Senators Bash DOJ for “Evasive” Response on “Too Big To Jail”


March 5, 2013
Watch The Untouchables, FRONTLINE’s look at why no Wall Street executives have been prosecuted for fraud in connection with the financial crisis.

Two U.S. senators have criticized the Department of Justice for offering an “aggressively evasive” response to their questions in an ongoing war of words over why major banks have avoided prosecution for their role in the financial crisis.

In a Jan. 29 letter, Senators Sherrod Brown (D-Ohio) and Chuck Grassley (R-Iowa) asked Attorney General Eric Holder a series of questions about the implications of crisis-related bank settlements that both lawmakers called “disproportionately low.” The settlements raised concerns, they wrote “that ‘too big to fail’ Wall Street banks enjoy a favored status, in statute and in enforcement policy.”

The letter cited statements made by Lanny Breuer, who led bank enforcement during his tenure as assistant attorney general, in an interview with correspondent Martin Smith for the FRONTLINE film The UntouchablesIn the interview (which you can read here), Breuer explained factors that contribute to the decision to bring an enforcement action:

In any given case, I think I and prosecutors around the country, being responsible, should speak to regulators, should speak to experts, because if I bring a case against institution A, and as a result of bringing that case, there’s some huge economic effect — if it creates a ripple effect so that suddenly, counterparties and other financial institutions or other companies that had nothing to do with this are affected badly — it’s a factor we need to know and understand.

Such considerations, Breuer said in a 2012 speech to the New York City Bar Association, “literally keep me up at night.”

The senators said Breuer’s statements raised “important questions about the Justice Department’s prosecutorial philosophy.” Brown and Grassley asked the DOJ to clarify, specifically requesting information on any cases in which considerations about financial markets prevented prosecutions or lessened settlements. They also asked for a list of outside experts consulted in making prosecutorial decisions, and what those experts were paid.

In a response dated Feb. 27, Principal Deputy Assistant Attorney General Judith Appelbaum defended the department’s record, writing that “No corporate entity, no matter how large, is immune from prosecution.”

The DOJ can win certain concessions through settlements that it otherwise could not achieve through a trial, Appelbaum said, such as the requirement that a company cooperate with any ongoing criminal investigation by the department.

She also wrote that in deciding whether to take a case to trial, it is critical for prosecutors to determine any “collateral consequences” that an enforcement action may mean for “investors, pension holders, customers, employees, and others who were not personally culpable.” To that end, “it is entirely appropriate” for prosecutors to consult with experts at regulatory agencies or at firms that are the target of an investigation.

In a statement issued last week, Brown and Grassley said: “The Justice Department’s response is aggressively evasive.  It does not answer our questions.” They called Appelbaum’s letter “unsatisfactory,” noting that it failed to include a list of any outside experts consulted by the department.

“The Department’s only clear response was that it speaks to regulators and the banks themselves. So either regulators are urging the Department to take a soft approach, or the Department is easily swayed by misleading Wall Street arguments.”

The Justice Department “owes us a complete response,” they added.

A spokesman for the DOJ was not available for comment.

Jason M. Breslow

Jason M. Breslow, Former Digital Editor



In order to foster a civil and literate discussion that respects all participants, FRONTLINE has the following guidelines for commentary. By submitting comments here, you are consenting to these rules:

Readers' comments that include profanity, obscenity, personal attacks, harassment, or are defamatory, sexist, racist, violate a third party's right to privacy, or are otherwise inappropriate, will be removed. Entries that are unsigned or are "signed" by someone other than the actual author will be removed. We reserve the right to not post comments that are more than 400 words. We will take steps to block users who repeatedly violate our commenting rules, terms of use, or privacy policies. You are fully responsible for your comments.

blog comments powered by Disqus

More Stories

New Data on Utah Police Shootings and Race Called ‘Extremely Uncomfortable’, ‘Disappointing’
Racial and ethnic minorities account for a third of the people shot at by Utah police over the past decade — despite these groups making up just a quarter of the population.
September 20, 2021
Most Minneapolis Voters Believe Crime Is on the Rise, New Poll Finds
An overwhelming majority of likely Minneapolis voters say crime is on the rise, a view strongly held by residents of every race, gender and age group across the city, according to a new Minnesota poll, our Local Journalism Initiative partner the Star Tribune reports.
September 18, 2021
Minnesota Poll: Most Minneapolis Voters Want Reform, Not Fewer Cops
A clear majority of Minneapolis voters oppose reducing the size of the city’s police force — a feeling that’s especially strong among Black voters, according to a new poll. At the same time, voters are showing support for replacing the police department with a new agency, our Local Journalism Initiative partner the Star Tribune finds.
September 18, 2021
Get the Backstory on Duterte’s ‘War on Drugs’ as ICC Green Lights Investigation into Philippines Killings
With the International Criminal Court authorizing an official investigation into Philippine President Rodrigo Duterte’s bloody “war on drugs," these two documentaries and one podcast episode offer context.
September 17, 2021