TIME Congress

Senate Democrat Says Nominee Told to ‘Sit in the Back of the Bus’

Justice Department Officials Announce Charges Against HSBC
Ramin Talaie—Getty Images U.S. Attorney for the Eastern District of New York Loretta Lynch arrives for a news conference to announce money laundering charges against HSBC on Dec. 11, 2012 in the Brooklyn borough of New York City.

The White House has avoided making similar arguments

Senate Democrats are turning up the heat on Republicans for delaying a vote on Attorney General nominee Loretta Lynch, implying that it’s tied to her race.

Sen. Dick Durbin, the No. 2 Democrat in the upper chamber, argued that the four-month delay of Lynch, the first African-American woman nominated for the post, may be related to her race. Using wording suggestive of the days of segregation, he said that Lynch had been told to “sit in the back of the bus.”

Durbin said that there was “no substantive reason” for delaying Lynch’s confirmation process, which has been the longest for an Attorney General nominee in 30 years and longer than the past five nominees combined.

“This is the first African-American woman in the history of the United States to be nominated to serve as attorney general. It is a civil rights milestone,” said Durbin. “Why has the Senate Republican leadership decided to target this good woman and to stop her from serving as the first African-American attorney general of the United States of America? There is no good reason. There is no substantive reason.”

“Loretta Lynch, the first African-American woman nominated to be attorney general, is asked to sit in the back of the bus when it comes to the Senate calendar,” he added. “That is unfair, it’s unjust, it is beneath the decorum and dignity of the United States Senate. This woman deserves fairness.”

Durbin’s comments echoed those of Democratic Rep. G.K. Butterfield, the chairman of the Congressional Black Caucus, who said Tuesday that race “certainly can be considered a major factor” in her delay.

But Durbin’s rhetoric Wednesday is a clear escalation from those of his Democratic colleagues. White House spokesman Josh Earnest reiterated Tuesday that Lynch is well qualified for the post but did not remark on her race.

“Well, let me just say that if Ms. Lynch were not confirmed by the United States Senate, it would be an astonishing display of partisanship,” said Earnest. “Particularly given the fact that not a single member of the United States Senate has raised a legitimate concern about her aptitude for that office.”

Senate Majority Leader Mitch McConnell has said that the Lynch vote won’t occur until after the Senate passes a bill that would help victims of sex trafficking, which Democrats have been filibustering recently over abortion provisions. McConnell spokesman Don Stewart said that the Lynch nomination is next on the schedule and would occur as soon as Democrats lifted their obstruction.

“The only thing holding up that vote is the Democrats’ filibuster of a bill that would help prevent kids from being sold into sex slavery,” said Stewart. “The sooner they allow the Senate to pass that bipartisan bill, the sooner the Senate can move to the Lynch nomination.”

With reporting by Maya Rhodan/Washington

TIME Crime

How to Rebuild the Ferguson Police Department

Police are deployed to keep peace along Florissant Avenue in Ferguson, Mo. on Aug. 16, 2014.
Scott Olson—Getty Images Police are deployed to keep peace along Florissant Avenue in Ferguson, Mo. on Aug. 16, 2014.

Other troubled local police forces show the way after a scathing federal report

At the end of the U.S. Department of Justice’s report into widespread police misconduct in Ferguson, Mo., are a series of recommended reforms so extensive that it’s as if the law enforcement agency would be best served by tearing the whole thing down and starting from scratch.

That might just be the point.

The report listed a series of overhauls that would require retraining dozens of police officers while upending the agency’s policing strategies, all in an effort to repair the department’s relationship with communities of color in the aftermath of last summer’s shooting of unarmed black teenager Michael Brown by white police officer Darren Wilson. That shooting led to weeks of often violent protests in the St. Louis suburb. And while Wilson was never charged and the federal report largely corroborated his version of events, it nevertheless faulted the mostly white local police for being systemically and violently prejudiced against the majority black town’s residents.

“Members of the community may not have been responding to a single isolated confrontation but also to a pervasive, coercive and deep lack of trust,” Attorney General Eric Holder said of the protesters on Wednesday. “Some of those protesters were right.” He said federal authorities will make sure the local police force takes “immediate, wholesale and structural corrective action.”

MORE: These Are Some of the Racist Emails Ferguson Police Sent

So what’s next?

Ferguson has examples it can look to as it rebuilds: Over the last decade, several U.S. police departments have been subjected to federal oversight. Cincinnati reformed its department after an unarmed black teenager was shot in 2001. Maricopa County‘s force in Arizona was sued by the Department of Justice in 2012 over charges of racially profiling Latinos. Seattle and New Orleans both came under federal scrutiny for excessive force and misconduct.

But the most relevant example might be found in East Haven, Conn.—a town and police force that is similar in size to Ferguson—where the DOJ found a pattern of illegal searches, traffic stops and use of force against Latinos by local cops. In October 2012, the Justice Department reached a settlement with the town to change the police agency’s treatment of Latino residents. Two years later, compliance expert Kathleen O’Toole, now the Seattle police chief, called the progress of the East Haven Police “remarkable.”

The kind of reforms that will likely take place in Ferguson may be similar to what occurred in East Haven. Police officers there each completed 60-100 hours of training on practices like bias-free policing and use of force. One lieutenant attended an executive education program at Harvard’s Kennedy School.

The training appears to have made a difference. In December 2011, the Justice Department found that traffic stops of Latino drivers by the East Haven police accounted for 19.9% of stops, which was more than the percentage of Latino drivers (15.5%). But during the year the police trained—from December 2012 to June 2013—the federal report found that only 8.9% of traffic stops were of Latinos. It cost roughly $2.5 million over four years to reform the department, according to the New Haven Register,

Kym Craven, the director of the Public Safety Strategies Group, a police consulting firm, says that reforms for agencies like Ferguson need to begin at the recruiting and hiring phase to ensure a department’s officers are reflective of its community. She says departments also need to have explicit policies and procedures in place that lay out what police chiefs expect from officers.

Ferguson may go through scenario-based training like what happened in East Haven to better react to situations where implicit racial biases may affect how an officer handles a situation. Those biases, Craven says, should also be talked about honestly and openly within the department and with the community.

But the biggest changes could likely come with a shift toward community policing, which has been routinely discussed as an alternative to the so-called “broken windows” strategy—which focuses on lower-level crimes on the assumption that it helps keep overall crime rates down.

MORE: U.S. Faults Ferguson Police for Racial Bias

The DOJ report’s first recommendation includes implementing a shift from “policing to raise revenue to policing in partnership with the entire Ferguson community,” while calling for more community partnerships between police and residents.

One city that appears to have found success with community policing is Atlanta. Two incidents eroded trust between the city’s residents and the police department over the years: a 2009 incident in which officers raided a gay bar while reportedly using derogatory slurs that triggered a federal lawsuit, and the death of a 92-year-old black woman by a drug strike force team in 2006.

“We lost the confidence in both our black community and the GLBT community,” says Atlanta Police George Turner, who took over the agency in 2010.

Turner soon shifted the department toward community-based policing that required police to get out of their cars, patrol their neighborhoods and engage with citizens. He outfitted cops with less-lethal weapons like TASERs, but sought the community’s involvement in the decision first. The city today has 4,600 surveillance cameras that feed into police headquarters, but the department asked for community input on where they should be placed. Turner has also set up special liaisons with the Hispanic and gay and lesbian communities.

“I think this is the most effective way,” Turner says. “You have to work every day with community leaders. People will give you an opportunity to investigate when crises happen, but you don’t get that unless you have a relationship with people and relationships are built on trust.”

The department has been widely praised by police experts, but it’s a cautionary tale nonetheless: The Atlanta Citizen Review Board actually saw complaints go up between 2012 and 2013, but numbers have remained stable since, according to statistics compiled by the Christian Science Monitor.

“Community policing was something that was started a long time ago, and it’s morphed into community relations,” Craven says. “But departments need to get back to the root of it, which is joint problem-solving between the police and the community. It’s more than having a BBQ or a picnic.”

The Justice Department also appears more willing to fully back community policing in ways it hasn’t in the past. Bob Stewart, president of Bobcat Training and Consulting, says that in the last two years, consent decrees—which are court-mandated orders that require police departments to follow federal guidelines—have increasingly recommended initiatives that deal with community trust and civilian oversight.

It’s likely that Ferguson will eventually be the subject of a consent decree, forcing the town’s police department to reform. But it’s possible that those reforms, taking place at a police department that drove a national conversation about race and use of force nationwide last summer, could be the focus of a new discussion, one about better ways of policing.

TIME justice

U.S. Faults Ferguson Police for Racial Bias

Protesters drop a mirrored casket in front of a line of police officers in front of the Ferguson Police Department in Ferguson, Mo. on Oct. 10, 2014.
Robert Cohen—St. Louis Post-Dispatch/Getty Images Protesters drop a mirrored casket in front of a line of police officers in front of the Ferguson Police Department in Ferguson, Mo., on Oct. 10, 2014

The report is scathing, but the big question is what comes next

The violent protests in Ferguson last August were driven by the indelible image of an unarmed black teenager, Michael Brown, lying in the street after a white police officer, Darren Wilson, shot him dead. But the outrage in Ferguson, and the national debate that accompanied it, were also about something harder to see: racism, and the allegation that Ferguson’s largely white cops were deeply, systematically and violently prejudiced against black residents.

Now, as one of his last acts as U.S. Attorney General, Eric Holder has painted a picture of Ferguson’s entrenched racism that is clear and unmistakable. A Justice Department investigation opened after Brown’s shooting has found routine patterns and practices of racism in Ferguson, including the excessive use of force and unjustified arrests, officials said Tuesday. The findings are scathing in their detail:

In 88 percent of the cases in which the department used force, it was against African Americans. In all of the 14 canine-bite incidents for which racial information was available, the person bitten was African American.

In Ferguson court cases, African Americans are 68 percent less likely than others to have their cases dismissed by a municipal judge, according to the Justice review. In 2013, African Americans accounted for 92 percent of cases in which an arrest warrant was issued.

The investigation also turned up bigoted emails, like one from November 2008 that reportedly said President Obama wouldn’t complete his first term as President because “what black man holds a steady job for four years.” The St. Louis Post-Dispatch reported another racist message, from May 2011, reading: “An African-American woman in New Orleans was admitted into the hospital for a pregnancy termination. Two weeks later she received a check for $5,000. She phoned the hospital to ask who it was from. The hospital said, ‘Crimestoppers.'”

The Justice Department spent 100 days in Ferguson collecting such details, and the report is an end in itself, putting an official stamp on the town’s problems that some had found easy to dismiss. But when it comes to fixing the harsh reality of racism in Ferguson, it’s not clear transparency will be enough.

The question now is whether the report will deliver reform in the beleaguered St. Louis suburb. The Justice Department under Holder has significantly increased the number of pattern or practice investigations, and some past settlements with police departments have led to dramatic improvements. But others say the department’s lack of enforcement powers mean reform depends on local politicians, and worry Ferguson’s leaders won’t bring change.

Under the 1994 law authorizing such “pattern or practice” investigations, the Justice Department has little enforcement power to fix the problems it finds. As a rule, it enters into contracts with the offending force, which agrees to increase transparency and data collection and to provide better training and supervision.

Police officials and their unions often resist reform, several studies have shown. The Justice Department has “very few sticks they can use,” to get past such obstacles, says Elliot Harvey Schatmeier, a lawyer at the New York City office of Kirkland & Ellis and the author of one such study.

Others say that in many cases, the attention brought by the investigations is enough. In Pittsburgh, New Jersey and Los Angeles, Justice Department investigations led to successful reforms, says Chris Stone, president of the Open Society Foundations and a criminal-justice scholar. More important, Stone says, “They’ve established a national standard for what good policing looks like.”

Holder’s Ferguson findings, Stone says, have the potential to lead to a similar blueprint for smaller, suburban police forces around the country, which have typically been hard to reform.

By the same token, though, a failure in the high-profile Ferguson case could set back the effort to reform small police departments. Holder has established with clarity the problem in Ferguson. But without local political buy-in, the town that came to symbolize 21st century police racism in America could end up symbolizing its resistance to reform too.

MONEY financial crisis

S&P to Pay Billions for Being the Watchdog That Didn’t Bark

Standard & Poor's building
Justin Lane—EPA

Standard & Poor's settlement is a reminder that the industry's safeguards failed in the lead-up to the financial crisis.

On Tuesday, Standard & Poor’s (S&P), agreed to pay $1.375 billion to settle claims by the Department of Justice and multiple state governments that the ratings agency defrauded investors in the lead up to the financial crisis.

As a bond-rating agency, S&P was responsible for keeping banks and other major financial institutions honest. Its apparently intentional failure to do so shows how one of the guard dogs of the financial system was co-opted by the very people it was meant to police.

Perverse incentives

Standard & Poors is one of three companies designated by the Securities and Exchange Commission as Nationally Recognized Statistical and Ratings Organizations (NRSROs). Their job is to rate the safety of bonds and thereby provide a kind of warning label for investors. The safest bonds—those issued by companies deemed most credit-worthy and best able to meet their financial commitments—are designated AAA; debt rated BB or lower is considered below investment grade, or “junk” in common parlance.

While companies like S&P theoretically exist to protect investors, much of their revenue comes from the lenders whose securities they were rating. As Kathleen Engel and Patricia McCoy describe in their book The Subprime Virus, ratings agencies generally bring in 1% of any debt deal they rate. Between 2000 and 2007, the three agencies underwrote $2.1 trillion in subprime mortgage-backed securities.

With that kind of money at stake, there was an obvious incentive for these firms to issue ratings that are favorable to the interests of their paying clients.

S&P and the financial crisis

According to a statement of facts released by the Justice Department and “agreed” to by S&P, that seems to be exactly what the company did. Contrary to the company’s Code of Practices and Procedures—which promises that its ratings “shall not be affected by an existing or a potential business relationship”—S&P “toned down and slowed down” the roll out of a new rating model for so-called Collateralized Debt Obligations (CDOs) after an unnamed investment bank suggested the system could jeopardize “potential business opportunities.”

The statement also shows S&P delayed for months ratings revisions on securities it knew to be failing. As far back as November 2006 the head of S&P’s residential mortgage-backed securities group sent two senior executives a spreadsheet—revealingly entitled “Subprime_Trouble.XLS”—warning that many S&P-rated loans were in serious trouble and should be downgraded.

Multiple sources told the Justice Department investigators that the group’s head frequently complained that her concerns were ignored because downgrades would hurt S&P’s rating business. A public warning that major downgrades were imminent was delayed until July, 2007.

Aftermath

The rest, as they say, is history. The housing crash brought to light the incestuous relationship between rating agencies and bond issuers, and eventually resulted in lawsuits like this one. Though S&P was not forced to admit wrong-doing, the case and subsequent settlement revealed a trove of information about the inner workings of the agency and wiped away a full year of the company’s profits.

Dodd-Frank imposed a number of additional regulations on ratings agencies, including new rules regarding conflicts of interest. But S&P’s payout is a reminder that it wasn’t just crooked banks and lenders that tanked the financial sector. The supposed watchdogs were involved as well.

TIME finance

The S&P Settlement Is Odious—And Business as Usual

S&P Index Reports Record Drop In U.S. Home Prices
David McNew—Getty Images GLENDALE, CA - NOVEMBER 27: A reduced price sign sits in front of a house November 27, 2007 in Glendale, California. U.S. home prices plummeted 4.5 percent in the third quarter from the year before. It is the biggest drop since the start of Standard & Poor’s nationwide housing index 20 years ago, the research group announced. Prices also fell 1.7 percent from the previous three-month period in the largest quarter-to-quarter decline in the index’s history. (Photo by David McNew/Getty Images)

The settlement is huge news and proof that the shady arrangement between Wall Street and Washington is back to business as usual

The bill finally came due for Standard & Poor’s Financial Services: $1.37 billion. That’s what the company will pay to the federal, state and D.C. governments to resolve the culpability of its ratings agency in draining trillions of dollars from our bank accounts, 401ks and home equity not to mention contributing mightily to the global financial crisis.

As Attorney General Eric Holder put it: “As S&P admits under this settlement, company executives complained that the company declined to downgrade underperforming assets because it was worried that doing so would hurt the company’s business. While this strategy may have helped S&P avoid disappointing its clients, it did major harm to the larger economy, contributing to the worst financial crisis since the Great Depression.”

But S&P got off cheap and the fact that none of the people in charge of the company at the time are going to jail tells you it’s business as usual between Washington and Wall Street. It’s just a speeding ticket, people. Move along. The company was quick to point out that it wasn’t guilty of what it admitted to: “The settlement contains no findings of violations of law by the Company, S&P Financial Services or S&P Ratings,” the company’s press release asserts.

Nope, just a level of odiousness that still resonates eight years later.

S&P, part of McGraw Hill Financial, Inc. rates bonds for a living—it still does—and it was living well up to the financial crisis by rubber stamping its top, AAA rating to tranche after tranche of residential mortgage-backed securities (RMBS) and collateralized debt obligations (CDOS) from 2004 to 2007. The way this works is that the bond issuers pay the ratings agencies to rate them. No conflict there, right? Triple-A is the rating reserved for the best of the best. But RMBs and CDOs that S&P was rating were partially underwritten by the vast number of no-doc, “liar loan” and other mortgages being handed out by equally sleazy outfits such as Countrywide Financial.

It all collapsed like the Ponzi scheme it was when these unfit buyers started to default on their mortgages and the value of the bonds crashed. It would lead to cascading calamities including the collapse of Lehman Brothers, the bailout of AIG, Freddie and Fannie Mac (quasi-government mortgage agencies) not to mention widespread contagion in the auto industry. S&P will also pay $125 million to calPERS, the California pension fund that, like many other pension funds, bought some of these AAA bonds under the guise that they were safe.

Nice work, that. For years, S&P was able to fend off lawsuits by claiming that its ratings were merely statements of opinion protected by the First Amendment, which particularly ticked me off. Don’t use our free-press/free-speech amendment to shelter your atrocious behavior. But that defense finally collapsed after the government took another tack: alleging that S&P committed fraud. “As S&P knew,” read the Justice Department’s lawsuit, “these representations were materially false, and concealed material facts, in that S&P’s desire for increased revenue and market share in the RMBS and CDO ratings markets led S&P to downplay and disregard the true extent of the credit risks posed by RMBS and CDO tranches in order to favor the interests of large investment banks and others involved in the issuance of RMBS and CDOs.”

S&P continued to resist, despite the DOJ uncovering emails that showed S&P employees knew they had clearly underestimated the risk of the RMBs and CDOs. Here’s my personal favorite: “Let’s hope we are all wealthy and retired by the time this house of cards falters.” (Some, in fact, did and are.) S&P’s other defense is essentially that the bankers all knew we were full of it.

In the agreement that S&P signed with prosecutors it admits to the fact that the company was selling garbage. The DOJ also made S&P eat the company’s assertion that the lawsuit was retaliation for S&P’s downgrading the debt of the United States in 2011. S&P was wrong about the quality of its bonds and wrong about the quality of U.S. treasuries. Treasuries have never been more desirable.

So now S&P is free to go about its business, which is an oligopoly that it shares with Fitch and Moody’s, the same threesome that controlled the rating market in 2007. In its reregulation of the financial industry, Congress left the ratings agencies alone. Which means that at some point in the future you can expect the same problems to crop again.

TIME Courts

U.S. Accuses Pair of Trying To Overthrow Gambian Government

US-AFRICA-SUMMIT
Jim Watson—AFP/Getty Images Gambia's President, Yahya Jammeh, attends the "Session 1- Investing in Africas Future" of the US-Africa Leaders Summit in Washington DC on Aug. 6, 2014.

'The United States strongly condemns such conspiracies'

Two men who allegedly tried to overthrow the Gambian government in December have been charged with conspiracy to violate the centuries-old Neutrality Act, according to a Department of Justice complaint filed in Federal court.

“The United States strongly condemns such conspiracies,” United States Attorney General Eric Holder in a statement. “With these serious charges, the United States is committed to holding them fully responsible for their actions.”

The Neutrality Act prohibits U.S. citizens from attempting to incite war with a country that is at peace with the U.S.

Cherno Njie, 57, and Papa Faal, 46, traveled to the Gambia with an arsenal of firearms that included semi-automatic rifles, according to the complaint. Faal and others met near the home of the country’s president and prepared an assault against government buildings. The effort was quickly stopped in its track.

Njie, stayed on the sidelines of the operation, reportedly planned to serve as the leader of the country once the leader had been deposed.

TIME Companies

U.S. Hits Deutsche Bank With $190 Million Tax Fraud Lawsuit

A general view of Deutsche Bank on Sept. 5, 2011 in London.
Dan Kitwood—Getty Images A general view of Deutsche Bank on Sept. 5, 2011 in London.

Justice Department has accused the banking giant of using shell companies to conceal profits and avoid paying taxes

The Justice Department has sued Deutsche Bank for fraud over an alleged scheme to avoid paying federal taxes.

The government is seeking more than $190 million in back taxes plus penalties and interest.

The lawsuit, which was filed on Monday in federal court in New York, alleges that Deutsche Bank DB -1.23% engaged in a series of transactions meant to evade federal income taxes — leaving the U.S. government “with a significant, uncollectable tax bill,” according to the Justice Department.

“Through fraudulent conveyances involving shell companies, Deutsche Bank tried to make its potential tax liabilities disappear,”Manhattan U.S. Attorney Preet Bharara said in a statement. “This was nothing more than a shell game.”

The government went on to describe the alleged fraud, which included the German bank’s creation of three separate “shell companies” as well as a series of subsequent transactions involving those companies that federal authorities claim were designed to avoid federal tax laws.

Deutsche Bank responded to the allegation in a statement to Fortune, saying: “We fully addressed the government’s concerns about this 14-year old transaction in a 2009 agreement with the IRS. In connection with that agreement they abandoned their theory that [Deutsche Bank] was liable for these taxes, and while it is not clear to us why we are being pursued again for the same taxes, we plan to again defend vigorously against these claims.”

This article originally appeared on Fortune.com

TIME Ferguson

Department of Justice to Announce New Anti-Profiling Guidelines

Eric Holder
David Goldman—AP U.S. Attorney General Eric Holder, center, meets with law enforcement and community leaders for a roundtable discussion at Ebenezer Baptist Church, Monday, Dec. 1, 2014, in Atlanta.

Attorney General Eric Holder made the announcement at a church where Martin Luther King preached

—The U.S. Department of Justice will announce stiff new protocols to curtail profiling by federal law enforcement in the coming days, Attorney General Eric Holder announced Monday evening.

Speaking at an interfaith service and community forum at Ebenezer Baptist Church in Atlanta following last week’s grand jury decision in Ferguson, Missouri, Holder previewed the long-awaited announcement, which would be the first change to federal law enforcement guidelines on racial profiling in more than a decade.

“In the coming days, I will announce updated Justice Department guidance regarding profiling by federal law enforcement, which will institute rigorous new standards—and robust safeguards—to help end racial profiling, once and for all,” Holder said at the first of several planned regional community discussions in the aftermath of the Ferguson grand jury decision. “This new guidance will codify our commitment to the very highest standards of fair and effective policing.”

President George W. Bush banned the use of profiling for race in 2003 through the Department of Justice’s Guidance Regarding the Use of Race by Federal Law Enforcement Agencies, but left loopholes for national security investigations and border security. In his 2001 Address to a Joint Session of Congress, Bush said the practice is “wrong and we will end it in America.” Those guidelines, which have been under review by the Justice Department for years, only ended profiling for race, not religion, sexual orientation, national origin, or other factors.

Holder has spoken previously about having been the subject of profiling, even when he was a federal prosecutor in Washington. Speaking to students at a St. Louis Community College in August after the death of Michael Brown, Holder told of being stopped by a police officer as he ran to catch a movie in Georgetown, a predominately white neighborhood of Washington, as well as unwarranted traffic stops and car searches on the New Jersey Turnpike.

“I remember how humiliating that was and how angry I was and the impact it had on me,” Holder said at the time.

Holder’s comments Monday evening come as he is has become the face of the Obama administration’s response to the Brown shooting and subsequent community unrest. Obama tapped Holder in August to take steps to bridge the trust gap that has emerged between law enforcement and the communities they serve, particularly in minority neighborhoods.

“We are dealing with concerns that are truly national in scope and that threaten the entire nation,” Holder told the thousands of attendees. “Broadly speaking, without mutual understanding between citizens–whose rights must be respected–and law enforcement officers–who make tremendous and often-unheralded personal sacrifices every day to preserve public safety–without that trust, without that interaction, there can be no meaningful progress. Our police officers cannot be seen as an occupying force disconnected from the communities they serve. Bonds that have been broken must be restored. Bonds that never existed must now be created.”

Earlier Monday, President Barack Obama announced executive orders to create a Task Force on 21st Century Policing and to order a review of the federal government’s support of state and local law enforcement purchases of military-style equipment. The White House also announced a request to Congress for $75 million over three years to help put 50,000 body-cameras on state and local police officers.

Before a meeting with Georgia community, faith, and law enforcement leaders, Holder said the situation in Ferguson, while tragic, “presents this nation a really unique opportunity” to address “issues that have for too long been ignored.”

Holder appeared to signal that the new guidelines would not eradicate profiling in every instance, but would further curtail its use, though how was not clear Monday. Department of Justice officials declined to further preview the official announcement.

Minority and civil rights groups have long called for the Obama administration to stiffen federal profiling rules, particularly in response to the use of profiling against the Muslim community. They have also called on the department to impose the guidelines on state and local jurisdictions that receive federal funding or work in concert with federal officers.

Speaking at the packed church where Martin Luther King, Jr. preached, Holder assured the audience that the Department of Justice’s investigation into Brown’s shooting death by Ferguson police officer Darren Wilson and its inquiry into the practices of the city’s police department are “ongoing and active.” Acknowledging that federal law sets an “extremely high legal bar in these types of cases,” Holder reiterated that the investigations would be “conducted both thoroughly and in a timely manner—following the facts and the law wherever they may lead.”

But Holder also spoke out against protests in Ferguson and other places that have turned violent at times. “It is deeply unfortunate that this vital conversation was interrupted, and this young man’s memory dishonored, by destruction and looting on the part of a relatively small criminal element,” Holder said.

TIME Companies

Justice Department Investigating J.P. Morgan Over Foreign Exchange Trading

JPMorgan Holders Led by Chairmen-CEOs to Vote on Dimon's Titles
Victor J. Blue—Bloomberg/Getty Images Pedestrians walk by the offices of JPMorgan Chase & Co. in New York, U.S., on Friday, May 17, 2013.

The criminal investigation is looking at foreign-exchange trading activities and controls

The Department of Justice is leading a criminal investigation into the foreign-exchange trading of J.P. Morgan Chase, the bank announced Monday in a regulatory filing.

Alongside other civil-enforcement regulators, the Justice Department is looking into the bank’s foreign-exchange trading activities and controls related to them, the Wall Street Journal reports.

The bank said it “continues to cooperate with these investigations” but that there is “no assurance that such discussions will result in settlements.”

J.P. Morgan, which is the largest bank in the U.S., estimated that its loses from legal proceedings could top $5.9 billion, as of Sept. 30. Three months earlier, the estimate was $4.6 billion.

[WSJ]

TIME justice

Obama Nominates Vanita Gupta to Be Civil Rights Chief

Vanita Gupta.
AP Vanita Gupta.

Gupta has been praised for her ability to bring opposing parties together in matters of criminal justice and civil rights.

President Obama has tapped the deputy legal director of the American Civil Liberties Union, Vanita Gupta, to head the Department of Justice’s Civil Rights Division, Attorney General Eric Holder announced Wednesday. In a statement, Holder praised Gupta’s “trailblazing work” as a civil rights lawyer, and said she “has spent her entire career working to ensure that our nation lives up to its promise of equal justice for all.”

Strongly supported by the left, Gupta has also won unexpected praise from conservatives normally critical of the Obama administration and Holder’s leadership of the Justice Department. Conservatives including Grover Norquist and former president of the National Rifle Association David Keene are among her supporters.

“We come from a different side of spectrum than ACLU,” says Marc Levin, policy director for the conservative criminal justice reform organization Right on Crime which has an informal relationship with the ACLU. “But, I’ve found her interested in identifying areas where we can work together.”

Gupta started her career at the NAACP Legal Defense Fund (LDF), where she won a challenge to reverse the convictions of a group of black men who were wrongfully convicted of selling drugs in Texas. In 2003, Gov. Rick Perry pardoned the defendants. At the ACLU she led a lawsuit against a Texas immigration detention facility that led to widespread detention policy reform.

As outrage has erupted in Ferguson, Mo. over the killing of an unarmed black teenager by a white police officer, Gupta and the ACLU have been among the loudest voices calling for accountability and transparency from the police department. Sherrilyn Ifill, President and Director-Counsel of LDF, said Wednesday that Gupta has “expertise in bringing law enforcement and communities of color to the same table, in pursuit of common goals of fairness and accountability.

Former U.S. Pardon Attorney Margaret Love says Gupta’s appointment is a “happy confirmation of the Obama Administration’s appreciation of the relationship between civil rights and the criminal justice system.”

Gupta may prove a less divisive choice than Obama’s prior nominee for the civil rights post, Debo Adegbile. His nomination was blocked in Congress because he once represented death row inmate Mumia Abu-Jamal, who was convicted of murdering a Philadelphia police officer. The Obama administration stood by their nomination of Adegbile, but he later withdrew and returned to private practice.

Gupta has her own legal history, however. She made her name in part by fighting to reform the nation’s drug laws, including embracing broad decriminalization of some drugs. In an opinion piece for the New York Times last September, she called for the elimination of the mandatory minimum sentences that have left many first-time offenders locked up for life. She supports of decriminalizing marijuana, the criminalization of which she has said has contributed to our nation’s overcrowded prison system.

“Those who seek a fairer criminal justice system, unclouded by racial bias, must at a minimum demand that the government eliminate mandatory minimum sentences, which tie judges’ hands; rescind three-strikes laws, which often make no distinction between, say, armed assault and auto theft; amend ‘truth in sentencing’ statutes, which prohibit early release for good behavior; and recalibrate drug policies, starting with decriminalization of marijuana possession and investment in substance-abuse prevention and treatment,” Gupta wrote in the New York Times.

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