Holder: Big Banks’ Clout “Has an Inhibiting Impact” on Prosecutions

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 said that the Justice Department had considered the economic fallout that could result from prosecuting major banks for their role in the financial crisis, in Senate testimony on Tuesday.

Holder’s comments underscored remarks his deputy, Lanny Breuer, gave in an interview for FRONTLINE’s film The Untouchables that raised concerns among some in government that the Justice Department hasn’t been sufficiently aggressive in prosecuting major banks for the fiscal crisis.

“I am concerned that the size of some of these institutions becomes so large that it does become difficult to prosecute them,” Holder told the Senate Judiciary Committee. “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. That is something that you all need to consider.”

Holder added that he felt the department had been “appropriately aggressive,” in pursuing and bringing cases where it could prove companies or individuals had broken the law. “These are not easy cases to make,” he said. “Things were done wrong, but the question is whether they’re illegal.”

So far, no Wall Street executives have been prosecuted for fraud in connection with the financial crisis.

Breuer’s interview, which you can read in full here, sparked a Jan. 29 letter from Sens. Charles Grassley (R-Iowa) and Sherrod Brown (D-Ohio) asking for more information on how the Justice Department determined which cases to prosecute. It also asked for the names of any outside experts Justice consulted, and what they were paid.

The Justice Department responded (pdf) one month later, defending its record. But the senators said the letter was “aggressively evasive” and didn’t answer their questions.

On Tuesday, Holder told Grassley that the DOJ would “endeavor to answer” the senators’ letter.

Holder’s full testimony is embedded below. (The exchange on financial fraud prosecutions begins around the 2:17:22 mark.)