In a recent presentation at NYU’s law school, the former Attorney General Eric Holder, said the Department of Justice needs help from whistleblowers if they are to bring financial malfeasance to justice. As Holder stated, ” their evidence is crucial to the work of investigators.” Yet some of us question the motives and believe it’s not about encouraging whistleblowing but once again just blowing smoke.
Holder’s call comes too little too late and is a blatant attempt to shore up his much criticized attempts to pursue criminal charges against the financial executives responsible for the 2008 meltdown. While Holder said the D.O.J. is committed to prosecuting errant bank and mortgage officials, he claimed it is a difficult task and the D.O.J. needs the help of whistleblowers to make charges stick . He stated he would “stand vigilant against financial fraud, wherever it is uncovered.” And who knows, perhaps his successor will.
Holder claimed,” that in the last six years, he and his colleagues had been singularly aggressive in pursuing cases and bringing charges where evidence warrants it.” Yet the actual facts do not support his claim. Holder’s statements sound as if the D.O.J intends to be more forceful, yet Bea Edwards, Executive and International Director of the Government Accountability Project, the nation’s leading whistleblower protection organization, and my attorney as well, advises one to ” look closer. There’s a loophole. The D.O.J. brings criminal charges where there is enough evidence. If there isn’t enough evidence per se, then there are no charges”.
So those responsible for the 2008 financial debacle , who took down their businesses, their investors, employees and let’s not forget the tax payers, they, the bankers walk — because enough evidence has not been collected?! Accidental? An oversight? No real evidence? Ms. Edwards cites Eileen Fisher, of Countrywide whistleblowing ” fame” and me — in her recent article regarding Holder’s call for whistleblowers as just two examples where evidence was presented — evidence that could have and should have led to charges. (See Related Articles below.)
Instead, the supposed lack of evidence caused the D.O.J. to prefer civil lawsuits to criminal prosecutions. And so the US Treasury bails out the banks responsible to the tune of $45 billion. The banks involved pay fines — substantial but not a real deterrent to fraud and the fines themselves are paid by the bank’s shareholders — not the management teams responsible! And let’s not forget the taxpayer.
They want whistleblowers? Really? Raise the rewards to encourage their voice when they see situations that lead to fraud? Regardless of what Holder stated, to date the evidence shows that it’s the whistleblowers themselves who are the most persecuted. Eileen Fisher was fired. So was I. Our evidence was thrown out and hidden away — until it was too late to act upon!
Mr. Holder’s appeal to whistleblowers to stamp out injustice sounded good — on the surface. But don’t think, given the history and experience of whistleblowers to date, that this call to action will encourage anyone willing to take the risk. It’s time the Department of Justice started holding those responsible for financial malfeasance’ feet to the fire and stopped paying lip service to the financial debacle.
The evidence is there D.O.J. Use it.
Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.
