Mythili Raman has moved on from the Justice Department. Photographer: Andrew Harrer/Bloomberg

One Banker Went to Jail, Two Prosecutors Got New Jobs

Christopher Flavelle writes editorials on health care, energy and environment for Bloomberg View. He was a senior policy analyst for Bloomberg Government and chief speechwriter for the leader of the Liberal Party of Canada.
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Why has just one top banker been imprisoned for the financial crisis? In this weekend's New York Times Magazine, ProPublica's Jesse Eisinger wrote that the answer is a Justice Department chastened by prosecutorial setbacks before the crisis, leaving an organization with neither the verve to seek criminal convictions nor the institutional know-how to achieve them.

Maybe most damning, Eisinger also attributes the department's reluctance to prosecutors with an eye on their next jobs. He cites Lanny Breuer, who left his job heading the department's criminal division to become vice chairman of Covington & Burling LLP, a Washington-based firm.

"Top governmental lawyers generally don't want to spend their entire careers in the public sector," Eisinger wrote. "Many want to score marquee victories and avoid mistakes and eventually leave for prominent corporate firms with starting salaries at 10 times what they make at the Department of Justice."

In other words, the department's failure to bring more criminal charges after the meltdown doesn't reflect only, or even primarily, the merits of those charges. Eisinger's story brings to mind what Mythili Raman, then acting chief of the department's criminal division, said in January at a Bloomberg Government breakfast in Washington. Asked why more people haven't gone to jail in the wake of the crisis, her response was:

So I think we have consistently said, and I believe strongly, that since the financial crisis and even at the time there was not a group more motivated to try to figure out whether there was crime underlying the crisis than prosecutors and FBI agents. We all devoted a great deal of resources and continue to devote resources to those issues. And I can't obviously speak to conclusions that were drawn in particular investigations, but I can say, and I want to emphasize this as much as possible, if -- where there are crimes -- provable crimes, the Department of Justice has always shown, our track record over decades, we will bring those cases. When there are not, we can't.

If the question is, were there crimes that were not prosecuted, I just don't think that is in a prosecutor's DNA to do. If there's a provable crime, we bring charges. If there's not, we don't. And so I think we have looked hard. We continue to look hard. And as you've seen, some of our civil counterparts have been using civil authorities to address some of that conduct of late. And I think that's what the department should be doing, which is using all of our tools as appropriate depending on the evidence. That's maybe an unsatisfying answer to your question, but it's about as close as I can get.

Last month, Raman left the department to join Breuer at Covington.

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