Eric Holder Backtracks Remarks on “Too Big To Jail”

Watch The Untouchables, FRONTLINE’s look at why no Wall Street executives have been prosecuted for fraud in connection with the financial crisis.

Attorney General Eric Holder on Wednesday sought to walk back comments that some financial institutions may be too large to prosecute, telling lawmakers at a lively Capitol Hill hearing that no single bank is above the law.

In a March appearance before the Senate Judiciary Committee, Holder testified that big banks’ clout “has an inhibiting impact” on prosecutions. As he explained:

I am concerned that the size of some of these institutions becomes so large that it does become difficult to prosecute them … When we are hit with indications that if you do prosecute, if you do bring a criminal charge it will have a negative impact on the national economy, perhaps world economy, that is a function of the fact that some of these institutions have become too large. It has an inhibiting impact on our ability to bring resolutions that I think would be more appropriate.

Holder’s comments echoed statements made by Lanny Breuer, the former head of the Justice Department’s Criminal Division, to correspondent Martin Smith in the FRONTLINE film The Untouchables. The economic impact of prosecuting a large financial firm is “a factor we need to know and understand,” Breuer said. Such considerations “literally keep me up at night,” Breuer said in a 2012 speech to the New York City Bar Association.

On Wednesday, the attorney general backtracked his earlier remarks, saying they had been “misconstrued.”

“Let me be very, very, very clear,” Holder said. “Banks are not too big to jail. If we find a bank or a financial institution that has done something wrong, if we can prove it beyond a reasonable doubt, those cases will be brought.”

The Justice Department, he added, has brought thousands of financially based cases over the course of the last four-and-a-half years. To date, however, no Wall Street executive has been prosecuted for fraud in connection with the financial crisis. Instead, the government has largely focused on a strategy of securing multi-billion settlements from financial firms, but rarely requiring an admission of wrongdoing.