By PAUL SHUKOVSKY AND DANIEL LATHROP
Seattle Post Intelligencer
October 31, 2008
They are bogged down big-time or there would be some indictments by now," said a recently retired bureau official who played a pivotal role in setting FBI policy after 9/ 11.
The FBI's response to the meltdown stands in sharp contrast to past financial crises, he said.
The administration -- in reinventing the FBI after the 2001 terrorist attacks -- shifted about 2,400 agents from traditional crime-fighting squads to counterterrorism units, according to a Seattle P-I analysis of FBI data. At least 1,700 of those agents haven't been replaced, and the latest Bush budget continues that trend.
The P-I has chronicled the result for the past 18 months, finding a dramatic drop in the number of crimes investigated by the FBI nationwide.
An FBI official in a position to know said Thursday that efforts to keep the problem before the administration and Congress are continuing.
Bush's proposed budget calls for increasing FBI funding in 2009 by $451 million, to $7.1 billion. That includes funding 280 additional agents for national security programs, but adding none for criminal programs.
Nationwide, only about 180 agents are investigating mortgage fraud in what has been called the most serious financial crisis since the Great Depression. About 100 additional agents are investigating corporate fraud, including the subprime loan debacle.
Many more agents needed, official says
The crisis emerged as a cooling housing market led to a surge in home foreclosures, followed by bank bailouts and failures -- including the collapse of Seattle-based Washington Mutual in September.
The agent shortage presents the FBI's remaining white-collar crime investigators with an impossible challenge: confront a mushrooming number of complex corporate investigations, each of which requires agents that the bureau doesn't have to give to it.
Tony Adamski, the FBI's former head of financial crime investigations, said Thursday that he had more than 1,000 agents dedicated to financial crimes during the savings and loan scandal of the 1980s and early 1990s -- a crisis that pales in comparison with today's financial meltdown.
When told Thursday how many agents the bureau now has working the problem, Adamski, now retired, broke into a gale of rueful laughter.
"They must be absolutely overwhelmed," he said. "It's clear to me that they don't have enough resources for the magnitude of the problem. Someplace very high up in the (Bush) administration, the decision has been made that this isn't a sufficient priority to dedicate the money necessary to increase the agent staff."
Adamski estimated that an additional 1,000 agents would be needed to handle the current inventory of cases stemming from the financial meltdown.
But since 9 /11, even partially restoring the FBI's crime-fighting capabilities has not been an administration priority, White House Deputy Budget Director Steve McMillin told the P-I in May.
Anthony Bladen, the FBI's assistant director for resource planning, said in May that it's hoped that by spending more for counterterrorism agents, there will be less pressure to tap remaining criminal agents for those duties.
In July, Democratic presidential candidate Barack Obama called for 1,000 new agents to restore crippled FBI crime squads, a move John McCain's campaign criticized as political posturing. Obama's running mate, Sen. Joe Biden, introduced a bill last year also calling for 1,000 new agents.
The McCain campaign has said the FBI will receive the needed resources to fight crime, but has refused requests to specify what the Arizona senator would do to bolster FBI crime squads if he's elected.