DOJ, State Dept. Officials Discuss Passports Breach

The Justice Department is coordinating its response to the passports breach with the State Department's inspector general's office, officials announced today.

A Justice spokesman confirmed that prosecutors have met with State Department representatives at the inspector general's office to coordinate "investigative efforts."

Last week, Attorney General Michael Mukasey said he wasn't sure what violations may have occurred and suggested Main Justice attorneys would await the outcome of the State Department's internal investigation before launching their inquiry.

However, Sens. Patrick Leahy (D-Vt.) and Arlen Specter (R-Pa.) on Tuesday demanded Mukasey open a criminal investigation into the passport scandal in which State Department contractors allegedly accessed the passport files of all three presidential contenders: Sens. Hillary Clinton (D-N.Y.), John McCain (R-Ariz.) and Barack Obama (D-Ill.).

"We ask that you take immediate action to look into this matter, and inform us what preliminary steps the department is taking to determine whether these passport file breaches involved the violation of federal laws," the senators wrote. "We both strongly believe that our government has a duty to protect the private information of its citizens. The Justice Department should not wait to be handed 'a box full of evidence,' as you said at your recent briefing, before determining whether federal laws were broken."

Asked if Mukasey had a change of mind, Carr — the Justice spokesman — said: "Due to the ongoing nature of these efforts, the department will have no further comment at this time."

US gubbermint at work (not) - Michael Mukasey

U.S. Weighing Criminal Response to Mortgage Crisis

By Robert Schmidt

March 21 (Bloomberg) -- The U.S. Justice Department is conducting a broad review of the subprime lending crisis to see if there is a ``larger criminal story'' to the mortgage meltdown, Attorney General Michael Mukasey said.

Mukasey said the agency hasn't decided if the turmoil merits a response similar to the Bush administration's corporate fraud crackdown that began in 2002 after the collapse of Enron Corp. Still, he told reporters in Washington today, the department's criminal division is now weighing how to address the issue.

``We're considering information that's coming in and possible legal theories,'' Mukasey said. ``People are looking at the law to see to what and to whom it might apply.''

The FBI, the Justice Department's investigative arm, announced earlier this year it was investigating 14 corporations for possible accounting fraud related to the mortgage rout; the number now is almost 20. The collapse in the credit markets has forced people from their homes, shaken Wall Street and become a major issue in Congress and the presidential campaign.

Fallout from bad mortgages has toppled at least half a dozen hedge funds and led to the departures of chief executive officers at Citigroup Inc., Merrill Lynch & Co. and UBS AG. More than 100 mortgage companies have suspended operations, closed or sold themselves since the start of 2007.

Subprime loans are typically made to borrowers with the weakest credit.

Facts `Still Coming In

Today, Mukasey said the facts about crisis ``are still coming in'' and he warned that potential cases would be complex and take longer to investigate and prosecute than most criminal matters.

The department is looking at ``what prosecutions are being and can be brought, and then figuring out whether there is some larger story to be told here,'' Mukasey said, adding that it would be a ``larger criminal story.''

Also, Mukasey urged Congress to pass a law extending U.S. authority to conduct surveillance of suspected terrorists. A temporary measure expired in February.

Mukasey and other administration officials say the lapse endangers the country's security.

``We need to stay engaged here because the stakes are tremendous,'' Mukasey said.

Terrorists wanting to harm the U.S. ``have a very long attention span, their fatwas and other directives do not have an expiration date,'' he said. ``The only weapon we have is intelligence, and a large part of that is electronic intelligence.''