Beyond the Bailout

Just another site

What is the Department of Justice?

What is the Department of Justice?

The Department of Justice is a Cabinet department in the United States government designed to enforce the law and defend the interests of the United States. The DOJ  acts to ensure that laws passed by the legislative branch are properly upheld. Also, it works to deal with crimes at a federal level of government, often dealing with crimes involving multiple states or acts of violence against the nation as a whole.

The DOJ is headed by the US attorney general, currently Eric Holder; who is the chief law enforcement officer of the US and is appointed by the president as part of his or her Cabinet. Through its various agencies, the DOJ works to provide basic legal support to the president and the federal government. There are numerous offices and groups within the United States Department of Justice, including the Federal Bureau of Investigation, the Drug Enforcement Administration, the Bureau of Prisons, the US Federal Marshals, and the US Parole Commission.

There are also groups and committees within the United States Department of Justice devoted to dealing with specific areas of legal justice. These groups include the Office of Professional Responsibility, which investigates issues of misconduct by legal professionals; the Antitrust Division of the DOJ, which works to ensure fair trade among companies in the US; and the Office of the Solicitor General, which represents the United States in legal cases before the Supreme Court.

The Relationship between the DOJ & the SEC…

Many people wonder what the function of the Department of Justice is and why it is not more involved in the recent cases of financial misconduct and  fraud. During the financial crisis Americans were uncovering the fraud, corruption and misconduct of the financial system. Many believed the DOJ and the SEC should have stepped in sooner to indict criminals and enforce regulations. According to Senator Chuck Grassly, “The Justice Department has brought no criminal cases against many of the major Wall Street banks or executives who are responsible for the financial crisis.”#The DOJ could pursue more criminal cases but deals with a lot of political pressure from banks and bank-friendly politicians.

The common misconception among these two departments is that they have the same powers and controls.  The Department of Justice is responsible for all criminal enforcement and for civil enforcement of the anti-bribery provisions with respect to domestic concerns and foreign companies and nationals. The DOJ  acts to ensure that laws passed by the legislative branch are properly upheld. The SEC is responsible for civil enforcement of the anti-bribery provisions with respect to issuers.

The SEC cannot commence a criminal case against someone who commits fraud.  Nothing the SEC does, alone, will result in prison time for financial criminals. The SEC brings civil enforcement actions, and can obtain injunctions, orders of disgorgement, and orders barring defendants from the securities industry. Essentially, what you really want to know is that-they cannot put anyone in prison.  The Department of Justice can file criminal charges. Often, their criminal complaints track the civil complaints filed by the SEC.

Many people wonder why the Department of Justice does not always file criminal charges against scam artists exposed by SEC investigations.  A theory is that the Department of Justice has no end of work.  There is more criminal conduct than they can possibly address.  Some financial fraud cases, therefore, die as a result of those decisions. In addition, the SEC has major gaps on the enforcement side.

Another consideration is the familiarity of the local U.S. Attorney’s Office with the federal securities laws.  Because of their proximity to Wall Street, the U.S. Attorney’s Office for the Southern District of New York is staffed with attorneys who know the securities laws like the backs of their hands.  The same is not true in other districts.  In a district that sees relatively few securities cases, therefore, the U.S. Attorney must consider the learning curve in making his decision about which cases he will prosecute.  Essentially, not every U.S. Attorney is willing to make that decision. Even with these considerations there is more-both of these agencies can do to protect consumers, investors, and the financial markets.

What are Anti-Trust Laws?

A department of the DOJ is the Anti-Trust Division; the goal of the antitrust laws is to protect economic freedom and opportunity by promoting free and fair competition in the marketplace. Competition in a free market benefits American consumers through lower prices, better quality and greater choice. Competition provides businesses the opportunity to compete on price and quality, in an open market and on a level playing field, it attempts to stop the formation of monopolies/oligopolies  i.e.the Too Big to Fail Banks (Bank of America, J.P. Morgan Chase, Goldman Sachs, Citigroup, Morgan Stanley, Wells Fargo), which are anti-competitive in nature; by forming oligopolies that dominate the financial markets.

Federal antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade, such as price-fixing conspiracies, corporate mergers likely to reduce the competitive vigor of particular markets, and predatory acts designed to achieve or maintain monopoly power.

Over the past year, the DOJ and the SEC have begun to address more cases against companies and their executives for fraud and anti-trust. As new regulations are adopted; we hope the SEC will enforce the rules with much more rigor and persistence; and the DOJ will prosecute more white collar criminals.


Vote with Your Wallet

Vote with your Wallet

Is another campaign possible, when will it happen again?

Elizabeth K. Friedrich & Rafael Morales

In 2008, America was in shock seeing the stock market crash, the housing market collapse, and a $12.8 trillion-dollar bailout of financial institutions many felt were responsible for the economic crash. We were paralyzed, unable to see past the madness and despair. At first, our national response was minimal. Americans had lost their homes, jobs, everything, and the anger was evident in the national mood. However, from that desperation and pain-came action and movement! People began to organize in order to decide their own fate, not leave it up to the 1% and/or a complacent government. Action came in many forms, marches in streets, letter-writing and media campaigns, peaceful occupation of public spaces, and of course “Move Your Money.”

The Move Your Money Project actually started several years ago, but had not gained significant momentum until last year, when consumers began to voice their anger and outrage at the very largest for-profit financial institutions, who had been bailed-out with billions in tax-payer dollars, and rather than using those funds to expand credit to communities in need, instead sat on this cheap money and tightened their lending standards. With historic low interest rates set and held by the Federal Reserve system, profit margins became slimmer and many banks responded by increasing their fees across the board, much to the ire of many fed-up consumers.  This action was a catalyst to finally moved people to question the role of their so-called trusted financial institutions and on November 5 2011, over 600,000 people moved their money totaling $80 million dollars out of traditional banking institutions into credit unions and community banks across the country. In addition to that single day of action, over the last few years, over 4 million accounts have moved from the nation’s largest Wall Street banks according to Moebs Services, an economic research firm in Lake Bluff, IL. They also project an additional 12 million people will do the same in the next two years.

This mass-exodus from the big banks is by no means accidental and shows the overwhelming, yet untapped energy of the American people who have grown discouraged with a government that was unwilling or unable to enact true, meaningful financial reform. Many of their reasons for this are clear: consumers are looking for ethical practices, re-investment in local communities, fewer fees and more service, and the end of “Too Big to Fail” financial oligopolies. Naturally, people began focusing on credit unions and community development banks, institutions that have the public interest in mind and seek to strengthen local communities. At these community-focused institutions you actually know where you money goes and what is used for.

Convenience over accountability…

Our culture has taught us that convenience is primary tool when making decisions as opposed to accountability and fairness. Just as we make other choices; purchasing food, clothing, and transportation. Convenience is often the factor that carries the most weight in our decisions rather than ethics. This comes with many consequences – often at the expense of the environment and disadvantaged communities. Hopefully, in the future accountability and transparency will be a primary motivation for consumers when making financial decisions.

What to do?

Today we have a choice whether we know it or not. There is a parallel financial industry functioning on the fringe: Community Development Financial Institutions (CDFIs), a national network community development banks, loan funds, and community development credit unions (CDCUs). These are institutions with a primary mission to strengthen vulnerable communities and invest locally. Banks and credit unions are regulated depository institutions; banks by the Federal Deposit Insurance Corporation (FDIC) and credit unions by the National Credit Union Administration (NCUA). Credit unions offer many of the same services as banks: mortgages, car loans, personal loans, small dollar loans, credit cards, savings/checking accounts, international money transfers, Individual Development Accounts (matched-savings accounts), retirement planning, financial literacy education and budgeting, affordable savings and checking accounts, and credit and debit cards with low minimum balances and flexible terms. They are not-for-profit financial institutions created to serve their local communities and members first. Unlike banks, which can serve any customer that walks in the door, credit unions are restricted to specific fields of membership.

This means that consumers have more options than ever with respect to their primary financial institutions, and a major selling-point for many is that the money they deposit in their credit union stays local within the specific field of membership. Rather than profiting shareholders, income earned at a credit union, dividends are returned in different forms from free services to better interest rates or to expand services in the community.

Making the choice to bank at a credit union or a community development bank creates a multiplier effect for the local communities being served, and ultimately in the entire the financial system. When you invest in a community development financial institution you are investing in job creation, building schools, developing housing and financing small businesses.

Some banks may be “too big to fail,” but consumers are waking up and realizing they have a choice where they put their money, and the impact that choice can have in their own communities. Rather than letting too big to fail institutions gamble away their hard-earned cash, people are choosing to exercise their power as consumers and speak with their wallet. In banking this means find the smart, responsible alternative for you, your family and your community, and community development banks and community development credit unions are a logical choice.

We have seen the success of the Move Your Money Project but when will it happen again? Many Americans are pledging to move their money but we need another day of action. Every account transfer is a victory but to send another message to the top dogs-there should be Bank Transfer Days every month! Remember, remember the 5th of November, December, February, March, April, May, June, July, August, September and October.  Instead of voting with your feet vote with your wallet, it creates a larger impact.

Hello & Welcome to Beyond the Bailout!

Welcome to Beyond the Bailout-A blog dedicated to uncovering financial and political corruption, sharing knowledge on the financial crisis/the bailout/current economy, responding to financial regulation & reform and eventually create financial solutions for Americans.

Background on Me: I am a supporter of Occupy Wall Street, a member of Occupy the SEC (, a participant in the Alternative Banking Working Group, a member of The Occupy Bank Working Group, and a community organizer spreading the word about alternative financial institutions in particular-Credit Unions.

I believe, the financial system would like the American public to remain ignorant to the power and control it has over us. Also, I think it is time to understand what role the financial system plays in our daily lives and how to make informed decisions to change the way it functions to work for us. There are many ways to engage with the financial and political system and hopefully this blog will inspire people to start.

Please send me questions, concerns, information to support and build this blog.

Thank You.

Elizabeth K. Friedrich