    Here’s an excellent take on the internationally illegal murder of bin Laden for those interested.

    Noam Chomsky: My Reaction to Osama bin Laden’s Death

    We might ask ourselves how we would be reacting if Iraqi commandos landed at George W. Bush’s compound, assassinated him, and dumped his body in the Atlantic.


    Couldn’t get the link thingy to work)

      • earlofhuntingdon says:

        Well, actually, we would, unless their remit was to find, arrest and bring him into a court of law. That would also be a waste of resources. All it would take is a government willing to enforce the law. We don’t seem to have one.

  12. zarf11 says:

    There was a day when we could trust the informed and concerned to keep the watch.

    Now that Bush has shown the way to loose honest AGs, here we are quite unprepared.

  13. revisionist says:

    I wouldnt say they were doing a “great” job. I mean the investiagtion took 2 years. Two. Years. And one witness spilled the beans early on. In detail.

  14. Sharkbabe says:

    Abolish the fucking DOJ. Srsly. 100x worse than useless.

    Oh and like I said over at Joemygod, though the Hamptons were extremely wronged by Ensign, they set their own asses up by their own yuppie greed. Hitching their entire family financially, 100%, to this one sugar daddy? VERY not smart.

  15. timr says:

    why? Because it is the plutocratsd who own congress and the executive branch. No matter what party is in power, be it the demothugs or the rethucrats.
    It should not be a surprise to discover that the rich walk while the other 98% of us go to jail.
    We are quite far along on our slide into the 3rd world.infastructure has gone to hell-see the program on sunday nite 9pm CDT on the History Channel called Inspector America. Prepare to be totally disgusted with our pols who have not done any maintainence for the last 40 years and see how america is falling apart
    Education has gone to hell, new college students have to take remedial classes. I saw an employer on local TV discussing why he hired 4000 people from other countries rather than hiring americans. Call center he was asked? Reply, Nope, engineers and other high paying jobs. COULD NOT FIND AMERICANS WHO COULD DO THE JOBS. and that right there says it all. Welcome to the USA, the 3rd world of the 21st century

  16. Bobster33 says:

    Pay no attention to the man behind the green curtain. We are all in the Wizard of Oz of justice. I think that the Dem’s will use these cases as shakedowns for donations.

    Eric Holder is truly the Banana Holder.

  17. marcusreno says:

    I’m speaking from personal experience, for a moderately complex white collar criminal investigation, it takes two years just to get the records-if you are lucky and you do not need foreign records. IF you need foreign records, add another two-four years. Some records, like Lichenstein bank records are unobtainable. After you get the records, then you can start to interview the witnesses and go through the usual rigamarole in that all corporate witnesses are essentially represented by law firms who have mutual defense agreements regarding cooperation. In short, as you interview any witness, the defense knows everything which you do. In the meantime you have lawyers hired by the targets who repeatedly file OPR and state bar referrals alleging the prosecutors and investigators are having sex with the corporate records while wearing Nazi insignia. This is why bank fraud statute of limitations were amended to 10 years. There is a big difference between writing a report and drafting an indictment with facts and witnesses to prove each element of the offense. In short, this is a lot like professional basketball, it looks a whole hell of lot easier than it really is to do it. Try it sometime, if you are looking for a nervous breakdown.

    • bmaz says:

      With all due respect, while that may be true for a financial, bank fraud, or complex racketeering case, the Ensign matter was most definitiely not that. It is a simple political case with a limited set of players – the Ensigns, the Ensign parents, the Hamptons (at least one of whom was cooperating) and a couple of C-Street witnesses/facilitators. The bank records are all apparently in the US and are all amenable to standard subpoena. Any competent prosecutorial/investigatorial entity could put this thing together quite nicely in six moths to a year max. Without even breaking a sweat.

      • earlofhuntingdon says:

        Yep. Just routine. Except that it would piss off Republicans and a lot of Mormons. All the Goopers would scream witch hunt and overkill and he wouldn’t take to his bully pulpit and call them hypocrites and scoundrels for defending the indefensible – because he seems to do it himself every day.

      • marcusreno says:

        Yes, you are corrrect about the Ensign investigation, but I would not consider it to be a complex case-it is a simple criminal case committed by a ‘famous’ man (like Barry Bonds) rather I was speaking about the complaint regarding GoldmanSachs. Oh by the way, I was considering the fraud theory, that is Goldman committed fraud when it shorted an investment it was selling investors, frankly I don’t think it will fly.

    • earlofhuntingdon says:

      Well, two senior prosecutors and 50 staff manage to charge and hold a sitting head of state named Slobodan Milosevic for war crimes. He avoided conviction by a UN tribunal owing to a lethal heart attack. The trial phase took 5 years, but that was because he acquired nearly as many ailments as Gen. Pinochet and because he defended himself. I don’t imagine Shrub would attempt it, though Cheney might.

  18. David Dayen says:

    And just to add to this, these were both bipartisan reports. The Ensign report had the participation of Johnny Isakson (R-GA) and the Goldman Sachs report was signed by Tom Coburn (R-OK)!

  19. EternalVigilance says:

    Sigh. Why is this even a question?

    The “Department of Justice” is as much about justice as the “Department of Defense” is about defense.

  20. EternalVigilance says:

    And enjoy this amusing Freudian typo about the DOJ from Harper’s and Scott Horton:

    It is also completely in line with recent Justice Department pubic integrity prosecutions

    Ha ha har dee har har

  21. onitgoes says:

    DOJ = Dept of Jerkoffs.

    Why I am on the hook to actually pay Eric Holder’s salary is yet one more egregious thing in my face by US “govt” which is of the corporations/Oligarchs, for the corp/Oligarchs & BUY the corp/Oligarchs.

    I’m with other commenters: frickin’ ABOLISH the DOJ. It’s filled to the brim with burrowed in “moles” from Cheney’s execrable Admin (yeah: Cheney’s Admin, ya read that right; not a typo). And Holder appears even more piss-weak & dunderheaded & clearly *bought off* than Gonzo, which almost beyond imagination. ICK. Do away with the DOJ. WASTE of time & money. Stupid, immoral, useless, unethical, lazy, pathetic … you name it.

  22. DWBartoo says:

    Another “interesting” aspect of this “revelation” is that federal judges cannot (apparently) allow themselves to notice or recognize “patterns” which this Senate investigation makes rather clear. Federal judges cannot ponder the obvious ability of their fellow upperclassers to “break” the law, with impunity, in numerous ways … or the implications arising therefrom. Federal judges must be as blind as justice herself, wrapping themselves in the dumbness of not seeing, not hearing, and making no mention of the thing the three little monkeys are steadfastly to avoid recognizing or speaking to or about.

    The Wisdom of the law says that the judges must not prejudice themselves, since some of this “behavior” might appear before their court some dark and dismal day … or not.

    In either case, the less judges are aware, the better it is (apparently) for blind lady justice and those who, unlike Bradley Manning, are, being of sufficent “importance” (and, by definition, sufficienlty “powerful” and “well-connected”), presumed and declared innocent until and unless proven guilty beyound the shadow of a single little doubt.

    Judges must make no distictions based upon “position”, “power”, or “wealth”, of course, giving no favor to those whom they hobnob socially with and to those with whom they are “invested”, and beholden (or be-Holdered) to.

    Why, judges cannot( apparently) even wonder why the DOJ or the FBI have shown NO (apparent) interest in investigating the affront of lying to another “branch” … let alone the implications to the rule of law and civil society which the “story” cannot help but stir among any who consider the law to be anything but the fundamental protector of wealth, power, and privilege.

    One imagines that there must be a few judges who have sufficient appreciation of history to feel some disquiet at hearing the many tales which they must most studiously avoid.

    (Do federal judges daiy practice those famous lines of Sgt. Shultz: “I see nothing, I know nothing …”? One wonders who plays Col. Klink in this unfolding saga of the Days of Our Lives? Perhaps all the MOTU take turns or have a designated hitter who doesn’t need to get “pumped” to bat a thousand?).

    Doubtless, I am completely mistaken, harboring such wee, silly vexations as these?


  23. VJBinCT says:

    in order to gain a conviction one must prove a conscious intent to deceive

    In other words, a signed, notarized statement of intent to defraud. With thumbprint, DNA sample, and signatures of two additional witnesses who must be registered Republicans. Lesser evidence will be disregarded.

    Unless the accused is a Democrat, of course.

  24. TimWhite says:

    I don’t think being bought was a conscious decision by the POTUS. I think he simply has no clue about money and banking. And since the MSM have effectively created the conventional wisdom that credits The Banksters with being too smart and too complex to understand, successive Presidents have felt it’s “best” to delegate money and banking to the ones who “know best.” Herego, we get Rubin and Paulson.

    When Obomba ran, I agreed with him that “judgment matters.” Silly me for associating that statement with the assumption that he had some.

    • earlofhuntingdon says:

      Don’t kid yourself. Mr. Obama grew up poor, went to school on scholarships, worked in poor neighborhoods in Chicago between Columbia and Harvard. He knows about money as personal finance. He was a top graduate at Harvard Law School, editor-in-chief of its prestigious law review and a Wall Street intern. He knows enough about deals and corporate finance to know that reining in that business would generate political conflict of a high order. He will protect it, not challenge it. It’s what he does, electoral hoopla – lies – notwithstanding.

  25. kspopulist says:

    Why Can’t They? We can’t hire enough lawyers and judges and investigators to find out what happens and we can’t pay them enough to counter the natural impulse of corruption in investigating and ajudicating big money powers.
    We here know the drill. You have to be basically complicit to get in and investigate ‘undercover’ to begin with and then the banksters get a whiff and let investigators know they can make real money when they end their stint as public servant. Nobody inside wants the system brought to justice until they can cash in after the revolving door. Wouldn’t want the stigma of being called a ‘whistleblower’ right? If you set out to keep people from making obscene amounts, you make enemies quick.
    Very few make the transition from business to government anyway – unlike Kathleen Sibelius HHS Sec. It’s always the other way around. First government if you want, then business then retirement.

    What incentives do we have or can be put in place to supplant or subvert the lure of fantastic wealth? Expecting them to follow the rules for the sake of ‘what’s right’ isn’t enough. Remember how Greenspan was so ‘surprised’ after the derivative market fell in on itself? OMG he was wrong and he admitted it!n But only after he knew he wouldn’t be blamed, by the law.

    • earlofhuntingdon says:

      It’s not about the money. You could find a 100 top notch lawyers willing to do it for free, along with 500 top law school grads who would assist as unpaid interns. It’s about power, not the law, not money, not sex. Barack Obama and his court wouldn’t dream of upsetting anyone’s apple cart by attempting it. Whistleblowers? As was said of Valerie Plame, fair game.

  26. earlofhuntingdon says:

    The NYT also cites several legal experts attributing DOJ’s impotence to embarrassment over the Ted Stevens trial (without, at the same time, wondering why William Welch is still at DOJ acting just as recklessly, only this time against whistleblowers and other leakers).

    Only the Times would swallow that story or have the balls to sell it as if it were reporting instead of a government press release. I wonder how David Halberstam would compare today’s New York Times to the one he worked for.

    How hard would a reporter have to, um, report, in order to determine that the DoJ chose to give Welch, with his charred and feathered success rate, such a high-profile case. A seasoned reporter, even a fictional centrist Cokie Roberts, would ask, because it’s out there, why do that if not to bury or corrupt an investigation rather than to empower one.

    Mr. Obama and his courtier, Eric Holder, truly outdo Chinese acrobats. They conjure up an image of a Department of Justice that enforces the law, letting prosecutorial decisions follow the facts and letting the chips fall where they may. When the cameras are off, they contort it into as small and as closed a box as possible. They can’t just close it down, because then they wouldn’t be able to threaten whistleblowers with the majesty of the law for not getting “with the program”. In another world, those would be high crimes and misdemeanors.

  27. earlofhuntingdon says:

    Mr. Obama doesn’t disagree with the CheneyBush view of the law as a shield for the predator and as a stick with which to beat the law abiding. He just thinks they went about it too haphazardly.

  28. bobschacht says:

    These two Senate committees did an excellent job mapping out the crimes of the powerful. But unless we see action from DOJ, the committees will also have, by comparison, mapped out the stark truth that DOJ refuses to apply the same laws we peons abide by to those powerful people.

    More like this, please!

    Bob in AZ

  29. JohnLopresti says:

    Regarding the [email protected] topic, there has been some movement at places like DoJ antitrust div, SEC enforcement div; and commodity futures trading commission (CFTC) under the current administration.

    re: **Latin American and E European lit prepared me for this era in American history** ([email protected]); q.e.d.

    I think congress needs to re-look at the sunsetting of the independent counsel statute, and the creation of some new analog. DoJ*s office of professional responsibility*s recent performance begs for some supplemental reinforcement so the politics of the parsed is displaced by processes that actually will strengthen the reliability of places like office of legal counsel (OLC); there is a tradition for it, but Bushco Republican less government offset by more executive privilege doctrines sidelined sagacious advice in favor of prarie justice, be it TX plains, Argentine pampas, or central european savannah.