TRUTH SERUM VERSION-

Via- Capitalism Without Failure

Jaime Falcon

Lanny Breuer appearing on the PBS production of The Untouchables

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June 19 (Bloomberg Law) — Eliot Spitzer, former Governor and Attorney General for the State of New York, talks with Bloomberg Law’s Lee Pacchia about the so-called revolving door between the public and private spheres. While he doesn’t think the entire concept requires regulatory change, he does feel particular examples have shown an enormous problem of individuals improperly internalizing defenses of the private sector when they go to work for the government. Spitzer feels the issue is more about a person’s capacity to change with their given roles. “Can people separate, emotionally and intellectually, one job from the past job…that’s a very hard thing to do,” he says.

Asked whether the broad discrepancy in pay between private and public sector jobs is making the situation worse, Spitzer points to the non-monetary benefits of working in government. “[Government workers] are a lot happier…lawyers in the government tend to draw their joy and satisfaction not from their paycheck but from, theoretically, the existential joy of what they are doing”, he says.

Spitzer adds that he is “disappointed” in the government’s current slate of regulators, pointing to what he sees as an “overstated fear” of the economic consequences of prosecuting systemically important companies. Spitzer also gives his thoughts on the upcoming mayoral election in New York City.

NOT like anything is going to change leaving the DOJ.

WaPO-

Lanny Breuer, one of the longest-serving heads of the Justice Department’s criminal division, is returning to Covington & Burling, the law firm plans to announce today.

The firm’s partners voted Monday to approve Breuer’s return. He will step into the newly created position of vice chair, working with the firm’s senior leaders on long-term strategy and international growth, and will also practice in white collar defense and investigations.

Covington has represented corporations that were investigated by the criminal division during Breuer’s time as division chief. Breuer said he will not be representing any companies on any matters that went before the Justice Department during his tenure. Ethics rules bar him from appearing before the DOJ on a client’s behalf for two years. He can, however, counsel a client on a new matter before the department from behind the scenes.

“I’m sure that if we have a client that has a new matter and we’re able to get that work, I would get involved,” Breuer said in an interview.

[WASHINGTON POST]

image: Politico/AP

Video of what really went down

Via- Capitalism Without Failure

Jaime Falcon

Lanny Breuer appearing on the PBS production of The Untouchables

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Must Watch Video

by nyuschooloflaw on Feb 9, 2012

A day after his Frontline appearance!

WaPO-

Lanny A. Breuer is leaving the Justice Department after leading the agency’s efforts to clamp down on public corruption and financial fraud at the nation’s largest banks, according to several people familiar with the matter.

As one of the longest-serving heads of the criminal division, Breuer’s tenure has been filled with controversy and high-profile prosecutions. He was admonished for his role in the agency’s botched attempt to infiltrate weapon-smuggling rings in the operation dubbed Fast and Furious. And he has been accused of being soft on Wall Street for failing to throw senior bank executives behind bars for their role in the financial crisis.

[WASHINGTON POST]

EXCERPT:

This past June, for example, the Fraud Section resolved allegations of criminal wrongdoing against Barclays Bank over the bank’s role in the manipulation of the London Interbank Offered Rate, or LIBOR. Barclays, which entered into a non-prosecution agreement, or NPA, with the government, paid a significant price for its egregious conduct. In the wake of our announcement, the top management of the bank was replaced. But, as we also recognized at the time, Barclays’s cooperation with our investigation was extraordinary, which is why an NPA was appropriate in that case.

DPAs and NPAs are appropriate in certain circumstances and, therefore, they can be useful alternatives to criminal indictments. But they cannot be a substitute for criminal charges. Just last week, for example, we announced criminal trade secret theft charges against Kolon Industries, a South Korean corporation, and five Kolon executives and employees. As the Kolon case shows, we do not hesitate to charge corporations criminally in appropriate circumstances, in addition to holding individuals accountable.

As I have said repeatedly, the strongest deterrent against corporate wrongdoing is the prospect of prison time. That is why I have put such a high priority on making sure that individuals are prosecuted when the evidence warrants prosecution. To give you just two Criminal Division examples: Lee Bentley Farkas, the former chairman of Taylor Bean & Whitaker, which was one of the largest private mortgage lending companies in the country, is serving a 30-year prison sentence for having masterminded a nearly $3 billion bank and securities fraud, and several of his co-conspirators are also serving substantial prison sentences. R. Allen Stanford, who misappropriated $7 billion from Stanford International Bank to finance his personal businesses, is serving a 110-year sentence.

[…]

[ipaper docId=110884675 access_key=key-p50tjd1yb68nw7ftzcg height=600 width=600 /]

Before you listen to this video that will make your ears hurt, read Insight: Top Justice officials connected to mortgage banks

 by NYCBarAssociation

Empty Wheel-

I’ve become increasingly convinced that DOJ’s head of Criminal Division, Lanny Breuer is the rotting cancer at the heart of a thoroughly discredited DOJ. Which is why I’m not surprised to see this speech he gave at the NYC Bar Association selling the “benefits” of Deferred Prosecution Agreements.  (h/t Main Justice) He spends a lot of his speech claiming DPAs result in accountability.

And, over the last decade, DPAs have become a mainstay of white collar criminal law enforcement.

The result has been, unequivocally, far greater accountability for corporate wrongdoing – and a sea change in corporate compliance efforts. Companies now know that avoiding the disaster scenario of an indictment does not mean an escape from accountability. They know that they will be answerable even for conduct that in years past would have resulted in a declination. Companies also realize that if they want to avoid pleading guilty, or to convince us to forego bringing a case altogether, they must prove to us that they are serious about compliance. Our prosecutors are sophisticated. They know the difference between a real compliance program and a make-believe one. They know the difference between actual cooperation with a government investigation and make-believe cooperation. And they know the difference between a rogue employee and a rotten corporation.

[snip]

[EMPTY WHEEL]

Must Watch Video

by nyuschooloflaw on Feb 9, 2012

We always knew they were corrupt from day 1.

NYT-

In early 2010, with the financial crisis still reverberating through the economy, a top Justice Department official arranged a meeting with executives from Goldman Sachs and some of his prosecutors, a document shows.

But the hourlong meeting at the Justice Department in Washington had nothing to do with the financial crisis or with Goldman’s role in marketing securities backed by mortgage loans made to borrowers with shaky credit histories, said a person briefed on the matter who spoke on condition of anonymity.

Instead, the gathering, organized by Lanny A. Breuer, then the assistant attorney general for the criminal division, focused exclusively on the subject of terrorism financing.

 [NEW YORK TIMES]

US attorney general’s tenure has proven unhelpful to the five million victims of mortgage abuses in the US

The Guardian-

The telling sentence in NPR’s report that US attorney general Eric Holder plans to step down once a successor is confirmed came near the end of the story.

“Friends and former colleagues say Holder has made no decisions about his next professional perch,” NPR writes, “but they say it would be no surprise if he returned to the law firm Covington & Burling, where he spent years representing corporate clients.”

A large chunk of Covington & Burling’s corporate clients are mega-banks like JP Morgan Chase, Wells Fargo, Citigroup and Bank of America. Lanny Breuer, who ran the criminal division for Holder’s Justice Department, already returned to work there.

In March, Covington highlighted in marketing materials their award from the trade publication American Lawyer as “Litigation Department of the Year,” touting the law firm’s work in getting clients accused of financial fraud off with slap-on-the-wrist fines.

[THE GUARDIAN]

image: Jason Reed/Reuters

Corporate Crime Reporter-

You had some of biggest names in the field.

You had your prosecutors — including Preet Bharara, Benjamin Lawsky, Andrew Ceresney, Denis McInerney, Jeffrey Knox.

You had your defense attorneys — including Lanny Breuer (Covington & Burling), John Buretta (Cravath), George Canellos (Milbank Tweed) Robert Khuzami (Kirkland & Ellis), Scott Muller (Davis Polk), Mythili Raman (Covington & Burling), Bruce Yannett (Debevoise) and John Savarese (Wachtell).

You had your in house counsel — including Bradford Berenson (General Electric), Mark Califano (American Express), Sheila Cheston (Northrop Grumman), Stephen Cutler (JP Morgan Chase), Eric Grossman (Morgan Stanley).

Your had your judges — including Jed Rakoff, Valeria Caproni, John Gleeson, Raymond Lohier, Gerard Lynch.

And you had your academics — including Jennifer Arlen, Brandon Garrett, Miriam Baer, Samuel Buell, Stephen Choi, Kevin Davis, David Engstrom, Brandon Garrett, Michael Klausner, Reinier Kraakman, Julie O’Sullivan, Daniel Richman, Andrew Weissmann, Sara Beale and David Uhlmann.

[CORPORATE CRIME REPORTER]

AND why would Holder intervene? His former law firm Covington ALSO was counsel to Moody’s…read this memo:

MEMORANDUM

On September 11, 2003, Robert L.D. Colby, Michael A. Macchiaroli, Thomas K. McGowan, Mark M. Attar, and Mandy Sturmfelz of the SEC’s Division of Market Regulation met with John Rutherfurd, Jr., President and CEO of Moody’s Corporation, and Raymond W. McDaniel, President of Moody’s Investors Service Inc. (“Moody’s”), to discuss Moody’s comment letter on the above-referenced concept release. David B.H. Martin and Lanny A. Breuer of Covington & Burling, counsel to Moody’s, also attended the meeting.

Lexology-

Former Moody’s analyst, Ilya Kolchinsky, has accused the credit rating powerhouse of overstating its ratings for countless toxic mortgage-backed securities that caused the financial meltdown in 2008, misleading investors and costing the U.S. billions in funds spent bailing out Wall Street’s too-big-to-fail banks. Kolchinsky’s 107-page False Claims Act complaint, filed in 2012, was recently unsealed after the government failed to intervene.

The complaint alleges that from 2004 to 2007, Moody’s issued inflated ratings, often “triple-A,” for the majority of risky residential mortgage-backed securities and collateralized debt obligations it reviewed, as a result of “concealed conflicts of interest and Moody’s reckless profit-maximization policies.” According to Kolchinsky, it wasn’t until October 2007 when the market started its downward turn that Moody’s began downgrading its ratings.

[LEXOLOGY]

image credit: Jason Reed/REUTERS

Come one, come all because we’re having a ball…

NYT-

Two blocks separate Covington & Burling’s offices in Washington from the Justice Department’s headquarters. Covington’s roster of lawyers shows a closer link.

Covington, the firm where Eric H. Holder Jr. practiced law before becoming attorney general, will announce on Tuesday that Mythili Raman is the latest former senior Justice Department official to join its ranks. Ms. Raman, who will be a partner in Covington’s white-collar crime and litigation practices, led the Justice Department’s criminal division until last month.

After departing the criminal division, where she oversaw investigations into some of the world’s biggest banks, Ms. Raman followed a well-trod path to Covington. She is the fourth recent criminal division prosecutor to join Covington and the fifth senior official under Mr. Holder to do so. Lanny Breuer, her predecessor as chief of the criminal division, is now Covington’s vice chairman.

[NEW YORK TIMES]

image: Richard Drew/Associated Press

“The I.G. report confirmed what’s been clear for quite a while — that the D.O.J. has never taken mortgage fraud seriously,” Professor Levitin said. “There is going to be no comeuppance for crimes committed during the financial crisis. This sets a really bad precedent for future crises because we’re seeing that there is going to be no deterrent effect of criminal law.”

NYT-

In the years since the financial crisis of 2008, the Justice Department has been regularly questioned about a lack of criminal prosecutions related to the mortgage mess.

Its responses have just about always been the same, whether in public speeches by Eric H. Holder Jr., the attorney general, or in interviews with Lanny A. Breuer, its former criminal division chief. Believe us, they would say, we’ve been working overtime on these matters; if there had been cases to make, we would have made them.

Mr. Breuer was especially vocal with these talking points. But last week, a report from the inspector general of the Justice Department, Michael E. Horowitz, set the record straight. Sure enough, the report told us how hard the nation’s law enforcement officials had been investigating these cases. That is, hardly at all.

[NEW YORK TIMES]

image: Jason Reed for Reuters

Former bank prosecutor Lanny Breuer is back defending corporate clients. Wait ’til you see what his new job prizes

Salon-

When Lanny Breuer left his position as head of the Justice Department’s criminal division to return to become vice chair at the law firm Covington & Burling, most observers saw it as evidence of the poisonous effect of the revolving door between Washington and Wall Street. After all, Covington (which also counts Attorney General Eric Holder as an alumnus) routinely defends the very white-collar clients Breuer was supposed to be pursuing with criminal charges in Washington. That potential for conflict of interest should be even clearer when you see how Covington & Burling promotes themselves to colleagues and potential clients.

Marketing materials sent out by the law firm highlight an article in the trade publication American Lawyer citing Covington & Burling as “Litigation Department of the Year.” You often cannot get a better read on a company than through how they present themselves in the industry trades, which are usually unseen by the public. And this cover story, proudly distributed by Covington & Burling as part of their own image boosting and available on their website, boasts, “Covington added muscle in all the right places to fight its way back into the top ranks of litigation firms this year.” A picture of Lanny Breuer is prominently displayed.

The article, entitled “Bigger and Better,” begins by noting that Covington increased staff at their litigation group by 40% over the past two years, particularly in the areas of “white-collar, product liability and antitrust.” The character witness given space to endorse Covington’s aggressive strategy in corporate trial defense is none other than John Lynch, the American general counsel for BP, a client of Covington’s in the Gulf oil spill case. In this hidden world, having BP talk up your prowess is seen as a positive.

[SALON]

Morgan, Lewis & Bockius for those who don’t know have been MERS’ counsel for many many years.

Reuters-

The White House said on Tuesday it planned to nominate a former prosecutor who helped build the case against Enron Corp to serve as the U.S. Justice Department’s top criminal cop.

President Barack Obama said he would nominate Leslie Caldwell, a private lawyer who previously supervised the Justice Department’s case against one of the largest accounting frauds in U.S. history, to run the agency’s criminal division.

Obama’s previous head of the division, Lanny Breuer, raised its profile with record financial settlements but also shouldered much of the blame for bringing few marquee cases related to the financial crisis.

[REUTERS]

This is absolutely NO excuse. They helped cartels and terrorist financially and you mean to say they are also too big for that?

He knows it’s a conflict of interest.. WHY? Because they were his law firms clients.

Who else gave them the legal advice on how to be Too Big Too Fail? Let the statute of limitations run along….and stand idle.

FrontLine-

Holder’s comments underscored remarks his deputy, Lanny Breuer, gave in an interview for FRONTLINE’s film The Untouchables that raised concerns among some in government that the Justice Department hasn’t been sufficiently aggressive in prosecuting major banks for the fiscal crisis.

“I am concerned that the size of some of these institutions becomes so large that it does become difficult to prosecute them,” Holder told the Senate Judiciary Committee. “When we are hit with indications that if you do prosecute, if you do bring a criminal charge it will have a negative impact on the national economy, perhaps world economy, that is a function of the fact that some of these institutions have become too large. It has an inhibiting impact on our ability to bring resolutions that I think would be more appropriate. That is something that you all need to consider.”

[FRONTLINE]

Transcript:

Sen. Chuck Grassley, R-Iowa: In the case of bank prosecution. I’m concerned we have a mentality of ‘too big to jail’ in the financial sector, spreading from fraud cases to terrorist financing to money laundering cases. I would cite HSBC.

I think we are on a slippery slope and that’s background for this question. I don’t have recollection of DOJ prosecuting any high-profile financial criminal convictions in either companies or individuals.

Assistant Attorney General Breuer said that one reason that DOJ has not sought these prosecutions is because it reaches out to ‘experts’ to see what effect the prosecution will have on the financial markets. On Jan. 29, Sen. [Sherrod] Brown and I requested details on who these so-called ‘experts’ are. So far we have not received any information. Maybe you’re going to but why have we not yet been provided the names of experts the DOJ consults as we requested on Jan. 29? We continue to find out why we aren’t having these high-profile cases…

Attorney General Eric Holder: We will endeavor to answer your letter, Senator. We did not, as I understand it, endeavor to obtain experts outside of the government in making determinations with regard to HSBC.

Just putting that aside for a minute though, the concern that you have raised is one that I, frankly, share. I’m not talking about HSBC here, that would be inappropriate. But I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute — if we do bring a criminal charge — it will have a negative impact on the national economy, perhaps even the world economy. I think that is a function of the fact that some of these institutions have become too large.

Again, I’m not talking about HSBC, this is more of a general comment. I think it has an inhibiting influence, impact on our ability to bring resolutions that I think would be more appropriate. I think that’s something that we — you all [Congress] — need to consider. The concern that you raised is actually one that I share.

Grassley: Do you believe that the investment bankers that were repackaging bad mortgages that were AAA-rated are guilty of fraud or is it a case of just not being aggressive or effective enough to prove that they did something fraudulent and criminal?

Holder: We looked at those kinds of cases. I think we have been appropriately aggressive, these are not always easy cases to make. When you look at these cases, you see that things were done ‘wrong’ then the question is whether or not they were illegal. And I think the people in our criminal division… I think have been as aggressive as they could be, brought cases where we think we could have brought them. I know that in some instances that has not been a satisfying answer to people, but we have been as aggressive as we could have been.

Grassley: If you constitutionally can jail the CEO of a major institution, that is going to send a pretty wide signal to stop a lot of activity that people think they can get away with.

Holder: You are right, senator. The greatest deterrent effect is not to prosecute a corporation — although that’s important — the greatest deterrent effect is to prosecute the individuals in the corporations that are responsible for those decisions. We’ve done that in the UBS matter and try to do that whenever we can. But the point that you make is a good one.

AND why they will not go after Moody’s could be a reason in this memo:

MEMORANDUM

On September 11, 2003, Robert L.D. Colby, Michael A. Macchiaroli, Thomas K. McGowan, Mark M. Attar, and Mandy Sturmfelz of the SEC’s Division of Market Regulation met with John Rutherfurd, Jr., President and CEO of Moody’s Corporation, and Raymond W. McDaniel, President of Moody’s Investors Service Inc. (“Moody’s”), to discuss Moody’s comment letter on the above-referenced concept release. David B.H. Martin and Lanny A. Breuer of Covington & Burling, counsel to Moody’s, also attended the meeting.

~~~

US News-

By CHRISTINA REXRODE and DANIEL WAGNER, Associated Press

WASHINGTON (AP) — The U.S. government accused Standard & Poor’s of inflating ratings on mortgage investments to boost its bottom line, taking aim at a key player in the run-up to the financial crisis.

In charges filed late Monday in Los Angeles federal court, the Justice Department said S&P gave high marks to mortgage-backed securities that later went sour, even though it knew they were risky. The government said S&P misrepresented the risks because it wanted more business from the banks.

[US NEWS & WORLD REPORT]

Watch Crooks on the Loose? Did Felons Get a Free Pass in the Financial Crisis? NYU Law Video w/ Neil Barofsky, Lanny Breuer, Eliot Spitzer, and Mary Jo White.

Did you know, Mary Jo White hired Mr. Barofsky back in 2000 when she was U.S. Attorney for SD of NY and served under her? I sure hope she hires him again if she gets the job!

Bloomberg-

Former Manhattan U.S. Attorney Mary Jo White is being considered as a candidate to chair the U.S. Securities and Exchange Commission, Bloomberg reported on Thursday, citing three people familiar with the matter.

If ultimately selected and confirmed, White would take the reins from current SEC Chairman Elisse Walter, who assumed the post last month after Mary Schapiro stepped down.

[BLOOMBERG]

image: NY Times

Rolling Stone-

If you’ve ever been arrested on a drug charge, if you’ve ever spent even a day in jail for having a stem of marijuana in your pocket or “drug paraphernalia” in your gym bag, Assistant Attorney General and longtime Bill Clinton pal Lanny Breuer has a message for you: Bite me.

Breuer this week signed off on a settlement deal with the British banking giant HSBC that is the ultimate insult to every ordinary person who’s ever had his life altered by a narcotics charge. Despite the fact that HSBC admitted to laundering billions of dollars for Colombian and Mexican drug cartels (among others) and violating a host of important banking laws (from the Bank Secrecy Act to the Trading With the Enemy Act), Breuer and his Justice Department elected not to pursue criminal prosecutions of the bank, opting instead for a “record” financial settlement of $1.9 billion, which as one analyst noted is about five weeks of income for the bank.

[ROLLING STONE]