Holder's Book-Cooking of Mortgage Fraud Enforcement Stats Not News Outside of the Business Press
On Friday, Eric Holder's Department of Justice gave the memory-hole treatment to wildly inflated statistics released last October about the number of cases and the amount of money involved in DOJ's mortgage fraud enforcement efforts.
Bloomberg News reporters who had discovered that the original numbers were suspect had been getting stonewalled for months in their efforts to get answers to their queries, and finally got them through the document-dump route. The differences are stark.
Here were the headlined numbers on October 9, 2012:
Here were the post-revision numbers released on August 9, 2013:
Thus, the number of defendants fell by 80% from what DOJ claimed less than a month before the presidential election. The number of victims fell by 76%. The amount of losses involved dropped by over 90%.
Other than those small matters, everything was in order. (/sarc)
Bloomberg's coverage of the changes by Phil Mattingly and Tom Schoenberg reminded readers how the original numbers were intensely hyped (bolds are mine throughout this post):
... The corrected statistics come in response to a Bloomberg News story reporting that some cases cited occurred before the initiative began in October 2011, including one filed by prosecutors more than two years before Obama took office.
The results of the nationwide initiative, which included undercover operations and a law enforcement surge in California, took place were initially presented at a Justice Department press conference that included Attorney General Eric Holder and Secretary of Housing and Urban Development Shaun Donovan.
... Holder said at the time that the results indicated a “historic, government-wide commitment to eradicating mortgage fraud and related offenses across the country.”
... The “Distressed Homeowner Initiative” was a coordinated effort by federal law enforcement agencies, inspector general offices, the Justice Department and the Consumer Financial Protection Bureau. It came after the FBI began to recognize a sharp increase in frauds aimed at struggling homeowners in the years following the 2008 housing crisis, bureau Associate Deputy Director Kevin Perkins said at last year’s press conference.
Eric Holder Owes the American People an Apology
The Justice Department made a long-overdue disclosure late Friday: Last year when U.S. Attorney General Eric Holder boasted about the successes that a high-profile task force racked up pursuing mortgage fraud, the numbers he trumpeted were grossly overstated.
... The government restated the statistics because it got caught red-handed by a couple of nosy reporters. Last October, two days after Holder first publicized the numbers, Phil Mattingly and Tom Schoenberg of Bloomberg News broke the story that some of the cases included in the Justice Department's tally occurred before the initiative began in October 2011. At least one was filed more than two years before President Barack Obama took office.
After their initial story, I asked a Justice Department spokeswoman, Adora Andy, several times over the course of a month for a list of the people charged and their case details so I could look them up myself. She promised repeatedly to provide one, until she finally stopped responding to my requests.
... My column about the Justice Department's refusal to come clean ran a few days later last fall. And it seems obvious now why I wasn't given the list. The government would have been handing me the proof that the numbers it was touting were wrong.
... What a charade. No wonder the government found it so difficult to bring a meaningful number of accounting-fraud cases against bank executives after the financial crisis. Its own books were cooked.
This was the second time, mind you, that Holder's Justice Department had pulled a stunt like this. In December 2010, Holder held a press conference to tout a supposed sweep by the president’s Financial Fraud Enforcement Task Force called "Operation Broken Trust." (The mortgage-fraud program was part of the same task force.) As with the mortgage-fraud initiative, Broken Trust wasn’t actually a sweep. All the Justice Department did was lump together a bunch of small-fry, penny-ante fraud cases that had nothing to do with one another.
Don't sit by the computer or TV waiting to see that apology, Jonathan. Being an establishment press-coddled attorney general means never having to say you're sorry.
It's obvious, but it still must be said: If a Republican or conservative presidential administration were ever to inflate the results of an important law enforcement initiative by factors of four to ten, the news would not be confined to the business pages and a few center-right blogs.
Cross-posted at BizzyBlog.com.