Wall Street Vs. Main Street
Floor Speech
The SPEAKER pro tempore. Under a previous order of the House, the gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
Ms. KAPTUR. Mr. Speaker, Wall Street speculation and the disaster it caused have been clear since the bailout in the fall of 2008. More foreclosures on Main Street, higher profits for Wall Street.
I fought against that bailout, and I continue to fight for Main Street and the people who are not high powered gamblers nor high paid investors nor the mega banks. My fight is for people to regain their jobs, for people to save their homes, and for people to have their hope restored.
I've been observing the U.S. Securities and Exchange Commission taking a baby step, long overdue, as watchdog of the markets that they are supposed to be regulating as enforcers of securities law.
As the New York Times reports today, rather than asserting that Goldman misrepresented a product it was selling, the most commonly used grounds for securities fraud, the Securities and Exchange Commission said in a civil lawsuit filed on Friday that the investment bank misled customers about how the product was created. In fact, the SEC can only file civil cases, so it's high time to look, rather, at the apparent criminal fraud involved in and around the hidden works of Wall Street and the financial crisis it precipitated.
Last year I introduced H.R. 3995, the 2008 Financial Crisis Investigation and Prosecution Act, authorizing the Director of the FBI to hire 1,000 additional agents and additional forensic accounting experts to probe down into the misdeeds that brought down the economy of our Nation.
Though the FBI is slightly beefing up their ranks on investigating fraud, during the savings and loan scandal of the late 1980s and early 1990s 1,000 agents, as well as forensic experts, exacted justice. Today, if there are even 300 over there doing part-time work on this, that would be a high number.
Back in the eighties and nineties, that savings and loan crisis cost the people of our country $170 billion placed right squarely on the back of our taxpayers. The 2008 financial crisis could cost our people trillions of dollars. So it must be the focus of the Department of Justice to find and fight the fraud in our financial system. And they simply need more financial white collar crime agents to do so.
Citizens following the law have nothing to fear. Those committing criminal acts should know they will be caught. That is why, in addition to authorizing more FBI agents, H.R. 3995 also authorizes the hiring of more prosecutors in the Department of Justice to take those cases to trial.
In addition, the SEC has an important role in enforcement, as shown on Friday of last week, and H.R. 3995 strengthens the SEC by authorizing the hiring of more investigators.
Many groups support this effort and recognize the necessity of ensuring our financial system is rid of these criminals, and also pointing out who's profited from the harm that has been caused to the American people through their moral hazards.
No one knows exactly how much the financial crisis of 2008 will cost our taxpayers, but one way to lessen that blow to them is to claw back to the assets of those who rigged the system to their benefit and our Republic's detriment. Our citizens want those who committed crimes to be held accountable, and H.R. 3995 supports the agencies who can work for real justice.
I ask my colleagues to support this bipartisan bill and work to support the agencies tasked with finding and fighting massive fraud in our financial system.
Furthermore, Congress should be assured that the Department of Justice is on task to find and fight this fraud.
The charges against Goldman Sachs, the speculators there, by the SEC have released a wave of response across this country. And in today's New York Times Letters to the Editor, Oliver Revell, who served for 30 years as Special Agent and Senior Executive of the FBI and as an Associate Deputy Director, wrote to the Times, ``It is clear to me that the SEC charges should be held in abeyance, and that the FBI and Justice Department should immediately open an investigation in the apparent fraud that occurred in this area.''
He states that out of concern that the SEC's civil charges might result in future criminal actions being impossible, as evidence in civil trials can be excluded as inadmissible from criminal trial if it is used first in a civil trial.
I agree. And I'm circulating a letter among my colleagues asking Attorney General Holder to investigate Goldman Sachs and other related cases to find and fight fraud in our financial system.
Many questions are yet to be answered and situations investigated. How much of this was under the watch of then CEO of Goldman Sachs, Henry Paulsen, the former Secretary of the Department of the Treasury, who then bailed out the big banks with which he was so intimately implicated?
AIG must be one of these cases since Goldman Sachs was the largest domestic recipient of counterparty payments through AIG. Goldman's excessive profits in this first quarter have gone up more than $3.5 billion. Imagine if you could borrow at one-half percent interest from the Federal Reserve and then lend that money out at 3.5 percent interest rate. You'd be making billions, too.
And it's not just all about Goldman Sachs. It's about Lehman Brothers, Washington Mutual, other banks, our speculative firms, hedge funds, mortgage companies. Fraud is against the law, and right now fraud appears to be rampant and getting away with it. We need to be investigating and catching the criminals and leaving those who abide the law alone.
I fought the bailout in part because I was concerned that rampant fraud was highly likely. And Congress needs to fight for Main Street and support those agencies that are responsible for fighting fraud in our system.
I ask my colleagues to join me by also signing the letter we have composed to Attorney General Holder asking for a criminal investigation with fraud related to these institutions; and also invite my colleagues to cosponsor H.R. 3995.
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