A reader sent me a link to a Washington Post article about a federal agency that, when it comes to bankers, knows evildoers when it sees them, and when it sees them, does everything it can to make sure they serve time.
At a time when the government is being criticized for not holding senior bank executives liable for crisis-era crimes, a little-known federal agency is compiling a growing list of criminal convictions.
Since 2008, the Office of the Special Inspector General for the Troubled Asset Relief Program has pursued criminal charges against 107 senior bank officers, most of whom have been sentenced to prison. Created to supervise the government bailout of the auto and financial industries, the agency has found dozens of cases of bank executives who misused bailout funds.
SIGTARP has a staff of 170, a budget of $41 million and an enforcement track record that rivals agencies twice its size. The agency’s work has resulted in $4.7 billion in restitution paid to the government and victims. Lawmakers are holding SIGTARP up as a model and questioning why other agencies are not producing similar results.
Of course, few, if any, of those broke-back bankers tread on the sidewalks of Wall Street when their heinous crimes were committed, but what the heck: the little fish are always easier to net.
SIGTARP has a strong record, but the office has mainly taken down community bankers, not Wall Street titans, for brazen acts of fraud, some observers say. “The amount of direct evidence of banker wrongdoing in these smaller bank cases is easier to show,” said Mark Williams, a former bank examiner who teaches finance at Boston University.
Still, he said, “these SIGTARP cases set an important precedence that bad banker behavior will not be tolerated and [will be ] aggressively prosecuted.”
That's what these cases show? I beg to differ. I think they show that the bigger you are, the firmer you stand. If you've got the money and the heft, you appear to be bullet proof. For the rest of the banking industry, the lesson is that if you're going to commit a crime, then, for heaven's sake, don't do it on a too-small-to-save financial institution. Dream big!
As definitive proof that SIGTARP's zealousness may be directed against the least troublesome class of crooks, Liz Warren has singled out the agency for special praise.
In October, Sen. Elizabeth Warren (D-Mass.) lauded the work of the inspector general in a letter asking financial regulators to disclose the extent of their efforts to pursue cases against individuals.
Although Warren credited the Office of the Comptroller of the Currency, the Federal Reserve and the Securities and Exchange Commission for achieving “landmark settlements” with banks for crisis-era misdeeds, she said that “a great deal of work remains to be done” at the agencies.
Hit with Liz Warren's praise: that has GOT to hurt.
My point isn't that SIGTARP isn't putting away bankers (or those close to them) who have committed crimes. My point is that the bankers they're putting away are low-hanging fruit. We saw droves of them jailed (some, more than once) in the aftermath of the savings and loan crisis of the late 1980s.Texas, for example, was at that time chock-full of venal, crass, and not-as-bright-as-they-needed-to-be-to-get-away-with-it banking bad actors. A prosecutor could stretch his arms yawning and knock a couple to the ground. Heck, a prosecutor could go "crook hunting" with Dick Cheney in those days and even Cheney could bag a few (albeit after peppering the prosecutor's mug with buckshot).
What would be world-class impressive would be to start slugging it out with some big bank masters of the universe who are bright, clever, rich, well-connected, and just as criminal, slap some cuffs on them, and put them through a public shaming. Then you'd have something to really crow about. Until then, bask in the glory of Wapo puff pieces inside The Beltway. Outside, the rest of the world is less than impressed.