There's an old saying in journalism that there are no new stories, only new reporters. The revelation that U.S. Attorney General Eric Holder's old law firm used to represent the bankrupt brokerage firm MF Global Holdings is a great example.
Here's the lead paragraph from an article yesterday on the right-leaning news website Breitbart.com, which was following up on an op-ed in the Washington Times:
"Those wondering why the Department of Justice has refused to go after Jon Corzine for the vaporization of $1.6 billion in MF Global client funds need look no further than the documents uncovered by the Government Accountability Institute that reveal that the now-defunct MF Global was a client of Attorney General Eric Holder and Assistant Attorney General Lanny Breuer’s former law firm, Covington & Burling."
It's great fodder for the scandal mill. It's also not a surprise. Covington & Burling, a powerhouse Washington law firm that was founded in 1919 by former Representative James Harry Covington, in recent years has represented JPMorgan Chase, Wells Fargo, Citigroup, Bank of America, Morgan Stanley, Goldman Sachs and UBS, to name a few. It would have been more surprising if the firm had never represented MF Global. Corzine, for anyone who hasn't been paying attention, is the former New Jersey governor who was MF's chief executive when it collapsed.
When it comes to financial debacles and Washington, some players never change. Covington & Burling represented the disgraced Charles Mitchell of National City Bank (now Citigroup) at the Pecora Commission hearings held by the Senate Banking Committee during the 1930s. (The name came from the committee's chief counsel, Ferdinand Pecora, who investigated Wall Street corruption and fraud after the 1929 stock market crash. You can read more about Mitchell and the hearings in this excerpt from Michael Perino's superb book about Pecora, "The Hellhound of Wall Street.")
This isn't to say it's a good thing for the Justice Department's leaders to have such close Wall Street ties. It's not, especially when the government has brought so few fraud prosecutions related to the financial crisis. Whoever wins the presidential election this fall, here's a suggestion: Find an attorney general who doesn't have these kinds of connections. It would go a long way toward restoring Americans' faith in the justice system.
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)
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