Sens. Brown, Grassley Press Justice Department On “Too Big To Jail”


Sens. Brown, Grassley Press Justice Department On “Too Big To Jail”

Senators Question Whether “Too Big to Fail” Status of Some Wall Street Megabanks Undermines Government’s Ability to Prosecute Large Financial Institutions, Impose Appropriate Penalties

WASHINGTON, D.C. – U.S. Sens. Sherrod Brown (D-OH) and Chuck Grassley (R-IA) sent a letter today to U.S. Attorney General Eric Holder questioning whether the “too big to fail” status of certain Wall Street megabanks undermines the ability of the federal government to prosecute wrongdoing and impose appropriate penalties.  They also requested that the Justice Department disclose the identities of parties with whom prosecutors consult about the appropriate level of penalties for financial institutions.

“Wall Street megabanks aren’t just too big to fail, they’re increasingly too big to jail,” Brown said. “Already, the nation’s six largest megabanks enjoy what amounts to taxpayer-funded guarantee by virtue of their size, making it harder for regional and community banks to compete. Now, these megabanks may also enjoy some impunity when they violate the law by laundering money or illegally foreclosing on homeowners.  Wall Street should pay the full price of its wrongdoing, not pass the costs along to taxpayers.”

“The best deterrent to crime is to put people in prison,” Grassley said.  “That includes those at powerful banks and corporations.  Unfortunately, we’ve seen little willingness to charge these individuals criminally.  The public deserves an explanation of how the Justice Department arrives at these decisions.”

Brown, who chairs the Senate Banking Subcommittee on Financial Institutions and Consumer Protection, is the author the Safe, Accountable, Fair & Efficient (SAFE) Banking Act, legislation that would prevent any one financial institution from becoming so large and overleveraged that its collapse could put our economy on the brink of collapse or trigger the need for a federal bailout. He also passed legislation with Sen. David Vitter (R-LA) to requiring the Government Accountability Office to study how banks with assets of $500 billion or more benefit from the belief that the government would not let them fail in a crisis.

As Ranking Member of the Judiciary Committee, Grassley has been critical of the Justice Department’s decisions against holding people criminally accountable in financial cases.  He called the Justice Department’s decision to forego any criminal prosecution of HSBC officials involved in that money laundering scandal inexcusable.  And he has questioned the Justice Department about the number of mortgage fraud cases brought forward, revealing a failure to bring significant criminal cases against any of the major banks or financial institutions that have faced civil actions for various frauds. Grassley is the author of the Fraud Enforcement Recovery Act, signed into law in 2009, that was designed to ramp up the government’s response to the crisis and ensure that prosecutors and investigators had the tools needed to combat fraud.

The full text of the letter from Brown and Grassley to Holder can be found below.

January 29, 2013

The Honorable Eric H. Holder, Jr.
United States Attorney General
U.S. Department of Justice
950 Pennsylvania Avenue, N.W.
Washington, D.C. 20530


Dear Attorney General Holder:

The large number of private and government lawsuits since the global financial crisis continues to undermine public confidence in our financial markets.  This confidence can only be restored by demonstrating that there are consistent rules in place that provide accountability for wrongdoing and deter financial predators.

Unfortunately, many of the settlements between large financial institutions and the federal government involve penalties that are disproportionately low, both in relation to the profits which resulted from those wrongful actions as well as in relation to the costs imposed upon consumers, investors, and the market. 

The nature of these settlements has fostered concerns that “too big to fail” Wall Street banks enjoy a favored status, in statute and in enforcement policy.  This perception undermines the public’s confidence in our institutions and in the principal that the law is applied equally in all cases. 

On settling with Swiss Bank UBS for Libor manipulation, for example, you said, “[t]he impact on the stability of the financial markets around the world is something we take into consideration.  We reach out to experts outside of the Justice Department to talk about what are the consequences of actions that we might take, what would be the impact of those actions if we want to make particular prosecutive decisions or determinations with regard to a particular institution.”

In an interview with Frontline, outgoing Assistant Attorney General Lanny Breuer defended the Department of Justice’s inability to prosecute large financial institutions by saying, “but in any given case, 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, and as a result of bringing that case, there’s some huge economic effect — 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.”

These statements raise important questions about the Justice Department’s prosecutorial philosophy.  In order to explore the Justice Department’s treatment of potential criminal activity by large financial institutions, please answer the following questions and provide the following information:


             1. Has the Justice Department designated certain institutions whose failure could jeopardize the stability of the financial markets and are thus, “too big to jail”?  If so, please name them.

             2. Has the Justice Department ever failed to bring a prosecution against an institution due to concern that their failure could jeopardize financial markets?

             3. Are there any entities the Justice Department has entered into settlements with, in which the amount of the settlement reflected a concern that markets could be impacted by such a settlement?  If so, for which entities?

             4. Please provide the names of all outside experts consulted by the Justice Department in making prosecutorial decisions regarding financial institutions with over $1 billion in assets.

             5. Please provide any compensation contracts for these individuals.

             6. How did DOJ ensure that these experts provided unconflicted and unbiased advice to DOJ?


Our markets will only function efficiently if participants believe that all laws will be enforced consistently, and that violators will be punished to the fullest extent of the law.  There should not be one set of rules that apply to Wall Street and another set for the rest of us. 

Thank you for your cooperation and attention in this matter.  We would appreciate a response by February 8, 2013.  If you have any questions, please do not hesitate to contact Graham Steele for Senator Brown at (202) 224-2315 or Chris Lucas for Ranking Member Grassley at (202) 224-5225.




            Sherrod Brown                                                  Charles E. Grassley

            Chairman                                                        Ranking Member

            Banking Committee,                                          Judiciary Committee

            Subcommittee on Financial Institutions

            and Consumer Protection




4 Responses to “Sens. Brown, Grassley Press Justice Department On “Too Big To Jail””
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  2. Herman Vergara says:

    HSBC Bank. This is an outrage:

  3. Robert Tatge says:

    Highly concern when I was turned down twice on a refiniance, by Country-wide. All at once Fifth Thrid Bank, did the refinance. I believe Country-wide look at all the “QUIETIONABLE LOANS” and rush to remove them from thier books anyway they could, using known brokers that could get this job done!, before the transfer to BANK OF AMERICA. I believe they blind-sided them also…. You see Fifth Third Bank started right away with apprasisal imbeciling, loan application, and my credit report approving. Then after approval Fifth Third Bank, start with Forced Placed insurance at $500 per month more on the payment, I had automatically take from my checking acct., this caused me to cash in my 401k plans just to cover, later to find out, I had insurance and Fifth Third Bank paid for it out of my escrow…Then Foreclosure with all attempts to refiniance with them were refused.
    They were the predator that worked with Country-wide in all these dealings, and ended up unharmed! I want my home back, free and clear with compensation, A.S.A.P.
    without predice,
    Robert Tatge

  4. Yode says:

    Holder is the lynchpin for taking down the Banksters. It is he who has betrayed the Public Trust and allowed the acts of fraud by his Bankster buddies to go unpunished. BTW… One would have to be a fool not to realize that this is all done with a nod from Obummer and others within his administration. After all , it would seem that Obummer does not hesitate to issue a bogus EO anythime he can further erode the Peoples Constitutionally protected rights now does it. How many of these EO’s have been issued to hold the CEO’s of these thieving banks accountable? Hmmmmmm……. No, the crimes of the Banksters and the failure of government to do anything meaningful with respect to insisting upon any serious consequences for those responsible for the blatant plundering of our Country by these Banksters has in large part been facilitated by the lack of anyone being held accountable. Think about it. In a foreclosure case, has anyone ever seen a Bank or their alleged counsel provide ANY contract or agreement whereby that alleged counsel (liar) has been provided the authority to represent said bank in the foreclosure? NO?…. Could it possibly be that if this were ever done, it would provide prima facie evidence of fraud on the part of the bank? I mean, we all know that the bank is not actually a party of interest in a foreclosure other than trying to extract fiat currency (which is nothing more than a controlled measure and mode of exchange of our labor) based upon a fraudulent debt…Right?…. The bank never gave anything for the right to hold your note and mortgage did they? No, they were an exchange agent at best who deposited your note in an account which was then monetized and that credit passed on to the person you “purchased” your home from. So, their (The Bank’s) admission that they are in fact the party coming after your home based on a non-existent debt would be an admission of fraud on their part. Much is the same where those in government do not like to take responsibility for the traitorous actions by the government. I see this letter to Holder as a move in the right direction. However, I do not see him as willing to openly take “ownership” for those actions which clearly violate the Public Trust in favor of the Banksters which pad the personal piggy banks of so many of those in government. This admission and taking “ownership” of a government policy that refuses to prosecute proven and even admitted criminal acts against the Public by HSBC (a foreign enemy) as well as others guilty of the same would after all come treacherously close to crossing over that line and into the realm of that dreaded “T” word that so many on the hill are beginning to fear…….. Make no mistake here people…. Those in government that are complicit in these HIGH CRIMES against the People…. HIGH CRIMES against the Public Trust where there has been aid and comfort given to these banksters can and well should in many cases lead to those found guilty of such, being made to suffer the ultimate penalty. You must also understand that if/when these criminal infiltrators within government lose control of their ability to dispense and ration “justice” as they see fit…. their very lives become at risk. Now, what do you think the limitations of the actions of criminal conspirators within government would be if their lives were on the line? Would you expect to see them attempting to disarm the Public? Would you expect them to possibly create some major catastrophic event to shift the focus away from their HIGH CRIMES? If you had the power over the military and covert government organizations …. what would you be willing do to preserve your life? It should be very interesting to see how Holder dances around this one……..

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