The Center for Public Integrity

In written testimony before Congress today, FBI Director Robert Mueller admitted that the growing numbers of mortgage fraud investigations “are straining the FBI’s resources.” He cited recent statistics from the Treasury Department’s Financial Crimes Enforcement Network, that the number of Suspicious Activity Reports (SARs) on mortgage fraud has continued to climb.

Want to know what kind of financial shape your local bank is in? The answer may well be in BankTracker, a project that has just been launched by The Investigative Reporting Workshop at American University’s School of Communication.

The news may spell economic doom and gloom, but seems there’s hardly been a better time to be a civil or criminal investigator. PaperTrail’s eye was caught by a new newsletter — “Global Fact Gathering” by the James Mintz Group, a private investigative firm — which maps out an “investigative armada” that has descended into the current sub prime-mortgage morass. There are FBI agents assigned to white collar crime, embattled SEC investigators, state auditors, forensic accountants, private investigators, all trying to try to sort out “alleged wrongdoing and conflicts of interest in the mortgage and financial industries.”

The auto industry bailout has stalled in the Senate, putting the fate of Detroit’s Big Three and their employees in the hands of the White House. Why did this bailout — or bridge loan, depending who you ask — fail, when the bank bailout succeeded?

A lawyer who has represented some of the nation’s largest banks — and helped them in their bids to grow even larger — has been tapped to advise the Treasury Department in its unprecedented effort to nationalize some of those same institutions to shore up troubled financial markets.

It has to be one of the more obscure subjects ever addressed in a news release from a major presidential campaign. John McCain — who two weeks ago called for the ouster of Securities and Exchange Commission Chairman Christopher Cox — now is praising the agency. Why? Its decision on Tuesday “to relax mark-to-market accounting requirements.”

On September 15 — the day Lehman Brothers filed for bankruptcy protection, Merrill Lynch was purchased by Bank of America, and AIG faltered — John McCain said in a speech that “the fundamentals of the American economy are strong.” Later in the day he revised that statement, explaining, “We’ve got to fix this economy, which the fundamentals of are at great risk right now . . .”

Revelations that the nation’s unemployment rate reached its highest level in five years in August helped make the economy issue No. 1 on the campaign trail this week. But the situation is actually worse than the media or candidates would have you believe.

The federal rescue plan for Fannie Mae and Freddie Mac is just waiting for the president’s signature at this point, but that doesn’t mean the next president will be spared addressing the issue. Senate Banking Committee Chairman Chris Dodd told NPR’s Morning Edition last week:

With Congress set to weigh in on the Federal Reserve and Treasury Department’s plan to rescue Freddie Mac and Fannie Mae, the increase in political contributions by the two corporations’ political action committees is receiving extra attention. Specifically, over the last two congressional cycles, PACs for both groups, which started donating in 2004, have contributed a combined $1,842,297 to federal candidates, according to data gathered by the Center for Responsive Politics.