U.S. Attorney General Eric Holder appeared before the Financial Crisis Inquiry Commission [3] today. He cited his strong statutory authority to go after the firms that had a role in the worst economic disaster since the Great Depression. His team was tackling securities fraud, accounting fraud, financial discrimination and fraud related to the stimulus bill. It was an impressive list, but what was not impressive was the first case he touted – Bernie Madoff [4].

You remember Bernie. His kids turned him in. It appears that the FBI considers this the high-water mark of criminal detective work.

The FBI is to be applauded for finally nabbing Mr. Madoff for his 1920s-style Ponzi scheme [5] (named for Charles Ponzi, a celebrity investor, who managed to build a house of cards off of international postal coupons). But can we talk about the modern era and what one professor of criminal law [6] has characterized as “the greatest elite white-collar crime wave in the history of the world”?

While the FBI [7] reports that it is working on some 5,000 investigations, including 2,800 mortgage fraud investigations, Bill Black, who played a key role in the crack-down on S&L officials and the unraveling of the Keating Five [8] scandal 20 years ago, thinks only two numbers matter: “Zero indictments and zero convictions of senior insiders at specialty lending companies.”

Commission member Douglas Holtz-Eakin put his finger on another problem with these impressive sounding numbers: “While mortgage fraud was important, it is the magnitude of the financial crisis that is central," he said. Mortgage brokers did not have the capacity to collapse the global economy. It took major banks and securities firms with the ability to package and peddle toxic assets around the globe to do that. But in the year and a half since the Wall Street titans blew a hole in the economy and forced the government to pony up some $14 trillion [9] in rescue funds, not one employee of a major Wall Street firm is behind bars. Not even AIG [10] executive Joseph Cassano [11], who was labeled the “Man Who Crashed the World” by Vanity Fair [12].

Compare this to what happened after the S&L crisis 20 years ago, which cost taxpayers approximately $350 billion in today’s dollars. According to Department of Justic [13]e statistics, no fewer than 1,852 S&L officials were prosecuted and 1,072 were jailed. 500 were top officers.

What is going on here? Don’t we believe in holding people accountable any more?

Black says: “The huge difference between the S&L crisis and now is that back then, regulators were pushing for criminal convictions. They were providing enormous resources to DOJ and the FBI, and they were demanding that they take action. That is what produced the successful convictions along with some very good FBI agents and prosecutors.”

This is clearly not happening today. No congressional committee has had a hearing on the slow progress of prosecutions. No members of Congress, certainly not those in the committees of jurisdiction who receive the vast majority of their campaign contributions from the financial sector, are subpoenaing JP Morgan Chase [14], Goldman Sachs [15], Bank of America [16], Lehman Brothers [17], Bear Sterns [18] or any other financial institution that pushed toxic mortgage-related securities.

That is why an independent Financial Crisis Inquiry Commission [3] is so critical. The commission’s message to U.S. Attorney General Eric Holder [19] should be that the big banks may be too big to fail, but they are not too big for jail. The commission should turn up the heat on Holder and the lackluster Securities and Exchange Commission [20] in an effort to get to the bottom of what the big firms knew and when they knew it, and they should put a spotlight on Ohio Representative Marcy Kaptur [21]’s bill [22] to muscle up these efforts with 1,000 new FBI agents.

This exercise in accountability is critical, because, as later witnesses made clear, new waves of criminal financial fraud are already upon us.