corporate personhood

ERIC HOLDER’S MISSING DEFENDANTS POSTED BY JOHN CASSIDY

In some of the instances detailed by the Justice Department’s statement of fact, the proportion of dubious loans in a given mortgage pool went as high as thirty or forty per cent. That is what the firms who did the sampling told Citi, anyway. On reading one of the due-diligence reports, a trader at the bank wrote in an internal e-mail, “We should start praying…. I would not be surprised if half of these loans went down…. It’s amazing that some of these loans were closed at all.”

In this case, and in many others, the bank went ahead and securitized loans from the pool whose quality had been called into question. The mortgage-backed securities that Citi created were sold for billions of dollars, and all too many of them subsequently endured heavy losses as individual home owners defaulted on their loans—just as the Citi trader had predicted they would.

Where is that trader today? Where is his boss, and his boss’s boss, and his boss’s boss’s boss? About the only thing we know is that they aren’t in the dock. Nobody is, unless, of course, you follow the example of the Supreme Court and ascribe some sort of full-blown personhood to a corporation, in this case Citigroup. “Today, we hold Citi accountable for its contributing role in creating the financial crisis,” Associate Attorney General Tony West said, “not only by demanding the largest civil penalty in history, but also by requiring innovative consumer relief that will help rectify the harm caused by Citi’s conduct.”

Ahem. The best possible spin on the settlement is that it represents a belated but promising step-up in the effort to hold some individual bankers accountable. Holder insisted that nothing in it precludes the bringing of criminal charges. Perhaps the inter-agency group of investigators and prosecutors that brought this civil case will now press ahead and use the evidence they uncovered to go after the traders and supervisors who were responsible for the “wrongdoing,” and the senior bank executives to whom they reported.