US Attorney General: Mortgage Mess Isn't Enron Redux
U.S. Attorney General Michael B. Mukasey ruffled the feathers of more than a few key Democratic lawmakers late Thursday, solidifying his earlier stance that he will not form a national task force to investigate the mortgage crisis -- particularly, mortgage fraud. Fraud in mortgages allegedly has run rampant from borrowers all the way through to Wall Street investors, helping fuel a global financial crisis that many economists say has pushed the United States into a recession. Mukasey said in a press conference with reporters Thursday that he did not feel the mortgage crisis warranted the same sort of response the Department of Justice mustered to Enron's collapse in 2002, when the DOJ formed a national task force to investigate the collapse of the energy industry titan. Instead, Mukasey called the mortgage problem local in nature and characterized the issue as a collection of "white collar street crimes," according to a published report in the New York Times, which first covered the story. That sort of response certainly didn't sit well with House Financial Services Committee Chairman Barney Frank (D-MA). He told the Times that Mukasey's stance on the mortgage issue was "disappointing" and said that the current crisis was worse than Enron. "Enron didn’t cause a worldwide recession," Frank said. "This has more innocent victims." Senate Banking Committee chairman Senator Chris Dodd (D-CT) also said in a press statement late Thursday that Mukasey's response was indicative of how the Bush adminstration has "vastly" underestimated the scope of the mortgage mess. "[M]illions of borrowers were lured into mortgages they could not afford by unscrupulous lenders and brokers," Dodd said. "The administration ought to be aggressively pursuing the perpetrators of these abusive practices." Mukasey, however, has steadfastly asserted that state-level responses to the mortgage problem are more effective; in April, the Wall Street Journal reported on Mukasey's initial resistance to calls for a centralized task force, a stance that seems to have only become more firm since that time.