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Tuesday, 07 July 2015 06:29

Eric Holder's Return to Covington & Burling Explains His Soft Treatment of Wall Street

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aaaarevolvingdoorThe revolving door: The list of financial giants that Holder's Department of Justice - and his Covington & Burling bench team – have treated with kid gloves is exhausting. (Photo: Nick Amoscato)

Eric Holder just rejoined the gilded DC law firm of Covington & Burling, after a few week's of hiatus between his stint as attorney general and his new job, in which he'll cash in on the status gained through his former position.

Covington & Burling - an elite law office that specializes in white-collar defense of banks and corporations – maintained a chokehold on the Department of Justice during Holder's tenure as attorney general. Indeed, when Holder became attorney general, he appointed Covington & Burling law partners to head both the civil and criminal divisions of the Justice Department. When the head of the criminal division, Lanny Breuer, stepped down and returned in early 2013 to Covington & Burling with a salary exceeding $4 million a year, he was replaced by Mythili Raman. Raman, in turn, stepped down from overseeing the DOJ criminal division in 2014 to become a partner at, yes, Covington & Burling.

The New York Times, at the time of Raman joining Covington, published an article with a revealing passage about the firm's revolving door with the DOJ in the Holder years:

She is the fourth recent criminal division prosecutor to join Covington and the fifth senior official under Mr. Holder to do so. Lanny A. Breuer, her predecessor as chief of the criminal division, is now Covington’s vice chairman.

“Reuniting with my former Justice Department colleagues was one of the biggest draws of Covington,” Ms. Raman, 44, said in an interview. “It was an easy choice.” [Italics inserted by BuzzFlash.]

That was written, by the way, more than a year before Holder returned to Covington & Burling.

The Intercept noted on July 6 what BuzzFlash has repeatedly pointed out in commentaries over the past few years:

The Covington & Burling client list has included four of the largest banks, including Bank of America, Citigroup, JPMorgan Chase and Wells Fargo. Lobbying records show that Wells Fargo is still a client of Covington. Covington recently represented Citigroup over a civil lawsuit relating to the bank’s role in Libor manipulation.

Covington was also deeply involved with a company known as MERS, which was later responsible for falsifying mortgage documents on an industrial scale. “Court records show that Covington, in the late 1990s, provided legal opinion letters needed to create MERS on behalf of Fannie Mae, Freddie Mac, Bank of America, JPMorgan Chase and several other large banks,” according to an investigation by Reuters.

The Department of Justice under Holder not only failed to pursue criminal prosecutions of the banks responsible for the mortgage meltdown, but in fact de-prioritized investigations of mortgage fraud, making it the “lowest-ranked criminal threat,” according to an inspector general report.

The clientele pool of Covington & Burling, in essence, was protected from serious criminal prosecution by the heads of the Department of Justice. It does not appear to be coincidental that these same officials, including Holder, ended up as partners at Covington & Burling, defending the same types of clients that they should have been holding legally accountable.

As BuzzFlash wrote in March of 2013, "Holder admits that Department of Justice believes big bankers are above the law." Lanny Breuer resigned after telling Frontline in 2013 that he considers the alleged financial impact of bringing charges against financial institutions as a reason for not prosecuting them. In September of 2014, BuzzFlash published a commentary that stated, "Eric Holder basically tells Wall Street to beware of moles." In December of 2013, we documented that "Holder is protecting JPMorgan Chase NYC from a criminal investigation" involving the bank's possible role in the fraud committed by Bernie Madoff.

The list of financial giants that Holder's Department of Justice - and his Covington & Burling bench team – have treated with kid gloves is exhausting. Yes, the DOJ did levy what appeared to be massive fines against a few banks, but the monetary "penalties" turned out - after tax deductions and other factors - to be merely the cost of doing business for the Wall Street behemoths. Furthermore, no changes in senior executives were demanded during the Holder tenure, and no serious structural changes were demanded of the institutions who engaged in likely criminal behavior. In addition, no banks were threatened with the revocation of their charters, although their illicit activity included not just financial malfeasance but the laundering of hundreds of millions of dollars with foreknowledge.

The Intercept reveals, "Holder is set to become among the highest-earning partners at the firm [Covington & Burling], with compensation in the seven or eight figures."

In short, under Holder, we had a Department of Justice in which the senior leaders were looking forward to padding their salaries at Covington & Burling - instead of prosecuting the past illegal behavior of Wall Street firms and forcing changes to their destructive ways.

Not to be reposted without permission of Truthout.