Public Papers - 1990 - June
Remarks to United States Attorneys
Thank you all, and welcome back to Washington, many of you. For those here, my thanks to you as well for the job you're doing. I want to thank Secretary Brady for being with us, Nick, and of course my valued counselor and friend, the Attorney General, Dick Thornburgh, who is doing an outstanding job for our country. And I'm grateful to him every single day that I'm President.
To the prosecutors and crimefighters, you know what -- when I told the grandchild that's with me there in the White House now that I'd be spending some time with some of America's finest crimefighters, Noelle asked me if I'd be sure to bring back an autograph from Dick Tracy. [Laughter] We just saw that show in the White House.
But nevertheless, true villains are drawn from life, not from primary colors; and where financial fraud is concerned, it takes a discerning mind and a determined spirit to distinguish the incompetent from the fraudulent, the unlucky from the unlawful. And this nation is very fortunate to be able to look to you, the United States attorneys of America, to make these tough calls. And we depend on you as you work with the FBI and other investigative and regulatory agencies to sift through piles upon piles of documents and understand that in the cold numbers of a ledger can be found the tragedy of an embezzled pension, the heartache of stolen savings.
White-collar crime is not as dramatic as violent crime, but white-collar crime still ruins lives, and it murders the fondest dreams of whole families. And it takes a snake, a coldblooded snake, to betray the trust and innocence of hard-working people. And so, if we have to look under rocks to find these white-collar criminals, then we will leave no stone unturned.
This administration, from our first days in office, has worked with Congress to crack down on white-collar criminals -- to crack down on fat-cat financiers who launder the smell of blood out of drug money and white-collar crooks who cheat the elderly out of their life's hard work, and to bring to justice government contractors who steal by the numbers. You already know of the 37 convictions from the Ill Wind probe of Federal defense contractors, and you already know of the 127 people rounded up in Operation Polar Caps crackdown on drug financiers.
And let me say I wanted you here today to also thank you because there are signs that we are starting at long last to make credible progress in the war on drugs. Dick and Nick Brady and I have just come from a meeting with Bill Bennett [Director of National Drug Control Policy] -- a report on where we stand; and we're beginning to get the sense -- and I think the country is beginning to get the sense -- that we will, indeed, win this war on drugs.
You already know that among cases involving abuse of HUD contracts, the Department of Justice has already obtained 65 convictions this fiscal year, including 21 convictions in Oklahoma alone, while courts have ordered almost /2\ million in restitution in that State, more than half of which will come from an executive who has a 5-year reservation in prison. And in all, the Government has won 10,000 financial fraud convictions since 1985. And just last year alone, the Department of Justice aggressively won almost 800 convictions in major financial institution fraud cases -- cases involving more than 0,000 each.
But the most critical financial fraud problem we've faced is the -- Dick referred to it -- the savings and loan crisis. Working closely with Congress, we succeeded in obtaining many critical regulatory reforms, but a great deal of wrongdoing had already taken place, had already occurred. And so, in the third week of my administration, I directed the Attorney General to give cases of S L fraud the highest priority; and he did just exactly that. And when it comes to civil action, we have sought restitution to protect taxpayers through tens of thousands of civil suits leveled against S L executives, owners, and borrowers. And when it comes to criminal action, we aim for a simple, uncompromising position: Throw the crooks in jail.
And this aggressive attitude is paying off, and in 3 years, we've won more than 150 S L convictions: 0 million ordered in restitution -- 0 million; more than 400 years in prison terms meted out. And I know that because of you and your firm support there will be much, much more. I am grateful to each and every one of you that is fighting hard to bring these people to justice.
Consider all that is happening. An S L chairman gets 30 years in the celebrated case in Dallas, Texas. An S L CEO in Santa Rosa is sentenced to prison, and the courts ordered almost million in fines and restitution. In Illinois, top officers of an S L go to prison and are ordered to pay million. Now, these cheats have cost us billions, and they will pay us back with their dollars, and they'll pay us back with years of their lives.
These prosecutions are the result of a determined effort, an effort which we are boosting with 202 FBI agents, 100 more FBI accounting technicians, and 118 more United States attorneys. The Dallas Task Force has been particularly successful, obtaining 52 convictions. So successful, in fact, that Attorney General Thornburgh is expanding the task force concept to 27 cities.
Now, we could have been moving even faster, but very candidly, Congress did not act on my request for .8 million in additional investigatorial and prosecutorial resources for 1989. And further, approval of my request that Dick talked about for million for the current fiscal year was delayed.
Under Secretary Brady's leadership, the IRS is aggressively pursuing individuals suspected of tax fraud in connection with failed savings and loan institutions, while the Resolution Trust Corporation is adding about 300 members to its investigative staff this year to become part of a new national investigative network. The FDIC is pursuing more than 1,200 cases of fraud and negligence against thrift officials -- attorneys, accountants -- and has collected more than 0 million in damages this year. Treasury's Office of Thrift Supervision, the OTS, has also required 664 institutions to agree to terminate unsafe and unsound practices, remove more than 150 senior thrift officers and directors, and issued 111 cease and desist orders to stop unsafe and unsound practices.
Throughout it all, our men and women in the Federal agencies are doing a great job, from the halls of Justice and Treasury to the passport clerk who recovered million in cash, jewelry, and gold by keeping a former savings and loan owner from skipping the country.
We're learning a lot from our successes, and so, I'm here today to back new legislative and administrative action. In further ways, we can crack down on white-collar crime. First, let me declare my support for a proposed amendment to the Omnibus Crime bill to enhance and enforce the civil and criminal penalties for fraud against financial institutions. This legislation, sponsored by leaders -- Bob Dole, Republican leader, and Bob Michel, by Senators Heinz and Garn, as well as Congressmen Hiler and Wylie -- will strengthen our investigative and prosecutorial tools in the service of justice, and it will provide added protection to the victims of crime.
We want to allow the use of court-approved wiretaps in investigating bank fraud. And we also want Congress to authorize Federal regulatory agencies to ask the courts to freeze the corporate and personal assets of defendants in civil cases involving financial institution fraud so that they will not leave the taxpayers high and dry. And we want to prevent rip-off artists from using bankruptcy as a strategy to avoid paying damages.
Now, these are some of the legislative steps that we can and must take, but we must also build on our recent successes by taking further administrative action. The Attorney General will establish within this great department, the Department of Justice, a new unit to direct and sharpen the Department's actions even further while helping to coordinate actions with other Agencies.
Where new problems emerge in S Ls we'll need to get involved fast, and that's why Attorney General Thornburgh and Secretary Brady have created a new approach: rapid response teams against fraud -- teams of razor-sharp prosecutors and auditors recruited from their Departments and other Agencies striking city by city, teams that will jump right into the paper chase, teams that will hit the trail while that trail is still hot. These teams will be deployed to help you. You're on the cutting edge, you U.S. attorneys. And I am confident that they will work well with you.
I have already seen the men and women of these two Departments working together, sharing a tenacious spirit born of a thirst for justice. Of course, we will always quantify the importance of our work together in terms of billions of dollars lost, but perhaps it is more appropriate to remember why this mission is so important to so many people -- a thought that will sustain you in the months to come as you sip that cold coffee long after everyone else has gone home. You'll be working late because you will not let those people be forgotten: savers whose hard work and honest trust must and will be protected, elderly people whose faith in the future must be preserved. It's your duty -- I would say it is your sacred duty -- to right these wrongs, to stand up for the vulnerable against the unscrupulous, the guileless against the conniving.
We will not rest until the cheats and the chiselers and the charlatans spend a large chunk of their lives behind the bars of a Federal prison. You do a difficult job in a spirit of professionalism. Sometimes you come under fire -- partisan political fire. And I will do my level best to see that the facts are out there so that the American people can understand and appreciate, as I do, the job that you all are doing. I can thank you, only thank you, on behalf of all Americans for this dedication, this dedication that you bring to the people's work.
I want to thank all of you for coming here to Washington, and may God bless each and every one of you. Thank you for what you're doing. We want to support you 100 percent. Many, many thanks.
Note: The President spoke at 11:12 a.m. in the Great Hall at the Department of Justice.