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Tragedy or Farce? FBI Claims Sequester Will Harm Their Wall Street Investigations
'Track record may make it difficult for the Department of Justice to earn the sympathy of the public'
Following the failure of the U.S. Congress and President Obama to navigate away from an otherwise avoidable sequester, the FBI is up in arms over the subsequent spending cuts they say will hamper, among other things, its ability to pursue financial crimes.
However, while the FBI says the reductions in funding will stall its ability to 'aggressively' pursue the financial sector, critics have found such claims laughable considering the lackluster efforts made thus far by the agency.
In a letter to lawmakers, The Federal Bureau of Investigations complained that the sequestration "will cause current financial crimes investigations to slow as workload is spread among a reduced workforce. In some instances, such delays could affect the timely interviews of witnesses and collection of evidence."
In response to the letter, Ryan Grim notes at the Huffington Post:
More than four years after the financial crisis, not a single Wall Street executive has been jailed for playing a role in the creation of the toxic financial products that fueled the real-estate bubble, which were in some cases designed simply to fail. That track record may make it difficult for the Department of Justice to earn the sympathy of the public as it warns that spending cuts will hamper its ability to investigate Wall Street fraud.
Former Rep. Brad Miller (D-N.C.) told the Huffington Post:
Are they worried that because of sequestration the FBI will interview critical witnesses three years after the statute of limitations has expired instead of just one year? Financial fraud investigations were already under a 'do not resuscitate' order and unresponsive to deep stimulation. It's hard for me to worry that DOJ will now be less 'aggressive.'
The letter continues:
The capacity to undertake new major investigations will be constrained. Left unchecked, fraud and malfeasance in the financial, securities, and related industries could hurt the integrity of U.S. markets. In addition, the public will perceive the FBI as less capable of aggressively and actively investigating financial fraud and public corruption, which would undercut the deterrence that comes from strong enforcement.
Read the full letter here.
Sen. Elizabeth Warren (D-Mass.), for one, has gone to great lengths to exhibit that the FBI's argument is a moot point.
In a recent Banking, Housing and Urban Affairs Committee hearing, Warren grilled financial regulators, including the Securities and Exchange Commission, over the fact that not a single Wall Street actor has been brought to trial since the beginning of the crash. The same critique would go for the FBI.
If [banks] can break the law and drag in billions in profits and then turn around and settle paying out of those profits, they don’t have that much incentive to follow the law [...]
I am really concerned that too-big-to-fail has become too-big-for-trial. That just seems wrong to me.