Congress: “Too Big to Jail: Inside the Obama Justice Department’s Decision Not to Hold Wall Street Accountable”

A galling read by the US House of Representatives.

The US House of Representatives today released the results of its three-year investigation – hampered along the way by the Department of Justice and the Department of the Treasury – into why HSBC and its executives weren’t prosecuted.

Empirical evidence has told us for years that in the US a bank and its executives cannot be prosecuted if the bank is big enough. We’ve come to call this type of bank “Too Big to Jail.”

Empirical evidence has also told us that a bank can do essentially whatever it wants to, given that, if caught, it may have to pay a fine that then becomes just part of the cost of doing business. Wall Street doesn’t care about fines. They’re “extraordinary items” that banks and analysts systematically exclude from their “ex-items” per-share earnings.

Fines matter under GAAP reporting. But they don’t matter in the rosy picture that Wall Street paints of the banks. And so they don’t matter.

But now comes the House Financial Services Committee and offers evidence beyond our “empirical evidence”: a 288-page report, “Too Big to Jail: Inside the Obama Justice Department’s Decision Not to Hold Wall Street Accountable.” And below is the Committee’s galling summary. Enjoy!

Too Big to Jail: Internal Treasury Documents Reveal Why Justice Department Did Not Prosecute HSBC

Washington, July 11, 2016

The House Financial Services Committee on Monday released a staff report of its investigation into the U.S. Department of Justice’s decision not to prosecute HSBC or any of its executives or employees for serious violations of U.S. anti-money laundering laws and related offenses.

The Committee initiated its investigation in March 2013.  The Department of Justice (DOJ) and the Department of the Treasury failed to comply with the Committee’s requests to obtain relevant documents, necessitating the issuance of subpoenas to both agencies.

Approximately three years after its initial inquiries, the Committee finally obtained copies of internal Treasury records showing that DOJ has not been forthright with Congress or the American people concerning its decision to decline to prosecute HSBC.

These documents show that:

  • Senior DOJ leadership, including then-Attorney General Eric Holder, overruled an internal recommendation by DOJ’s Asset Forfeiture and Money Laundering Section to prosecute HSBC because of DOJ leadership’s concern that prosecuting the bank would have serious adverse consequences on the financial system.
  • Notwithstanding Attorney General Holder’s personal demand that HSBC agree to DOJ’s “take-it-or-leave-it” deferred prosecution agreement deal by November 14, 2012, HSBC appears to have successfully negotiated with DOJ for significant alterations to the deferred prosecution agreement’s terms in the weeks following the Attorney General’s deadline.
  • DOJ and federal financial regulators were rushing at what one Treasury official described as “alarming speed” to complete their investigations and enforcement actions involving HSBC in order to beat the New York Department of Financial Services.
  • In its haste to complete its enforcement action against HSBC, DOJ transmitted settlement numbers to HSBC before consulting with Treasury’s Office of Foreign Asset Control to ensure that the settlement amount accurately reflected the full degree of HSBC’s sanctions violations.
  • The involvement of the United Kingdom’s Financial Services Authority in the U.S. government’s investigations and enforcement actions relating to HSBC, a British-domiciled institution, appears to have hampered the U.S. government’s investigations and influenced DOJ’s decision not to prosecute HSBC.
  • Attorney General Holder misled Congress concerning DOJ’s reasons for not bringing a criminal prosecution against HSBC.
  • DOJ to date has failed to produce any records pertaining to its prosecutorial decision making with respect to HSBC or any large financial institution, notwithstanding the Committee’s multiple requests for this information and a congressional subpoena requiring Attorney General Lynch to timely produce these records to the Committee.
  • Attorney General Lynch and Secretary Lew remain in default on their legal obligation to produce the subpoenaed records to the Committee.
  • DOJ’s and Treasury’s longstanding efforts to impede the Committee’s investigation may constitute contempt and obstruction of Congress.

The Committee is releasing this report to shed light on whether DOJ is making prosecutorial decisions based on the size of financial institutions and DOJ’s belief that such prosecutions could negatively impact the economy.  By the House Financial Services Committee.

The above summary by the House Financial Services Committee is infuriating even years after we’ve known, from watching it unfold, that this was the case, that, as Holder himself had said, a bank can be too big and its executives too powerful to prosecute, for fear of causing stocks to go down and bonds to blow up, or whatever….

But now, in this bizarre world of today, there’s a gloomy scenario the “smart money” is betting on. Read… Fear, Loathing & Record Money-Making in Government Bonds

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  50 comments for “Congress: “Too Big to Jail: Inside the Obama Justice Department’s Decision Not to Hold Wall Street Accountable”

  1. Merlin says:

    DC to NYC: The corruption corridor is a two-way cesspool of crony capitalism. Too big to fail, too big to jail, and the taxpayers will bail!

    • john folger says:

      if the wright person asks putin he may give them a full copy of clinton emails

  2. michael says:

    Criminals do not indict criminals…….

  3. Lolo Gecko says:

    … I’m SHOCKED … congressional investigations prove … the first law of political inertia … and … the second law of campaign contribution hysteresis ….

  4. Chris says:

    Banks are the law because banks perpetuate the credit cycle. We are no longer a country with disposable income. Rather, our economic activity is predicated upon an ever expanding pool of debtors from which to create more currency. Our economy requires a perpetuation of credit to maintain any degree of economic activity. Bottom line: We lost control of our country when we lost control of our money. We gave that control to the banks. The banks are the law. No prosecution, period.

    • ben franklin says:

      rothschild ;the one who controls the money controls the country i care not who makes the law

  5. polecat says:

    you know Wolf…in light of the total dereliction of duty by the dept. of JUST-THEM……why should ANY citizen of this country abide by ANY laws, at all….because it’s become blatantly in-your-face apparent that the rules of law are a farce……..only to be applied to the liliputs…the marks…the chumps…the muppets…..the ones that don’t know better…….I am soooo f#cking steamed !!!!

    This ‘investigation’ is also a farce, in that members of Congress , whether the House, or the Senate, are exempt from laws, that THEY make, with regard to insider trading!….SO they can still shovel in the tubmans regardless of how they ‘earn’ it ……. There is nothing good left to believe in in this once great Republic !

    • Jungle Jim says:

      That is exactly the point, the leaders of this kleptocracy depend on other people obeying the laws. They don’t do it themselves, but they need us to. By encouraging this kind of thing they are undercutting their own control. If everyone starts working an angle, it will be almost impossible for the “legal crooks” to function.

      • NotSoSure says:

        There’s always a point in time where following the law is exactly the wrong thing (even in moral terms) to do.

        If a collapse is coming anyways, the right thing to do is quicken the pace.

    • Randy says:

      Are we beginning to realize that the government representatives that we elected are totally corrupt gangsters? Finally, but too late.

  6. OutLookingIn says:

    The swine wallow that is the DOJ will remain a filthy pit of corruption, as long as the revolving door between Wall street and Washington remains open.

    The pigs descend upon capital hill and rattle their spoons in their money swill buckets and Wall street gets exactly what Wall street wants. After the piggery has accomplished whats wanted, the swine leave the wallow and exit through the revolving door back to their slop rewards on the street.

    It will remain so until monetary rewards are removed from politics.
    Don’t look for it to happen. The elites love things just as they are. As Gerald Celente says; “Its not justice anymore – its JUST US and you.

  7. Uncle Frank says:

    I’m sure the Clinton transition team has already assembled the entourage from Goldman Sachs that will move into Treasury, DOJ, SEC, etc. Nothing changes under this corrupt system.

    • OutLookingIn says:

      The “pigs” already occupy Treasury, DOJ, SEC, etc.

      It will be just a diifferent set of piglets let loose with a full swill bucket.

    • Petunia says:

      The Clinton changes are going to give us TPP and the privatization of social security. Wall St. can’t wait to get their hands on the rest of our money, and neither can the Clintons. Remember that they betrayed the unions who supported them with NAFTA, and the blacks who supported them with the crime bill, and the women who supported them with welfare reform.

    • TheBloomIsOffTheRose says:

      It has changed. Corruption is now so institutionalized, people so powerless, all pretense has been dropped.

      In my prominent northern California town, the only daily newspaper stopped accepting reader comments to news stories or LTEs , six weeks before the June elections, after commenters made threats to oust elected officials over unrestrained development with taxpayer paid giveaways, exposed graft, and offered embarrassing corrections and additions to news stories.

      The only other ostensibly public forum, the social media site Nextdoor, is administered by the city. Politically incorrect posts are routinely censored by being hidden from view. No apologies or explanation offered.

      Vigilantism and reporting neighbors to authorities is encouraged in this Tea Party Town. One learns to expect vandalism, slander odd incidents or accidents to follow any politically incorrect comments or actions.

      Turns out, the towns been this way for a long time. The remaining veneer’s just recently been rubbed off, so that what is cannot be mistaken.

      • TheBloomIsOffTheRose says:

        “One learns to expect vandalism, slander odd incidents or accidents to follow any politically incorrect comments or actions”. The sentence should read,
        One learns to expect vandalism, slander odd incidents, “accidents” or “acts of God” to follow politically incorrect comments or actions.

        I mourn what once was. Or perhaps more correctly, for what I thought once was.

  8. Petunia says:

    Eric Holder was selected as Attorney General because he was a Wall St. lawyer. He gave up his cushy job to go to DC solely to protect the interests of his clients. The people never knew this because the media never reported his connection to the cases that were being prosecuted. Since Obama picked him in the first place, this must have been what he wanted done. Now Holder is back at his old firm, no doubt, cashing in on his government work.

    • polecat says:

      Once a ‘White Shoe Boy’……..ALWAYS a ‘White Shoe Boy’…..!!

      …to use some Gerald Celente parlance……..

    • ‘The people never knew this’ because they didn’t want to know it, just like they don’t want to know anything else. Everything you ever wanted to know about Eric Holder was readily available on alternative news sites from the get go.

      Americans basically care about: sports, Hollywood entertainment, cheap beer, Cheetos, payday loans and title loans.

  9. raoul says:

    absolutely sickening, all of it. Why are these people still alive?

    I have nothing to further to offer but I do have a question, posed to anyone who cares to render an opinion.

    Where else in the world would you consider living today? This is a serious question please. I have nothing holding me back. America – no longer a republic – has seen its best days. I want out.

    • Petunia says:

      Iceland. They had the guts to put the bankers in jail. Beautiful country too.

      • Nicodemos Marat/Paine says:

        There are no genuine refuges anymore. You can’t run and hide. You are going to have to fight your last battle here.

      • JerryBear says:

        They have a highly homogeneous population of 332,529, about that of a smaller American city. They are not inclined to welcome hordes of outsiders from outside.

  10. Spencer says:

    Nothing will happen, the sheep will sleep. EBT, welfare, SS disability, voter fraud, banker fraud, political fraud, war fraud, wanna keep going! USA is a fraud nation addicted to crime and criminals. Close your borders and eat yourselves, a nation eating and feeding upon itself into ruin. A free nation does not behave in this manner, grave robbing the future generation of their inheritance! A sickening spectable by a zombified people. If you cannot rise up, head to your grave site! Like Rome, like the USA. It is sickening to read and hear this crap everyday. Go to Trump, go to Clinton, the powers that be are playing you for fools. Pick one, they want you to, go ahead, you will like it, they will like it.

    • Petunia says:

      “When choosing between two evils, pick the one you haven’t tried before.” — Mae West

      • TheBloomIsOffTheRose says:

        May West was choosing between producers or sugar daddies. We have to choose between candidates for President of the United States. Details matter.

        • Petunia says:

          I couldn’t have put it better myself. Trump the producer and Hillary the sugar daddy.

        • Drumpfabooie says:

          There is a Harvard study that shows how the Media, after pumping Trump 24/7 for a year, the coverage has gone sharply negative on Trump after his winning enough delegates. So they are obviously trying to manufacture him as a boogy man for the GOP to install their preselected candidate. It appears to me to be a psyop to aid the installation of Hillaboo, after thoroughly defrauding Bernie from winning the nomination. (See ) Wall Street, the Koch brothers, the Neocons who lied us into Iraq, George Will, Laura Bush, etcetera are all now aboard this Commander-in-Theif Train. I’m going to have to keep taking a look at it all before I decide, but Hillary is definitely out, I told Bernie that in an email.

    • Wolf Richter says:

      Do you feel better now, having gotten this off your chest?

      • d says:

        I always thought her best was:

        “when I’m good, I’m good, and when I’m bad, I’m even better”

  11. Humpty Dumpty says:

    When this all blows up (again) we know how easy it will be for the administration/congress to facilitate the taxpayer bailout these slugs expect. Easier if done fast, I think, a la Paulson. Hillary would be on board for that, Trump probably, too. Consequences: none, in the short term. Long term, though, the final meltdown of the last vestiges of the middle class economy. Insurrection anyone?

  12. Paulo says:

    Come on guys, you remember what Obama said in his victory speech?

    “Yes, we can”.

    You just didn’t know what he meant. No one did. But Wall Street knew…they paid for his victory.

    Raoul: I sure enjoy being a Canadian. My folks sold out and moved north in ’68. Actually, my Mom was coming home. Both parents were WW2 vets and met overseas. The times were similar. One too many riots, Draft looming for one of my brothers, (we lived in the Bay Area…I was born on Pill Hill…Oakland), and one day a Black Panther spokesman said on Cronkite that no longer would they be burning their own neighbourhoods. They were going out into the suburbs to riot. My Dad sold his business, our home, and we moved in about 6 months.

    It took courage, and my Folks gave up everything they had worked for including a successful business. My Dad started over at age 50, just when it looked like he could kick back in a few years. My sister still lives in WA, and to be honest, I am always worried when crossing the border. The one prep we never forget is topping up our medical coverage in case we get into an accident.

    Best of luck.

  13. dave roderick says:

    simple answer bring back the greenback or as we had the bradbury pound and cut the bankers out of the circle compleatly

    • robt says:

      Free money printed by the state, controlled by politicians, and backed by faith? No interest? I’m in!

  14. Chris from Dallas says:

    This is sounding more and more like 1980s Japan Inc. with all their interlocking cronyism and willful suspension of rational economic principles.

    But if so, let’s celebrate as we have 30+ years before it flatlines!

    Seriously, Iceland or Costa Rica sound good until you look at little deeper. And being from Canada and hearing the complaints of lots of relatives and friends, I will take the problems in the US over anywhere else.

  15. d'Cynic says:

    I am surprised noone mentioned the purely accidental meeting between president Clinton, and attorney general Loretta Lynch on the tarmac of the Phoenix airport. Probably because they only talked about their grandchildren, golf and travel.

    • Coaster Noster says:

      Maureen Dowd of the New York Times wrote an article about it. I’m not a NYT subscriber, but you might find it.

  16. night-train says:

    Folks, I understand there is anger upon the land. I am a saver. I am stuck in a house that I had not intended to retire in, because I couldn’t bring myself to pay the home prices of 2005-2008, or the purely manipulated prices post 2008. So, yes, I too have some anger issues.

    But be careful for what you wish. While tearing the whole thing down has a visceral satisfaction, the reality would be far from satisfactory. No revolution has ever brought results that benefited the masses. The masses are a useful tool to create the destruction that a different group of elites will exploit. So, by all means vent your anger. But think seriously before getting in line with any group following a Pied Piper. Make damn sure whatever promises of change and reform are actually possible before jumping in. I expect by the time of our elections, we will have a better understanding of the consequences of Brexit. How it goes there might better inform our play.

    • Petunia says:

      I’m just hoping for someone who can fix something, anything, at this point.

      • JerryBear says:

        Petunia, that is how Hitlers get started. They offer false hope to the masses in return for absolute power.
        People need to take the initiative themselves.

  17. Dan Romig says:

    One needs only to look at Obama’s appointments to see where it all starts.

    In May of 1999, the Senate passed the Gramm-Leach-Bliley Act 54 to 44. Clinton vetoed it, and had it rewritten to include some of the provisions he was asked to put in; such as modifying the Community-Reinvestment Act. This let smaller banks to be reviewed less frequently for CRA compliance, and it allowed banks to merge or expand into other types of financial institutions. The person who rewrote the repeal of Glass-Steagall was Neal Wolin.

    Wolin is now the Chairperson of the Intelligence Oversight Board. From 1999 to 2001, he was General Counsel to Treasury Secretary Lawrence Summers, and Obama appointed Wolin to be the Deputy of the Secretary of Treasury under Tim Geithner right after he took the White House. Wolin was overwhelmingly approved by Congress, and was Geithner’s right hand man from 2009 to 2013.

    Mostly overlooked is Obama’s appointment of the Secretary of Commerce, Penny Pritzker. Obama put her in at the beginning of his second term. Before that, Pritzker and family ran Superior Bank of Chicago, and she was Chairperson of the bank from 1991 to 1994. This bank was predatory to say the least, and it was helped in these nefarious actions by Clinton’s CRA modifications. However, the bank had a bit of trouble with the FDIC, and paid a $406 million dollar fine to Uncle Sam in July 2001. Pritzker did help Obama get elected to Congress and the White House back in the last decade, so on 26 June 2013 Obama rewarded her.

    Lynch was part and parcel to Wall Street’s Ponzi-schemes. Clinton appointed her to be the US Attorney for Eastern District of New York (Wall Street), where she ‘served’ from the summer of 1999 to the summer of 2001. She then sat on the Board of Directors of the Federal Reserve’s Bank of New York (the epicenter of the Fed and Wall Street’s big five) from 2003 to 2005 under then President of the Board Tim Geithner.

    Should anything that’s been done under Obama, Holder and Lynch come as a surprise? If HRC is our next President, any guesses as to what will happen?

    • Petunia says:

      Comey and Lynch were both involved in the wrist slap that HSBC got for laundering money for anybody and everybody. Did you really expect anything other that another wrist slap, for Hillary, from them.

    • wratfink says:

      Comey also prosecuted Martha Stewart for lying to authorities. He didn’t have evidence for the insider trading charge to stick, but the lying got her prison time.

      This seems to be the same offense that Ms Clinton could be charged with. I suppose recommending prosecution of this one is frowned on by the bosses and will do nothing to further his career…unlike the Martha Stewart case.

  18. Merlin says:

    Never believe a single word a politician says for the lie comes so easily to their lips during the campaign but watch carefully what they do during the term for their actions prove their true intent every time. Their intent appears to be to stay in power and become wealthy for life.

    Wolf, thanks for a topic that allowed some venting of political frustration against financial shenanigans that cost the taxpayers billions.

  19. JimTan says:

    A long but detailed explanation of why individual bankers have nor been prosecuted:

    well worth your time.

  20. wratfink says:

    It seems the Sanders section of the Democratic Party attempted to install a plank to limit the “revolving door” into the convention platform but was rejected by the Clinton section of the party.

    So don’t look for any change in that policy from either the red team OR the blue team. It’s too lucrative for them to change.

  21. Meme Imfurst says:


  22. Soupcon says:


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