Summer camp games DO teach useful skills- like financial fraud…

(This is my first blog-esque post ever. So, sorry…)

Remember that game Sharks And Minnows? Where one person was the shark and you had to swim with a group from one side of the pool to the other without getting tagged? Safety in numbers was the lesson then, especially because the game got progressively harder as the number of sharks rose and minnows dropped. Still, it was a useful exercise; and for those rare few who were the last minnows standing, one got that shiver in your thighs as you realized you were the last one–and that this is what it must have felt like for Custer at Little Big Horn and the Spartans at Thermopylae.

That game seems to be having a do-over on Wall Street. Bloomberg reports today that the FBI is being forced to re-task its agents away from tracking terrorists (and terrorist financing) to investigate fraud like the much-blogged Madoff scheme. The reason cited is a flood of cases and a limited pool of agents. As it reports :

“Special Agent Rachel Rojas, who once worked on tracing terrorist financing and al-Qaeda, now oversees 15 agents investigating mortgage fraud, said Cardona, a career agent with 23 years at the bureau. He declined to say how many other agents he has reassigned from anti-terror work to financial crimes.”

I feel safer already. It continues:

“Some big cases are left to others. The FBI didn’t get involved in the investigation of Marc Dreier, a New York lawyer charged Dec. 8 with defrauding hedge funds out of more than $100 million. The Dreier case is being handled by investigators in the U.S. Attorney’s Office in Manhattan.

“We don’t chase every case,” he said. “We don’t have the resources.”

To save agents time, the New York office has established Web sites and telephone hotlines for anonymous e-mail complaints and tips about mortgage fraud and the Madoff case, Cardona said.”

I wonder where all that rhetoric about aiding terrorists went. I know the Bush administration is out in four weeks, but this is what they did best. In their heyday they went so far as to suggest that smoking marijuana helps terrorists. Now there is hardly a wimper, even as one of the front-line fighters in protecting domestic tranquility has to divert its focus to dealing with predators in a system that was and remains horrifyingly fragile? The lesson for the mujahideen is to move money now. We are too busy to keep track of everything. It’s hard enough to do this job without shooting ourselves in the process (just ask Plaxico Burress). Where is the Administration effort to warn those tempted to try a fraud scheme that they will be considered as aiding the terrorists? Might that not encourage decency, or at least second thoughts?

To be fair, some of this is the FBI’s own doing. I understand that agents need to be trusted to handle sensitive information. However, they also need to be able to do their jobs, and in this war that sometimes means getting dirty. I recently had lunch with my former and one of his colleagues. We were talking about federal employment and he remarked that the FBI had stringent standards on who they hired. For example, even though the FBI recently raised its drug history tolerance, you are still disqualified if you have done anything more than marijuana within the last ten years (there goes a big chunk of the under 30 crowd) or if you have done marijuana at all within the last three years (goodbye many recent college grads). What you basically end up with (no offense to those who serve in the FBI) are people who have spent little to no time around anything that does not smell right. And the whole point of financial surveillance–be it against terrorist cells or rogue fund managers–is to catch something that does not smell right before you find the raccoon that fell into your chimney and died three weeks ago.

Or, to put it another way: what is the FBI smoking?