TIME Crime

Former Government Cybersecurity Head Convicted on Child Pornography Charges

The US Department of Health and Human Se
The U.S. Department of Health and Human Services building is shown in Washington, D.C., 21 July 2007. Saul Loeb—AFP/Getty Images

He is the sixth person convicted in an ongoing DOJ investigation of three child pornography sites

The former acting head of cybersecurity at the U.S. Department of Health and Human Services was convicted on child pornography charges in a Nebraska federal court, the Department of Justice said Tuesday.

The former official, Timothy DeFoggi, allegedly expressed interest in the violent rape and murder of children in online exchanges and at one point suggested meeting up with another web user to fulfill such fantasies, the Justice Department said in a statement.

DeFoggi, 56, was convicted of engaging in a child exploitation enterprise, conspiracy to advertise and distribute child pornography, and accessing a computer with intent to view child pornography, according to the DOJ.

He was the sixth person convicted in an ongoing investigation into three child pornography websites, the DOJ said. The administrator of the sites has previously been convicted of engaging in a child exploitation enterprise. According to the Justice Department, DeFoggi registered on the site in March 2012 and was active until it was taken down in December of that year.

It’s unclear if his illegal activity overlapped with his work for the government. In an HHS budget report for Fiscal Year 2014 that was found by the Washington Post, a Tim DeFoggi is identified as head of OS IT Security Operations for the department.

 

TIME Companies

Here’s How Much Banks Have Paid Out Since the Financial Crisis

Bank of America's new settlement with the Justice Department is among the largest

The Bank of America deal announced Thursday, the government’s largest-ever settlement with a single company, means the nation’s second-biggest bank will shell out $16.65 billion over allegations that it knowingly sold toxic mortgages to investors.

The landmark agreement is a win for the government—particularly the Department of Justice, which spearheaded the probe—after drawing criticism for its sometimes weak response to the financial crisis in 2008. The sum surpasses Bank of America’s entire profits last year and is significantly higher than the $13 billion it offered during negotiations in July.

But the deal also caps a string of settlements that the Justice Department and other regulators have imposed on banks in the wake of the recession. Since the crisis, the six largest banks by assets have paid more than $123.5 billion in settlements over faulty mortgages, according to previous data from SNL Financial and incorporating the latest settlement. Authorities have forced the banks to pay the majority of that amount, and more deals are likely: Goldman Sachs and Wells Fargo are both reportedly on deck.

Here are seven of the largest government settlements:

$25 Billion
Wells Fargo, J.P. Morgan Chase, Citigroup, Bank of America, Ally Financial
February 2012

In what President Barack Obama called a “landmark” settlement, five of the nation’s largest banks agreed to a $25 billion settlement with 49 states and the feds to end an investigation into faulty foreclosure practices (Oklahoma reached a separate deal). Most funds were directed toward mortgage relief.

$16.65 Billion
Bank of America
August 2014

The settlement announced on Aug. 21 includes $7 billion for consumer relief, such as mortgage modification and forgiveness, and $9.65 billion in cash. But the deal doesn’t absolve the Charlotte-based bank of future criminal claims or claims by individuals.Bank of America has paid more than $60 billion in losses and legal settlements spawning from troubled mortgages—the most of any bank.

$13 Billion
J.P. Morgan Chase
November 2013

The largest U.S. lender agreed to what was then a record-setting settlement with the Justice Department over its role in the sale of the mortgages. “JPMorgan was not the only financial institution during this period to knowingly bundle toxic loans and sell them to unsuspecting investors, but that is no excuse for the firm’s behavior,” Holder said at the time.

$11.6 billion
Bank of America
January 2013

The bank, which acquired the mortgage lender Countrywide Financial in 2008, agreed to a $11.6 billion settlement over claims that it and Countrywide improperly sold mortgages to Fannie Mae.

$9.5 billion
Bank of America
March 2014

Ahead of the Justice Department settlement, Bank of America agreed to pay $9.3 billion to settle additional allegations that it sold faulty mortgages to Fannie Mae and Freddie Mac.

$9.3 Billion
Thirteen Banks
February 2013

Federal regulators finalized a deal with thirteen lenders — including the three largest — for faulty processing of foreclosures. The sum allowed for borrowers who went through foreclosure to access up to $125,000.

$7 Billion
Citigroup
July 2014

Citigroup, the third-largest bank, and the Justice Department announced the deal in July amid allegations that the company misled investors about the mortgage-backed securities. The settlement, which included about $2.5 billion for consumer relief, surprised some analysts by its size, but was a harbinger of what was in store for Bank of America in the coming weeks.

MONEY financial crisis

What Bank of America Did to Warrant a $17 Billion Penalty

A protester holds up a sign in front of the Bank of America as a coalition of organizations march to urge customers of big banks to switch to local credit unions in San Diego California November 2, 2011.
Mike Blake—Reuters

It's the biggest settlement ever between a corporation and the U.S. government. Here's what it reveals about how bankers inflated the housing bubble.

Bank of America has agreed to pay $16.65 billion dollars in penalties—the largest settlement ever between the U.S. government and a private corporation—for its role in the financial crisis. As Attorney General Eric Holder said Thursday morning, the payout will help “hold accountable those whose actions threatened the integrity of our financial markets and undermined the stability of our economy.”

So what did Bank of America actually do? As part of the settlement, the Justice Department has issued a 30-page “Statement of Facts,” signed by the bank, detailing the actions Bank of America is paying for today. The document includes events that took place at Merrill Lynch and Countrywide, which Bank of America later acquired. It’s full of e-mails and statements from employees and executives, which often make for infuriating, if sometimes grimly funny, reading.

Here’s what happened. In the years leading up to the financial crisis, Bank of America and Merrill Lynch sold various securities based on home loans. If the buyers paid their loan back, investors made money, but if too many defaulted, investors lost. To make sure investors knew what they were getting into, the two companies were required to report to investors on how safe these loans actually were.

The problem? Both BoA and Merrill, the statement says, knew with increasing certainty that many of their loans were troubled or at least likely to be risky, and didn’t fully disclose this.

At Merrill, one consultant in the company’s due diligence department complained in an email:

[h]ow much time do you want me to spend looking at these [loans] if [the co-head of Merrill Lynch’s RMBS business] is going to keep them regardless of issues? . . . Makes you wonder why we have due diligence performed other than making sure the loan closed.

The Merrill email pales next to the almost-cartoonish cynicism on display in some Countrywide emails. In addition to selling mortgage-backed securities, Countrywide was on the front lines giving mortgages to home buyers. Justice Department documents suggest that the company increasingly offered loans to almost anyone who walked in the door. What mattered was whether the loan could later be sold to someone else. Wrote one exec:

My impression since arriving here, is that the company’s standard for products and Guidelines has been: ‘If we can price it [for sale], then we will offer it.’

In an email from 2007, another executive reflected that:

[W]hen credit was easily salable… [the desk responsible for approving risky loans] was a way to take advantage of the ‘salability’ and do loans outside guidelines and not let our views of risk get in the way.

Because why should a mortgage company care about risk?

But what makes Countrywide special isn’t just that they gave out a lot of bad loans, it’s that they sold those bad loans to others while keeping the good ones for themselves. In a 2005 email, the Countrywide Financial Corporation (CFC)’s chairman—not named in the statement, but it was Angelo Mozilo—wrote that he was “increasingly concerned” about a certain adjustable rate loan. He feared that the average borrower was not “sufficiently sophisticated to truly understand the consequences” of their mortgage, making them increasingly likely to default. He wrote:

…the bank will be dealing with foreclosure in potentially a deflated real estate market. This would be both a financial and reputational catastrophe.

So what did Countrywide do about it? Sell the products on the secondary market, and keep only the mortgages given to more qualified buyers. According to the settlement document, Countrywide’s public releases “did not disclose that certain Pay-Option ARM loans included as collateral were loans that Countrywide Bank had elected not to hold for its own investment portfolio because they had risk characteristics that [Countrywide Financial Corporation] management had identified as inappropriate for [Countrywide Bank].”

In another email, this time from 2006, CFC chairman Mozilo explicitly spelled out this policy to the president of Countrywide Home Loans, writing:

important data that could portend serious problems with [Pay- Option ARMs]. Since over 70% have opted to make the lower payments it appears that it is just a matter of time that we will be faced with a substantial amount of resets and therefore much higher delinquencies. We must limit [CB’s retained investment in] this product to high ficos [credit scores] otherwise we could face both financial and regulatory consequences.

What do you know? Looks like those “financial and regulatory consequences” happened anyway.

TIME Crime

These 4 Cities Show What Federal Intervention Could Look Like in Ferguson

Seattle police fire teargas and pellets at protesters outside the World Trade Organization conference in Seattle, Washington on November 30, 1999.
Seattle police fire teargas and pellets at protesters outside the World Trade Organization conference in Seattle, Washington on November 30, 1999. Andy Clark—Reuters

The Department of Justice has intervened in other cities in the past

In the wake of unrest in the city of Ferguson, Mo., the Department of Justice says it will investigate reports of excessive force by local police. The investigation is in its earliest stages, but the history of the federal government’s intervention in more than 20 cities over the past two decades provides an idea of what Washington’s approach to local police reform might look like if they find wrongdoing in the case.

In response to findings of police misconduct in the past, cities across the country have entered into agreements, called consent decrees, that have allowed the federal government to force police departments to enact policies that curb racial profiling, improper interrogation and illegal search and seizure, among other things. The exact terms and conditions vary in each case, and the deals are lifted only with the approval of a federal judge.

Here is a look at how federal intervention played out in four cities:

Seattle

When Seattle cracked down on protestors at a World Trade Organization meeting in 1999 the world took notice. Just over a decade later, the city’s police found themselves facing more allegations of improper use of force, this time from the Justice Department. The city’s consent decree required the city to rethink its firearm policies. Officers were required to carry less dangerous weapons and to utilize “de-escalation techniques.”

Seattle police fire teargas and pellets at protesters outside the World Trade Organization conference in Seattle, Washington on November 30, 1999. Andy Clark—Reuters

New Orleans

New Orleans, and its scandal-ridden local government, received attention for civilian deaths caused by police in the aftermath of Hurricane Katrina. It also received an unusually far-reaching consent decree. A 2012 Department of Justice investigation found multiple cases of illegal use of force that resulted in death, inappropriate use of “uncontrollable” dogs to find suspects, discriminatory targeting of minorities for arrest, and other violations. The decree mandated extensive officer training, new supervision requirements and data collection to solve the issue. Recent reports suggest that the police department still has a way to go.

New Orleans Police subdue a man who refused to cooperate when he was asked to step out of his car and who was found to have a knife in the front seat, at the scene of a house fire in New Orleans East on July 6, 2006. Robyn Beck—AFP/Getty Images

Los Angeles

In 2001, a decade after the beating of Rodney King in 1991 and the riots that followed, the Justice Department entered into a consent decree with the Los Angeles Police Department. The beating was one of many allegations of misconduct by the LAPD. A letter to then-Mayor James Hahn from a Justice Department official outlined a number of areas of concern, including the LAPD’s use of excessive force and false arrests. The letter also said that the department lacked procedures to deal with the issues. The consent decree required that department to collect data on police actions like firearm use and its response to cases of resisting arrest. Under the plan, supervisors were then instructed to monitor officers’ action and report potential policy violations. After more than a decade of federal oversight, the consent decree was lifted by a judge in 2013.

Video image of LA cops beating black motorist Rodney King as he lies on ground; taken by camcorder enthusiast George Holliday fr. window overlooking street. Charles Steiner—Image Works/The LIFE Images Collection/Getty Images

Oakland

Federal involvement took a slightly different form in the city of Oakland. The city entered into a settlement with more than 100 plaintiffs in 2003 that mandated a number of police reforms. Ten years later the city acknowledged that it had failed to deliver on its end of the bargain and asked the federal government to help. A federal officer, whose powers included the ability to fire the chief of police, was appointed to oversee the department. The overseer also failed, and was removed by a federal judge this year.

Occupy demonstrators clash with Oakland police during May Day protest in Oakland, California on May 1, 2012. Stephen Lam—Reuters
TIME justice

FBI to Probe Police Shooting of Unarmed Missouri Teen

+ READ ARTICLE

Demonstrators took to the streets of a St. Louis suburb Monday to protest the fatal shooting Saturday of an unarmed black teenager by police, as officials appealed for calm after a night of riots and the FBI said it would investigate the incident.

“Ferguson police show us no respect,” Chanel Ruffin, 25, said during the protest. “They harass black people all the time.”

“This is a terrible tragedy,” Ferguson, Mo., police chief Tom Jackson said Monday on CNN as protesters marched. “Nobody wanted this to happen but what we want to do is we want to heal. We want to build trust with the community and part of that is to have a transparent, open investigation, conducted by outside party.”

The protests Monday remained mostly peaceful, in contrast to the looting that took place Sunday night. A spokesman for the family of the teenager, Michael Brown, told media outlets his family wants “justice.” A list of demands being circulated among protestors Monday was much broader, calling for, among other things, a more diverse police force and that the officer who shot Brown be identified, fired and charged with murder. In a sign of the growing national attention focused on the small town, the hacking group Anonymous hacked Ferguson’s website on Sunday night.

Jackson said he understood the concerns of demonstrators and that a full, independent probe would help the community move forward. The FBI informed Jackson on Monday that it will investigate, the Associated Press reports. Missouri Gov. Jay Nixon, among other officials, had called for such an investigation.

“It is vital that the facts about this case are gathered in a thorough, transparent and impartial manner, in which the public has complete confidence,” Nixon said.

Attorney General Eric Holder also released a statement saying the FBI and the Justice Department’s Civil Rights Division will work in conjunction with local officers to conduct a thorough investigation.

“The federal investigation will supplement, rather than supplant, the inquiry by local authorities,” Holder said in a statement. “At every step, we will work with the local investigators, who should be prepared to complete a thorough, fair investigation in their own right. “

It remains unclear—and a matter of hot dispute—what led to the shooting Saturday of Brown, 18. Police say the teenager had assaulted an officer and reached for his gun. Many in community are skeptical of that account.

In downtown historic Ferguson on Monday morning, hundreds of protestors gathered around the Ferguson Police Department demanding justice for Brown, who they called a “gentle giant.” With raised hands in the air, people shouted “Don’t shoot me.”

Some protesters were peaceful. Others got in police officers’ faces, screaming obscenities and crossing police lines. Officers shouted “cuff him” while arresting at least a half-dozen protesters. Most protesters dispersed after a couple hours.

As news of the protests spread via social media, people of all races came from the region—one more than 60 miles—for a second, impromptu anti-police protest, this time in front of a burnt and looted convenience store. Protesters said they heard about the earlier demonstrations and drove to Ferguson to support to Brown’s family and the community.

Police in riot gear stayed mostly quiet as protesters shouted “no justice, no peace” and drivers honked in support. Police were not addressing the crowds.

The shooting has come at a time of heightened scrutiny across the country over police tactics and racial disparities in the criminal justice system. But Jackson resisted comparisons to other cases.

“This case, I know it seems like it’s similar to others, but what I would really hope is that we could allow the investigation to play out,” said Jackson, who, in an indicator of how hot tensions are running, reported being shot at himself Sunday night in a local Walmart parking lot.

The riots Sunday night in Ferguson left a trail of destruction, with cars vandalized, stores looted and walls spray-painted. More than 30 rioters were arrested, and police said two of their officers were injured.

“People were acting out of emotions,” Ruffin said. “There are a lot of people hurting. I’m not saying what they did was right. … We want justice.”

Police were on hand Monday to keep order.

“We can’t have another night like last night,” Jackson said on CNN. “So we hope it doesn’t happen, but we’re prepared for the worst.

About 130 police formed a line, in riot gear, as protesters chanted “we’re not stupid. We ‘re not stupid.” Protesters formed their own line with their hands up, crying out things like “don’t shoot me” and “you got to stop killing our people.” Brice Johnson, 27, held up a sign that read: “Please do not shoot. My hands are up. RIP Mike Brown.”

Police arrested at least half-a-dozen people who did not disperse.

“This is a terrible tragedy,” Jackson, the police chief, said of the shooting. “Nobody wanted this to happen, but what we want to do is we want to heal, we want to build trust with the community. And part of that is to have a transparent, open investigation, conducted by outside party.”

-Kristina Sauerwein reported from Ferguson, Mo.

 

TIME Money

Bank of America Reported Close To Record DOJ Settlement

Paying up for their role in the housing crisis

+ READ ARTICLE

Bank of America may pay $16 billion to $17 billion to the Department of Justice as a settlement for their role in the housing crisis, according to media reports.

That would be the highest payment to the DOJ for mortgage securities fraud to date, exceeding the $13 billion settlement that J.P. Morgan Chase negotiated in November.

Bank of America issued the most mortgage securities of any large bank on Wall Street in the years leading up to the financial crisis. According to the Wall Street Journal, of the $965 billion in mortgage securities that the bank issued between 2004 and 2008, $245 billion in securities have defaulted or become delinquent.

 

TIME

Herbalife Hires Biden’s Former Chief of Staff

Herbalife Ltd. signage is displayed outside of Herbalife Plaza in Torrance, Calif. on Feb. 3, 2014.
Herbalife Ltd. signage is displayed outside of Herbalife Plaza in Torrance, Calif. on Feb. 3, 2014. Bloomberg/Getty Images

Alan Hoffman will oversee the company's vast lobbying effort in Washington, DC. as it fights allegations that its business model is a predatory pyramid scheme

In yet another chapter in what has become a real-life, Wall Street-D.C. soap opera, the nutritional supplements company Herbalife announced today that it has hired Vice President Joe Biden’s former chief of staff, Alan Hoffman.

Hoffman, who left Biden’s side in 2012 to join Pepsi Co., will start in August as Herbalife’s new executive vice president in charge of everything from “public policy” to “government affairs”—a title that translates, in layman’s terms, to the person who will oversee the company’s vast lobbying effort in Washington, DC.

It’s a big job. Herbalife is reportedly under investigation by the Federal Trade Commission, the Department of Justice, the FBI, and at least two state attorney generals over allegations that the company’s business model is a predatory pyramid scheme.

Herbalife’s arch nemesis, the billionaire hedge fund manager Bill Ackman, gave a three-hour presentation on Tuesday this week outlining his case against the company, which he describes as a “criminal operation” that fleeces poor people by promising, but not delivering, lucrative rewards for selling Herbalife’s nutritional supplements.

But Herbalife’s all-star team of backers, which includes former Secretary of State Madeleine Albright, the activist investor Carl Icahn, and soccer celeb David Beckham, have dismissed Ackman’s allegations out of hand as “completely false and fabricated.”

Ackman has led a lonely crusade against the company for the last 18 months, spending $50 million of his investors’ money hiring a battalion of investigators to prove that the company is misleading distributors, misrepresenting sales figures and selling its products at inflated prices. Ackman became tearful Tuesday describing the company’s practices, which he compared to those used by the Mafia, the Nazis, and Enron.

Ackman’s hedge fund, Pershing Square Capital Management LP, has also bet against Herbalife in the market and stands to gain $1 billion if the company’s stock collapses.

Herbalife’s stock has soared and plummeted, roller coaster-like, since December 2012, when Ackman first vowed to take the company down. Since January 2013, Herbalife has thrown itself into the battle, dumping roughly $2 million on official lobbying efforts in Washington, according to the Center for Responsive Politics. That kind of spending marks a major increase for the company, which shelled out about the same amount on lobbying over the course of a decade between 1998 and 2008.

This week, the company suggested that it may sue Ackman for defamation — something public companies seldom do, in part because the legal barriers are very high and in part because such an action could give Ackman the power to demand access to some of Herbalife’s non-public records. (Ackman responded Tuesday to a question about the possible lawsuit: “Bring it on.”)

Hoffman, who has worked for all three branches of government, has close ties with officials within the Department of Justice, the Federal Trade Commission, Congress, and the Obama administration. “I look forward to ensuring that the public more clearly understands the critical role the company plays in advancing good nutrition,” Hoffman said in a statement today. “I also look forward to promoting the economic opportunities that this global nutrition company provides for hard-working people in communities everywhere.”

During Ackman’s presentation this week, which he promised would be a “death blow” for the company, Herbalife’s stock actually rose, ending the trading day 25% higher than where it had started. Ackman alleged that the company had bought its own stock to make its price rise.

Herbalife’s retail strategy depends on hiring salespeople who do not draw an independent income, but instead share in revenues generated by the salespeople they recruit, and those of their recruits’ recruits. Herbalife does not dispute that model.

But Ackman alleges that many of Herbalife’s “customers” are purchasing the company’s products in an effort to qualify to open a branded “nutrition club,” which the company bills as a lucrative business opportunity. Ackman says his investigators’ analysis of a sample of Herbalife’s “nutrition clubs” lost an average of at least $12,000 a year, and that fewer than 2% of its salespeople made more than $5,000 last year. Herbalife says those numbers misrepresent its model, where many customers sign up as “salespeople” to get discounts on the products for themselves, their friends and family.

“I’m an extremely, extremely persistent person. Extremely,” Ackman said Tuesday. “And when I believe I am right, and it is important, I will go to the end of the earth.” Whether he’s right or wrong, he’s up against a formidable team in Washington, DC.

MONEY credit cards

AmEx’s Battle With the Feds Could Mean Lower Costs for Credit-Card Users

The American Express Co. logo, along with those of Visa Inc. and Mastercard Inc., are displayed in a shop window in New York, NY
Scott Eells—Bloomberg via Getty Images

American Express is facing off against the Justice Department today in a court battle that could shape the future of the credit card industry.

The suit, which concerns the fees merchants pay every time a customers uses plastic, is the culmination of a four-year war between federal authorities and the New York-based credit card giant. Its outcome won’t just affect the way American Express does business, but will likely impact consumers at the checkout counter as well.

Currently at stake is AmEx’s “take it or leave it” policy. Every time a customer pays with a credit card, the merchant must pay a processing fee, generally between 2% and 3% of the total purchase. American Express — which, according to the government, charges the highest merchant fees of any card network — forbids its merchant partners from offering customers incentives to use cards that are cheaper for the vender to accept.

The Department of Justice argues that the policy is anti-competitive because AmEx—which accounts for 26% of all money transacted through credit cards in the U.S.—is too important for most businesses to drop. It also claims customers, even those who use a different card, end up paying for AmEx’s higher rates because merchants compensate by increasing prices.

American Express, of course, disagrees. The company says it is too small to have an anti-competitive effect on the market. Court documents show that there were 53.6 million AmEx cards in circulation in 2013, compared to 178 million MasterCards and 254 million U.S.-issued Visa cards. It also argues these higher fees are necessary to provide merchants with services like fraud reduction programs, financing and marketing, and data analytics.

This is the latest battle in a four-year-old war over credit-card company business practices. In 2010, the Justice Department filed a lawsuit against MasterCard, Visa, and American Express for various merchant restrictions that the department found ultimately result in consumers paying more for their purchases. Visa and MasterCard quickly settled, later agreeing to a record-high $5.7 billion antitrust settlement with U.S. merchants over alleged fee fixing. But AmEx held out. In 2013, it reached a separate peace with merchants, allowing them for the first time to add a surcharge to AmEx purchases as long as they added the same charge to all credit-card transactions — the “take it or leave it” policy. But the settlement failed to satisfy the Justice Department, which now seeks to force AmEx into the same deal it cut with Visa and MasterCard.

For AmEx, the stakes are high. Merchant fees make up 65% of the company’s revenues, and it depends on high processing rates to offer its customers benefits like discounts and frequent-flyer miles. A loss would allow merchants to offer customers incentives for using a competitor’s card, and could cut into AmeEx’s profits by pushing the company to lower its merchant fees.

For consumers, a D.O.J. victory could potentially mean lower prices. Many businesses have historically priced in credit-card processing fees by raising the cost of their goods by 1% to 3%. Past settlements have allowed merchants to pass on these fees directly to credit card users, theoretically sparing cash and debit customers from having to share in the cost of accepting credit cards. However, many have questioned whether merchants are actually passing their savings onto consumers.

If American Express loses, merchants would be allowed to offer additional discounts to credit-card users with cards that charge lower fees. This won’t pacify those who say customers are paying the same prices as before plus new credit-card processing fees, but it does mean certain credit-card users might pay less than others.

Don’t expect AmEx to give up. The company may “need those rules in place to remain competitive with Visa and MasterCard,” Darren Bush, an antitrust law expert at University of Houston Law Center, told Bloomberg. “They’re willing to put more on the line.”

TIME Department of Justice

Ted Cruz: Holder Must Appoint IRS Special Prosecutor or Expect to Be Impeached

Eric Holder
Attorney General Eric Holder testifying on Capitol Hill in Washington, Jan. 29, 2014. J. Scott Applewhite—AP

Sen. Ted Cruz (R-Texas) added that the Justice Department is “the most partisan” in its history.

Attorney General Eric Holder must appoint a special prosecutor to investigate IRS targeting of conservative groups or expect to face impeachment proceedings, Sen. Ted Cruz (R-Texas) said on the chamber floor Thursday.

“When an Attorney General mocks the rule of law, when an Attorney General corrupts the Department of Justice by conducting a nakedly partisan investigation to cover up political wrongdoing that conduct by any reasonable measure constitutes high crimes and misdemeanors,” said Cruz. “Attorney General Eric Holder has the opportunity to do the right thing. He could appoint a special prosecutor with meaningful independence who is not a major Obama donor.”

The donor Cruz is referring to is Justice Department prosecutor Barbara Bosserman, who has given $6,750 to the Democratic Party and President Obama over the past ten years, according to the Washington Post. Bosserman has been chosen to lead the Justice Department probe into the IRS.

Cruz and other conservatives are dismayed that the Justice Department has yet to indict anyone 13 months after the IRS admitted that it targeted nonprofit political advocacy groups with the terms “tea party” or “patriot” in their names from 2010 to 2012.

Finance Committee Chairman Sen. Ron Wyden (D—Ore.) took to the floor after Cruz’s speech to object to the call for a special prosecutor, saying that there have been five IRS investigations either concluded or ongoing and another could add “significant cost” to the taxpayer. He also said the call was “premature” given that his committee’s report, conducted with Sen. Orrin Hatch (R-Utah) and his staff, is “almost finished.”

The House of Representatives has impeached only one cabinet official in its history, Secretary of War William Belknap in 1876. He was acquitted in his Senate trial.

MONEY stocks

WATCH: Insider Trading is More Widespread Than You Thought

According to a new study, nearly 25 percent of all public company deals involve some insider trading.

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