The Justice Department and Attorney General Eric Holder are unwilling to staff and provide resources to the internal working group tasked with pursuing prosecutions on Wall Street, advocates say.
It is a “betrayal” of the American people and “lady justice herself” not to support the Residential Mortgage-Backed Securities Working Group, Tracy Van Slyke of New Bottom Line, a national campaign established to “challenge big bank interests,” told reporters on a conference call today.
Participants in a news conference hosted by the Campaign for a Fair Settlement expressed frustration with what they see as the Justice Department’s unwillingness or inability to staff the Mortgage Fraud Task Force established by President Barack Obama earlier this year. The group is charged with investigating the mortgage abuses that lead to the 2008 financial crisis.
“It’s just become crystal clear there are not enough people working on the investigation,” the campaign’s Brian Kettenring said. “Either the Department of Justice is obstructing justice or they’re incompetent.”
The unit is focused on Wall Street firms, big banks and other entites that many people think should be held accountable for the collapse of the housing market. The task force aimed to launch investigations into the creation of mortgage-backed securities that typically lead to charges of tax evasion and securities or insurance fraud. New York Attorney General Eric Schneiderman is one of the group’s five co-chairs.
Schneiderman told the Wall Street Journal in May the group “wants things to go faster.” In April the group was reportedly still looking for office space. Some critics are pinning Holder with the blame, accusing him of dragging his feet.
Kettenring said CFS is prepared to launch petitions urging Holder to give the task force more resources.
The Residential Mortgage-Backed Securities Working Group was formed in January. ”This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans,” Obama said in his January State of the Union Address.
Another participant in today’s press conference, Richard Eskow of Campaign for America’s Future, said the the Attorney General is “stonewalling.” Eskow said investigators close to the RMBS informed him the Justice Department has been delaying further investigation.
“There’s a stunning pile of evidence that documents what clearly seems to be criminal behavior in major wall street banks and yet there’s been nothing done about it,” Eskow said. ”You need to enforce the law and we haven’t seen convictions, investigations, prosecutions; the economy is endangered by reckless and illegal back behavior and to prevent that you need deterrence.”
The inactive RMBS may also raise political concerns in the midst of Obama’s reelection campaign. The Justice Department’s alleged stonewalling may hamper Obama’s efforts to woo voters and characterize Republican presidential candidate Mitt Romney as a financial engineer, Van Slyke said.
“Underwater home owners are now underwater voters,” Van Slyke said. “And with more than 15 million underwater voters, that’s a lot of voters.”
Eskow called the RMBS’s inactivity a ”ticking time bomb” and said Democrats on the Hill are getting “extremely frustrated.”
“The Justice Department [must] act and act quickly,” he said.