Lawmakers to Holder: Goldman, other firms aren't 'too big for jail'

McClatchy NewspapersApril 28, 2010 

WASHINGTON — Maintaining that no Wall Street executive is "too big for jail," 62 members of the House of Representatives asked the Justice Department Wednesday to investigate whether Goldman Sachs and other Wall Street firms committed criminal fraud in the lead-up to the subprime mortgage meltdown.

Two liberal-leaning activist groups, the Progressive Change Campaign Committee and MoveOn.org, also said that they garnered the signatures of 140,000 Americans on a petition supporting the request.

The congressional letter asks Attorney General Eric Holder to order investigations into Wall Street's role in the financial crisis, and especially whether Goldman employees broke any laws in a 2007 offshore deal that led the Securities and Exchange Commission to file a civil fraud suit earlier this month.

"If both global and domestic confidence in the integrity of the U.S. financial system is to be regained, there must be confidence that criminal acts will be vigorously pursued and perpetrators punished," wrote the House members, led by Rep. Marcy Kaptur, an Ohio Democrat.

Kaptur, a member of the Committee on Oversight and Government Reform, which has investigated aspects of the financial crisis, said that "an ever growing mountain of evidence" suggests that the SEC case against Goldman "is neither unique nor isolated."

"The American people both demand and deserve justice in the matter of Wall Street banks, whom the American taxpayers bailed out, only to see unemployment and housing foreclosures rise," she said.

Others signing the letter included Michigan Democratic Rep. John Conyers, the chairman of the House Judiciary Committee, Republican Rep. Michael Burgess of Texas and conservative Democratic Reps. Bart Stupak of Michigan, Charlie Melancon of Louisiana, John Barrow of Georgia, Gene Taylor of Mississippi and Ben Chandler of Kentucky.

The request came a day after a Senate panel took more than 10 hours of sworn testimony from Goldman chief executive Lloyd Blankfein and six other present and former company executives over allegations that the firm sold off billions of dollars in risky mortgages while secretly betting that they'd fail.

The SEC accused Goldman and one of its younger vice presidents of allowing a longtime client to stack an offshore deal with highly risky mortgages and then secretly bet that they'd fail. The investor, the hedge fund Paulson & Co., later made $1 billion on the deal while two European banks lost that amount.

Goldman has denied wrongdoing.

The SEC has declined to say whether it referred its evidence to the Justice Department, which with the FBI has been investigating a number of major corporations' roles in the financial crisis. Department spokeswoman Alisa Finelli said only that "the department will review the letter" from Congress.

ON THE WEB

Lawmakers' letter to Holder

Petition for Justice Department probe

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