The Federal Bureau of Investigation does not have enough manpower to investigate financial crimes related to the current financial collapse, reports The New York Times.
The bureau slashed its criminal investigative work force to expand its national security role after the Sept. 11 attacks, shifting more than 1,800 agents, or nearly one-third of all agents in criminal programs, to terrorism and intelligence duties. Current and former officials say the cutbacks have left the bureau seriously exposed in investigating areas like white-collar crime, which has taken on urgent importance in recent weeks because of the nation’s economic woes.
The FBI has been under pressure to do more financial crime investigations since criminal investigations have been opened against Fannie Mae and Freddie Mac, American International Group (AIG), Lehman Brothers, as well as 1,500 other mortgage-related investigations. In response, the agency will reassign hundreds of agents to work financial crimes, but the Justice Department wonders where the agents will come from and whether there will be enough.
From 2000 to 2007, prosecutions for various forms of fraud fell sharply as the FBI was transformed into a domestic counterterrorism and intelligence organization. Fraud prosecutions against financial institutions fell 48 percent, insurance fraud prosecutions tumbled 75 percent, and security fraud cases dipped 17 percent.
According to the Times, the FBI has repeatedly requested additional funding from President Bush to hire more agents to do criminal investigations. The requests were denied.
Currently the FBI has 177 agents working 1,552 cases of mortgage fraud, hundreds of agents short of the staffing levels seen during the savings and loan scandals of the 1980s.
Assistant Director John Miller of the FBI told the Times that the agency only concentrates on multimillion-dollar corporate fraud cases where it can do the most good and retrieve victims' money due to the resource shift from criminal investigations to counterterrorism and intelligence.