By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She now spends most of her time in Asia researching a book about textile artisans. She also writes regularly about legal, political economy, and regulatory topics for various consulting clients and publications, as well as scribbles occasional travel pieces for The National.
Attorney General Jeff Sessions asked 46 US Attorneys (USAs) to resign on Friday– including Preet Bharara, US attorney for the Southern District of New York, whom Trump had asked in a previous November 2016 meeting to stay on in his post. Bharara failed to comply with the resignation request, and Sessions fired him on Saturday, as the New York Times reported in U.S. Attorney Preet Bharara Resigns After Refusing to Quit.
To those readers coming late to this party, this ain’t no Saturday Night Massacre, folks. USAs are political appointees, appointed to serve four year terms, yet as is the case with other political appointees, they serve at the pleasure of the President. This means they can be dismissed at any time, without cause.
In days gone by, it was customary for USAs to serve out their four year terms when a new President took office (although in the first two years of the Reagan administration, a majority of the USAs were replaced). That’s no longer the case. In fact, in March 1993, Attorney General Janet Reno took a similar action, asking 93 holdover USAs to resign. This was the largest such request to date yet the New York Times account Attorney General Seeks Resignations from Prosecutors only noted laconically:
All 93 United States Attorneys knew they would be asked to step down, since all are Republican holdovers, and 16 have resigned so far. But the process generally takes much longer and had usually been carried out without the involvement of the Attorney General.
Please note the lack of hysteria. (In his earlier incarnation as a USA, Sessions was one of these 93.)
In fact, that 1993 NYT account on Reno’s action continues in a downright sympathetic vein:
Ms. Reno is under pressure to assert her control over appointments at the Justice Department. She was Mr. Clinton’s third choice for Attorney General and arrived after most of the department’s senior positions were already filled by the White House.
Please bear with me as I recap some further recent history. Vox reports in President Trump asked 46 US Attorneys to resign. That’s normal. that early in his first term, President George W. Bush approved a similar move, also removing holdover USAs– yet allowing them until June 2001 to clear out. And in May 2009, Politico reported in Obama to replace U.S. Attorneys on the new administration’s plans to take a similar action, and quoted then-Attorney General Eric Holder as saying, “[E]lections matter–it is our intention to have the U.S. Attorneys that are selected by President Obama in place as quickly as they can.”
Anger and Hysteria Ensues
Against this backdrop, I find reports such as these at best baffling, if not downright disingenuous. Take CNN, for instance: Anger mounts over handling of US attorney firings, which reports:
The Justice Department announced the firings Friday afternoon, and many prosecutors had not been formally notified or even told before they were fired, according to a law enforcement source. Acting Deputy Attorney General Dana Boente was in the beginning stages of calling each US attorney individually to tell them they had to resign when the DOJ issued a statement.
A law enforcement source charged that “this could not have been handled any worse” because there was little warning. Many prosecutors found out through media reports that they had to resign today.
Really, cry me a river. I can’t believe any of these prosecutors is exactly surprised to be asked to resign.
I’ve read through several media reports, and it seems that while none has been able to make the inconvenient facts of how Trump’s predecessors treated the issue disappear, they can hammer on the “abruptness” of the announcment. From CNN again:
It is common for administrations to ask holdovers to step down, but what is less common is the abruptness of Friday’s announcement. Two sources familiar with the Justice Department tell CNN they were unsure for some time whether such an action would happen and had been looking for some type of announcement — but received radio silence.
“There was not any particular clarity from the Justice Department as to what the future held for the US attorneys” until now, one source said.
Over to the Grey Lady, who in an earlier account, used surprisingly identical language, Trump Abruptly Orders 46 Obama-Era Prosecutors to Resign (I say, order those folks at CNN a thesaurus, please). From Friday’s NYT:
The abrupt nature of the dismissals distinguished Mr. Trump’s mass firing from Mr. Clinton’s, because the prosecutors in 1993 were not summarily told to clear out their offices.
Oh, I see. That makes the Trump action an abomination, and the Clinton dismissals– which up to that date, had not been undertaken on such a scale, nor so rapidly– perfectly understandable.
What does Senator Dianne Feinstein think about the dismissals? According to a press release:
“I’m surprised to hear that President Trump and Attorney General Sessions have abruptly fired all 46 remaining U.S. attorneys.
I could go on in a similar vein, but I think readers get my point.
The “Sheriff of Wall Street”
Much pearl-clutching has ensued over the decision to include US Attorney for the Southern district of New York Preet Bharara in the dismissals. Trump had met with Bharara in November, and asked him to stay on, and he’d agreed. But something changed between now and then. When Bharara refused to resign after being instructed to do so, he was fired, as the New York Times reported in U.S. Attorney Preet Bharara Says He Was Fired After Refusing to Quit.
I’ve seen considerable speculation about why Trump changed his mind– ranging from speculation about the deterioration of Trump’s relationship with Senator Chuck Schumer (Bharara is a Schemer protege), to some musings that Bharara might have been pursuing an inquiry into Trump’s alleged business conflicts of interest (the link includes Harvard Law School constitutional law professor Laurence Tribe’s tweet about this latter claim; he’s a major player in the targeting of Trump’s business conflicts. I’ve discussed why I regard these efforts as a non-starter in these two posts: Law Profs Sue Trump, Alleging Violation of the Emoluments Clause and US Constitution’s Emoluments Clause: a Nothingburger for Trump.) I have no special insights to offer here so I’m not going to attempt any.
What I’d like to address here is Bharara’s over-inflated reputation as the “Sheriff of Wall Street“– evidently bestowed by those who don’t really have much understanding of Wall Street or finance. (Bharara has also targeted public corruption, but due to space considerations and in the interests of keeping this post focussed, I’ll not discuss those here.)
Bharara’s reputation for taking on The Street is based on his unbeaten reputation in bringing successful insider trading prosecutions. That record was at one point threatened by a US Court of Appeals for the Second Circuit decision, United States v. Newman, which overturned one of these convictions, and appeared to place others of these prosecutions in jeopardy. Yet a December 2016 United States Supreme Court decision, United States v. Salman, overturned the appellate decision, safeguarded the convictions, leaving his record on insider trading convictions secure. (I posted about that decision in Insider Trading: Supreme Court Decision Enables Securities Law Theater.)
Time magazine has been a major promoter of his reputation, as has been The New Yorker, as part of its downward spiral into hagiography and hysteria. On Saturday, the magazine published, THE PREET BHARARA FIRING: A READING LIST. Allow me to quote from one of these New Yorker pieces, The Showman, here:
Before Bharara became known as the scourge of insider trading—a 2012 Time cover story called him the “top cop” of Wall Street—he gained attention for the cases he did not bring against the financial industry. He took office in 2009, at the height of the mortgage crisis, and the Southern District, along with the Justice Department, in Washington, conducted investigations of the major firms and individuals involved in the financial collapse. No leading executive was prosecuted. Bernie Sanders, the Presidential candidate, says in his stump speech, “It is an outrage that not one major Wall Street executive has gone to jail for causing the near-collapse of the economy. The failure to prosecute the crooks on Wall Street for their illegal and reckless behavior is a clear indictment of our broken criminal-justice system.”
In a conversation in his office, Bharara rejected the critique. Without going into specifics, he said that his team had looked at Wall Street executives and found no evidence of criminal behavior. “It shouldn’t come as a surprise to anyone that the things that we had either been assigned before I got here or had the initiative to look at were looked at really, really carefully and really, really hard by the best people in the office,” he said. “There’s a natural frustration, given how bad the consequences were for the country, that more people didn’t go to prison for it, because it’s clearly true that when you see a bad thing happen, like you see a building go up in flames, you have to wonder if there’s arson. You have to wonder if there’s anybody prosecuting. Now, sometimes it’s not arson, it’s an accident. Sometimes it is arson, and you can’t prove it.”
Amazingly, The New Yorker’s Jeffrey Toobin, lets it go at that that. He doesn’t himself come back at Bharara with any rebuttal, nor does he turn to other lawyers, critics, political figures, or academics who at the time of the financial crisis and subsequently, have spelled out various pathways to prosecution. (As just one example, Yves has written on several occasions, about how the Sarbanes-Oxley Act of 2002 was designed to make it impossible for senior corporate executives to disclaim knowledge of problematic activity to avoid liability. The legislation required companies to put effective internal control procedures in place, and for the CEO and CFO to certify personally the accuracy of financial statements and the adequacy of internal controls. Yet Bharara and the rest of the Department of Justice (DoJ) failed to use this statutory authority.)
Instead, Toobin turns to the widely feared Eric Holder for further exculpation of Bharara’s failure to bring any major Wall Street prosecutions in any area other than insider trading:
Eric Holder, who, as Attorney General, was Bharara’s boss for six years, made a similar point. “Do you honestly think that Preet Bharara and all those hotshots in the U.S. Attorney’s office would not have made those cases if they could?” he said. “Those are career-making cases. Those cases are your ticket. The fight would have been over who got to try them. We just didn’t have the evidence.”
Oh, I see.
Is it any wonder no wonder that seasoned attorneys turned to deriding the DoJ as the Department of Jokes, for its record in pursuing white collar and financial sector crime, as I wrote in The Obamamometer’s Toxic Legacy: The Rule of Lawlessness?
Bottom Line
As I’ve written before and will no doubt write again: the Trump administration in many ways terrifies me. This isn’t one of them. These USA dismissals are pretty much now SOP for incoming administrations.
Now, to be sure, it’s unlikely Trump’s going to appoint someone to replace Bharara who’ll be more of a junkyard dog on Wall Street prosecutions. If you believe that a sheriff of Wall Street should focus on insider trading convictions, to the exclusion of more systemic abuses, Bharara’s certainly your man. Yet if you’d hoped for something better, Bharara’s been a major disappointment, and I’m certainly not going to mourn his firing.
50 comments
Comments are closed.
I’m beginning to think that Trump/Bannon might have a point when they consider the US media to be hostile opposition rather than an impartial press.
Anonymous
March 13, 2017 at 10:09 am
it is beyond credulity to believe that no one at these media outlets is UNaware of the history of AG firings upon a new administration being elected. The willful hysteria proves a obdurate bias.
I’m not a fan of Trump, but I’ve long felt that he’s had a point about a hostile US media. Admittedly during the campaign, it was the reverse, IMO. Trump got literally billion$ in free advertising from a very very chummy media, but since he’s won, they’ve definitely turned on him. It’s been, uh, interesting to witness it.
That said, the media has SUCKED for ages and ages in this nation and has really not provided much in the way of useful real factual information in quite some time. It’s all propaganda 24/7/365.
Caveat Emptor applies 100% of the time. Plus also always think: Cui Bono.
I hate to admit in in public, but I find myself agreeing with Trump on a lot of things. Especially when he talks about the American mainstream media.
Cui Bono. jeez i was just reading about him in our free and unfettered press. Something about how he and Obama got a standing ovation while dining together in midtown manhattan on friday….Nothing if not fawning….wonder what they ate?
And what were they WEARING? That is really important!
And was Miley in attendance?
Notice the parallel with Camp Clinton. At first they actively worked to elevate Trump as a “pied piper” competitor. Then the media coverage of Trump was free and chummy. But once the Clinton MegaMaid switched from suck to blow, the media likewise turned to full attack mode against Trump.
Just a coincidence, I’m sure.
Hah … yes, just what i was thinking. Clinton tried to suck the oxygen out of the R contenders by encouraging focus on Trump.
Reminds me of any of a number of Wile E Coyote cartoon punchlines
The MSM are treating political appointee convention as if it is new and sinister. The gullible progressive media entertainment consumers who are so smart that they are idiots are clutching their pearls like thay are trying to make diamonds. (Ok they are calcium carbonate.. its a metaphor)
Hah … yes, just what i was thinking. Clinton tried to suck the oxygen out of the R contenders by encouraging focus on Trump.
Reminds me of any of a number of Wile E Coyote cartoon punchlines
The MSM are treating political appointee convention as if it is new and sinister. The gullible progressive media entertainment consumers who are so smart that they are idiots are clutching their pearls like want to make diamonds. (Ok they are calcium carbonate.. its a metaphor)
Great article!
We heard the same swill about Susan Yates, but a background check shows her to be just another g-worker, Wall Street stooge.
http://www.truthdig.com/report/item/when_it_comes_to_wall_street_preet_bharara_is_no_hero_20170313
When I see CNN now, I have to fact check it due to slants such as this informative article points out. That is not how I desire to listen and learn from the news. Just give me the news and stop the assumptions and inunedos that are getting so old. CNN and NYTimes need to get a life. A new life!
Thank you! The hysteria in the liberal media is baffling…until you remind yourself that they only claim to play by different rules than the know-nothings.
One doesn’t have to be a fan of Bharara or buy the Sheriff of Wall Street nonsense to be concerned
about this. The President has an extensive business empire, based in New York, as does his son-in-law’s family.
Here are two investigations or potential investigations in the SDNY that might be shut down:
1. Possible violations of the Foreign Corrupt Practices Act by the Trump organization in Azerbaijan and elsewhere.
[As the article mentions, US executives have gone to prison for this.]
2. Tax fraud for political donations from the Trump Foundation. [Ditto.]
And yes, if you believe in the rule of law, chaos in USA offices around the country is not helpful.
As much as we would love to live in a world where the FCPA actually gets enforced, this is not one.
As I’ve written here, http://www.nakedcapitalism.com/wp-admin/post.php?post=96972&action=edit, I believe the DoJ’s past focus on FCPA violations is a misplaced enforcement priority. There are more attractive enforcement targets, closer to home, that would be far easier to prosecute.
Indeed. Part of the reason the FCPA is so difficult to apply is its reliance on reporting from foreign countries, particularly their governments, which results in stuff like the recent South Korean F-35 “competition.”
True. SDNY is critical for Trump. It makes sense even if the others were cover.
As long as media depends on advertising, it will sensationalize.
Considering the reason that Bharara didn’t think he had to pay attention to Sessions telling him to get out is because he had an assurance from Trump that he was to stay in office, I think your
pearl clutchingconcern may be misplaced.I loved when someone else I know was so upset because Bharara was getting closer to finally indicting the third man in the room, Cuomo. Oops, I guess they missed where Preet was going after another thorn in little Andy’s side, De Blasio. Anyone who did not get that Bharara was very very selective about who got prosecuted and who wasn’t was not paying attention to anything but the PR.
I have no clue why you think Trumps supposed assurances are related to his wanting to avoid a possibly hostile us attorney.
What did I learn from this? I understand this article as basically saying that Bharara was ineffective as US Attorney, good riddance, don’t look for any improvement, yes, everything sucks, cynicism, despair and all that.
So did this guy do anything right?
Considering he began his position during the financial crisis crime spree and zero prosecutions…..what do you think?
If I read my history correctly, this country was founded in part by Media Hysteria and even enshrined it in the Constitution. The lack of Media Hysteria would be a sign of the decline and fall of the Republic.
Back then, the ‘Media’, as such, was not a voice of one !
I seem to remember a similar outcry when W fired a bunch of US attorneys too. Evidently this is only a problem when the Democrat party loses the electoral college.
As to Bharara, I suppose taking on the Martha Stewart’s of the world is better than nothing, but not by much. But even if you do think Bharara was doing important work, let’s not forget that despite passing legislation to prevent insider trading among members of Congress, they still consider themselves immune from being investigated and prosecuted, so this current whining over Bharara reeks of hypocrisy, like most of what we hear from the beltway.
If you’re thinking of the group that included David Iglesias, that was because they refused to pursue spurious “voter fraud” cases and other politically motivated prosecutions at the behest of Karl Rove and the Bush White House.
I still remember the sight of then AG Alberto Gonzalez muttering “I don’t recall” dozens of times before a Congressional inquiry on the firings, as if he’d suddenly developed Alzheimer’s.
Ah yes, thanks for the reminder – so the circumstances there were somewhat different.
What about when John Asscroft fill the DOJ with graduates of Pat Robertson’s Regents law school? Monica Goodling come to mind? Where was the outrage?
Thanks for the great memories. I always will remember him having the two statues covered up doj. Those the days;)
Thanks for this article. Preet Bharara joins the hall of shame along with Eric Holder and Lanny Breuer. Of all the US Attorneys, Bharara, whose jurisdiction included Wall Street, was best equipped to do something effective about the frauds that helped to cause the Great Financial Collapse, yet he did nothing.
Worse than nothing: his prosecutions of insider trading were a cynical form of misdirection, intended to make it look as if the Obama administration was doing something about financial crimes, when it it was in fact giving the looters a pass.
He had started going after some stuff in Cuomo’s office. Other than that, I hadn’t seen anything noteworthy.
I can’t figure out what the fuss is about because the US attorneys serve at the pleasure of the AG and President and historically they have a very high turnover at Administration change-overs.
The only reason to report on this is if Preet Bharara was starting to get somewhere in a Trump investigation and this was the means to terminate the investigation. Other than that, there would be no there there in the story.
Perhaps, but it is important to understand the connection between Covington & Burling’s Eric Holder (and many of the others at that firm like Carl Bildt, Chertoff, et al.) and the economic meltdown, and MERS and MERSCorp.
Yes. Bingo.
The NYT headlines are just mind-boggling.. it’s like waking up in the twilight zone every day.
“Trump wants faster growth. The Fed moves for restraint.” Discussing how the economy is “near its maximum sustainable pace” according to the Fed.
“How Democrats Got Their Mojo Back, as the Opposition”
I’m not even sure what planet I’m on anymore..
This media brouhaha has me wondering what we’ve polluted our environment with that makes everyone’s, and especially the media’s, memories so short…..
Love this quote: “Now, sometimes it’s not arson, it’s an accident. Sometimes it is arson, and you can’t prove it.”
Addendum: “Sometimes it is arson, but the people who committed the arson are extremely wealthy and connected to powerful politician and bureaucrats, who’d quickly have me and my staff fired or reassigned if we dared to go after them using confidential informants or aggressive prosecutions of their subordinates involving plea deals in exchange for betraying their bosses. This would be very easy, for example we could arrest mid-level executives at Wall Street firms like Goldman Sachs on cocaine or prostitution charges, threaten them with state prison, and offer indemnity in exchange for them becoming informants. However, that would be career suicide for me, so forget about it. I’ll stick to the little fish, thank you.”
The most telling thing is the number of high-level Justice Dept officials who end up with lucrative jobs in Wall Street firms after “retirement”; it’s the white-collar mafia’s version of paying off the dirty cops for a job well done.
Yes, and made all the more preposterous by Holder’s false claim that these were “career-making cases.”
If these lawyers intended to remain in public service, they might have been, but since these characters invariably go work for the people they were ostensibly keeping in line once they leave the government, they in fact would have been “career-destroying cases,” since no one would have later hired them if they’d actually prosecuted the banksters.
“… it’s an accident.”
Hey, accidents happen beyond a reasonable doubt.
So I was wondering if carmen ortiz was also a victim of this fascistic purge. She’s the usa whose accomplishments include hounding Aaron Swartz to suicide and “prosecuting” Dzhokhar Tsarnaev of Boston Marathon fame.
According to Wikipedia, she saw the writing on the wall. ” In December 2016, Ortiz announced that she would step down from her post in January. Her announcement was not unexpected, due to the fact that President-Elect Donald Trump will have the power to name new US Attorneys.”
PS. I’ll bet Bill Black could have helped Holder / Bharara with their “evidence” problems with one hand tied behind his back. Oh wait……
One of the many sources I looked at in compiling this post– sorry not to produce the link– suggested that the reasons the Trump number– 46– is roughly half the number Reno dismissed– 93– is that USAs now know the score, and line up their exit strategies accordingly if the party of the President that appointed them loses the election. Note that since Clinton won in ’92– and this USA purging started bigtime– we haven’t seen a situation where the same party has held the White House for three terms. Would Hillary have conducted such a sweeping housecleaning? Or Gore in 2001, or McCain in 2009?
Bill Black did an interview on Real News awhile back where he appeared with a ex-bank exec (from citi, maybe?) and said he didn’t have anything like that high level and high quality whistleblower when he was involved in the S&L prosecutions.
What intrigues me is that the report of the Senate Permanent Subcommittee on Investigations chaired by Carl Levin and Tom Coburn set forth all the evidence for the prosecution of the executives of Goldman Sachs and Deutsche Bank and still no one did the actual work of criminally prosecuting the CEO and CFO for their so-called “misconduct.” Those banks only paid a monetary penalty initially without having to admit to wrongdoing and promising not to do it again!
I suspect the judgement was that they felt they could not prove the case beyond a reasonable doubt which is required, particularly after the expensive lawyers of the defense got involved. All they defense lawyers need to do is to create reasonable doubt and the defendants must be acquitted. One key point is that doing stupid things is not a crime in matters financial. The prudent man standard only applies in civil cases.
Perhaps because they did not have the wiretaps like in some of the insider trading cases. Likley the senate report would provide probable cause, but did not provide proof beyond a reasonable doubt. Recall that few folks from Wall Street got prosecuted in the 1930s except for self dealing and embezzlement.
Thanks for the post and good commentary. Mark me down for: this is why I tossed out my tv ages ago, and why I read nooz papers – and NOT the NYT or the WaPoo – and listen to the radio sparingly.
I had heard somewhere that Trump/Bannon were firing the US AGs and figured pearl clutching on the fainting couch was meant to be my response as a good little do-bee so-called “leftyish” person who’s also supposed to RESIST (cough cough) everything that Trump does… even stuff I agree with.
Get over it. The firing of US AGs has happened at the beginning of most change-over Admins. I think Obama may have been among the few who did NOT do it, and frankly, that sucked bc it just enscounced the W AGs in office… maybe that was the INTENTION?? Methinks so.
So Bannon’s doing what everyone else does. Call the whaaaaambulance.
Preet Behara can’t go away soon enough for me. Useless. Feckless. Tool of the 1%. Yes, Behara will probably be replaced by someone Just. Like. Him. I should worrry NOW why?
“I should worrry NOW why?”
Because it’s you’re godless ‘Librul’ given duty to worry …. because Orange is the new black … list …. ! /sn
Preet seemed to be grandstanding and it made the front page on a slow news day. It had the same half-life as the Pence private email story. Both were big yawns. Not sure there is any great plan by the MSM to foment a coup though. Instead, this is what the public seems to want to read. The problem is that “outrage fatigue” is soon going to be setting in. If everything related to Trump is tagged as equally scandalous — from his tweets about Arnold Schwartzeneger’s low ratings to the gutting of Medicaid expansion — the public won’t be able to judge what is a real act of actual or moral corruption from so-called nothingburgers. That is the problem with these attempts by the MSM to create a “he said, she said” narrative. It leaves less room to discuss the impact of actual policies like new regulatory changes, climate change policy, health care, and tax reforms/cuts.
And Donnie of Orange outfoxes the Meritocratic/Creative Class yet again…
I gotta say that, if not for the sad-making consequences down the line, I’d be helping myself to to big servings of schadenfreude right now.
It’s not the routine firing of the previous administration’s USDAs that should be disturbing, or the mainstream media’s lack of perspective. It’s who the Trump Administration is going to replace them with–most likely people who won’t prosecute white collar crime or incidents of discrimination (unless the offended are conservation white Christians). As a friend who is a public interest lawyer reminds me, we must not forget that our new U.S. Attorney General is one of the most dangerous men ever to reach high-level public office.
POTUS wanted Bharara gone once he found out he couldn’t control him. Bharara was investigating the Russian connections & was open about it. @AngryWHStaffer
http://www.politico.com/story/2017/03/trump-white-house-paranoia-236069
Many White House aides are using encrypted apps or leaving their personal cellphones at home in case their bosses initiate phone checks of the sort that press secretary Sean Spicer used last month to try to identify leakers.
Not sure if AWHS is for sure real, seems to be.