Moral Low Ground


As Covington & Burling Partners, Attorney General Eric Holder, DOJ Criminal Division Chief Lanny Breuer Represented Fraudulent Foreclosure Banks

Holder: Revolving-door warrior, mortgage fraud protector.

U.S. Attorney General Eric Holder and Lanny Breuer, the Justice Department’s criminal division chief, were partners for years at Covington & Burling, a high-powered Washington law firm that represented a bevy of big banks that are accused of fraudulently foreclosing on the homes of countless Americans.

Reuters reports that legal experts say that federal conflict of interest rules required Holder and Breuer to recuse themselves from any Justice Department decisions pertaining to any of the banks they once personally worked for.

The Justice Department won’t say if Holder or Breuer personally worked for any of the big banks currently embroiled in an alleged massive mortgage fraud scandal, but DOJ spokeswoman Tracy Schmaler told Reuters that both officials were in full compliance with government conflict of interest regulations. However, Schmaler did not indicate whether they had recused themselves from business related to their former clients.

And oh what business there is! The DOJ is under intense pressure from Congress, state and local officials, homeowners and their attorneys and activists to open a criminal investigation of mortgage service companies, the most prominent of which have been Covington & Burling clients. Indeed, the firm has represented America’s four largest banks– Bank of America, JP Morgan Chase, Citigroup and Wells Fargo, as well as mortgage giant Freddie Mac and Mortgage Electronic Registration Systems (MERS Corp), which has been accused of widespread mortgage fraud.

In the 1990s, Covington & Burling wrote legal opinion letters necessary to form MERS Corp on behalf of many of the major banks and mortgage companies listed above. By 2010, MERS Corp owned around 60 million mortgages, around half of all such loans in the U.S. The problem is that MERS Corp authorized thousands of unauthorized bank employees to sign off on foreclosures as high company officials.

As two of the top DOJ officials, Holder and Breuer have been suspiciously reluctant to bring any criminal charges against big banks and other mortgage service companies, despite mountains of evidence of criminal wrongdoing. Forgery, perjury, obstruction of justice and illegal foreclosures on the homes of thousands of active-duty military service members are all widely documented, yet no criminal charges have been filed by the DOJ.

Reuters also cites “large numbers” of apparently forged mortgage promissory notes that were submitted as evidence to courts and “almost routine manufacturing” of false mortgage assignments, the documents of ownership transfer between banks or investors. Mortgage assignments are legally required to prove a bank’s right to foreclose.

According to Reuters and Hot Air, Salem, Mass. register of deeds John O’Brien, Jr. announced Wednesday that he sent 31,897 allegedly fraudulent foreclosure documents to Holder, requesting a criminal investigation of mortgage service companies and the law firms representing them due to a “pattern of fraud,” forgery and false notarizations.

“I think it’s difficult to find a fraud of this size on the U.S. court system in U.S. history,” Yale Law School professor Raymond Brescia told Reuters.

Despite all of this, and the national attention the “robo-signing” scandal has attracted, Holder’s DOJ has rejected any criminal investigations. Perhaps this is because of the so-called “revolving door” between the DOJ and Covington & Burling. No less than 22 current Covington attorneys once worked for the DOJ; another 12 were with the U.S. Attorney’s offices. John Garland, Holder’s former deputy chief of staff, as well as Breuer’s former deputy chief of staff Steven Fagell, both work for Covington & Burling.

Right-wing blogger Michelle Malkin has literally written the book on the culture of corruption within the Obama administration, focusing heavily on Holder’s DOJ and the Attorney Generals’ dubious dealings with everyone from Chiquita Brands International, the U.S. fruit giant that colluded with a Colombian paramilitary death squad that slaughtered thousands of innocent workers in an attempt to crush labor unrest, to protecting Big Pharma drugmakers accused of corruption and deceptively marketing unsafe medicines. Malkin, a regular Fox News contributor, comes off as a reactionary hothead. But she’s relentless and spot-on, (although rabidly and unabashedly partisan), when it comes to uncovering corruption among the ranks of the current administration, which promised transparency and an end to revolving-door politics but has delivered nothing but business as usual in Washington.


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