Holder wonders why Justice doesn't get more credit on financial crime, and why affirmative action is in question
U.S. Attorney General Eric Holder is bothered by the perception that the Justice Department hasn't been vigorous enough in prosecuting financial crime.
At an event at Columbia University yesterday moderated by university president Lee Bollinger, Holder said, "For some reason, I’m not sure exactly why, all the great work that has been done has not somehow seeped into the American consciousness."
During the speech, Holder listed a number of steps taken by the Obama administration to go after financial criminals, including recent work by the Financial Fraud Enforcement Task Force, the11-year sentence on insider-trading charges for Galleon Group founder Raj Rajaratnam, and a $25 billion settlement from mortgage companies for foreclosure abuse. Holder mentioned 11 civil subpoenas to financial institutions and promised more.
“Although I can’t go into detail about ongoing investigations, I can tell you, we expect more to follow,” he said.
Holder said there was a need to reaffirm and renew faith in the American promise as job losses and household savings dwindled, economic difficulties he said could be traced in part to "reckless misconduct” on Wall Street.
“These abuses have driven away many who were once willing to invest in our economy and destroyed once thriving economies,” he said.
Holder's comments squared with President Obama's message in the past two months, beginning with a speech in Kansas then during the State of the Union, on leveling the economic playing field, preserving the middle class and going after financial criminals.
Early on into his prepared remarks at Columbia, Holder recognized a number of local U.S. attorneys who sat in the front, but Preet Bharara of the Southern District of New York got special attention.
“Many of you know Preet from what you saw in Time magazine just recently,” Holder said, holding up an issue with Bharara's face on the cover.
“He will be signing copies of this in the back,” he said, joking.
Holder said some of the finance industry's practices were “morally reprehensible" but still legal.
“Believe me, I understand and I often hear about the public desire to, as one pundit put it, see the handcuffs come to Wall Street," he said. "So let me assure you, whenever and wherever we uncover evidence of criminal wrongdoing, we will not hesitate to bring prosecutions.”
Holder also defended the Justice Department when Bollinger brought up recent criticism about the lack of high-level prosecutions and convictions compared to those during the 1980s Savings and Loan Scandal. Holder said there were in fact thousands of financial, heath care and consumer-fraud cases across the country.
“Not every case is worthy of front-page covers above the fold in the New York Times," he said. "Nevertheless real people are hurt by these schemes."
Bollinger asked holder about the precedent set by the Supreme Court’s decision this week to review race as a deciding factor in admissions. As president of the University of Michigan in 2003, the court sided with Bollinger in a case that upheld affirmative action.
Holder told him he saw an article where Bollinger called the decision “ominous,” but little has changed since the practice was affirmed. Holder said at the time, he was struck by Justice Sandra Day O’Connor’s remarks saying she hoped the practice would no longer be needed in coming years.
But Holder said it was too soon to think about ending affirmative action, and that in a historical context that includes slavery and the pre-civil-rights era, affirmative action has been around for a relatively short time.
“Not only when does it end, but when does it begin?” Holder said.
He said as an African-American at Columbia he remembered being a valued and diverse contributor amongst his white colleagues.
Holder and President Obama graduated from schools at Columbia. After the politics, Bollinger asked the attorney general about his memories of attending the school 35 years ago.
Among them, Holder said, was not taking a final exam until his junior year.
“We were always on strike,” he said, of the campus occupations of the early 1970s, quickly adding, to laughter from the audience,“I’m not suggesting that."