In a recent Congressional hearing FBI chief Robert Mueller defended his agency’s efforts to investigate and tackle government corruption and white collar crime. He called public corruption cases the FBI’s top priority citing that more than 1,000 government employees have been convicted over the last two years with his agency’s help.
I personally find this odd as I reported two concerns to the FBI regarding possible government malfeasance and heard nothing from his agency. One involved a pattern of donations from for-profit health care companies to a powerful House Ways and Means Committee Chair and a summer 2005 hearing on their pet issue.
The other involved the White House’s preferential treatment of a Carlyle Group affiliate in their Hurricane Katrina Lessons Learned report. LifeCare Hospitals got a free pass from the Bush administration (receiving not one mention in the report despite having the largest number of patient deaths).
If Robert is investigating public corruption he appears to be staying away from his big boss and some of his cronies. The lack of criminal charges against Fannie Mae is a great example of this. The company paid $400 million in fines for a six year accounting fraud that resulted in a $6.3 billion profit overstatement. The numbers were fudged to maximize executive pay and meet Wall Street earnings expectations. Company executives pocketed hundreds of millions in bonuses from 1998 to 2004 as a result of the fraud.
Fannie Mae escaped criminal prosecution over the accounting failure. The Justice Department had pursued a criminal investigation, but federal prosecutors said in August that they had shut down their probe without bringing any action. The SEC still could bring civil actions against individual executives, including people no longer at Fannie Mae, with the burden of proof less stringent than in criminal prosecutions.
Do any of my frequent readers recall who serves on the Board of Fannie Mae? It is none other than Kenneth M. Duberstein of international policy consulting fame who happened to serve with Dr. Robert Gates on the Forum for International Policy. Investigators were quite critical of the Board’s role in the long running scandal, yet none have been charged with failure to provide proper governance oversight. Ken served on the Fannie Mae board since 1998, the whole time the fraud occurred.
Yes, the FBI has aggressively pursued low level white collar criminals. The ones with high political connections are let off the hook or not even investigated. Why am I not surprised? I’ll become a bit less jaded when I learn of the FBI’s investigation into the LifeCare/Carlyle omission from the White House’s Lessons Learned Report…
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