For Immediate Release
GAP Scrutinizes Nominee for Deputy Attorney General
Inside Sources Prompt Questions about James Cole’s Record at AIG as Independent Monitor
WASHINGTON - The Government Accountability
Project (GAP), which has been critical of the nomination of James Cole
was rumored to be on the short-list for Deputy Attorney General, has
mock questions for members of the Senate Judiciary Committee to pose to
his confirmation hearing later today.
Cole was nominated by the
Obama administration last
month to be second-in command at the Department of Justice. For years,
served as the Independent Consultant (IC) stationed at insurance
as a result of two deferred prosecution agreements (DPAs) between the
corporation, the SEC, and the Department of Justice in 2004 and 2006.
were put in place as part of a settlement when AIG previously faced
"The administration is
trying to deflect
attention from Cole's poor record of oversight at AIG in the years
leading up to the financial crisis by claiming he was not asked to
troubled subsidiary," said Bea Edwards, GAP's International Program
Director. But in fact, it was Cole's own decision that exempted that
subsidiary from his scrutiny."
When rumors of Cole's
potential nomination began
to emerge in April, GAP began receiving frequent and disturbing calls
alumni and current staff about serious problems with Cole's actions
during his tenure. Since then, Edwards has been steadily posting
blog entries about Cole based on the disclosures we have received.
In advance of this
hearing, Edwards has produced a
primer on Cole's role at AIG, followed by five questions GAP believes
should be asked at the hearing.
The questions that GAP would like to pose to
Cole involve the following
topics (please click the first few words of each topic to go directly to
interaction with AIG-Financial Products (AIG-FP) CEO Joseph Cassano,
who was in a
position to oversee the AIG subsidiary that oversaw credit default
According to our sources, this corporation, which primarily
traded these swaps, was
exempted from compliance obligations and oversight at the
Cole and three AIG officials - General Counsel Anastasia Kelly, Chief
Compliance Officer Kathleen Chagnon, and subsequent-Chief
Officer Suzanne Folsom (of Paul
Wolfowitz-World Bank infamy) - regarding
credentials and hiring.
September 2008 purge (one month after the meltdown) of AIG senior
compliance attorneys, that was (according to sources) executed under the
authority of Kelly
independence of Cole's reports to the Department of Justice, and the SEC, as
specified by the DPA.
involvement (or lack thereof) of oversight of AIG-FP, and his
to not subject AIG-FP to a higher level of scrutiny and oversight, despite
subsidiary's serious problems in the past (related to fraud).
That subsidiary, in charge of the CDSs, became heavily involved in
future 2008 problems.
"Cole was the Justice
Department's and the
SEC's eyes and ears at AIG as the corporation assumed unmanageable risk.
If, as the administration claims, he actually was completely unaware of
was happening at AIG-FP, that alone should raise serious questions about
suitability for the post of Deputy Attorney General," said Edwards.
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The Government Accountability Project (GAP) is a 30-year-old nonprofit public interest group that promotes government and corporate accountability by advancing occupational free speech, defending whistleblowers, and empowering citizen activists. We pursue this mission through our Nuclear Safety, International Reform, Corporate Accountability, Food & Drug Safety, and Federal Employee/National Security programs. GAP is the nation's leading whistleblower protection organization.