Punish all who caused crash

The Wall Street collapse that precipitated today's economic crisis has many causes, from regulatory failures to recklessness and greed. But before Congress begins to write new rules, we must investigate any crimes that may have been committed, whether by local mortgage brokers or the biggest banks.

Let's enforce the laws that were on the books and throw those who broke them in jail.

I am not prejudging anyone. We may well find that only a few cases involved outright criminal behavior. And we must take care that our anger does not cloud our judgment.

But if people rob a bank, they go to jail. If bankers rob people, they should go to jail, too.

We have already seen anecdotal evidence that:

Mortgage brokers may have fraudulently solicited mortgages or engaged in predatory practices.

Bankers may have neglected their due diligence in the design and marketing of mortgage-related products.

Credit-rating agencies earned fees from the very bankers whose shaky products they stamped "AAA."

As the housing bubble burst, banks may have failed to disclose material information as they went from supposedly profitable to insolvent, leaving investors holding the bag.

And where were the lawyers and accountants who are paid to keep an eye on all this? Was there so much cash around that the professionals who make these deals possible became blind to their duties?

Attorney General Eric Holder has emphasized that federal law-enforcement officials can understand exactly what happened and investigate the people and firms involved only by "drilling down" into the records of complicated financial transactions. Right now, the resources to do so are not there.

Sens. Patrick Leahy (D., Vt.), Chuck Grassley (R., Iowa), and I have a bill to solve this problem. It provides resources to investigators at federal law-enforcement and regulatory agencies so they can find the crimes that have already been committed.

The bill also amends fraud statutes to protect us against those who might be tempted to cheat in the future.

The FBI's necessary shift of resources to counterterrorism efforts has had the unintended consequence of hampering its ability to investigate sophisticated financial crimes. At a recent hearing, FBI Deputy Director John Pistole testified that the increasing financial-fraud caseload "is straining the FBI's limited white-collar crime resources."

Pistole told the committee that the FBI was investigating 530 open corporate-fraud investigations, including 38 directly related to the current financial crisis.

"More must be done to protect our country and our economy from those who attempt to enrich themselves," Pistole said.

Today, the FBI has only 240 agents investigating complex financial fraud. During the savings-and-loan crisis in the 1980s - a mere shadow of the current financial meltdown - the FBI had more than 1,000 agents investigating financial fraud.

We must dramatically increase the number and training of FBI agents investigating these crimes. Our bill authorizes $155 million a year for the Justice Department to hire fraud prosecutors and investigators in 2010 and 2011. It also provides $65 million a year for 190 additional FBI special agents and more than 200 professionals to fight white-collar crime.

Prosecuting bad people won't put an end to all bad behavior. But it will make people in the board rooms, on the trading desks, and in the mortgage industry think twice before they look the other way, put greed over fiduciary duty, or deal from the bottom of the deck. At the end of the day, this is a test of whether we have one justice system in this country or two.

This is not about vengeance or politics. For our economy to work for all Americans, investors must have confidence in the honesty and transparency of our financial markets. Our economy will flourish only when Americans again trust that everyone is accountable to the law.