M E M O R A N D U M
To: Reporters and Editors
Re: Justice Department on “too big to jail”
Da: Friday, March 1, 2013
Sen. Sherrod Brown of Ohio and Sen. Chuck Grassley of Iowa received a response from the Justice Department to their “too big to jail” letter of Jan. 29. The senators consider the response unsatisfactory. They made the following comment:
“The Justice Department’s response is aggressively evasive. It does not answer our questions. We want to know how and why the Justice Department has determined that certain financial institutions are ‘too big to jail’ and that prosecuting those institutions would damage the financial system. Outgoing Assistant Attorney General Lanny Breuer said ‘… I and prosecutors around the country, being responsible, should speak to regulators, should speak to experts, because if I bring a case against institution A, 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.’ Among other things, we asked the Justice Department ‘for the names of outside experts consulted by the Justice Department in making prosecutorial decisions regarding financial institutions with over $1 billion in assets.’ We asked how the Justice Department ensured ‘that these experts provided unconflicted and unbiased advice.’ So far, the Justice Department has not provided any of this information. The Department’s only clear response was that it speaks to regulators and the banks themselves. So either regulators are urging the Department to take a soft approach, or the Department is easily swayed by misleading Wall Street arguments. We’ve conveyed our dissatisfaction, so the Justice Department is aware that it still owes us a complete response. The public deserves the facts about the Justice Department’s refusal to prosecute big banks and senior bank executives.”
A press release and the text of the senators’ Jan. 29 letter are available here.