While candidate Trump ran (and railed) against Wall Street, President-elect Trump has done a historic flip-flop — filling senior positions with Wall Street financiers and lawyers, including his nomination for Treasury secretary, chairman of his National Economic Council, and chairman of the Securities and Exchange Commission.
However, his nominee for attorney general, Sen. Jeff SessionsJefferson (Jeff) Beauregard SessionsOvernight Hillicon Valley — Apple issues security update against spyware vulnerability Stanford professors ask DOJ to stop looking for Chinese spies at universities in US Overnight Energy & Environment — Democrats detail clean electricity program MORE (R-Ala.), has a history of words and deeds that appear to be pretty tough on banks and bankers. The Senate Judiciary Committee needs to determine if Sen. Sessions will continue this decades-long fight against financial crimes and demand for banking accountability.
Long before he was a senator, Sessions was U.S. attorney for the Southern District of Alabama from 1981-1993 and then Alabama attorney general until he was elected to the Senate in 1996. Throughout his time as an elected official, Sessions has talked tough on financial crimes.
It has been widely noted that then-U.S. Attorney Sessions brought many prosecutions against bankers for their role in the historic savings and loan fraud. Reflecting on this experience at a 2002 Senate Judiciary Committee hearing, he said, “I am going to tell you, there is a lot better behavior in banking today because people went to jail over those cases in the past.”
Sessions also correctly observed that “harsh sentencing does deter,” which is well-recognized by most, though often forgotten with respect to Wall Street crime.
During a 2007 Judiciary Committee hearing, Sessions stated, “Corporate fraud is an important thing, and millions of people have lost their whole life savings as a result of fraud by corporate officers.”
He also made the important point that, because corporations can hire the very best representation, prosecutors “have to be strong….a prosecutor cannot be a weak-kneed person going up against a major corporation in a fraud case.”
In 2010, when President Obama nominated James Cole to serve as deputy attorney general, Sessions discussed Department of Justice (DOJ) treatment of British Petroleum (BP) for its role in the Gulf of Mexico oil spill: “I have said repeatedly that BP is liable and should be held liable for their responsibilities to the extent of their existence. In other words, they are not too big to fail.”
Later in the same hearing, Sessions and Cole discussed the Arthur Andersen LLP prosecution related to its deficient work for the now-infamous Enron Corporation, one of the country’s largest corporate frauds.
Sessions felt that Cole had strayed from enforcement of the law and placed too much consideration on the impact of prosecution on other employees.
“I was taught, if they violated the law, you charge them. If they did not violate the law, you do not charge them,” Sessions said.
Directly contrary to those views, then-Attorney General Eric HolderEric Himpton HolderOregon legislature on the brink as Democrats push gerrymandered maps Christie, Pompeo named co-chairs of GOP redistricting group Democrats look to state courts as redistricting battle heats up MORE, in testimony before the Judiciary Committee, infamously created an appalling double standard where too-big-to-fail banks would get favorable treatment: “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.”
All of these policies, practices and views need to be explored by the Judiciary Committee during Sessions' hearing. For example, does Sessions share former Attorney General Holder’s views on not prosecuting too-big-to-fail banks?
Does Sessions repudiate that practice, which would be consistent with his past statements? Does he believe that no company, specifically, no bank or financial entity, is too big to fail and, therefore, not too-big-to-prosecute, as he believed for BP?
Also, the biggest banks on Wall Street have used their shareholders’ money to pay huge fines to settle the banks’ liability, but not one of the bank executives or officers were ever charged with a crime by the Justice Department.
Does Sessions believe that individuals, including executives and supervisors, should be prosecuted if they break the law, even if they work at Wall Street’s too-big-to-fail banks?
There is a great deal of justifiable controversy around Sessions’ nomination to head the Department of Justice. While others will appropriately focus on those many other key issues, Sessions’ record as a crime fighter and his views on enforcement of the law, particularly against banks and bankers, deserve scrutiny as well.
Dennis Kelleher is president and CEO of Better Markets, a Washington-based independent, nonpartisan, nonprofit organization that promotes the public interest in financial reform, financial markets and the economy.
The views expressed by contributors are their own and not the views of The Hill.