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Did you ever wonder why nobody is getting prosecuted for the biggest white-collar crime in the history of the world–the worldwide financial collapse of 2007-2008? The answers are starting to come out.

The explanation involves a remarkably lenient  U.S. Department of Justice, who were apparently sensitive to large corporations, like Wall Street banks, having to worry about being hauled off to jail. Can you imagine how upset bank execs would be if they knew the DOJ would come after them for some clever little transgressions that may have inadvertently blown up the world’s economy?

Two New York Times reporters several months back discovered that federal prosecutors adopted lenient new guidelines in 2008 allowing “deferred prosecutions,” enabling the Department of Justice to essentially handslap corporate criminals. Rather than a guilty or not guilty plea, the government allowed companies to investigate themselves and report whatever wrongdoings they found. The feds could then delay or dismiss any prosecution if the companies promised to change its behavior. You know, a kinder, gentler DOJ.

According to Gretchen Mortenson and Louise Story (“As Wall St. Polices Itself, Prosecutors Use Softer Approach,” New York Times, July 7, 2011) this lenient policy may help explain why nobody is being held accountable for the super-sized white-collar crimes in the housing and financial markets:

Though little noticed outside legal circles, the guidelines were welcomed by firms representing banks…The guidelines left open a possibility other than guilty or not guilty, giving leniency often if companies investigated and reported their own wrongdoing. In return, the government could enter into agreements to delay or cancel the prosecution if the companies promised to change their behavior.

Although these “deferred prosecutions” were used in the Bush Administration prior to the financial crisis, the DOJ made them official in 2008. They must have figured the banks had plenty enough to worry about and didn’t need the pressure of any pesky prosecutors lurking about.

The Securities and Exchange Commission also added deferred prosecution as a tool last year and has embraced another alternative to litigation — reports that chronicle wrongdoing at institutions like Moody’s Investors Service, often without punishing anyone.

That’s right. Their punishment is having a report published about their criminal activity.

Another example of this more cautious prosecutorial strategy: Government lawyers now go to companies earlier in an inquiry, and often tell companies to figure out whether improper activities occurred. Then those companies hire law firms to investigate and report back to the government.

Some critics call it “outsourcing” of investigations, according to Morgenson and Story, who go on to detail numerous examples of collusion between corporations and the government.

Such results provide bragging rights among corporate defense lawyers, according to longtime observers of the legal system.

“The corporate crime defense bar has this down to a science,” said Russell Mokhiber, the editor of Corporate Crime Reporter, a publication that tracks prosecutions. “I interview them all the time, and they boast about how they’ve gamed the system.”

This is the kind of story the American people should have been enraged about. And they probably would have been, if they had known about it. The New York Times investigation was published last July, and wasn’t a sexy or interesting enough story to get much play at that time in the corporate news media. Besides, it wouldn’t be in the media company’s best interest to call attention to it.

Because of the Occupy Wall Street movement, we are seeing more scrutiny given to the crimes of the banksters. This story is one more outrage to add to the list of government and Wall Street collusion.

While the Big Boys of Wall Street have yet to be held accountable for tanking the economy, it would be nice to think the current sharper focus on the financial industry could put pressure on the Obama Justice Department, enough to force them to actually do their job of prosecuting crimes.

I’m not going to hold my breath waiting for perp walks to happen anytime soon, if ever, but if the Occupy Wall Street movement continues to grow, the chances of seeing bank executives in prison can only get better.

That would be Justice We Can Believe In.

(This is a revised version of a previously posted report in thebigpicturereport.com from July 15, 2011.)