Attorney General Eric Holder wants to clear up something he said months ago: We only thought he said that some U.S. banks are too big to jail. What he meant was the exact opposite of that, he would like us to know.
Holder was testifying at a super-fun House Judiciary Committee hearing on Wednesday about the Justice Department's many ongoing nightmares, from spying on the Associated Press to the Internal Revenue Service hassling the Tea Party. During the hearing, Holder was asked about comments he made at a Senate hearing in March about big banks.
Back then, Holder said: "I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. And I think that is a function of the fact that some of these institutions have become too large."
To a layperson, that certainly sounds like Holder was publicly confirming what others in his Justice Department had already admitted, to The New York Times and to Frontline documentarians: Charging big banks with crimes might blow up the economy real good-like, so it dare not be done.
On Wednesday, Holder backtracked furiously:
Let me make something real clear right away. I made a statement I guess in a Senate hearing that I think has been misconstrued. I said it was difficult at times to bring cases against large financial institutions because [of] the potential consequences that they would have on the financial system. But let me make it very clear that there is no bank, there's no institution, there's no individual who cannot be investigated and prosecuted by the United States Department of Justice.
And in case that was not clear, Holder added: "Let me be very, very, very clear. Banks are not too big to jail. If we find a bank or a financial institution that has done something wrong, if we can prove it beyond a reasonable doubt, those cases will be brought."
All righty, then. But the record is also very, very, very clear that not a single bank has been charged with any crime arising from the financial crisis. And not a single big bank has been charged with any crime involving money-laundering, though some big banks have copped to letting drug dealers and terrorists move cash through their branches. And only one bank has been charged with a crime so far in the still-unfolding Libor scandal -- UBS's Japanese subsidiary last December pleaded guilty to one charge of fraud, the first such charges against a bank since 1989.
There is no doubt that the Justice Department can prosecute banks and bankers. In fact, Congress wrote laws giving it just that power. So far, however, there is no evidence that the agency will ever actually use that power.