Not since former Treasury Secretary Henry Paulson pulled off a $700 billion raid of taxpayer dollars to shore up Wall Street have Washington regulators scurried so quickly to ferret out evidence of collusion between the feds and the nation's major banks and other financial services firms.
The last minute push by regulators comes ahead of a threatened WikiLeaks data dump.
According to WikiLeaks founder Julian Assange, the soon-to-be-released materials will focus on a major American bank -- possibly Bank of America. Mr. Assange claims to have enough incriminating evidence to force the resignation of top bank executives.
But sources in Washington say they expect there will be very little surprising in the WikiLeaks disclosures, which were apparently taken from a computer hard drive.
"As far as any bank is concerned, we're probably in for another 'Casablanca' moment," said one source. He was referring to the famous film starring Humphrey Bogart in which a police inspector is "shocked" to discover gambling going on in Bogie's supper club.
"The [WikiLeaks] dump may turn up a few new cons, or some old ones. We know how the banks operate. The material may be embarrassing to a bank only because the media will make a big deal of it. But don't count on seeing lots of red faces in a shameless environment."
The federal regulators, however, do anticipate no small degree of harsh exposure. Especially sensitive to the possibility of embarrassment is the Securities and Exchange Commission (SEC) and its rumored links to Ponzi swindler Bernard Madoff. Both Mary Schapiro, current head of the commission, and former SEC Chairman Christopher Cox are in line for possible charges of conflict of interest or willful negligence.
The industry group formerly headed by Ms. Schapiro, the Financial Industry Regulatory Authority, also may be in the cross hairs for more than a few potential shockers, including the apparent insider sale of nearly $600 million in auction rate securities before the market crashed in February 2008.
Andrew Ross Sorkin, writing in The New York Times Dealbook, speculated that the big surprise would be that such "chicanery" was documented "and that regulators haven't found it yet -- or worse, they found it and did nothing about it."
"Imagine the public relations hassle," suggested one source. "How do explain away what's been there, right in front of you, in black and white, and yet you did nothing about it?"
Robert A. Mintz, a former public prosecutor, says much of the dumped information, when and if it is made public, will not be well understood by the public. And then there's the problem of the material as actual court-worthy evidence. WikiLeaks documents may not hold up as legally sound.
Attorney General Eric Holder, now at the helm of the somewhat embarrassing Project Broken Trust, has promised to investigate State Department documents released earlier by WikiLeaks. But General Holder has lost face running Project Broken Trust, which thus far has netted about 300 small time con artists and other swindlers while neglecting the $136 billion auction-rate securities fraud.
General Holder has remained relatively silent on WikiLeaks presumed financial disclosures.
"We don't know the details of the documents," a Capitol Hill source said. "It's possible much of the information will date back to the Bush years and the 2008 meltdown. If that's the case, republicans will have quite a mess to deal with."
For now, however, Mr. Assange holds the high ground, despite threats from General Holder to seek prosecution for the State Department leaks. None of this has shaken the determination of Mr. Assange, who promises to go public in early 2011 with the financial disclosures.
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