DOJ Compounds Stat Screwup By Whitewashing Old Eric Holder Speech

By Matt Taibbi, Rolling Stone

14 August 13

ourtesy of old friend Paul Thacker, former Hill staffer and currently a fellow at Harvard's Edmond J. Safra Center for Ethics, here's an interesting addendum to Bloomberg's highly embarrassing Eric-Holder-Caught-Juking-the-Stats story that came out this Sunday.

It turns out that Barack Obama's Justice Department, in the person of Attorney General Holder, didn't just grossly overstate the success of its Mortgage Fraud Task Force. In what at best is a bonehead mistake, the Department channeled 1984 and whitewashed a web page, re-transcribing an old speech of Holder's to better reflect the "updated" version of the mortgage facts.

By now most people who follow white-collar crime know the backstory. Last year, on October 9th, Mr. Holder gave a press conference in which he touted the efforts of Barack Obama's Mortgage Fraud Task Force, claiming that in a year's time, the Department had secured "285 federal criminal indictments and informations against 530 defendants for allegedly victimizing more than 73,000 American homeowners - and inflicting losses in excess of $1 billion."

Two days after that appearance, a pair of pain-in-the-ass Bloomberg reporters, Phill Mattingly and Tom Schoenberg, reported that at least one of the cases Holder was citing was a Bush-era prosecution, and multiple others had been filed long before the Task Force existed. "There is no attempt to fudge the numbers," an FBI spokesman grumbled lamely at the time.

Subsequently, Bloomberg writer Jonathan Weil continued to follow up, pestering the DOJ for a list of the cases Holder was talking about. He repeatedly asked a DOJ spokesperson for the list, and whether the delay was coming from the FBI (which had the information) or the DOJ, he never got the information he was after.

Last Friday, the reason for that stalling finally emerged. The DOJ issued a revised press release, admitting that it had not, in fact, prosecuted 530 individuals in the program, but 107 as Weil noted, an 80% decrease. Wrote Weil this weekend, in a piece entitled "Eric Holder Owes the American People and Apology":

Holder originally said the defendants had victimized more than 73,000 American homeowners. That number was revised to 17,185, while estimates of homeowner losses associated with the frauds dropped to $95 million from $1 billion.

Now, the new, revised DOJ press release came with a big banner at the top announcing their screwup, along with a full-paragraph mea culpa in which they basically admit to gaming the numbers for press purposes in multiple ways. The new press release reads like a Capitol Hill version of horror fiction. Emphasis is mine:

This press release was updated on August 9, 2013.
An extensive review of the reported cases concluded that the original figures included in the Distressed Homeowner Initiative were not just criminal defendants who had been charged in Fiscal Year 2012, as reported, but also a number of defendants who were the subject of other prosecutive actions such as a conviction or sentence in Fiscal Year 2012. In addition, the announcement included a number of defendants who were charged in mortgage fraud cases in which the victim(s) did not fit the narrow definition of distressed homeowner that the initiative targeted. As a result, the announcement overstated the number of defendants that should have been included as part of the Distressed Homeowner Initiative. . .

It goes on. This is the kind of paragraph that should have been written in drippy-blood font, for heads surely rolled behind this incident: I would bet just about anything that the dumpsters outside the DOJ offices in D.C. this week are full of medical waste bags, bodies wrapped in carpet and duct tape, etc. . .

Enough hay has already been made about the Task Force numbers screwup, so no need to go there. What is interesting is what my friend Thacker noticed yesterday. Not only did the DOJ revise the original press release on the web, they also revised the transcript of Holder's remarks from the infamous October 9th, 2012 press conference from last year. The only thing is, unlike the press release, there was nothing on the web page containing that transcribed speech indicating that it had been altered. Here's how the second paragraph of the official DOJ transcript of Holder's remarks reads now note some of the numbers:

This national effort known as the Distressed Homeowner Initiative ran from October 1st, 2011, to September 30th of this year and was led by members of the Mortgage Fraud Working Group of the Financial Fraud Enforcement Task Force. This landmark Initiative, spearheaded by the FBI, was launched to help streamline and advance investigations and prosecutions against fraudsters who allegedly targeted, and preyed upon, Americans struggling to keep their homes. And it's been a model of success. Over the past 12 months, it has enabled the Justice Department and its partners to file federal criminal charges against 107 defendants for allegedly victimizing more than 17,185 American homeowners and inflicting losses in excess of $95 million. On the civil side, as part of this Initiative, Mortgage Fraud Working Group Members have filed federal civil cases against 128 defendants for losses totaling at least $54 million, and involving more than 19,000 victims.

Thanks to the joy of the Wayback Machine, however, we know what Holder actually said that day. His actual remarks read as follows:

This national effort known as the Distressed Homeowner Initiative ran from October 1st, 2011, to September 30th of this year and was led by members of the Mortgage Fraud Working Group of the Financial Fraud Enforcement Task Force. This landmark Initiative, spearheaded by the FBI, was launched to help streamline and advance investigations and prosecutions against fraudsters who allegedly targeted, and preyed upon, Americans struggling to keep their homes. And it's been a model of success. Over the past 12 months, it has enabled the Justice Department and its partners to file 285 federal criminal indictments and informations against 530 defendants for allegedly victimizing more than 73,000 American homeowners and inflicting losses in excess of $1 billion. On the civil side, as part of this Initiative, we have filed 110 federal civil cases against over 150 defendants for losses totaling at least $37 million, and involving more than 15,000 victims.

As someone who collects old newspapers and once paid pretty fair money for an old Soviet magazine featuring a photo in which the face of Lev Trotsky had been blotted out I find this very curious.

Certainly it is news when the Attorney General recites erroneous statistics, but the fact that his Department admitted to such a mistake last week would normally be in his, and its, favor.

But just as clearly, one can't go back into history and change what someone said, in public, at a news conference. Nonetheless, this is, in fact, what the Department of Justice just did.

The DOJ insists that in short order there will be a disclaimer on the Holder-speech page to match the disclaimer on the press-release page (UPDATE: the disclaimer is now up). As to the other obvious question, whether this is the first time this sort of history-fixing thing has been done, I'm working on that. At best, it's a pretty weird little story.