WASHINGTON - Senate Banking Committee members Charles Schumer, D-N.Y., and Richard Shelby, R-Ala., introduced legislation yesterday that would provide an additional $110 million for federal law enforcement agencies to boost the number of investigators and prosecutors of white-collar crimes that have contributed to the ongoing financial crisis.
The Supplemental Anti-Fraud Enforcement Markets Act calls for the hiring of 50 new Federal Bureau of Investigation agents, 50 new assistant U.S. attorneys, and 100 new Securities and Exchange Commission enforcement officials. The FBI would receive an additional $80 million annually, while the SEC and Justice Department would receive $20 million and $10 million, respectively.
The proposed legislation comes as the Justice Department and the SEC are conducting a number of criminal and civil investigations into alleged anticompetitive and pay-to-play practices in the municipal market.
"Our white-collar crime divisions are understaffed, underfunded, and overwhelmed," Schumer said in a statement. "When a wave of violent crime sweeps through a city, the immediate response is to beef up the police forces, putting more cops on the beat, extending overtime, and making sure the city returns to safety. Our reaction to the financial crisis and the massive and complex financial fraud investigations that loom should be no different."
Shelby said the legislation is needed because the foundations of the nation's economy "has been badly shaken by greed, but is further eroded by fraud. In order to restore confidence, those who perpetrate fraudulent acts must be brought to justice."
The bill comes as the agencies charged with policing Wall Street have been "hamstrung" by a lack of resources, notably since Sept. 11, 2001, "when the nation's law enforcement priorities understandably shifted to counterterrorism," according to the statement released by Schumer's staff.
The Bush administration did not replace at least 2,400 FBI agents who were transferred to counterterrorism squads, and as a result, white-collar units are currently down at least 625 agents from pre-Sept. 11 levels, a reduction of 36%. In addition, many U.S. attorney's offices have been subject to more recent hiring and budget freezes, which contributed to a 48% drop in the number of prosecutions of frauds against financial institutions.
