THE DOJ US ATTORNEY WHO TERRIFIES WALL STREET – fired by President Trump in March 2017
As the United States Attorney for the Southern District of New York, Preet Bharara runs one of the largest and most respected offices of federal prosecutors in the country. Under his leadership, the office has charged dozens of Wall Street figures with insider trading, and has upended the politics of New York State, by convicting the leaders of both houses of the state legislature. Last week, Bharara announced charges against a hundred and twenty alleged street-gang members in the Bronx, in what was said to be the largest gang takedown in New York history. The turning point in Bharara’s own career, though, took place not when he triumphed in a courtroom but when he masterminded a dramatic congressional hearing.
Bharara, who is now forty-seven, graduated from Columbia Law School in 1993, spent several years at private firms, and then, from 2000 to 2005, served as an Assistant U.S. Attorney, in Manhattan. On leaving his A.U.S.A. post, he made an unusual choice for a promising young lawyer. Instead of becoming a partner at a law firm, he went to Washington to work for Senator Charles Schumer, the New York Democrat. Schumer chaired the Judiciary Committee’s oversight subcommittee, and Bharara was the top aide on his staff. He organized hearings and prepared Schumer for conducting them. Schumer is famous for cultivating media attention, and his aides are responsible for making sure that he gets it.
“When Chuck approaches a hearing, he wants to elicit something, leave a mark, unearth something that the A.P. will file a story on,” a Schumer staffer from this era told me. “Preet knew this, and he would take the pen and make the first draft of questions that made Chuck’s round of questioning stand out. He would draft them with sound bites in mind. He learned to think that way and write that way.” In early 2007, Bharara, under Schumer’s supervision, was investigating the firing of several U.S. Attorneys by Alberto Gonzales, the Attorney General in President George W. Bush’s second term. For a hearing on May 15th, the issue was whether the firings had been politically motivated. Bharara prepared James Comey, who had been Deputy Attorney General in the Bush Administration, to testify.
“That was my hearing, chaired by Senator Schumer,” Bharara told me. He knew the witness well, because Comey had been the U.S. Attorney for the Southern District when Bharara was an A.U.S.A. there. “I talked to Jim the week before and said, ‘We’re going to have you come testify.’ ” In debriefing Comey before his testimony, Bharara heard a more extraordinary tale than he had expected. On the night of March 10, 2004, Comey had learned that Gonzales, then the White House counsel, and Andrew Card, the White House chief of staff, were heading to a Washington hospital, where John Ashcroft, the Attorney General, suffering from gallstone pancreatitis, was in intensive care. Gonzales and Card wanted Ashcroft to reauthorize a government surveillance program that Comey and his staff had concluded was unlawful. Comey and Robert Mueller III, the F.B.I. director, raced, sirens blaring, to beat Gonzales and Card to Ashcroft’s bedside. In a tense confrontation at the hospital, Ashcroft told Gonzales and Card that, since Comey was Acting Attorney General, the decision was his to make.
As Bharara recalled, “Jim told me the whole story on the phone, and the hair stood up on the back of my neck, because I realized what a significant story this was, and I was sworn to secrecy and nobody knew about it. I told Chuck. He was, like, ‘_Whoa!’ _” In the days leading up to the hearing, Bharara and Schumer told no one about the revelation that was coming. “I was afraid that if the story got out of what Jim was going to say the Bush Administration would figure out a way to prevent him from testifying,” Bharara said. “We needed to preserve the element of surprise.”
At the committee hearing, Comey, under Schumer’s questioning, told the story of the bedside confrontation. It caused a sensation in the hearing room and in the press. “Russ Feingold”—the Wisconsin Democrat—“said after that that it was the most amazing and jaw-dropping hearing he had ever attended as a senator,” Bharara told me. “So that was my formative experience.” Less than two years later, when Barack Obama was elected President, Schumer recommended that he nominate Bharara as the United States Attorney for the Southern District.
Bharara was forty, and he brought a media-friendly approach to what has historically been a closed and guarded institution. In professional background, Bharara resembles his predecessors; in style, he’s very different. His personality reflects his dual life in New York’s political and legal firmament. A longtime prosecutor, he sometimes acts like a budding pol; his rhetoric leans more toward the wisecrack than toward the jeremiad. He expresses himself in the orderly paragraphs of a former high-school debater, but with deft comic timing and a gift for shtick.
Bharara’s success with Comey’s testimony prefigured some of the methods he has used as prosecutor. He believes in meticulous preparation and reveres the tradition of collegiality among current and former Southern District prosecutors, like Comey and like him. He also welcomes publicity.
The U.S. Attorney’s main office is housed in 1 St. Andrew’s Plaza, a brutalist carbuncle beside the Thurgood Marshall United States Courthouse, a classical-revival gem in lower Manhattan. Next to the door of Bharara’s office suite, there is a large-format photograph of a reunion dinner of Southern District prosecutors, at the Plaza Hotel, in 2014: hundreds of middle-aged white men in tuxedos. For decades, a stint as an A.U.S.A. for the Southern District has led to prosperous anonymity in the upper reaches of the legal profession, especially in major New York law firms. And Bharara’s predecessors in the top job include Robert Morgenthau (1962-1970), who later became the Manhattan district attorney; Rudolph Giuliani (1983-89), subsequently the two-term mayor of New York; Mary Jo White (1993-2002), the current chair of the Securities and Exchange Commission; and Comey (2002-03), now the director of the F.B.I.
“At least since the time of Morgenthau, the Southern District has been known for integrity and innovation,” Jed Rakoff, who was a prosecutor in the Southern District before he became a judge there, in 1996, told me. “The Southern District was the first U.S. Attorney’s office to take on white-collar crime on a regular basis. It led the way in official corruption cases,” as well as in Mafia cases and in terrorism cases.
“There’s a tradition of independence in the Southern District,” Rakoff said. “And that has often led to tension with the Justice Department.” Indeed, in law-enforcement circles the Southern District is nicknamed the “sovereign district,” because of its reputation for resisting direction, even from its nominal superiors, in Washington.
Some have said, half-jokingly, that the Southern District is the only U.S. Attorney’s office with its own foreign policy. In 2013, Bharara’s office charged Devyani Khobragade, then the Deputy Consul General of India in New York, with committing visa fraud in order to gain entry for an Indian domestic worker in her employ. Khobragade was strip-searched after her arrest, and the government of India demanded an apology and removed the security barricades in front of the U.S. Embassy in New Delhi. Secretary of State John Kerry expressed regret about Khobragade’s treatment. Bharara told me that the case originated in the State Department, and was properly vetted by his office. (Khobragade, who still faces charges, has gone back to India.)
On a more positive note, in March Bharara’s office charged Reza Zarrab, a Turkish gold trader, with money laundering and with helping Iran evade trade sanctions imposed because of its nuclear program. In Turkey, where the government of President Recep Tayyip Erdoğan has become increasingly authoritarian and tolerant of corruption, Bharara has been hailed as a hero on social media. He quickly gained nearly three hundred thousand Twitter followers, many of them in Turkey, and has had to decline numerous offers of Turkish rugs and delicacies, though he did take his son out for Turkish food.
Bharara’s family history is unusual for someone in his position. His parents were born in what is now Pakistan, before it separated from India. His father, Jagdish, is a Sikh and his mother, Desh, a Hindu, so their families joined the great migration to India. “My father is one of thirteen, my mother’s one of seven, and that doesn’t count siblings who didn’t make it for very long,” he told me. The family eventually settled in Firozpur, in Punjab, where Jagdish, a physician, was assigned to the Indian railway system. Shortly after Preet was born there, in 1968, Jagdish received a fellowship to practice medicine in Buffalo. “My mother had never seen snow,” he said.
The family soon moved to New Jersey, where a second son, Vinit, was born, and Jagdish set up a pediatric practice in Asbury Park, with Desh as the office manager. Vinit Bharara told me, “Dad was a principled, disciplinarian kind of guy, an introvert, very focussed on our values, cared a lot about our getting good grades. He doesn’t have a great sense of humor. Our mom was sort of the opposite. She is an incredibly optimistic, affable, easygoing person. She loves to throw parties and mingle and make friends. Preet and I both got that yin/yang.” (In keeping with the local customs of his adopted region, Bharara became a Bruce Springsteen fan and has attended about thirty of his concerts.) Bharara recalled, “Our dad definitely wanted us to grow up to be doctors, but in seventh grade I read ‘Inherit the Wind’ and decided I wanted to be Clarence Darrow. And then, in tenth grade, chemistry was a disaster, and that probably sealed it for lawyer over doctor.”
After serving as valedictorian of his class at a small local private school, Bharara went to Harvard. A college friend, Viet Dinh, recalled that he met Bharara in an introductory government seminar. “Our first assignment was to determine whether the Framers set up the American government based on the idea that man was essentially bad or that man was essentially good,” Dinh said. “We left class and wound up talking all night. I argued ‘bad,’ and Preet argued ‘good.’ I am more skeptical. Preet is more optimistic.”
Bharara was a Democrat, and Dinh a Republican, who went on to serve as a senior official in George W. Bush’s Justice Department. Despite their political differences, the two have remained close friends. (Bharara was the best man at Dinh’s wedding.) “People think that because Preet is a prosecutor he sees only the underbelly of society, but he fundamentally believes in the goodness of man and that government can ennoble society,” Dinh said. “He sees all the bad, but he sees his job as a way to foster good.”
After Harvard, Bharara went to Columbia Law School. “My wife never wants me to say this, but I was not a good attender of classes,” Bharara told me. (Bharara and his wife, Dalya, a nonpracticing lawyer, live in Westchester; they have three children.) He figured he could read the texts. “I think the only class in which I had a perfect attendance record was trial practice,” he said. A veteran of the Southern District taught the class, which fixed Bharara’s ambition to become a federal prosecutor. In 1999, Mary Jo White offered him a job as an A.U.S.A. “It was the best day of my life,” Bharara said. “It was awesome.”
Vinit Bharara followed Preet to Columbia Law School but, after practicing law briefly, became an entrepreneur. His first venture, which included Preet as an investor, did not thrive. Then he and a partner went into the diaper business. Preet, of course, became the U.S. Attorney. He said, “I have subpoena power, I’m chief federal law-enforcement officer in Manhattan, Bronx, and six other counties. So I’m thinking I’m winning the family competition, and my brother calls me and he’s, like, ‘I’m going to sell diapers.’ I said, ‘Knock yourself out, man, I still got subpoena power.’ ” Vinit’s company, diapers.com (“We’re No. 1 in No. 2”), went on to be acquired by Amazon in 2011. Preet told me, “That’s my brother’s way of saying, ‘Hey, bro, I see your whole U.S. Attorney thing, and I raise you five hundred and forty-five million dollars.’ ”
Southern District prosecutors traditionally conduct roasts of departing colleagues. When Richard Zabel, Bharara’s longtime deputy, left the office last year for the private sector, Bharara sang a farewell to the tune of “American Pie.” In his response, Zabel said, “Since I left the office, everyone has been asking me the same question. Have I seen ‘Billions’?” The television series, on Showtime, features the pursuit by an aggressive U.S. Attorney, played by Paul Giamatti, of a Wall Street billionaire for insider trading. It is widely thought to have been inspired by Bharara’s long-term investigation of Steven Cohen, the founder of SAC Capital Advisors; there is also a fanciful subplot involving sadomasochistic sex. “The truth is, I haven’t seen it yet,” Zabel said. “But I did see a clip, where a woman in a dominatrix outfit stands astride our shirtless U.S. Attorney, burning him with a cigarette and then urinating on him.” Zabel added, “I am surprised how since I left they have lost control of his image.”
Before Bharara became known as the scourge of insider trading—a 2012 Timecover 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.”
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.”
Instead, Bharara brought cases for insider trading, many based on investigations that began before his arrival in the office. One of Bharara’s predecessors, Michael Garcia, had obtained wiretaps on the phones of Raj Rajaratnam, a billionaire who founded the hedge fund Galleon Group. The F.B.I. arrested Rajaratnam, and prosecutors showed that he used a network of well-placed tipsters, including Rajat Gupta, the former managing director of the consulting firm McKinsey & Company, to illicitly gain about seventy-two million dollars through stock trading for Galleon Group.
There was little ambiguity about the criminality of Rajaratnam’s intentions. In one tape played at trial, he called a contact and said, “I heard yesterday from somebody who’s on the board of Goldman Sachs that they are going to lose two dollars per share.” Rajaratnam quickly traded his shares, avoiding major losses, thanks to this inside information. Convicted in 2011, he was sentenced to eleven years in prison, and given a ten-million-dollar fine, along with an order to forfeit more than fifty-three million in gains. (Gupta, who was also a board member at Goldman, was later convicted of insider trading as well.)
Bharara followed up with a series of prosecutions of less well-known figures, whom he nevertheless described as big fish. Announcing the arrest of a group of mid-level Wall Street brokers, Bharara said, with some hyperbole, that the case was “precisely the type of pervasive and pernicious activity that causes average people to think that they would be better off pulling their money out of Wall Street and stuffing it in a mattress.” A prosecutor who served in the office at the time told me, “Preet made promises that he couldn’t deliver. Those cases were not that big.”
During this period, Bharara did pursue a major target—Steven Cohen and SAC Capital Advisors—but the investigation ended on an ambiguous note. Bharara’s prosecutors convicted six lower-level former employees of SAC Capital, but they never brought a criminal case against Cohen. Instead, in 2013 Bharara reached a deal with Cohen’s company, which pleaded guilty to an indictment charging “institutional practices that encouraged the widespread solicitation and use of illegal inside information.”
SAC Capital paid a record $1.8-billion penalty and was effectively shut down. Cohen, however, not only avoided prosecution but was permitted to continue managing his multibillion-dollar personal fortune. “People are always trying to make these cases mano a mano between me and someone,” Bharara told me. “But we did the same in this case as we did in any other. We charged as much as we thought was justified by the evidence.”
There are some indications that the judges in Bharara’s courthouse resented the hype underlying his insider-trading offensive. On December 10, 2014, the Second Circuit Court of Appeals repudiated a key part of Bharara’s legacy. In some of his major prosecutions, including the Rajaratnam case, the defendant had traded on information provided by insiders who were also making money from illegal trades based on inside knowledge. However, the cases that Bharara brought against Todd Newman and Anthony Chiasson, who were stock traders for hedge funds, were different. Newman and Chiasson were convicted of insider trading based on information provided by a group of analysts who had obtained it from insiders at Dell and other companies. As the Second Circuit noted, “Newman and Chiasson were several steps removed from the corporate insiders and there was no evidence that either was aware of the source of the inside information.” Moreover, there was insufficient evidence that Newman and Chiasson knew that the insiders had benefitted in any way by supplying the inside information. In the light of the attenuated connection between the defendants and the source of the inside information, the appeals court said, their convictions could not stand.
Between the lines, the three judges’ opinion betrayed considerable distaste for Bharara’s aggressive tactics. It referred to the “doctrinal novelty of . . . recent insider trading prosecutions,” and suggested that Bharara’s lawyers had attempted to place their insider-trading cases with a sympathetic trial judge in the Southern District—of judge-shopping, in other words. The court said that Bharara was trying, in effect, to act like a legislator, by rewriting the criminal laws to his liking. As the court noted, “Although the Government might like the law to be different, nothing in the law requires a symmetry of information in the nation’s securities markets.” According to the judges, there was always going to be inside information circulating in the markets. But criminal behavior would entail a meeting of corrupt minds—a tipster and a trader who both profited from information that they knew was unlawfully obtained.
Most scholars favor Bharara’s interpretation of the insider-trading laws. “The public wants to believe that you can get an advantage from hard work and research, not because you know a guy who knows a guy,” Samuel Buell, a professor at Duke Law School, said. Buell is also a former prosecutor and the author of the forthcoming book “Capital Offenses: Business Crime and Punishment in America’s Corporate Age.” It’s hard to quarrel with Bharara’s observation that “there is some core of material nonpublic information that is so material and relevant and market-moving that people shouldn’t be able to take advantage of that over the average investor, and I think most people agree with that and those are the kinds of cases that we brought.”
Still, the Newman reversal led to a cascade of bad news for Bharara. He has had to dismiss twelve pending insider-trading cases, and defense attorneys are seeking to have more thrown out as well. (Both Rajaratnam and Gupta are appealing their convictions.) Bharara’s targets have even begun to take the offensive against his office. David Ganek, of Level Global Investors, a hedge fund that was raided in an insider-trading investigation in 2010, sued the government for violating his civil rights. In a ruling on March 10th of this year, Judge William H. Pauley III allowed the case to proceed, writing, “These raids sent shock waves through Wall Street: investment bankers and traders were indicted, and multibillion-dollar businesses—including Level Global—were shuttered. But five years later a different picture has emerged. The Second Circuit rejected the Government’s theory of insider trading. Criminal convictions were vacated, and indictments dismissed.”
Bharara plays down his conflict with Cohen, but he does little to hide his dislike for another subject of a Southern District investigation: Governor Andrew Cuomo, of New York. The cause of Bharara’s ire can be identified with some precision.
In July, 2013, in response to New York’s long history of corruption in state government (and to some of Bharara’s early prosecutions of legislators), Cuomo created what was known as the Moreland Commission. Cuomo’s charge to the commission, which was given subpoena power, was to investigate corruption in state government, and to submit recommendations by the end of the following year. Then, on March 29, 2014, the day that Cuomo announced a budget deal with the legislature, he abruptly shut down the Moreland investigation.
Bharara pounced. “Preet is a very intense guy, and he can get angry,” Rich Zabel, his former deputy, told me. “It was just obviously outrageous to shut down the Moreland Commission. We were, like, there is no way that is going to stand. And we sent the van over.” A van was dispatched to seize the commission’s investigative files. Bharara told me, “Our first and most important goal was to make sure that whatever they had under way was not lost, and that there was not going to be a whitewash of things that had been undertaken. If they weren’t going to do it, we were going to do it.”
Bharara had to show that he could turn the dramatic gesture into indictments and then into courtroom victories. In addition to determining whether Cuomo had unlawfully obstructed the investigators, Bharara had an opportunity to examine the prime source of corruption in Albany in recent years—the outside activities of state legislators. “New York has a part-time legislature,” Blair Horner, the executive director of the New York Public Interest Research Group, told me. “That means that most legislators have other jobs. As long as lawmakers are allowed to serve two masters, the temptation to misbehave is too great. So what winds up happening, over and over again, is that they take money in their private jobs to take action as legislators.”
At the time, the most powerful figure in the legislature was Sheldon Silver, who had been the Speaker of the Assembly since 1994. Silver also worked as a lawyer for Weitz & Luxenberg, a personal-injury law firm in New York City, but he had not fully disclosed his income or the nature of his duties there. In 2011, the state had passed a law mandating that legislators disclose outside employment, and Bharara’s investigators decided to study Silver’s disclosure forms. “In the Silver case, we were looking at the flows of money,” Bharara told me. Silver had said publicly that he represented “plain, ordinary simple people” in his law practice, and that his work consisted of spending several hours a week evaluating possible claims for the firm to accept.
Bharara’s team subpoenaed Weitz & Luxenberg’s records to see how the firm accounted for its payments to Silver. The investigators found that over the previous decade Silver earned a hundred and twenty thousand dollars annually in base salary, and had received more than three million dollars in referral fees, all from cases involving plaintiffs’ exposure to asbestos. The investigators tracked down the clients. Many had been treated by Dr. Robert Taub, who ran a clinic at Columbia University dedicated to research on mesothelioma, a deadly form of cancer that is linked to exposure to asbestos. Taub, in turn, suggested that his patients retain Weitz & Luxenberg in connection with any legal claims they might have. (Asbestos cases can be extremely lucrative, often generating a million dollars in fees for a plaintiff’s law firm.) Prosecutors say that Silver never met with the patients referred by Dr. Taub, and that he received referral fees based on their value to the firm.
This arrangement raised the question of why Taub would refer cases to Weitz & Luxenberg. Taub told investigators that he began sending patients as prospective clients to Silver’s firm in the hope that Silver would arrange for the state government to give financial support to his clinic at Columbia. Beginning in 2005, after Taub’s referrals began, Silver used a state health-care fund that he controlled to send a total of five hundred thousand dollars to the clinic. Silver’s disbursements to Taub illustrated his power as Speaker. As Bharara put it, “He was parcelling out money to this doctor, Dr. Taub, for his mesothelioma clinic, and nobody had to agree to it. There was no oversight, and nobody had to know about it, and his fingerprints didn’t have to be on it.” The circle was complete: taxpayer money went to Taub’s clinics, the referrals went to Weitz & Luxenberg, and the fees went to Silver. (Neither Taub nor lawyers affiliated with Weitz & Luxenberg were charged.)
Bharara’s investigators also noticed that Silver used peculiar wording on the financial-disclosure form. He said that his income came from “Law Practice (including Weitz & Luxenberg),” suggesting that he might be receiving income from another law firm as well. “So when we started looking at payments, because we were looking at the weirdness of Weitz & Luxenberg, you start looking at bank accounts to see if there were any other things that were not disclosed,” Bharara told me.
There was a second firm, called Goldberg & Iryami, a highly specialized outfit that consisted of just two lawyers. It represented commercial-property developers who were contesting the assessments used to determine their tax rates. Bharara’s investigators found that the firm paid Silver based on fees from two large New York developers, Glenwood Management and the Witkoff Group, but that Silver did no actual work for the firm.
Why did the developers set up a scheme to funnel money to Silver? Both Glenwood and Witkoff had significant matters before the state legislature—bills that set subsidies and tax rates that meant millions of dollars to them. In all, Silver made about seven hundred thousand dollars from the real-estate firms. (Glenwood and Witkoff were not prosecuted; neither was Goldberg & Iryami.) Bharara and his team concluded that the money that went through those companies to Silver amounted to an illegal kickback in return for the Speaker’s services in the legislature. (Through his lawyer, Silver declined to comment.)
Silver was arrested on January 22, 2015, and Bharara—ignoring the traditions of the historically buttoned-down Southern District—turned the event into a media extravaganza. At a press conference, he said, “How could Speaker Silver, one of the most powerful men in all of New York, earn millions of dollars in outside income without deeply compromising his ability to serve his constituents? Today, we provide the answer. He didn’t.”
The next day, Bharara gave a speech at New York Law School in which he mocked the state’s political leadership, and had some fun with the old adage that Albany is governed by “three men in a room.” He said, “There are by my count two hundred and thirteen men and women in the state legislature, and yet it is common knowledge that only three men essentially wield all the power—the governor, the Assembly Speaker, and the Senate president.”
He went on, “Why three men? Can there be a woman? Do they always have to be white? How small is the room—that they can only fit three men? Is it three men in a closet? Are there cigars? Can they have Cuban cigars now? After a while, doesn’t it get a little gamey in that room?”
Bharara’s splashy announcements may be rooted in something more than ego. Historically, prosecutors have made their names in courtrooms, during trials, but in recent years trials have nearly disappeared. Nearly all federal prosecutions end in plea bargains. Last year, defendants pleaded guilty in 97.6 per cent of federal criminal cases; there were 2,002 criminal trials in the federal system, forty per cent fewer than in 2009. Federal sentencing guidelines virtually guarantee lower sentences for defendants who plead guilty rather than go to trial.
“Defense attorneys and their clients just don’t want to take the risk of going to trial and losing, especially because federal prosecutors have the time and resources to build strong cases,” William G. Young, a federal district judge in Massachusetts, who has studied the decline in trials, said. “We don’t try cases. We process guilty pleas. And we impose sentences that have been, by and large, negotiated in advance without our involvement.”
In plea bargains, prosecutors serve, in essence, as both judge and jury, weighing the merits of the charges and deciding, within certain ranges, on the appropriate sentence. But their enhanced power also creates a dilemma for them. Without trials, how do they tell the public about their work? For decades, federal criminal cases have usually begun the same way. A law-enforcement official, from the F.B.I. or another agency, files an affidavit (known as a complaint) with a federal magistrate judge stating that there is probable cause to believe that the defendant has committed a crime. These complaints, which are drafted by A.U.S.A.s, have traditionally been dry, bare-bones documents outlining the defendant’s behavior and the relevant statutes in colorless legal language.
Bharara’s office, however, has employed what are known as “speaking complaints,” which, under the guise of showing probable cause, assume the form of forensic melodramas. The complaint against Silver ran to thirty-five single-spaced pages, and vividly detailed the Speaker’s plot to use his office for personal financial gain.
On May 28, 2015, Bharara indicted Silver’s counterpart in the State Senate, Majority Leader Dean Skelos, and his son Adam. In this instance, the complaint told an even more dramatic story, requiring forty-three pages. Adam, who was in his early thirties and sporadically employed, had bought a house that he could not afford, for six hundred and seventy-five thousand dollars. His father used his power in the state, and, especially, in his political base, on Long Island, to pressure government contractors to hire his son—who rarely showed up for work. Using quotations from wiretapped conversations, the complaint detailed how the father and son worried about Bharara’s investigation of them even as Senator Skelos continued to try to steer jobs and cash to Adam. On March 28, 2015, Adam Skelos complained that his father was not giving him any “real advice” about dealing with a business contact: “You can’t talk normally because it’s like fucking Preet Bharara is listening to every fucking phone call. It’s just fucking frustrating.” Dean replied, “It is.”
Bharara did not invent speaking complaints, but his prolific use of them has become the subject of debate. “These complaints are unnerving and disturbing and fundamentally unfair,” Henry Mazurek, a prominent defense attorney, told me. “Preet has recruited strong people, and the office is incredibly effective, but, on the flip side, I’m concerned that he has created an office that has been more politically motivated than it has been under previous regimes. When defendants are accused in such detail, there are huge reputational and professional repercussions for them. People think that they can’t fight the government at that point.” Mazurek notes that speaking complaints continue to help the prosecution even in those rare cases (like those against Silver and Skelos) when the defendants choose to go to trial. “The complaints tell a story and set a tone, especially in the press, that’s very hard to counteract,” he said. Judge Rakoff told me, “It’s inevitable that the media is more interested in the complaint and the indictment than in the sentence. It’s old news at that point. The media tends to be much more focussed when the original charge is brought. The only time you really hear both sides is when the case goes to trial, and there are very few trials these days.”
“Sometimes it’s hard for the public to understand why something is a crime,” Richard Zabel, Bharara’s former deputy, said. “Silver and Skelos were complicated and opaque crimes, and we wanted them to be laid out pretty clearly. The complaint offered the opportunity to explain it to the public.” He added, “Also, when you want coöperators, and you lay out all that proof, it can be pretty intimidating and cause people to coöperate. Public disclosure, in the form of complaints, can be a force for deterrence, too.”
Bharara’s outspokenness generated a backlash, notably from some judges in the Southern District. Silver’s lawyers filed a motion to dismiss the case, based on what they asserted was Bharara’s violation of the rules governing public statements by prosecutors prior to trial. Judge Valerie Caproni took Bharara to task. “In this case, the U.S. Attorney, while castigating politicians in Albany for playing fast and loose with the ethical rules that govern their conduct, strayed so close to the edge of the rules governing his own conduct that Defendant Sheldon Silver has a non-frivolous argument that he fell over the edge to the Defendant’s prejudice.” In the end, Caproni didn’t throw out the case, but her rebuke to Bharara for showboating was both rare and stern.
Bharara argues that publicizing criminal behavior is a public duty, for the purpose of deterrence. “It’s not my job to put out a ten-point program to fix corruption in New York State,” Bharara told me. “Prosecutors alone are not going to solve the problems. But we do want the problems to be solved. I cansay that when you have an overabundance of outside income for legislators, when you have an overconcentration of power in the hands of a few people, and when you have a lack of transparency about how decisions are made and who makes them—that it is our job to point that out. We can give these issues a sense of urgency. A lot of people wake up to the possibility of better government when you start putting people in prison.”
Bharara was pleased that Silver and Skelos, unlike most defendants, chose to go to trial. “Trials are good, because only at a trial does everyone see all the muck that maybe the investigators and prosecutors saw,” he told me. “You might not have believed as fully in the guilt of that person even if he had pleaded guilty to something small.”
The two trials unfolded in Shakespearean fashion, one a history, the other a comedy. The Silver trial revealed a despotic figure, more feared than loved by his subjects. The Skelos case revealed a beleaguered father’s desperate and bumbling attempts to prop up his ne’er-do-well son.
The prosecutors in the Silver case made an unusual choice for their first witness. They called Amy Paulin, a member of the Assembly from Westchester, who was first elected in 2000. She knew nothing about Silver’s personal business arrangements, but she introduced the jury to the workings of the state government. She explained the basic structure of the Assembly and outlined the way Silver supervised both the process and the substance of legislation, especially the budget. Paulin said that Silver controlled all spending in each member’s district, all capital spending in the state, and also “lulus,” which are salary supplements for Assembly members’ service on committees.
“During the tenure of Sheldon Silver as Speaker, who decided which members of the Assembly got lulus?” Howard Master, a prosecutor, asked Paulin.
“After you reached a certain level of seniority,” she replied, “the Speaker would appoint you to be a committee chair or to one of the responsibilities that receives a lulu.”
“But ultimately who had to make that appointment?”
Steven Molo, Silver’s lead lawyer, pointed out on cross-examination that Paulin had repeatedly voted to retain Silver as the Assembly Speaker.
Master followed up on redirect. “You were asked how many times you voted for him?” Master asked.
“Yes,” Paulin replied.
“And so, with respect to the vote that actually mattered within the Democratic majority, how much opposition did Sheldon Silver have during each of the times?”
“During my time there, I think one or two people didn’t end up voting for him,” Paulin said, adding that Silver had no “real opposition.”
Master asked Paulin about the last time any Assembly member challenged Silver for the job of Speaker.
“It was right before I got there. It was in 1999 or 2000. It was Marty Bragman, an Assembly member from upstate New York, and he didn’t win. He tried to take over as Speaker, and he was ostracized, really, until he left.”
Paulin testified that she sat next to Bragman when she was first elected to the Assembly. “It was one of the back rows, and right next to me was Marty Bragman. When I first got elected until he left, he used to say, ‘You know, don’t talk to me, because that’s not good for you.’ ”
Silver was brazen in the exercise of his power. He instructed Dr. Taub, the mesothelioma researcher, not to disclose that he was referring patients to Silver’s law firm. To keep the referrals coming, Silver did more than just send half a million dollars in state money to Taub’s clinic. He found a state job for Taub’s daughter; he sent a state grant to Taub’s wife’s charity; he arranged for an official state proclamation lauding Taub’s work.
Silver’s efforts on behalf of the developers were just as important, if necessarily less public. Silver represented the Lower East Side of Manhattan, where many low-income families live in rental apartments. Silver, who styled himself a defender of tenants’ rights, did not reveal on his disclosure form that he was receiving payments from two developers. At a lunch with the developer Steve Witkoff, Silver asked him to move his lobbying business to the law firm of Goldberg & Iryami, without telling Witkoff that he would keep a piece of that action for himself.
In the other trial, Adam Skelos emerged as a pitiable figure. His lawyer, Christopher Conniff, put it this way in his opening statement: “Like most of us, he has had his ups and downs through the years, and his dad has been right by his side through them all.” Conniff acknowledged that Adam “is by no means perfect.” Adam’s real trouble started when he bought his house without any means to pay for it. His father gave him fifty thousand dollars and promised him a hundred and twenty-five thousand more. But, instead of giving Adam the cash, Senator Skelos found him a series of jobs.
The first witness, Christopher Curcio, was Adam’s supervisor at a firm called PRI, which sold medical malpractice insurance. “How would you describe his attendance at work?” he was asked.
“It was very spotty,” Curcio said.
“What do you mean by spotty?”
“Some days he was there. Some days he wasn’t.”
The dramatic high point of the trial came when former Senator Alfonse D’Amato, now an éminence grise of Long Island politics, took the stand. After losing his Senate seat, in 1998, D’Amato started a lobbying firm, which represented the malpractice insurer PRI. At one point, D’Amato testified, a colleague told him that “PRI had hired Adam Skelos and that there was difficulty in that Adam was not showing up to work and when he was at work was disruptive.”
So D’Amato paid a call on Senator Skelos, an old friend, and told him that Adam had to start doing his job. According to D’Amato, Skelos “told me that Adam really needed the job; that his wife, I believe, was expecting; that he needed the medical insurance as well as the job—that was very important and significant.” But Skelos didn’t promise that Adam would start working harder. Adam himself later went to see D’Amato, hoping to be hired at his lobbying firm. D’Amato refused.
The government called Anthony Avella, Jr., a state senator from Queens, to serve roughly the same purpose that Paulin did in the Silver case—to explain to the jurors how the state legislature worked. Jason Masimore, a prosecutor, established through Avella that the senators had no idea that the Skelos family had a financial interest in legislation.
“Senator Avella, prior to the passage of the 2015 budget legislation, what, if anything, did you learn concerning whether the Senate Majority Leader and his son had agreed to try to direct storm-water-related funds to benefit a company paying Adam Skelos ten thousand dollars per month?” Masimore asked.
Avella said that he knew nothing about the arrangement.
“Would that have mattered to you as a state senator?”
“It would have mattered greatly,” Avella replied.
“Why is that?”
“It has the appearance of impropriety,” Avella said. “And I think it totally inappropriate that the Majority Leader and the son are benefitting personally from a budget bill.”
In cross-examination, Adam’s lawyer stressed that the case was all about the love of a father for a son. He asked Senator Avella if he had once been a child with a father.
Masimore’s redirect was brief and devastating. “How, if at all, is the oath of office different for senators who have family members from senators who don’t have families?”
“It’s the same,” Avella said.
Rahul Mukhi, another prosecutor, pursued the same theme in his summation:
You cannot commit a crime and then just say I’m not guilty because I did it to help my son. A bank robber can go into a bank, take the money, give it to his son, and say: I didn’t commit a crime because I gave the money to my son. For the same reasons, a senator cannot use his public powers to get private payments for his son and then say it’s not a crime because as parents we all love our kids.
After brief deliberations in both cases, the defendants were found guilty on every count. All will be sentenced later this month.
On January 11th, Bharara issued a statement saying that his office would not indict Governor Cuomo, or anyone else, in connection with the closing of the Moreland Commission. “After a thorough investigation of interference with the operation of the Moreland Commission and its premature closing, this office has concluded that, absent any additional proof that may develop, there is insufficient evidence to prove a federal crime,” Bharara said.
When I asked Bharara why he felt compelled to give Cuomo a clean bill of health, he replied, in an uncharacteristically icy tone, “Nobody gave a clean bill of health to anybody. A non-indictment is not an endorsement of anyone’s conduct.”
Rather, Bharara said, in certain rare circumstances, when an investigation had received a lot of publicity, it seemed fair to announce that no charges would be brought. (Through a spokesman, Cuomo declined to comment on Bharara.)
Bharara’s office recently started an investigation of corruption in New York City. The case involves possibly unlawful campaign contributions solicited by Mayor Bill de Blasio on behalf of candidates for public office. But, clearly, Bharara considers his anti-corruption campaign in Albany unfinished. Earlier this year, he took a daylong victory tour through the state capital, giving talks about the need to fight the corruption exposed in the Silver and Skelos trials. He started with a speech about political corruption to the New York Conference of Mayors, followed by a visit to the Court of Appeals, the highest court in New York, for the swearing in of Janet DiFiore as the state’s new Chief Judge. DiFiore had been the district attorney of Westchester, which is within the Southern District, so she had been a colleague of Bharara’s. Governor Cuomo also attended the ceremony, but afterward he and Bharara went their separate ways, without shaking hands or even making eye contact.
Toward the end of the day in Albany, Bharara went to an auditorium at WAMC, the local NPR affiliate, for a town-hall-style meeting before an invited audience of good-government activists. “I love New York with all my heart,” he told them. “What has been going on in New York State government is heartbreaking, infuriating, and almost comic.” At least, he pointed out, “there are tough cops on the beat.”
Bharara was in a cheerful mood, possibly because he was going to a Springsteen concert later that evening. When audience members asked him if he would run for office, perhaps against Cuomo, in 2018, he grinned and answered, “I was not born to run.” It seems likely, however, that he would welcome an offer to be the U.S. Attorney General in a Democratic Administration. Such an appointment would make him the boss of James Comey, now the F.B.I. director, for whom Bharara worked when he was an A.U.S.A. In an e-mail, Comey said that Bharara “has somehow managed to be incredibly smart, principled, independent, and hilarious, all at the same time.” ♦
UPDATE: MARCH 2017, PRESIDENT TRUMP FIRED PREET BHARARA – DID TRUMP’S PERSONAL LAWYER GET PREET BHARARA FIRED?
Former U.S. Attorney Preet Bharara has grown increasingly vocal about his interactions with President Donald Trump, who allegedly reneged on his promise to allow the famed New York City prosecutor to keep his job before unexpectedly demanding his resignation in March. For weeks after his ouster, Bharara stayed largely on the sidelines, fueling speculation about his next move in political circles. But now, in the wake of James Comey’s abrupt dismissal as F.B.I. director amid allegations that he resisted Trump’s requests for his loyalty, Bharara is speaking out—and suggesting that his own ouster was similarly motivated. “It appeared to be that he was trying to cultivate some kind of relationship [with me],” he told George Stephanopouloson Sunday, citing several chummy phone calls that Trump tried to initiate with him. “It’s a very weird and peculiar thing for a one-on-one conversation without the attorney general, without warning, between the president and me or any United States attorney who has been asked to investigate various things and is in a position hypothetically to investigate business interests and associates of the president.”
Bharara’s account appears to be bolstered by a ProPublica report published Tuesday, which suggests that Trump fired Bharara specifically to neutralize a potential political threat. According to four sources that spoke to ProPublica, Marc Kasowitz, Trump’s personal lawyer and his primary counsel on matters related to the Russia investigation, had bragged that he was largely responsible for getting the U.S. attorney for New York’s Southern District fired. “This guy is going to get you,” Kasowitz recalled saying to Trump, according to one of the sources. (Kasowitz has not returned the Hive’s request for comment.)
At the time, Bharara had been in the middle of multiple investigations with connections to Trump, including an inquiry into Health and Human Services Secretary Tom Price, Fox News, and Deutsche Bank, Trump’s primary private lender, for its alleged ties to Russian money-laundering operations. Shortly after he was fired, Bharara also cryptically suggestedthat he had been investigating other matters involving Trump and corruption. Now that the job is vacant, Trump is free to appoint whomever he wants in Bharara’s place, giving that person the power to decide whether to drop those cases. One of the potential candidates for New York’s Southern District, arguably the most powerful district in the country, is Edward McNally, a partner at Kasowitz’s law firm.
Beyond the obvious questions of political patronage, however, arise other concerns about the way that Trump and Kasowitz, who represented Trump in his most controversial lawsuits as a private citizen, operate. Trump has been surprisingly forthcoming about his reasons for firing Comey, confirming during an interview on national television that he had wanted to put a stop to “this Russia thing”—fueling allegations that he had sought to obstruct justice. (Later, reports emerged that Trump had bragged to Russian officials in the Oval Office that firing his “nut job” F.B.I. director had taken off “great pressure.”) Kasowitz, who released a statement last week accusing Comey of having perjured himself during his Senate testimony about Trump, is similarly aggressive. But if the accounts of Kasowitz’s boasting about getting Bharara fired are true, it’s possible that his behavior could cross the line into attempting to obstruct justice, too.
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