While most of the media have gone on to other things – such as Judd Gregg’s change of heart about taking a job as President Obama’s commerce secretary – a Los Angeles Times writer has provided an enlightening update on that $700 billion bailout package the Bush gang got Congress to approve before leaving town. According to Times writer Josh Meyer, the FBI has so many open cases involving suspected “illegal activity” in the mortgage mess that the agency can’t find the manpower to follow up effectively.
Meyer quotes “top FBI and Justice Department officials” as blaming mortgage fraud “and other types of corporate criminal behavior” for contributing to the current economic crisis. Meyer reports the law enforcement agencies have more than 2,300 open investigations into suspected “illegal activity” in the mortgage business and 38 cases directly linked to the housing market’s collapse.
“Those investigations are already straining the resources of the FBI and the Justice Department, FBI Deputy Director John Pistole and Acting Assistant Attorney General Rita Glavin said in testimony before the Senate Judiciary Committee,” Meyer wrote.
Reading Meyer’s article, I concluded there may be hanky-panky not only in the mortgage racket but also in the distribution of the bailout money. Here are a few excerpts from the article:
The problems will worsen exponentially as the economy plunges, and as the Obama administration and Congress spend more than $1 trillion in various bailout and stimulus packages in an effort to forestall foreclosures, corporate bankruptcies and a prolonged economic depression, (Pistole and Glavin) said. Pistole said he expected the number of major investigations to rise into the many hundreds, focusing on big-name companies that “everybody knows about,” and to be similar in scope and complexity to the massive probe of energy company Enron Corp. after its collapse in 2001…. The sheer volume of cases is so overwhelming, he said, that agents can focus only on those “systematically trying to defraud the system,” including lawyers, brokers and real estate professionals…. Neil Barofsky, the inspector general of the government’s financial rescue package, told the panel that making an example of some high-profile lawbreakers is the best use of the government’s limited resources.…
High-profile lawbreakers? Hmmm. I wonder who those could be? I’ve blogged off and on about this massive (and scarily secretive) bailout of the high rolling losers in the U.S. banking system. The deal reminds me too much of the Savings & Loan scandal back in the late Eighties. It turned out that organized crime was behind the looting of the S&Ls, apparently with complicity in high places. How high up will the trail lead this time? I have no doubt that people will go to jail, as they did last time. But will the masterminds behind the scheme get caught? Or will some lower-level operatives “take the rap” (again)?