Friday, February 13, 2009

Some truly stimulating news from Washington

No, this is not a detailed analysis of the near-trillion dollar porkmobile that was rushed through Congress because new President Obama feels he must be seen as doing something.

I refer instead to an AP story by Devlin Barrett, reported on ABC News (though I first saw a version of this story in the February 11 issue of the Chicago Daily Law Bulletin), in which we learn, from Barrett's account of testimony given by Deputy FBI Director John Pistole to the Senate Judiciary Committee, that the FBI is pursing 530 active corporate fraud investigations -- 38 of them involving some of the "biggest names in corporate finance in cases directly related to the current economic crisis" -- and some 1,800 mortgage fraud investigations, more than double the number of such investigations a year ago.

In fact, according to Barrett's account of Pistole's testimony, there are so many mortgage fraud investigations that the Bureau "is not focusing on individual purchasers, but industry professionals generating fraud schemes." Pistole told the Senate that these might total hundreds of millions of dollars. For my money, you can remove the "might." Lawyers, brokers and real estate professionals are being investigated for "systematically trying to defraud the system," Pistole said.


Fellas, they succeeded. And this is how we arrived at the pretty pass where we are today. (In a February 12 report by Les Christie, for, posted on Yahoo! Real Estate, we learn that American housing prices have fallen "12.4% during the fourth quarter of 2008, the largest year-over-year decline since the National Association of Realtors began keeping comprehensive records in 1979.")

While the politicians were trying to stimulate job creation, one might have hoped they'd create a whole bunch of new investigative positions at the FBI and a bunch of new Assistant U.S. Attorneys to prosecute these crimes. That, of course, would have been useful -- so I assume (without knowing for certain) -- that it didn't happen.

We'll just have to muddle through with the people we have.

But -- you want to restore confidence in the financial markets? In the banks? In the currency? Put the crooks in jail! Knowing that the FBI is apparently really and truly trying to do just that stimulates me, at least.

On a related note, here's a cartoon from Jeff Danzinger, posted on Yahoo! News that I found to be right (you should pardon the expression) on the money (click to enlarge):


Empress Bee (of the high sea) said...

and i still can't get over a tax cheat heading up the irs! i may never get over that one! they have no morals or standards at all! and now i heard they snuck in the socialized medical krap into the trillion dollar porkapalooza. seriously anyone signing that bad boy is commiting fraud because they can't have even read the thing! oh my blood is boiling!

sigh, bee

Linda said...

I don't know, the "change" in Washington is starting to look a lot like "business as usual" to me.

You're quite right in that it would definitely stimulate at least our faith in the system if the government were to go after and prosecute these people who seem to think they are above the law simply because they've been getting away with breaking the law for so long.

Even if I could do a cartwheel (which I seriously can't), there's been nothing coming out Washington to inspire one and I doubt there will be anytime soon. This mess is going to take a long time to fix, especially when it just keeps getting worse and worse.

Jeni said...

Loved the cartoon! If the FBI is indeed investigating these jackasses, it will be interesting to see if they ever get charged, tried and convicted too then. I'd love to see a whole bunch of those fools sent off to the "big house."

Jean-Luc Picard said...

Four bankers over here are being questioned as well.

Anonymous said...

The new FBI initiative is another tool in the arsenal prescribed for taking the taxpayer’s eye off the ball.