The Department of Justice announced it will not bring civil or criminal charges against investment bank Goldman Sachs, despite its probable violations of various banking and securities laws that precipitated the financial collapse of 2008. In a statement it released yesterday, investigators said they “ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time.”
On the same day Goldman Sachs also revealed that the Securities and Exchange Commission was ending its investigation into a $1.3 billion subprime mortgage deal without bringing charges.
Given the close ties between Goldman Sachs and the government, the timing of these announcements raises red flags about the adequacy of banking and financial regulations and signals a lack of political will to hold large banks accountable for creating our present economic mess.
These announcements are surely disappointments to millions of mortgage holders, consumers, and taxpayers who are shouldering the costs of Goldman Sachs and other large banks’ complicated and ill-conceived banking practices. Although the Justice Department and SEC claim there is insufficient evidence to prosecute, these announcements in no way exonerate the large investment bank from its share of responsibility in creating and sustaining America’s largest financial disaster since the Great Depression.
Despite election year rhetoric pinning America’s economic problems on President Obama’s shoulder the real problem appears to be lax Congressional oversight, impotent laws, and regulatory agencies with cozy ties to their friends in the banking industry. Without the political will in Congress to write stronger laws to regulate this industry, mortgage holders, consumers and taxpayers alike are unlikely to see any substantial relief from the financial and political corruption that is rife in this country.