FBI limited in pursuit of financial wrongdoers

"Clearly, we have felt the effects of moving resources from criminal investigations to national security," said the FBI's assistant director, John Miller. "In white-collar crime, while we initiated fewer cases overall, we targeted the areas where we could have the biggest impact. We focused on multimillion-dollar corporate fraud, where we could make arrests but also recover money for the fraud victims."

But Justice Department data, which include cases from other agencies such as the Secret Service and Postal Service, illustrates the impact. Prosecutions of frauds against financial institutions dropped 48 percent from 2000 to 2007, insurance fraud cases plummeted 75 percent, and securities fraud cases dropped 17 percent.

Statistics from a research group at Syracuse University, the Transactional Records Access Clearinghouse, using somewhat different methodology and looking only at the FBI, show an even steeper decline of nearly 50 percent in overall white-collar crime prosecutions during the same period.

In addition to the investigations into Fannie Mae and Freddie Mac, the FBI is carrying out investigations of American International Group and Lehman Brothers, and it has opened more than 1,500 other mortgage-related investigations into companies big and small. Some FBI officials privately worry that the $700 billion federal bailout of the financial industry may itself become a problem because it contains inadequate controls to deter fraud.