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$700 billion for the bailout, but NOTHING for enforcement?
By Lauren | October 23, 2008
NPR reported this morning that the FBI has begun investigating the financial crisis on Wall Street, and has already started uncovering instances of subprime mortgage lending fraud. That’s no surprise, because we already know that loans were being made to homeowners who couldn’t possibly afford to pay them. The good news is that the FBI is bringing the fraud to light, and at least some of the financiers who let greed overcome their better instincts will be facing prosecution soon.
The bad news is that the FBI will have to do its job on a badly frayed shoestring. Apparently, when Congress and the Administration committed $700 billion of taxpayer money to bailing out the Wall Street firms that got us into this mess, they allocated all of that money to the Department of the Treasury, without putting aside funds to help the FBI figure out how much of the current financial crisis was brought about by stupid-but-honest decisions and how much by outright dishonesty. Now, the FBI is going to have to investigate one of the biggest financial scandals in American history at a time when federal agencies’ budgets will almost certainly be deeply slashed to help cover the $700 billion bailout. What were our leaders thinking?
If everyone involved in the subprime mortgage debacle had been ethical enough to follow the rules voluntarily, we wouldn’t be in the financial mess we are today. Unfortunately, a lot of them weren’t. There’s no point in having federal laws that prohibit fraud unless they’re enforced, and federal prosecutors will depend on the FBI to ferret out the evidence to support the criminal charges they bring.
Financial fraud is difficult to prove under the best of circumstances. It takes, time, money, and meticulous research to search through the haystack of complicated documents to find the evidentiary needle that proves dishonest intent. Denying the FBI the necessary resources to do its job amounts to a decision by our leaders to let at least some of the scoundrels who created the subprime mortgage crisis to get off scott-free. Shame on them - the American people deserve better.
Topics: Business Ethics, Legal Ethics, Social Ethics, corporate responsibility, ethics |
October 23rd, 2008 at 7:20 pm
[...] Now, the FBI is going to have to investigate one of the biggest financial scandals in American history at a time when federal agencies’ budgets will almost certainly be deeply slashed to help cover the $700 billion bailout . …[Continue Reading] [...]
October 25th, 2008 at 8:45 am
[...] the rest of this great post here [...]
November 2nd, 2008 at 4:54 pm
[...] presents $700 billion for the bailout, but NOTHING for enforcement? posted at The Business Ethics Blog, saying, “How does the government plan on catching those [...]