Senator Elizabeth Warren (D-MA) urged the Department of Justice ("DOJ") Office of the Inspector General ("OIG") to conduct an investigation of the DOJ's response to "referrals made by the Financial Crisis Inquiry Commission [("FCIC")] for potential securities laws violations identified during the FCIC's investigation of the causes of the 2008 Financial Crisis." In a separate letter, Senator Warren asked FBI Director James Comey to "promptly facilitate the release of any and all materials related to the FBI's investigations and prosecutorial decisions regarding these referrals."

Senator Warren stated that the FCIC produced a 633-page report and sent 11 separate referrals to the DOJ, but the DOJ failed to prosecute any of the named individuals criminally. The full archives of the FCIC proceedings were released in March 2016.

Senator Warren asked that the FCIC investigation include:

  • "an analysis of the process by which FCIC referrals were obtained and analyzed by the DOJ";
  • a determination of whether the DOJ and the responsible individuals at the DOJ "took appropriate actions and devoted appropriate resources to these referrals";
  • an analysis of whether the DOJ "obtained acceptable outcomes with regard to these referrals"; and
  • "recommendations for both administrative and legislative action" moving forward.

In a separate letter to Mr. Comey, Senator Warren argued that the FBI's recent investigation of former Secretary of State Hillary Clinton "provide[s] a clear precedent for releasing additional information about the investigation of the parties responsible for the financial crisis." Senator Warren emphasized that the FBI usually refrains from releasing internal documents from investigations in which it does not recommend prosecution, but nevertheless made undisclosed materials "available to the public in the interest of transparency." Senator Warren opined that this unusual disclosure in the name of "transparency" demanded balance:

If Secretary Clinton's email server was of sufficient "interest" to establish a new FBI standard of transparency, then surely the criminal prosecution of those responsible for the 2008 financial crisis should be subject to the same level of transparency.

Commentary

Senator Warren's letter is based on the political premise that the financial crash was caused by the criminal conduct of a few people at the big banks, and that if there had not been such misconduct, the financial crisis would never have occurred. The Senator might want to focus on less political but more practical concerns that have real implications for the economy: (i) the high level of federal and municipal debt, and the possibility of additional governmental insolvency, (ii) the aging population, (iii) pension plans' inability to make forecasted returns due to low interest rates, and (iv) the low employment rate, to name a few. Unfortunately, concentrating on issues like these won't provide a villain for the political stage.

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