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Eric Holder
June 28, 2014
by J.A. Young
The Man Who Let Banks Steal Billions

In one of my first pieces for CTM I profiled John Yoo as The Man. While mostly unknown in the public sphere, Yoo was the legal architect for many of the massive and fraudulent power grabs that George Bush, Dick Cheney, and Donald Rumsfeld made during their years spent running the White House. While Yoo has mostly managed to stay away from the eyes of public scrutiny to this day, he had a profound impact on our government by helping to lay out toxic precedents for the executive branch. Many of the legal justifications (if you can call them that) for torture, indefinite detention, unsanctioned killings, and authoritarian executive action originated from his memos. In an unsurprising, but ironic, continuation of Yoo’s place in the Bush administration, Eric Holder has earned the crown of The Man for current president Barack Obama.

While many of the failures and controversies of the Bush and Obama administrations have blurred together in a cloudy haze of gross mismanagement and blatant illegality, there are some clear distinctions to be made (sorry Dick and Liz Cheney). Officially starting the War on Terror and burying America into debt with two invasions can be levied on Bush, while Obama’s major crises will be remembered as health care and financial reform. In the same way that Bush used Yoo and other legal advisors to create his own rule-breaking Oval Office brain trust, Holder has spent a great deal of time institutionalizing Obama’s corrupt economic preferences. If you want to understand how we ended up with The Patriot Act and killing innocent civilians with unmanned drones, John Yoo is a good place to start. To understand why our banking and insurance CEO's have completely avoided legal action from the government , Eric Holder is the cornerstone.

Before making his way into the White House and earning the appointment as Attorney General in 2009, Holder traveled a likely path towards becoming an esteemed lawyer. Earning both his B.A. and J.D. from Columbia University, the Bronx native worked briefly for the Reagan administration before becoming Deputy Attorney General under Bill Clinton in 1997. During this period Holder became versed in Clinton’s popular liberal perspectives on financial deregulation, for example the passing of the Gramm–Leach–Bliley Act. The act repealed a ruling from 1933 which prevented insurance companies, securities companies, and investment banks from mixing their pots and becoming one giant business. This new law laid the groundwork for creating many of the investmant giants that would later come crashing down onto the world economy in 2008 like Citigroup, Wells Fargo, and Bank of America. Much in the same way that Yoo honed his appreciation for constitutional misenterpretation at Yale Law School, Holder willingly drank the Clinton Kool-Aid during his time as Assistant Attorney General. It is unsurprising, then, to hear that after leaving Washington, Holder took a job at one of the most prestigious corporate law firms in Washington: Covington and Burling.

Drawing the lines from Holder’s tenure under Clinton and his days of private practice at Covington and Burling, you will find some absurdly large red flags. As outlined in Matt Taibbi’s new book The Divide, the entire background of Covington and Burling is rife with alliances to corrupt corporations and satanic business models. During his time spent at Covington and Burling, Holder was working directly for a firm that has been responsible for defending companies guilty of fraud and massive white-collar theft. If your bank was caught in the middle of a web of fraud and lies during the banking crises, there was a good chance that you would be hiring attorneys from C&B.

To use an analogy, that would be like Obama hiring a person who had previously defended members of Mexican drug cartels as his DEA Chief. But of course, Holder was being well paid for the job.  As noted by columnist David Corn, “He took years of experience he had gathered as a public servant and rented it to corporations accused of serious wrongdoing. He smoothly went from doing good to doing well.  In 2008, according to his confirmation questionnaire, he made $2.1 million at Covington and Burling.” In hindsight, it would be hard to pick a worse candidate for dealing with the mortgage and banking crises than Eric Holder. Barack Obama chose to appoint as his Attorney General someone who honed his litigating skills at a company that was responsible for defending big banks and insurance companies.

This glaring conflict of interest has been one of the main reasons that, to this day, Wall Street has largely avoided prosecution for their billions of dollars in theft and fraud at the expense of average American citizens. Starting with a memo authored by Holder (just like with Yoo), the Justice Department under Obama took the stance that some banks were just too large to fail, and that their crimes were too difficult to prosecute. Holder, who is supposed to represent the legal interests of America, was the one who has repeatedly sided with the purely evil business strategies at places like Goldman Sachs, HSBC, and Bear Stearns. He has deferred his responsibility to punish the greatest thieves that the world has ever known.

HSBC is the perfect example of how Holder has paved the way for future alliances between Washington and Wall Street. Despite the fact that the bank was clearly responsible for laundering drug money from Mexican drug cartels, the Holder justice department decided that leniency was the fairest approach. It doesn’t take a doctorate in economics to draw the lines between Holder’s time at Covington and Burling and his decisions as attorney general. Holder wold be the last person to ever go after banks and financial institutions, because he built his career rubbing shoulders with their CEO’s and legal teams.

Like so many of America’s glaring political problems today, Holder’s history of siding with corrupt financial institutions and the one-percenters is not without a terrible irony. In his own right Barack Obama is an excellent lawyer, who has a reputation as a brilliant constitutional scholar and legal academic. He knows as well as anyone that America needs to clamp down on risky financial players and worldwide fraud, and he chose the one person who would never dream of doing that.  He could have picked a thousand other lawyers who would have had the stones to say, “this system is totally messed up, and we have to fix it.” That would have meant digging up a lot of dirt and pissing off a lot of very wealthy people, which is something that Obama promised to do in his campaign speeches. Clearly the president has changed his priorities.

Instead he chose to side with The Man, and it is the rest of the world that continues to pay the price.

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