Maybe President Obama has something else he'd rather be doing come January 2013?

Let's see if I got this right: They may have done lots of stuff that was immoral but apparently nothing illegal, because of loopholes that we fixed with Dodd-Frank (yeah, right!), and we know they didn't commit crimes 'cause, um . . . well, no, we didn't investigate exactly, but . . . ooh, got it! If they did, Attorney General Holder would have stuck it to them, or maybe still will stick it to them, but that's his job, nothing to do with the president.

by Ken

Obama on Bank Prosecutions: They Did Nothing Illegal, Only Found Loopholes That We Worked to Close

By: David Dayen Thursday October 6, 2011 8:55 am

For perhaps the first time, President Barack Obama was forced to explain why there have been no prosecutions of Wall Street executives for their fraudulent actions during the run-up to the financial crisis. Asked by Jake Tapper to explain this behavior, Obama basically suggested that most of the actions on Wall Street weren’t illegal but just immoral, and that his Administration worked to re-regulate the financial sector with the Dodd-Frank reform legislation.

“Banks are in the business of making money, and they find loopholes,” the President said. Apparently forging and fabricating documents to prove ownership of homes that are subsequently stolen from borrowers is now a loophole.

Many of the practices on Wall Street “weren’t necessarily against the law but they had a huge destructive impact,” said the President. The work of Bill Black, the Financial Crisis Inquiry Commission, the Senate Permanent Subcommittee on Investigations, and a host of other official studies, analyses, and even court cases cut against that. Just the other day, a new whistleblower lawsuit against banks for setting illegal fees against military personnel wasn’t joined by the Justice Department.

In a follow-up, the President said that “if somebody they violated laws on the books, they need to be prosecuted, and that’s the Attorney General’s job.” Of course, investigations have to actually be carried out, and the President’s Justice Department has been at the lead of a foreclosure fraud settlement which would bail out banks that would otherwise owe in the trillions for fraudulent practices with the origination and securitization of loans, for a pittance of a sum. Only the work of a few Justice Democrats have put a stop to this. . . .

It's because this is so transparently silly that I'm left wondering if the president really doesn't want to stay on the job past January 2013, if maybe he has something else he'd rather be doing. For example, maybe the demands of the job have proved so onerous that he's really looking to be able to spend more time with his family.

Fortunately, the indefatigable D-Day, who's been all over this story, has the stamina to respond seriously to this latest nonsense from the White House. Predictably, the similarly indefatigable Marcy Wheeler is also on the case, in "Why Is Thomas Perrelli Negotiating a Settlement If the Banksters Didn’t Commit Fraudulent Actions?":

[President Obama's] comments are funny for a number of reasons. Apparently, the President can’t go around saying “prosecute somebody,” but he can go around saying, “assassinate somebody.”

More curiously, though, he insists that if someone has engaged in “fraudulent actions, they need to be prosecuted.”

FHFA [the Federal Housing Finance Agency] has sued 18 banks, a number of them for fraud, most of them in federal court. As part of those suits, it has sued a number of named individuals. DOJ, however, seems to have no interest in all those entities accused of fraud.

More troubling still, mortgage servicers have, in sworn depositions, admitted to fraud of a variety of types.

And yet Associate Attorney General Thomas Perrelli is busy trying to craft a settlement -– not a prosecution –- with those who engaged in this fraud. (And in the wake of CA’s withdrawal from the settlement talks, the banks are crowing that DOJ is still going to sign such a deal.)

The Administration needs to be asked not just why no big banksters have been prosecuted, but also why in the face of massive fraudulent actions, DOJ is choosing to settle, rather than prosecute.

Meanwhile a colleague raises what seems to me an exceedingly interesting question about the (im)probability of no-law-breaking in the economic meltdown and mortgage-industry scandals: How does it come about that 1100-plus bankers were subjected to criminal prosecution in the '80s S&L scandal and next to none in this much larger scandal? He also raises the question of civil liability. Oh, I forgot these are questions for the AG, not the president.

D-Day's final point in the above-cited morning post is worth noting:

Obama also added this, approximately: “I expended a lot of political capital to keep the banks afloat, and I have the scars to prove it. And I still think it was the right thing to do, because otherwise our economy would have been worse off.” This is the President taking ownership of TARP, which did not pass under his Presidency but which he whipped as a candidate for President in 2008. He took ownership of the extraordinary financial support given to banks as they teetered on the verge of collapse. And this is a central grievance of the protesters on Wall Street and across the country. [Emphasis in the original.]

It's looking to me more and more like the president's family will be getting to spend a lot more time with him, whether they want to or not.

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