In re the announcement that the FBI is opening a criminal investigation of Citigroup, Jonathan Weil of Bloomberg remarks:
The big story of the morning comes from New York Times reporters Ben Protess and Michael Corkery, although it’s important to remember that, in the U.S. these days, criminal investigations of large banks don’t result in criminal prosecutions of large banks, because the Justice Department for all practical purposes has deemed them immune: “Federal authorities have opened a criminal investigation into a recent $400 million fraud involving Citigroup’s Mexican unit, according to people briefed on the matter, one of a handful of government inquiries looming over the giant bank. The investigation, overseen by the FBI and prosecutors from the United States attorney’s office in Manhattan, is focusing in part on whether holes in the bank’s internal controls contributed to the fraud in Mexico.” Here’s what I’d like to know: What was Corbat’s basis for certifying that Citigroup’s internal controls were effective when the company filed its 2013 annual report? Because, at least from the perspective of an outsider looking in, they sure don’t seem like they were effective in all material respects.
I think we’ll find that this is theatrics or, more precisely, battlespace preparation. How are you going to extract large political contributions (not to mention justifying that million dollar job after getting out of government) if you don’t have a nice club to wield?