The show probed the abuses at Countrywide Financial, which engaged in widespread lending fraud, persecuting whisteblowers and enriching its own executives at the expense of homeowners (and the taxpayers who were called upon to save the industry). One senior vice president even said the fraud at the company was systemic. Yet despite these practices, there were no major prosecutions at Countrywide or most other major financial institutions.
So 60 Minutes decided to confront Larry Brewer, who is head of the criminal division at the Department of Justice (DOJ), and ask him why there have not been more high-profile prosecutions utilizing, for example, the Sarbanes-Oxley law. Brewer responded that he thinks nobody “lacks confidence” in the department’s ability to prosecute financial crime:
60 MINUTES: We spoke to a woman at Countrywide who was a senior vice president for investigating fraud and she said that the fraud inside countrywide was systemic. That it was basically a way of doing business.
BREWER: Well, it’s hard for me to talk about a particular case. Of course in the Countrywide case, terrific office, US Attorney’s office in Los Angeles, investigated that. Interviewed many, many people. Hundreds of people, perhaps. Reviewed millions of documents.
60 MINUTES: Do you lack confidence in bringing cases under Sarbanes-Oxley?
BREWER: Steve, no one is really has accused this Department of Justice, or this division, or me of lacking confidence. If you look at the prosecutors all over the country, they are bringing record cases with respect to all kinds of criminal laws. Sarbanes-Oxley is a tool, but it’s only one tool. We’re confident. We follow the facts and the law wherever they take us. And we’re bringing every case that we believe can be made.
As 60 Minutes goes on to note, a lot of people actually lack confidence in the DOJ’s ability to take on financial crime. In fact, prosecution for financial crime has actually hit a 20-year-low:
As former financial regulator and University of Missouri professor Bill Black says, not only should Americans as a whole and federal officials be seeking prosecutions of financial fraud, but so should “honest bankers.” After all, allowing criminals to help cause a global recession that plunged 60 million people into extreme poverty and then proliferate in an industry will only sully its reputation.