Talking Points Memo picks up on Eric Schneiderman’s investigation of Bain Capital’s tax avoidance strategies, and asks a couple questions about why the New York Attorney General is probing something clearly within the purview of the IRS.

“[W]hat the hell is the Attorney General doing here?” asked Ed Kleinbard, a tax expert at USC’s Gould School of Law who has explained Romney’s controversial tax strategies to reporters on behalf of the Obama campaign. “I’m glad he’s shining light on this tax practice. But it’s not clear what his role is. These are tax issues. These are tax issues that should have been aggressively audited and litigated by the IRS.”

A source familiar with the New York probe explains that the Attorney General’s authority in this case stems jointly from the state’s False Claims Act and a more recent enhancement to that law called the Fraud Enforcement and Recovery Act, which together empower the attorney general to bring actions against anyone who defrauds the government, and force them to pay triple damages and civil penalties back to the treasury.

Early in his term, Schneiderman stood up a Taxpayer Protection Bureau within his office and dedicated prosecutors to cracking down on companies that illegally skirt state tax laws — which many private equity firms may have.

TPM is appropriately skeptical, but they fail to add the political context for this move, which clears up all the confusion. Eric Schneiderman is essentially acting as a political hitman for his backers in the Obama Administration. The goal is not necessarily to prosecute anything – the streets of Manhattan and Albany are littered with AG subpoenas that never get a follow-up. The goal is to get free media profiles of Bain’s tax avoidance strategies, to embarrass Mitt Romney. That’s really it. As Kleinbard says later, this isn’t a criminal investigation, and the AG’s office doesn’t appear to be doing actual tax audits to collect the needed information to build a case. So there’s nothing to suggest an investigation, instead of a grab for headlines.

Meanwhile, and this isn’t mentioned at all, Schneiderman is supposed to carry a portfolio of investigating banks for their securitization practices. But this has really fallen by the wayside. Phil Angelides, the former head of the Financial Crisis Inquiry Commission, highlights this in an op-ed at Politico today:

Wall Street executives themselves admit that high-level wrongdoing has become commonplace, threatening the financial system and the economy. Twenty-four percent of senior financial industry executives in the U.S. and Britain said they believe financial services professionals may need to engage in unethical or illegal conduct to be successful, according to a recent survey. Fully 30 percent reported that their compensation or bonus plans create pressure to compromise ethical standards or violate the law [...]

When a much smaller and less complex scandal infected the savings and loan industry in the 1980s, a Republican president and a Democratic Congress supported a wide-ranging investigation fueled by ample resources — including a $50 million appropriation in 1989 alone to hire 450 more personnel. More than 1,000 bank and thrift executives were convicted of felonies.

Yet more than seven months after this current working group was established, and years after the financial meltdown, staffing levels remain well under the levels of the S&L investigation. Reports indicate that approximately 200 personnel are involved in the task force’s investigation, and it’s unclear how many are full-time staff dedicated to this critical mission.

As one of the attendees of the protests in Charlotte said yesterday, the Justice Department had more people investigating Roger Clemens lying to Congress than investigating the financial system.

Angelides recommends more resources, and a focus on criminal wrongdoing rather than merely civil prosecutions. Members of outside groups want to see a moratorium on foreclosures to ensure due process. But the President, though the New York AG, is telling you what’s actually going to happen; nothing, save for media events aimed at his political opponent, not the banks.