The Divide: American Injustice in the Age of the Wealth Gap Highlight

The second fact is that at the very moment Vance was marching his defendants into court on the day of the indictment, the FDIC and the OCC were in the Abacus offices, preparing to take action if the negative publicity resulted in a run on the bank. “They were worried about a run,” says Thomas Sung. “They knew something could happen.” This is significant because it says something about the government’s willingness to conduct a prosecution that it knew might result in a bank failure, job losses, and/or other “collateral” damage. Both state and federal authorities apparently had no problem taking that risk with little, politically unconnected Abacus. A defender of the Justice Department in this instance will naturally protest that the Abacus case had nothing to do with Eric Holder, because Abacus was not prosecuted federally. But upon closer examination, Collateral Consequences showed loudly in this case. Mainly, it showed in those “extraneous matters”—in the nonprosecution of every other bank in America that really was guilty of responsibility for the financial crisis. Those noncases certainly can be laid at the institutional feet of Holder’s Justice Department. And if Eric Holder’s voice wasn’t the direct inspiration, the spirit of Collateral Consequences certainly moved Cyrus Vance, who sent subpoenas to many Wall Street firms but chose to indict only a small, globally nonconsequential Chinatown bank. Abacus isn’t just the only bank in the entire country to face indictment since the financial crisis. It’s also the first company that we know of that was officially deemed small enough to destroy. Too-big-to-fail, meet small-enough-to-jail.