Moyers and Company caught up with a man who knows a lot about fraud — and fraud prosecutions — to explain why that is, and what the possible consequences of letting Wall Street off the hook might be. William K. Black, now a professor of law at the University of Missouri at Kansas City, is a former bank regulator who played an integral role in throwing a number of high-level executives in jail for white-collar crimes during the savings and loan crisis in the 1980s. We spoke with Black by phone. A lightly edited transcript of our discussion is below.
Joshua Holland: To date, a few loan officers — small fish — have been convicted of various offenses related to the financial crash. But none of the big bankers have faced any charges. And it’s not that the government has been losing cases in the courts. There’s simply been no concerted effort to prosecute these guys. Can you contrast that with what happened during the savings and loan scandal of the 1980s, and also give us your sense of why this has been the case?
William Black: Sure. The savings and loan debacle was one-seventieth the size of the current crisis, both in terms of losses and the amount of fraud. In that crisis, the savings and loan regulators made over 30,000 criminal referrals, and this produced over 1,000 felony convictions in cases designated as “major” by the Department of Justice. But even that understates the degree of prioritization, because we, the regulators, worked very closely with the FBI and the Justice Department to create a list of the top 100 — the 100 worst fraud schemes. They involved roughly 300 savings and loans and 600 individuals, and virtually all of those people were prosecuted. We had a 90 percent conviction rate, which is the greatest success against elite white-collar crime (in terms of prosecution) in history. ...