Can we please put some bankers in jail now?

• Author: Miller, Bailey
• Position: Too Big to Jail: How Prosecutors Compromise with Corporations - Book review

Too Big to Jail: How Prosecutors Compromise with Corporations

by Brandon L. Garrett

Belknap Press, 384 pp.

With Eric Holder leaving the Justice Department, Washington has a chance to get serious about prosecuting financial crimes. But what exactly has been the holdup?

Supporters lauded Attorney General Eric Holder's legacy on civil rights when he announced his resignation at the end of September. But his work--or lack thereof--going after the country's biggest banks complicit in the recent financial meltdown has left many scratching their heads.

Holder took a hard line in refusing to back the Defense of Marriage Act in court and has won praise for his engagement during the riots in Ferguson, Missouri, earlier this summer. But his lack of response to the biggest financial crisis since the Great Depression could smear his glowing reputation in the history books. Policymakers have largely pieced together how the financial industry's reckless lending destabilized the housing market and sent the economy reeling, but prosecutors have been slow to act in response.

The biggest banks--JPMorgan Chase, Bank of America, and Citigroup--have all recently paid multibillion-dollar fines stemming from the mortgage fraud perpetrated in the lead-up to and fallout from the crisis, but no top executives have gone to jail. Moreover, those companies copped to civil charges, but have not faced criminal prosecution. This marks a sharp departure from past banking scandals, such as the savings and loan crisis, where more than 1,000 bankers were convicted by the Justice Department through the late 1980s and early 1990s.

What's changed in the past three decades? One clue might be the contents of a memo written by Holder in 1999, during his stint as deputy U.S. attorney general. The document, "Bringing Criminal Charges Against Corporations," urged prosecutors to take into account "collateral consequences" when pursuing cases against companies, lest they topple and take the economy down with them. Holder also raised the possibility of deferring prosecution against corporations in an effort to spur greater cooperation and reforms--a policy, unsurprisingly, later supported by the Bush administration.

The attorney general angered many last year when he reiterated those concerns at a congressional hearing, admitting "that the size of some of these institutions becomes so large that it does become difficult for us to prosecute" because of the potential nasty economic effects...