House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., today sent a letter to Attorney General Eric Holder regarding oversight of the Department of Justice’s litigation policy with respect to large financial institutions accused but not convicted or adjudicated of illegal conduct in conjunction with the financial crisis.
“On July 14, 2014, you announced a $7 billion settlement with Citigroup Inc. to resolve federal and state civil claims related to Citigroup’s conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities prior to January 1, 2009,” Chairman Issa wrote in the letter. “This announcement follows a $13 billion settlement with JPMorgan for similar conduct in November 2013. Both settlements were predicated on violations of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. While FIRREA authorizes the Department to initiate a lawsuit for civil money penalties, both Citigroup and JPMorgan resolved the investigations through pre-suit settlement negotiations.”
Issa continues in the letter:
“The Department’s inclination to enter into settlement agreements with respect to mortgage securities fraud stands in marked contrast to the Department’s litigation strategy in other contexts. In May, the Department secured a guilty plea from Credit Suisse AG concerning charges that it entered into a conspiracy to aid and assist U.S. taxpayers in filing false income tax returns; the plea agreement requires Credit Suisse pay a total of $2.6 billion in penalties. In June, BNP Paribas SA pled guilty and agreed to pay $8.9 billion in penalties for illegally processing financial transactions for countries subject to U.S. economic sanctions.”
The letter requests the following documents:
- All documents and communications since January 1, 2011, referring or relating to the settlement agreement with JPMorgan announced by the Department on November 19, 2013.
- All documents and communications since January 1, 2011, referring or relating to the settlement agreement with Citigroup announced by the Department on July 14, 2014.
- All documents and communications since January 1, 2011, referring or relating to policies governing the decision to conclude pre-suit settlement negotiations.
Click here to read the complete letter to Holder.