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Why Holder Didn't Loot Goldman Sachs
Howard Richman, 10/24/2013

It is hard to prove that Attorney General Holder's shakedown of JPMorgan for $13 billion was politically motivated. The timing suggests political motivation, in that JPMorgan CEO Jamie Dimon had spoken out against Obama's "anti-business" economic policies during the 2012 election campaign. But timing doesn't prove causation. 

The circumstances suggest political motivation, in that the charges mostly stem from shady practices at two failed financial institutions that JPMorgan bought to prevent a chain reaction of defaults, at the request of the Bush administration. But Holder's punishment of public-spirited take-overs, also, doesn't prove political motivation.

The size of the settlement, the largest ever extracted by the government from an American business, and the diversion of $4 billion into a political slush fund suggest political motivation. But, again, they do not prove it.

The strong evidence of political motivation comes from Holder's selective prosecutions. According to an August 10, 2012, press release by Michigan Democratic Senator Carl Levin, JPMorgan's fellow major bank Goldman Sachs was caught red-handed by his investigative committee in mortgage fraud. Here's a selection:

Our investigation of the origins of the financial crisis revealed wrongdoing and failures among mortgage lenders, banking regulators, credit rating agencies and investment banks. One of those investment banks, Goldman Sachs, created complex securities that included “junk” from its own inventory that it wanted to get rid of. It misled investors by claiming its interests in those securities were “aligned” with theirs while at the same time it was betting heavily against those same securities, and therefore against its own clients, to its own substantial profit. Its actions did immense harm to its clients, and helped create the financial crisis that nearly plunged us into a second Great Depression.

And yet, the day before Levin's press release, Holder gave Goldman Sachs a free pass. International Business Times reported:

The Justice Department will not prosecute Goldman Sachs or its employees in a financial fraud probe, officials announce Thursday.

In a written, unsigned statement, the department said it conducted an exhaustive investigation of allegations brought to light by a Senate panel investigating the 2008-2009 financial crisis, the Associated Press reported.

"The department and investigative agencies ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time," the department said.

Why was Goldman Sachs exempted from prosecution? Talk show host Michelle Malkin gave some possible reasons in an April 2010 commentary:

  • "Democrats are silent on the $994,795 in Goldman Sachs campaign cash that Obama bagged."
  • "Goldman Sachs partner Gary Gensler is Obama’s Commodity Futures Trading Commission head."
  • "Goldman Sachs kept White House Chief of Staff Rahm Emanuel on a $3,000 monthly retainer while he worked as Clinton’s chief fundraiser"
  • "Former Goldman Sachs lobbyist Mark Patterson serves under Geithner as his top deputy and overseer of TARP bailout"
  • "While Goldman Sachs’ lawyers negotiated with the Securities and Exchange Commission over potentially explosive civil fraud charges, Goldman’s chief executive visited the White House at least four times."

In Ayn Rand's dystopia of Atlas Shrugged, Washington goes on a looting spree. Businesses have to buy influence in Washington if they want to avoid being looted. The looting is applauded by ignorant Americans, even as it sends their economy into a downward spiral. Was Rand predicting, back in 1957, just what we see playing out in Washington today?

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