On Monday, May 20th, hundreds of homeowners facing foreclosure and housing rights activists from across the country will rally outside of the United States Department of Justice to demand Attorney General Holder hold the Wall Street Banks that ravaged America’s economy accountable. Dozens of struggling homeowners are prepared to risk arrest in non-violent civil disobedience or set up an ongoing occupation outside the Department of Justice until demands for Wall Street accountability and relief for their communities are addressed.

Demonstrators today are using their bodies to send a message to Eric Holder that it is time to stop shielding the big Wall Street banks from prosecution. Hundreds of homeowners who have been playing by the rules while the big banks have cheated them are risking arrest at the Department of Justice to make an unmistakable statement: it is about time for the government to side with poor and middle class folks who the bankers have screwed rather than those banks who have been cheating them.

The Campaign for a Fair Settlement and the Alliance for a Just Society put together devastating reports in April and May, the first of which points out that the administration has yet to prosecute a single major bank or top level executive for the widespread fraud leading to the system's collapse, while the most recent report discusses how much better the economy would be if the administration was forcing the big banks to actually help homeowners who had been hurt by the banks. From the report:

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There is a new report out this morning once again reminding us of the greatest disappointment progressives have in the Obama administration: the lack of toughness in regards to Wall Street. The report, issued by the Campaign for a Fair Settlement (full disclosure: this is a coalition I have helped in various ways since their founding), is probably the most harshly critical analysis yet by a coalition aligned with traditional progressive Democratic groups. The report opens with this damning list of hard-to-dispute facts, and then just goes on from there:

• The Administration has yet to prosecute a single major bank or top level executive for the widespread fraud leading to the system’s collapse.
• Civil penalties have similarly failed to be imposed on top executives, and fines levied against the banks have been so small as to amount to a minor cost of doing business.
• Settlements have left the banks themselves in control of providing relief and restitution to homeowners, giving them credit for cleaning up their balance sheets more than preventing foreclosures.
• Far from showing any signs of having been chastened, the biggest banks are now even bigger, and have successfully slowed down or weakened key elements of the financial reform bills passed in the wake of the collapse.

And signs even early on in the second Obama administration are not encouraging:

• With no mention of Wall Street and the banks anywhere in either his second inaugural speech or his 2013 State of the Union address, the President appears to be wishing the crisis behind him more than addressing its still festering wounds.
• Statements by new appointees like Treasury Secretary Jacob Lew have suggested that they view the “too big to fail” problem as having been largely solved, even as new studies confirm how much the systematically risky banks still benefit from market assumptions that they retain that status.
• Despite having faced withering rebukes for their handling of key cases and settlements, agencies like the Office of the Comptroller of the currency have reignited that criticism in their attempts to amend the disastrous Independent Foreclosure Review settlement, yet again constructing terms far more favorable to the banks than to homeowners and borrowers.

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Think of it as the story of two antagonists. One of them was an honest Senator who came to Washington to fight corruption. The other is an arrogant banker who's so sure of his untouchability that he wore "FBI" cufflinks when he made a public appearance last month.

The Senator

Former Sen. Ted Kaufman, whose epic struggle to bring Wall Street to justice was depicted in PBS Frontline's recent episode The Untouchables, made a striking observation on a press call today. "In a private case," Sen. Kaufman said, the Dexia bank's lawsuit "… uncovered reams of emails directly related to the fact that fraud was (allegedly) being committed by JPMorgan Chase."

He was referring to headlines like "E-Mails Imply JPMorgan Knew Some Mortgage Deals Were Bad" in the New York Times and "JPMorgan Hid Reports of Defective Loans Before Sales" in Bloomberg News. Sen. Kaufman added:

"It is just hard to believe that if the Department of Justice had made Wall St fraud a major priority, with the resources they have, they could not have found these same emails and brought these cases."

It's not just that the government wasn't bringing a case against JPMorgan Chase.  Everybody in Washington from the President on down was praising its CEO, Jamie Dimon, claiming he was our nation's smartest and most ethical banker. So were a lot of reporters. Roger Lowenstein's flattering profile of the dyspeptic Dimon remains a classic of the Wall Street flattery genre.

Even Alison Frankel, who has done some excellent reporting in this area, was somehow able to ask only last month (unless her editors wrote the headline for her): "Is JPMorgan Chase the new MBS (mortgage-backed securities) piñata?"

Sometimes a piñata turns out to be a real donkey.

FBI Cufflinks

Wall Street Journal reporter David Erlich sent this to his Twitter followers from the international finance soiree at Davos: "Jamie Dimon is sporting FBI cuff links at #Davos. Sadly he wouldn't let me take a picture of them."

But then, there are a lot of things Jamie Dimon doesn't want coming to light. What message do you suppose he was trying to send with those cufflinks, especially in the wake of the criminal inquiries into his bank's behavior in the "London Whale" scandal?  Peter J. Boyer and Peter Schweizer noted last May that, based on the Justice Department's record of hands-off attitude toward the bank, "JPMorgan Chase has nothing to fear from an FBI probe."

Even after JPMorgan Chase entered into enormous financial settlements - for charges that ranged from sophisticated investor fraud to plain old-fashioned Alabama bribery - it was considered somehow déclassé to suggest that the crime wave which occurred on Mr. Dimon's watch should in any way reflect badly on his character or managerial skills.

JPMorgan Chase was the "good" bank, and Dimon the "good" CEO. It was considered "unserious" to imagine that the bank's crimes could be pursued - or, despite mountains of evidence, that they had even been committed.  But somehow Dexia and its attorneys were able to obtain evidence that the Department of Justice, the FBI, and the enormous machinery of our national security state could not - or would not - find for itself.

What did FBI-cufflink wearing Jamie tell the public about that criminal matter, the $6 billion dollar loss that he told investors was nothing? "We did have record profits. Life goes on.”

I think we can guess what the "F" stands for.

The Evidence

The information that Dexia assembled is breathtaking -- and damning. The JPM section of their complaint begins by reminding us that JPMorgan Chase was lagging behind its Wall Street competitors in 2005. Dimon has tried to rewrite history since then by arguing that he was smarter than other bankers and stayed away from the short-term profits of mortgage-backed securities because he was wise enough to see how risky they were.

Nonsense. As the Dexia lawsuit recaps, they were just late to the game. Dimon was desperate to get it on the action, telling investors in the 2006 Annual Report that the unit handling MBS had "materially increased its product breadth and volume" - from virtually nothing to $25 billion in just a year.

Dimon also reassured investors that the unit "maintained its high lending standards" and had "materially tightened" its underwriting - much as he assured investors that the bank had tightened its standards after the 2008 crisis when the "London Whale" unit reporting directly to him wasn't following published standards, and much as he told them that the "London Whale" losses were a "tempest in a teapot" when he secretly knew they amounted to billions.

The emails uncovered by Dexia show that JPMorgan Chase tried desperately to make up for its late entrance into the mortgage feeding frenzy by cutting corners and misleading investors. In fact, the Dexia suit includes documentation which suggests that Dimon had already told a senior executive to sell off the bank's own ownership of these poorly-underwritten securities.

A Forbes magazine story cited in the suit also quote Dimon as saying "This stuff could go up in smoke!"

True Confessions

An internal JPMorgan Chase memo reportedly told staff how to cheat "Zippy," the company's underwriting system, by falsifying information in order to write bad loans. The memo was even entitled "Zippy Cheats & Tricks."

The Dexia filing extensively documents JPMorgan Chase's flouting of underwriting standards, its misrepresentations to investors, and its rewriting and falsification of independent analyses. These acts are strongly suggestive of criminal acts by individuals, as well as civil wrongdoing.

Sen. Kaufman spoke authoritatively about the deterrent effect that criminal indictments have against white-collar crime. Someone is much less likely to commit a white-collar crime, according to studies, if they know that they could be prosecuted. As Sen. Kaufman explained, this deterrent effect is much weaker for drug crimes, whose perpetrators have already faced the criminal justice system. But bank crimes aren't drug crimes - except, of course, when they are.

Sen. Kaufman added: "There have been a number of us saying in the cases against JPMorgan Chase and Goldman Sachs and Morgan Stanley and the big banks was that one of the problems with the settlements … is that they never had to admit wrongdoing."

The Badge

When JPMorgan Chase was sued over the actions of subsidiary Bear Stearns, it implied that it had only acquired that firm as a favor to the nation - a myth the press has often repeated - and made it clear that it felt it was unfair to be punished for the acts of an organization that was not under Mr. Dimon's supervision at the time. Thanks to Dexia, that particular injustice has now been corrected.

It remains to be seen if the Justice Department will follow Dexia's lead and investigate the compelling evidence of criminal actions at JPMorgan Chase.

Jamie Dimon may believe that he and his peers above the law, but there are still honest people trying to hold them accountable. And he may have those FBI cufflinks, but hey -- Elvis Presley got Richard Nixon to give him a badge from the Narcotics Bureau, and we know how that story ended.

(The press call was part of the Campaign for a Fair Settlement's call for prosecution of Wall Street crimes in the first 100 days of the President's second term.)