Sunday, October 19, 2008

No surprise here -- FBI economy probes left underfunded

Sadly, it's no surprise to hear that the FBI says it doesn't have enough resources to investigate allegations of criminal wrongdoing that could have caused the global financial crisis. In fact, the Bush administration has been shortchanging the FBI's criminal investigative workforce since 2004 despite being aware of the looming mortgage collapse, the New York Times reported Sunday. The Times said the Bush administration ignored FBI requests for additional funding to investigate corporate wrongdoing as it refocused the agency on national security after the Sept. 11 attacks. "The administration's top priority since the 9/11 attacks has been counterterrorism," Justice Department spokesman Peter Carr told the Times. "In part, that's reflected by a significant investment of resources at the FBI to answer the call from Congress and the American public to become a domestic intelligence agency, in addition to a law enforcement agency." Data compiled by the Times shows sharp cutbacks in investigation of white-collar crime, particularly mortgage fraud. Fraud prosecutions directed at financial institutions dropped by nearly one-half from 2000 to 2007, insurance fraud cases fell 75 percent and securities fraud decreased by 17 percent, the Times said. "Clearly, we have felt the effects of moving resources from criminal investigations to national security," FBI Assistant Director John Miller told the Times. "In white collar crime, while we initiated fewer cases over all, we targeted the areas where we could have the biggest impact. We focused on multimillion-dollar corporate fraud, where we could make arrests but also recover money for the fraud victims." But the Times and the Reuters international news service reported that former law enforcement officials said senior White House and Treasury Department officials cautioned the Justice Department and the FBI to be more pro-business. Reuters said administration officials described aggressive corporate prosecutions, such as the Justice Department's national task force to investigate the collapses of WordCom, Adelphia and Enron, as "over- deterrence."

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