Qui Tam

* * * *

In recent months, amid the financial crisis that has roiled the U.S. economy, a rising number of securities and accounting fraud cases have surfaced, accounting for billions of dollars in losses for investors. But the agencies on the front lines of policing the Wall Street?s top financial institutions and investment managers have been hamstrung by a lack of resources. Since September 11, 2001, when the nation?s law enforcement priorities understandably shifted to counterterrorism efforts, the ranks of personnel at white-collar crime units have declined sharply. By some published estimates, the Bush administration failed to replace at least 2,400 FBI agents who were transferred to counterterrorism squads. As a result, the FBI?s white collar units are currently down at least 625 agents from pre-9/11 levels, a reduction of 36 percent.
Many United States Attorneys? offices throughout the country have been subjected to hiring and budget freezes. The number of new Assistant United States Attorneys has grown by around .5% each year during recent years. But new hires have been allocated to prosecuting internet crime, immigration offenses, and gangs ? important areas, to be sure, but none more emergent than financial fraud during our current crisis. As a result, from 2000-2007, the number of prosecutions of frauds against financial institutions plummeted by 48 percent.

After the savings and loan debacle of 20 years ago, Congress authorized $75 million to hire more FBI agents and prosecutors. The law enforcement effort resulted in more than 600 convictions and $130 million in ordered restitution. Schumer and Shelby?s bill similarly seeks to provide extra resources to meet the added strain put on these law enforcement agencies.

The $110 million authorized by the senators? proposal would allow for new hires at each of three different law enforcement offices, as listed below:

-- 500 new FBI agents ($80 million)
-- 50 new Assistant United States Attorneys ($10 million)
-- 100 new SEC enforcement division employees ($20 million)