The U.S. Justice Department faces an internal crisis in morale and a public crisis in credibility. And while every Justice Department pushes its political agenda alongside its lofty goals of upholding the law, the Bush Justice Department sometimes pushed its political agenda in violation of the law. The question is whether Eric Holder Jr., Barack Obama's pick for attorney general, can fix it. Nobody knows better than Holder that the line between law and politics at DOJ can be blurry. The one stain on his otherwise gilded career was the role he played, as No. 2 at the Clinton Justice Department, in the pardon of fugitive commodities trader Marc Rich in the last Clinton hours. Holder didn't give the pardon application much thought before concluding that he was "neutral, leaning towards favorable." Clinton relied in part on that advice in granting the pardon. Holder later testified before Congress that he'd made a mistake.

What Holder stands to inherit from Michael Mukasey and his predecessor, Alberto Gonzales, is not a Justice Department that was slightly confused about where the law began and politics ended. If confirmed, he will take over an institution where, at least in recent years, politics sometimes had no end. The department became fodder for late-night TV jokes in 2007, when Attorney General Alberto Gonzales and his staff flimflammed their way through congressional hearings about the partisan firings of eight U.S. attorneys. Those independent prosecutors were let go for failing to be—in the parlance of Gonzales's underage underlings—"loyal Bushies." More than a dozen officials resigned in the wake of that scandal.

Things at Justice worsened with internal reports finding the department had hired career civil servants, law-student interns, assistant U.S. attorneys and even immigration judges based on their loyalty to the GOP. Secret memos produced by the department's Office of Legal Counsel authorized brutal interrogation techniques and warrantless government eavesdropping. The subordination of law enforcement to politics led to the flight of career attorneys in the department's Civil Rights Division and especially the Voting Section, where by 2007 between 55 percent and 60 percent had transferred or left the department.

If the rot at Justice could have been cured through the simple act of replacing Gonzales, the appointment of Michael Mukasey, a respected federal judge, in 2007 might have been enough. It wasn't. To be sure, Mukasey said noble things about the evils of torture and made moves toward disentangling the department from the White House. But more often than not, he declined to lance the boil. He refused to call waterboarding torture. He insisted no crimes were committed when department officials violated civil-service laws. And he criticized those seeking accountability for the architects of the administration's torture policy as "relentless," "hostile" and "unforgiving."

Perhaps the most important quality Eric Holder would bring to his new position is that he knows the Justice Department and Washington. In addition to serving as a judge in the District of Columbia, Holder was the top federal prosecutor for the District, and served in DOJ's Public Integrity Section, prosecuting government corruption. Gonzales came to the job with no understanding of the department.

Everybody has advice for Holder, starting with shuttering Guantánamo and repairing detention and interrogation policies, recalibrating the legal limits on information-gathering by intelligence agencies, doing away with provisions of the Patriot Act that encroach on civil liberties and restoring the integrity and independence of the Office of Legal Counsel, which advises the president on the lawfulness of a proposed action. At a speech he delivered last June, Holder condemned the Bush administration for abusing prisoners, violating the Geneva Conventions and authorizing warrantless surveillance on Americans, promising that "we owe the American people a reckoning."