In Washington, it often seems that forming a new task force falls somewhere between convening a blue-ribbon panel and conducting a fact-finding mission on the list of things to do when you need to look like you're doing something.
The November announcement of the new Financial Fraud Enforcement Task Force, however, may not merit the usual skepticism. With representatives from 23 federal agencies, plus relevant inspectors general, the task force clearly has great breadth. More importantly, it has ample funding. The Fraud Enforce- ment and Recovery Act (FERA), enacted in May, devotes substantial new resources to financial crime enforcement.
But the Bush task force was more limited in its scope and mandate. It consisted principally of the Justice Department, FBI and state attorneys general. Bank regulators were involved only tangentially, and in the early years, the SEC did not play a major role. The effort was primarily focused on bringing to justice the individuals responsible for accounting, audit and backdating fraud.
In contrast, the Obama administration is casting a much wider net. The current financial crisis was precipitated by financial products and practices that crossed traditional regulatory boundaries, or simply slipped through the cracks.
"It looks good on paper, but the reality is that these agencies are notoriously uncooperative," Meyers says. "The SEC and DOJ have been in turf wars forever. If they can overcome their own internecine squabbling and actually coordinate, there's an opportunity to have a meaningful impact. And to be fair, if you look at the recent cases that the SEC and DOJ have brought, they are collaborating more than they have in the past."