Th­ese gov­ern­ment lawyers care more about win­ning than jus­tice

Book re­view by Paul But­ler

The Washington Post Sunday - - OUTLOOK - Paul But­ler is the Al­bert Brick pro­fes­sor in law at Ge­orge­town Uni­ver­sity. A for­mer fed­eral prose­cu­tor, he is the au­thor of “Choke­hold: Polic­ing Black Men.”

One would not re­al­ize that the United States has the high­est rate of in­car­cer­a­tion in the world by ex­am­in­ing pros­e­cu­tions of white-col­lar crim­i­nals. Se­nior bankers, For­tune 500 ex­ecs, Big Eight ac­coun­tants and white-shoe lawyers are the thugs who brought us the 2008 fi­nan­cial melt­down, the worst since the Great De­pres­sion. For the un­speak­able mis­ery th­ese cor­po­rate swindlers caused — the dec­i­mated re­tire­ment funds and the mas­sive unem­ploy­ment — not one top ex­ec­u­tive has gone to pri­son. Rather, U.S. pris­ons are teem­ing with the poor and the pow­er­less.

“The Chick­en­shit Club” is Jesse Eisinger’s pow­er­ful lamen­ta­tion of a jus­tice sys­tem as up­side down as 0mort­gages left in the wake of cor­po­rate greed. The book’s ti­tle is drawn from a speech by James Comey, the re­cently de­posed FBI di­rec­tor, when he served in the early 2000s as the head fed­eral prose­cu­tor in Man­hat­tan. The club, Comey ex­plained to new lawyers in his of­fice, is a dis­honor so­ci­ety for pros­e­cu­tors who have never lost a case. Eisinger, in this brave and el­e­gant take­down of the U.S. De­part­ment of Jus­tice, makes it clear that he shares Comey’s view that gov­ern­ment lawyers who pur­sue only slam dunks are more con­cerned with win­ning cases than do­ing jus­tice.

Mem­bers of the club, ac­cord­ing to Eisinger, a se­nior re­porter at ProPublica, in­clude for­mer at­tor­neys gen­eral John Ashcroft and Eric Holder; Mary Jo White, who led the Se­cu­ri­ties and Ex­change Com­mis­sion dur­ing the Obama ad­min­is­tra­tion; and Preet Bharara, one of Comey’s suc­ces­sors as chief fed­eral prose­cu­tor in

Man­hat­tan. Eisinger cas­ti­gates Bharara as a show­boat whose press agents — Bharara landed on the cover of Time with the head­line “This Man Is Bust­ing Wall St.” — were more ef­fec­tive than his pros­e­cu­tors.

As Wall Street’s head law en­force­ment agent, Bharara pur­sued rel­a­tively small fish, such as in­sider traders at small hedge funds, but not big banks or top of­fi­cers at the most pow­er­ful cor­po­ra­tions. This car­ried on the new tra­di­tion of wimpi­ness in the once proud Souther District of New York. As a re­sult of this vir­tual im­mu­niza­tion from prose­cu­tion, Eisinger writes, “bankers at the big­gest in­sti­tu­tions sold de­fec­tive prod­ucts, mis­rep­re­sented them, played games with their own fi­nances, and al­most crashed the global fi­nan­cial sys­tem, save for a mul­ti­tril­lion-dol­lar tax­payer bailout.”

Bharara’s wimpi­ness was, in Eisinger’s view, a prod­uct of Jus­tice De­part­ment cul­ture, which largely gives cor­po­rate crim­i­nals a pass. It wasn’t al­ways this way. In 1909, the Supreme Court ruled that cor­po­ra­tions them­selves, as well as their em­ploy­ees, can be crim­i­nally pros­e­cuted. The feds have rarely pur­sued white-col­lar crim­i­nals with the same zeal as other of­fend­ers — as Eisinger puts it, “the rich and pow­er­ful have al­ways been rich and pow­er­ful” — but there have been pe­ri­ods when cor­po­rate crime has been more of a law en­force­ment pri­or­ity.

Robert Mor­gen­thau, the cru­sad­ing head fed­eral prose­cu­tor in Man­hat­tan in the 1960s, asked, “How do you jus­tify pros­e­cut­ing a 19year-old who sells drugs on a street cor­ner when you say it’s too com­pli­cated to go af­ter the peo­ple who move the money?” He brought cases against elites such as James Lan­dis, a for­mer chair­man of the SEC and dean of Har­vard Law School, and Roy Cohn, who was Sen. Joseph McCarthy’s chief coun­sel dur­ing his in­fa­mous com­mu­nist witch­hunt hear­ings in the 1950s. Mor­gen­thau lost his case against Cohn, who went on to rep­re­sent a young busi­ness­man named Don­ald Trump.

Back then, los­ing cases against lawyered-up white-col­lar de­fen­dants didn’t mat­ter as much to the feds, who twice more un­suc­cess­fully pros­e­cuted Cohn (he was dis­barred shortly be­fore his death in 1986). But that changed fol­low­ing two fed­eral pros­e­cu­tions shortly af­ter the turn of the cen­tury. In 2002, the Jus­tice De­part­ment tar­geted Arthur An­der­sen, which was then one of the five largest ac­count­ing firms in the coun­try. The next year the feds brought a re­lated prose­cu­tion against top ex­ec­u­tives of En­ron, a Hous­ton-based en­ergy con­cern.

In those cases, gutsy pros­e­cu­tors went for the kill — fig­u­ra­tively, as in charg­ing Lea Wein­garten, wife of En­ron Chief Fi­nan­cial Of­fi­cer An­drew Fas­tow, with fil­ing a false in­come tax re­turn, in an ef­fort to get Fas­tow to co­op­er­ate; and lit­er­ally, as when their prose­cu­tion led to the demise of Arthur An­der­sen. Some 18,000 peo­ple had al­ready lost their jobs when, three years later, the Supreme Court over­turned the ac­count­ing firm’s con­vic­tion, but Eisinger’s cen­tral con­cern is the chill­ing ef­fect the failed prose­cu­tion had on the feds.

Ac­cord­ing to Eisinger, the re­sult­ing le­gal and po­lit­i­cal fall­out trau­ma­tized the Jus­tice De­part­ment. Pros­e­cu­tors es­sen­tially stopped pur­su­ing crim­i­nal sanc­tions against cor­po­ra­tions and dra­mat­i­cally ratch­eted down pros­e­cu­tions of in­di­vid­u­als sus­pected of white-col­lar crimes.

In Eisinger’s melo­dra­matic procla­ma­tion, “An­der­sen had to die so that all other big cor­po­ra­tions might live, free of prose­cu­tion.” He does not have a per­sua­sive re­but­tal to the le­git­i­mate con­cern that when a cor­po­ra­tion it­self is charged, it’s the in­no­cent low-level em­ploy­ees who suf­fer the most, while many of the more cul­pa­ble se­nior-level of­fi­cials just move on to other cushy jobs in the fi­nan­cial sec­tor.

Nor does Eisinger ad­dress the pre­cept that guided me, as a pub­lic-cor­rup­tion fed­eral prose­cu­tor in the 1990s, to de­cline many more cases than I pur­sued. The Jus­tice De­part­ment man­ual states that pros­e­cu­tors should not bring cases un­less they think they can win at trial. This stan­dard al­lows some of­fend­ers to es­cape prose­cu­tion, but it is ar­guably an ef­fi­cient use of lim­ited pros­e­cu­to­rial re­sources. Ev­i­dence of fi­nan­cial fraud of­ten con­sists of com­pli­cated pa­per trails, rather than smok­ing guns. Lawyered-up de­fen­dants are rich enough to out-re­source the gov­ern­ment, and mas­sive ex­pen­di­tures for ex­haus­tive in­ves­ti­ga­tions, jury con­sul­tants and fancy trial ex­hibits have a way of gin­ning up rea­son­able doubt. For­mer at­tor­ney gen­eral Holder may have made a re­spon­si­ble de­ci­sion to pri­or­i­tize pros­e­cu­tions of trig­ger­happy po­lice of­fi­cers or cor­rupt elected of­fi­cials. There’s no short­age of bad guys out there, so why waste time on “dogs” — the term we pros­e­cu­tors used for cases that were prob­a­bly losers?

Jeremy Ben­tham, the great philoso­pher of crim­i­nal law, thought pun­ish­ment should be de­clined when its costs out­weigh its ben­e­fits. In Eisinger’s en­thu­si­asm for crim­i­nal sanc­tions, he falls prey to the same zeal for pun­ish­ment that brought us the mass-in­car­cer­a­tion cul­ture that he cor­rectly de­cries.

Still, the book’s sus­tained out­rage makes it a com­pelling read. The con­so­la­tion prize for not do­ing jus­tice as a fed­eral prose­cu­tor ap­pears to be mov­ing to an elite D.C. or Wall Street law firm and mak­ing mil­lions of dol­lars a year rep­re­sent­ing the other side.

Eisinger pro­vides story af­ter story of skit­tish fed­eral pros­e­cu­tors out­ma­neu­vered by a re­volv­ing door of se­nior of­fi­cials, in­clud­ing Jamie Gore­lick, deputy at­tor­ney gen­eral dur­ing the Clin­ton ad­min­is­tra­tion, who went on to a part­ner­ship at WilmerHale, an elite D.C. law firm where her clients in­clude BP, which she rep­re­sented in the oil spill case, and Jared Kush­ner, Pres­i­dent Trump’s son-in-law and se­nior ad­viser.

Even the man who coined the term even­tu­ally joined the club. Comey be­came the deputy at­tor­ney gen­eral dur­ing the Ge­orge W. Bush ad­min­is­tra­tion. There he de­clined to pros­e­cute the ac­count­ing gi­ant KPMG for ques­tion­able tax shel­ters. Comey’s ra­tio­nale, re­mem­ber­ing Arthur An­der­sen, was that he didn’t want to put an­other ac­count­ing firm out of busi­ness.

Eisinger is a fear­less re­porter. He ap­par­ently does not care much about eat­ing lunch on ei­ther Wall Street or K Street. Any lawyers who have pros­e­cuted or de­fended white-col­lar cases over the past 30 years are likely to go first to the book’s in­dex to look for their names, and more than a few will be crushed by what they read. Un­like the Jus­tice De­part­ment’s ap­proach to white-col­lar crim­i­nals, Eisinger’s im­por­tant and pro­found book takes no pris­on­ers.

THE CHICK­EN­SHIT CLUB Why the Jus­tice De­part­ment Fails to Pros­e­cute Ex­ec­u­tives By Jesse Eisinger Si­mon & Schus­ter. 377 pp. $28

AN­DREW HARRER/BLOOMBERG NEWS

Preet Bharara, for­mer U.S. at­tor­ney for the South­ern District of New York, didn’t go af­ter Wall Street’s big fish, Jesse Eisinger writes, cit­ing a cul­ture at the Jus­tice De­part­ment that of­ten gives cor­po­rate wrong­do­ing a pass.

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