Attorney General Eric Holder

In the same hearing where he publicly endorsed the Aaron Swartz prosecution, Attorney General Eric Holder admitted that the reason he has not done his job the last five or so years is because he can’t.

Here’s an unexpected addition to the long list of people who say large banks may be too large to prosecute: Attorney General Eric Holder…

Mr. Holder defended his agency’s track record in testimony Wednesday before the Senate Judiciary Committee. But he conceded that the economic impact of a conviction could be so significant that cases are difficult to pursue.

“I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them,” Mr. Holder told lawmakers. Prosecutors, he said, must confront the problem that “if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. And I think that is a function of the fact that some of these institutions have become too large.”

There you are. It was not just Lanny Breuer refusing to uphold the law, his boss also believed Wall Street should be above the law. Too Big To Jail is real.

But we should not factor out the other truth in all this, Eric Holder has a massive conflict of interest.

While Holder and Breuer were partners at Covington, the firm’s clients included the four largest U.S. banks – Bank of America, Citigroup, JP Morgan Chase and Wells Fargo & Co – as well as at least one other bank that is among the 10 largest mortgage servicers

A particular concern by those pressing for an investigation is Covington’s involvement with Virginia-based MERS Corp, which runs a vast computerized registry of mortgages. Little known before the mortgage crisis hit, MERS, which stands for Mortgage Electronic Registration Systems, has been at the center of complaints about false or erroneous mortgage documents.

Court records show that Covington, in the late 1990s, provided legal opinion letters needed to create MERS on behalf of Fannie Mae, Freddie Mac, Bank of America, JP Morgan Chase and several other large banks. It was meant to speed up registration and transfers of mortgages. By 2010, MERS claimed to own about half of all mortgages in the U.S. — roughly 60 million loans.

Holder and Breuer were at ground zero of the fraud that brought on the mortgage crisis. Is anyone surprised they have not done anything to hurt their old and likely future clients?