Attorney General Eric Holder testified earlier this year before a Senate committee, saying the department had encountered some difficulties in prosecuting large institutions due to “a negative impact on the national economy, perhaps even the world economy,” adding that the department has determined that such institutions should be protected from criminal prosecution.
Holder’s announcement signaled that the Justice Department considers the “too big to fail” status of such institutions as the deciding factor for non-prosecution. Holder also said that external experts were consulted about the potential impact of prosecuting major financial institutions.
“To date, the subcommittee’s investigation has indicated that the Justice Department has not received any material information from outside experts,” Subcommittee Chairman Patrick McHenry said. “DOJ has provided nothing material to explain the comments made by the attorney general.”
McHenry said Holder’s testimony earlier this month contradicted previous remarks, in which he said “there’s no bank…no institution…no individual that cannot be prosecuted by the U.S. Department of Justice.”
The subcommittee also questioned officials from the U.S. Treasury, Federal Reserve, OCC, Office of Financial Research and Financial Stability Oversight Council to determine which outside experts are used by the DOJ when making prosecutorial decisions involving major financial firms.
“However, the attorney general’s contradicting comment does not explain whether the department’s view of the collateral harm of convicting a financial institution has changed, or if the department’s view has not changed, the circumstances in which a party’s criminal conduct is so egregious that prosecution is appropriate even in the face of significant harm to innocent parties,” McHenry said.