(image: blogpocket, flickr)

(image: blogpocket, flickr)

Reuters has a bit of a bombshell.

It seems Covington & Burling, the powerhouse law firm that used to employ, and could be expected to re-employ, Attorney general Eric Holder and Assistant Attorney General in charge of the Criminal Division Lanny Breuer is also the same firm that issued the opinion letter that said that MERS was a valid way to transfer mortgages.

If DOJ were to bring criminal charges against the big banks for all the mortgage fraud, it would be really tough to do so without attacking MERS and the status of the alleged transfers made within MERS. A conclusive finding that MERS is and always was the dumbest idea on earth and that any L1 law student should have been able to see that, will destroy the law firm.

Even if Holder and Breuer are not planning to return to Covington after their stint in public service, their pensions are presumable tied to the viability of the firm. This isn’t a “did you work on this particular matter” kind of conflict of interest, this is more existential.

They should have recused themselves outright and appointed a special prosecutor to handle the foreclosure fraud issue.