There’s nothing like watching someone who is already in a hole dig deeper.
Yesterday, the New York Daily News ran an article that chronicled how the much ballyhooed mortgage fraud task force was going nowhere fast. It quoted task force co-chairman Eric Schneiderman as saying that the effort had no staff and no executive director and the Justice Department confirming that the effort had no office.
The problem, of course, is that bout of candor is inconsistent with recent efforts of the Administration to pretend that there was a serious effort underway. So, not surprisingly, a piece appeared today in the Nation that tried to dispute the Daily News account but a discerning reader would see it as a de facto confirmation.
We’ll get to the Nation piece in short order, but to give a bit more background, last week, the DoJ provided this bureaucratic confection in response to Dave Dayen’s inquiry on the task force’s status:
The new Residential Mortgage-Backed Securities Working Group is marshaling parallel efforts on the state and federal levels to collaborate on current and future investigations, pooling resources and streamlining processes to investigate those responsible for misconduct contributing to the financial crisis in a comprehensive way. Significant efforts continue to move forward and if they uncover evidence of fraud or other illegal conduct, we will pursue such conduct aggressively.
Notice how wonderfully abstract this statement is? The key bit, if you read closely, is that the ONLY activity described is that of coordinating existing efforts. An anonymous DoJ source maintained that there were at least 50 DoJ staffers working on the effort. Dayen raised the question of whether they were working on the investigation or working on getting the effort staffed. I wonder, instead, what “working on” means (as in being in any way involved in the communication chain could be defined to be “working on”). Since the other co-chair, Lanny Breuer, had said the initiative would have only 55 people working on it, if 50 really were already up and running, there’d be no reason for the official response to be so labored. You’d get something more along the lines of: “We are at over 90% of our targeted manpower level.”
Today, George Zornick at The Nation tried rebutting the Daily News story. Amusingly, the piece tries to deny that not much new is happening yet is unable to dispute the charges made in the Daily News account. It’s worth discussing in some detail as an illustration of not-very-effective propaganda.
The critical part of the messaging is the headline: “Financial Fraud Task Force Is Active, Has Staffers.” Many people either don’t read articles or skim them in haste, so headlines have disproportionate weight. And you have to read the piece to learn how little “is active” and “has staffers” means.
The substance of the article starts with a statement from, not Schneiderman, who was a source for the Daily News piece, but his flack, Dan Kanner:
Kanner said 50 attorneys, investigators, and analysts across the country are already working on the task force, and that hiring would continue as investigations progressed. He added that the offices of several state attorneys general are also coordinating with the working group.
A Department of Justice official confirmed those staffing numbers, and said that ten U.S. Attorney offices were part of the effort, and that more were expected to join as the investigations progress. The Department of Justice has also asked Congress for $55 million to expand staffing.
Finally, both Kanner and the Department of Justice said that the five co-chairs of the task force meet formally on a weekly basis, and talk daily.
What does this really mean?
Existing mortgage investigation efforts and case development have been consolidated into the task force. The fact that that number appears to be only 50 is pathetic.
State attorneys general had been coordinating before the settlement. They didn’t need to bargain away many of their best theories of action in a broad release to continue those efforts.
Oh, and the article confirmed the lack of a dedicated office and executive director.
New York University law professor and former SIGTARP chief Neil Barofsky’s reaction:
The comments reinforce concerns that I had when the Task Force was first announced, that it would just be a repository for existing cases around the country that would eventually be brought irrespective of whether a task force was formed or not. Of course, there is no need for a dedicated office or staff if all they are doing is rebranding existing cases as new “Task Force” cases. If that is the case, all they would really need is someone to craft the press releases and to stand on the podium to take credit for other people’s work, which, of course, is what most task forces do best.
Let’s consider a different possibility. Recall that Schneiderman was embarrassed almost as soon as this effort was announced when he said the staffing of the effort would be in the hundreds and Lanny Breuer corrected him by saying it would be 55. The DoJ keeps maintaining that the number of people working on this effort now is over 50. It is increasingly looking like the 55 that were promised for this effort was simply the staff working on existing mortgage cases, plus per Barofsky, an executive director and maybe a PR person and “coordinator” to burnish appearances.
In other words, both the critic’s and Administration’s accounts are probably true once you parse the definitions. Schneiderman and the world at large thought the underwhelming 55 that were promised to be tasked to this program would be dedicated additional resources. But the Administration appears to have simply added up the bodies working on existing efforts and rounded it up to 55 for the extra people who would have to be dedicated for PR purposes.
Underestimating this Administration’s cynicism has been a losing trade, and there is no reason to think this case is an exception.