With great fanfare, the President announced during his State of the Union the formation of the Residential Mortgage-Backed Securities Working Group. The mission: “To expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis.” It’s headed up by an all-star cast of law enforcement elites: Robert Khuzami, Shaun Donovan, Eric Schneiderman, John Walsh, Tony West, and Lanny Breuer. But here’s the problem:
First, did someone check the calendar? This is 2012. The mortgage crisis occurred in 2008! Taxpayers have already footed the bill to the tune of hundreds of billions of dollars. Remember that little thing called the TARP? So what now? Memories have faded, defenses have been constructed, people have moved on.
My former boss at the Department of Justice, Eric Holder, knows how to fight crime. He sat for a time as a Superior Court Judge in the District of Columbia and later as US Attorney for the District of Columbia. He’s gotta know this isn’t how it’s done. You don’t send the police out four years after the crime. If you are serious about law enforcement, you make sure your agents are pounding the pavement, picking up evidence, getting people to talk—that day. At worst, you get the cops out the next day—but four years later? I don’t think so.
Second, 55 people to investigate and prosecute a crisis that pales in comparison to the Savings & Loan crisis of the 1980s?! It’s a crime that stretched across the country, involved huge and sophisticated entities: banks, mortgage brokers, securities dealers, and investment bankers. The list goes on. And the government has put together a staff of 55? Please. It’s as if the New York Giants traveled to the Super Bowl with only a quarterback, center, and one receiver. Even with Eli Manning at the helm, it wouldn’t be close. Finally, this gang of 55 has 25 million documents to review. Let’s assume they split them up equally: that’s 500,000 documents per person.
It ain’t happening. This is window dressing for an election year sound bite—nothing more.