Remarks as prepared for delivery
Thank you Attorney General [Jim] Hood for your gracious introduction, for your service as both the chief lawyer for the state of Mississippi, and for your leadership of the National Association of Attorneys General.
It’s a real privilege for me to have an opportunity to meet with you today. I know that over the years you all have worked closely with the department on a number of important issues, from child exploitation to financial fraud, and you have been critical partners in each of these endeavors. I know that not only from my perch now at main Justice, but also from the 25 years that I spent in the field. Until just six weeks ago, I was serving as the U.S. Attorney in Atlanta – a position that I held for about five years. This is my 26th year with the Department of Justice. I started as a line AUSA, then supervisor, first assistant U.S. Attorney, U.S. Attorney – and now nominated to serve as Deputy Attorney General.
I have served in leadership positions in both Republican and Democratic administrations. And what I learned during that time – and what this organization reflects – is that the vast majority of what we all do isn’t governed by political affiliation. It’s governed by doing what’s right for the citizens we serve. Law enforcement – public safety – really is a non-partisan issue. It’s something on which we can, and indeed we must, work together. The public should demand no less from us.
I was fortunate in Atlanta to be able to work with our Attorney General and my good friend Sam Olens. Certainly, Sam and I don’t agree on everything. But there is much on which we do agree, and Sam and I joined forces to try to make the citizens whom we both served safer.
For example, human trafficking is a huge issue for Atlanta. Some rate it as the number one city for child sex trafficking – some rate it a bit lower. Whatever the ranking, it’s too high. And Sam and I worked together to develop a comprehensive strategy to not only aggressively prosecute the traffickers, but importantly, also to raise public awareness of the issue and address demand.
In addition to our work combatting human trafficking, our U.S. Attorney’s office worked hand-in-hand with Sam’s office on vigorously pursuing health care fraud cases. I know many of your U.S. Attorneys have partnered with your offices to prosecute healthcare fraud in a similar manner. Because regardless of where one stands on the Affordable Care Act, we can all agree that fraudsters cannot be permitted to drain our precious health care dollars.
And, speaking of public health, Sam and I worked together to address an issue that is both a public health challenge and a law enforcement challenge – and that is prescription drug abuse. In my home state, where six times more people die from prescription drugs than all of the illicit drugs combined, cracking down on pill mills and having common sense state-level legislation to provide law enforcement the tools necessary to enforce these laws is critical. And I’m pleased that Sam and I worked hand-in-hand on that issue as well.
So I come to this position of Acting Deputy Attorney General with a decidedly local perspective. And I hope that perspective will help keep me grounded and focused as we seek to partner with you on a national level.
The National Association of Attorneys General serves an important role not only in bringing together state attorneys general but also in uniting them with federal counterparts. The Department of Justice has joined with the states on dozens of important issues, any one of which would be a rich source of discussion for today. We are proud to have had such a long-standing partnership in areas such as cyber security, violent crime, civil rights, criminal justice reforms, child exploitation, and human trafficking. In all of these matters, the state-federal partnership has been the key to our ability to create deep and lasting change.
Just last week, the department’s Antitrust Division and 17 state attorneys general won a hard fought victory against anti-competitive practices at American Express. In that case, state attorneys general worked side by side with the Antitrust Division not only during the two and a half years of pre-trial discovery but also during the trial, where lawyers from the Missouri and Ohio attorney general’s offices offered opening and closing statements. Also in the antitrust arena, state attorneys general were partners with the department in the Apple e-books case – where no less than 33 states participated – and the Munibonds cases where we cooperated with 26 state attorneys general to hold banks and individuals accountable for manipulating the bidding process on municipal investment contracAnd of course, our joint efforts in combatting fraud from the financial crisis provide one of the best examples of how we must work together.
The financial fraud enforcement task force was the broadest coalition of federal, state and local law enforcement and regulatory agencies ever assembled to fight financial fraud.
Through the efforts of all the task force partners – including the National Association of Attorneys General and its members – the task force has brought about some measure of redress and accountability for the widespread misconduct that led to our nation’s economic collapse just a few years ago.
Our combined efforts have resulted in major banks such as JP Morgan, Citibank, and Bank of America paying $36.6 billion in penalties, compensation, and consumer relief to investors and victims who suffered because of the reckless behavior of those banks and others. And the billions of dollars in consumer relief will go a long way to helping thousands of consumers – homeowners who were underwater – to begin anew.
In the JP Morgan case, for example, our state attorney general partners – New York, California, Delaware, Illinois, and Massachusetts -- were invaluable throughout, from sharing evidence and other information as the investigations unfolded, to strategizing as the settlement negotiations began. Associate Attorney General West was correct when he noted in his remarks that “the scope and scale of the settlement with JP Morgan would not have been possible without our partnership with states.” The same is true of our state partners in the Citi Group and Bank of America settlements, which added Kentucky and Maryland to the team.
Finally, just a few weeks ago, we successfully resolved a case against Standard & Poor’s that alleged fraud in the firm’s issuance of ratings for residential mortgage backed securities and collateralized debt obligations. The settlement of almost $1.5 billion included not only a lawsuit filed by the Department of Justice in 2013, but also parallel lawsuits brought by 19 states and the District of Columbia.
As important as these settlements are, I think we must also acknowledge that corporations can only act through people, and even imposing unprecedented financial penalties on the institutions whose conduct led to the financial crisis is not a substitute for holding individuals within those institutions personally accountable for their actions. I know that you, as partners in this endeavor, know how challenging it is to build a case against individuals, particularly high ranking individuals who have insulated themselves from the activity of others. Compartmented knowledge and lack of evidence of intent can be difficult to overcome. But we owe it to the public we serve to double down on our efforts to determine how best to hold culpable people responsible. The Attorney General has asked U.S. Attorneys with pending residential mortgage backed securities cases to go back and take a fresh look at whether there are criminal or civil cases to be made against individuals in these matters, and to report back in a few weeks.
Going forward, we’re going to do even more. We have begun an examination of how we are approaching our investigation of complex white collar cases involving institutions, and what we need to do in the future to overcome the hurdles inherent in charging individuals. We’re going to determine if there are concrete things we can do differently to meet those challenges. And we will want to engage with you to get your thoughts as well.
Let me be clear, the Justice Department will never bring charges against anyone who doesn’t deserve it just to satisfy a public demand. But we also know that to meet our core obligation to hold lawbreakers accountable, to achieve maximum deterrence, and to inspire the confidence of the public we serve, we must do everything we can to ensure that culpable individuals are charged when the facts and the law support it.
We have also begun to take a more forward-looking approach to financial fraud, and we are collectively turning our attention to emerging areas of abuse. For example, task force members – including a number of state attorneys general – are taking a hard look at the auto lending industry. These include instances of auto loan fraud and lending discrimination. They also include deceptive consumer practices that state attorneys general are particularly adept at targeting. We are also in touch with state attorneys general who are examining potential fraud related to securities backed by auto loans. As the Wall Street Journal recently reported, subprime lending has increased in auto loans and credit cards to nearly the same levels that occurred prior to the financial crisis. While that alone does not signal that fraud is going on, we shouldn’t wait until there is a crisis to pay attention. We can and should use our experience investigating mortgage-backed securities to be on the lookout for, and head off, any potential threat, rather than waiting until after losses have been suffered.
While it’s too early to tell what will result from our efforts regarding auto lending, what matters here is our approach. By keeping the lines of communication open and coordinating our efforts with you, we will be able to have a more complete understanding of the conduct at issue and we can be smarter about how we address it.
So circling back to where I started, it’s clear to me that just as it’s been said that all politics is local, all law enforcement is really local, too. I truly valued my opportunity to work with my local attorney general during the time I served as U.S. Attorney. I’m even more excited in this new capacity to have the opportunity to partner with all of you on at the national level. It’s clear that as a whole, we are truly greater than the sum of our parts, and I look forward to working to working with you as we join forces to serve the American people.
Thank you for this opportunity to speak to you today and I look forward to getting to know each of you in the months to come.