In a testament to the power of independent media, the award-winning public television show Frontline this week helped push a top Department of Justice (DOJ) official out the door.
On Tuesday, Frontline aired a report called “The Untouchables” detailing the DOJ’s failure to prosecute the big banks for the 2008 financial meltdown and zeroing in on Lanny Breuer, the former White House legal counsel for Clinton who headed the DOJ’s criminal division under Obama.
On Wednesday, the Washington Post reported that Breuer was stepping down.
Breuer’s Legacy: Enshrining “Too Big to Jail” as Legal Precedent
Many had criticized Attorney General Eric Holder and Breuer for failing to take action against the mega banks on Wall Street, and watched with disbelief last December as the DOJ decided to pass on criminal penalties against HSBC for laundering drug money and helping to finance terrorists. The behemoth bank was ordered to pay a record civil fine, but no criminal charges were lodged against any HSBC official. A New York Times editorial called the decision a “dark day for the rule of law.”
But this time around, the Frontline crew had unparalleled access to Breuer which generated a number of key revelations:
Frontline documented that Breuer/Holder failed to use the tools available to them to really dig.
FRONTLINE: We spoke to a couple of sources from within the Criminal Division, and they reported that when it came to Wall Street, there were no investigations going on. There were no subpoenas, no document reviews, no wiretaps.
LANNY BREUER: Well, I don’t know who you spoke with because we have looked hard at the very types of matters that you’re talking about.
Frontline documented that Breuer/Holder failed to reach out to key whistle blowers.
FRONTLINE: Another criticism that has been thrown at you is that you’ve not done enough to go looking for the whistle-blowers that are out there. We have been able to contact a number of people who were inside the banks, doing due diligence work as contractors, who all told us that they were never contacted by the Justice Department.
BREUER: I can’t talk in general about nondescript, anonymous whistle-blowers. But here’s what I can tell you. Whenever I personally have been in any public setting, I’ve invited whistle-blowers to come forward.
Frontline documented that Breuer/Holder worried more about the fragility of the banks than cleaning up corruption on Wall Street.
FRONTLINE: You gave a speech before the New York Bar Association. You talked about your use of nonprosecution and deferred prosecution agreements. And in that speech, you made a reference to “losing sleep at night over worrying about what a lawsuit might result in at a large financial institution.” Is that really the job of a prosecutor, to worry about anything other than simply pursuing justice?
BREUER: 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, it affects the economy so that employees who had nothing to do with the wrongdoing of the company….. 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.
Just this week Propublica put out another blockbuster report about the corruption at Morgan Stanley before the financial meltdown, unveiling documents where employees dubbed the securities they were peddling: “Subprime Meltdown,” “Nuclear Holocaust,” “Shitbag.” This information was garnered not from the federal government prosecutions, but from a private lawsuit against the bank.
Before his appointment at the DOJ, Breuer had worked at the Washington office of Covington & Burling LLP alongside Holder. The firm specializes in helping big name corporations, including tobacco firms, evade taxes and get off the hook for crimes and malfeasance. Breuer is likely to return to that natural perch, unfortunately he will be leaving Holder behind to continue business as usual at the DOJ.