I’m so old I remember the time, four years ago, when Democrats hated Deferred Prosecution Agreements.
Back in the days when Chris Christie, former US Attorney, was challenging Jon Corzine, once and future bankster, to be governor of New Jersey, Democrats made hay of the significant numbers of DPAs Christie signed, mostly with a series of medical device companies busted for kickbacks. After it was revealed Christie had picked his former boss, John Ashcroft, to make $52 million monitoring one of those medical device companies, it became a convenient way to show the corporatist corruption of Christie.
There was even a bit of discussion, in early 2009, about whether DPAs made banks more likely to engage in fraud because they assumed they’d get a DPA rather than a prosecution. Those discussions largely centered on the two DPAs AIG got in the mid-00s for fraudulently hiding its risk, which nevertheless didn’t prevent AIG from taking on so much risk it blew up the entire financial system. One of the monitors of those DPAs–who arguably should have but didn’t see AIG’s ongoing fraud–was a guy by the name of James Cole. He’s now the Deputy Attorney General.
One cannot ignore the spike of 38 deferred prosecution agreements in 2007, up from a mere four agreements in 2003. That proves that what was supposed to be an option to be used in rare circumstances had become the norm at the Department of Justice.
It is imperative that the Congress reign in the unmitigated power that federal prosecutors hold to serve as judge, jury and sentencer in the deferred prosecution process.
And yet I have heard very little about the two DPAs signed last week–perhaps because big corporate impunity has become such a common occurrence in the post-crash era.
First, there’s the deal Pratt & Whitney and two subsidiaries signed for evading export restrictions to help China build an attack helicopter. Effectively Pratt & Whitney laundered their production of some development helicopters–plus the military grade engine control module software to go with them–through a Canadian subsidiary. And when they finally admitted they had deliberately avoided US export restrictions on military equipment, they lied to DOJ about doing so. While they have to pay a $75 million fine, some of the charges are being deferred. And no individual has been charged with helping China get a helicopter designed to attack tanks.
So DOJ’s punishment for a defense contractor to put Chinese civil contracts ahead of US national security is a big fine, deferred prosecution, but no jail time.
Even more troubling is the Non-Prosecution Agreement signed with Barclays over its manipulation of the LIBOR rate. Effectively, during the heady bubble days, Barclays colluded to lie about the interbank lending rate to maximize its own trades; as finance was crashing and Barclays itself had to pay higher rates for credit, it lied about that to imply the bank was healthier than it was. And while between DOJ, Commodity Futures Trading Commission, and Britain’s Financial Services Authority, Barclays will have to pay around $475 million in fines, and while CFTC imposed the kind of mandated fixes that DOJ normally would under a DPA, Barclays is basically scot-free for colluding to lie about a rate that affects people throughout the financial system.
Matt Taibbi explains why this is so important: because when the banks said the LIBOR rate was lower than it really was, a lot of investors got a smaller return on their LIBOR-tracked investments than they otherwise would have.
A sizable chunk of the world’s adjustable-rate investment vehicles are pegged to Libor, and here we have evidence that banks were tweaking the rate downward to massage their own derivatives positions. The consequences for this boggle the mind. For instance, almost every city and town in America has investment holdings tied to Libor. If banks were artificially lowering the rates to beef up their trading profiles, that means communities all over the world were cheated out of ungodly amounts of money.
The Special Agent in Charge of the Newark FBI, Michael Ward, laid into the NYPD’s CIA-on-the-Hudson program for its spying on New Jersey’s Muslims. He raised several legitimate gripes: that the NYPD was picking and choosing the information it shared, that the NYPD wasn’t focused on centers of terrorism, that it has created distrust between the Muslim community and law enforcement.
But there is one complaint that Ward should direct closer to home: that law enforcement officers have a specific articulable basis for mapping out the location of ethnicities. (Ward’s comments in this start after 7:00–note what he says on video is slightly different from what he appears to have said later to the NJ Star-Ledger journalist.)
[The public needs to know] you’re following leads that are warranted and that you’re not out chasing anything but you have a–there’s a specific law enforcement reason behind what you’re doing, and that you use the least intrusive means possible, when available.
It’s also important that [the public] know that Joint Terrorism Task Force, the FBI, and law enforcement in New Jersey in general, that we take the guidelines which we’re supposed to follow very very seriously.
Mind you, I think there should be an articulable basis to map out locations of specific ethnicities.
But just as the NYPD doesn’t agree, neither does the FBI. In fact, as the ACLU’s FOIA is showing, the FBI is doing precisely the same kind of demographic mapping around the country as the NYPD is doing in NYC with their Domain Assessment program.
While the office is dawdling over releasing the unredacted copies, here’s the plan the FBI put into place for mapping out Muslims in Detroit, just as the NYPD did in NYC.
There are more than forty groups designated as terrorist organizations by the US State Department. Many of these groups originate in the Middle-East and Southeast Asia. Many of these groups also use an extreme and violent interpretation of the Muslim faith as justification for their activities. Because Michigan has large Middle-Eastern and Muslim population, it is prime territory for attempted radicalization and recruitment by these terrorist groups. Additionally, Sunni terrorist groups always pose a threat of attack on U.S. soil since it is the stated purpose of many of these groups. The Detroit Division Domain Team seeks to open a Type IV Domain Assessment for the purpose of collecting information and evaluating the threat posed by international terrorist groups conducting recruitment, radicalization, fund-raising, or even violent terrorist acts within the state of Michigan.
And here’s how Ward’s own office used census data to map out the Latino population in New Jersey as part of their efforts to fight the MS-13 gang (this was done in 2008, before Ward got appointed to Newark, but while Chris Christie was still US Attorney).
MS-13 is comprised of members from Central American countries, primarily El Salvador, Guatemala, and Honduras. According to the 2000 Census, there are 67,320 individuals from these countries living in New Jersey. [redacted] from these countries during the time period of January. 2008 to July 2008. An analysis of Hispanic populations and [redacted] helps the Domain Team assess where [redacted] The Domain Team assesses [redacted] The Domain Team notes that New Jersey has the fifth largest Central American population in the United States. [redacted]
According to the 2000 Census, the largest Hispanic communities in New Jersey are Puerto Rico with 366,788, the Dominican Republic with 91,316, Columbia with 69,754, Mexico with 67,667, and Cuba with 55,241. In addition tthheerree are an estimated 1,265,000 African Americans living in New Jersey from which [redacted]
“He’s Ray Kelly, so what’re you gonna do? I mean, he’s all-knowing, all-seeing,” Christie said.
“And I don’t know all the details yet, but my concern is, you know, why can’t you be, you know, communicating with the people here in New Jersey, with law enforcement here in New Jersey. Are we somehow not trustworthy?” said Christie.
“This is New York Police Department. I know they think their jurisdiction is the world. Their jurisdiction is New York City. So if they’re going to leave their jurisdiction and go to investigate a case in another jurisdiction, it could be dangerous,” Christie said. “This is the way law enforcement people get hurt or killed, is when they’re not cooperating with each other, not communicating with each other.”
“I’m not saying they don’t belong in New Jersey, but tell us! Share it with the appropriate law enforcement agency,” Christie said. “My concern is this kind of obsession that the NYPD seems to have that they’re the masters of the universe.”
Then there’s the spectacle of King defending Ray Kelly as if the latter is a shrinking violet, with neither access to the press nor taste for a fight himself.
Rep. Peter King, chairman of the House Homeland Security Committee, said Gov. Chris Christie crossed a line when he mocked Police Commissioner Ray Kelly as “all-knowing, all-seeing” and said the NYPD’s intelligence operation in Newark may have been “born out of arrogance.”
“I just found it a real disappointment the way he was conducting himself, the way he was taking cheap shots at Ray Kelly,” King said.
Sure, aside from Booker, who seems genuinely concerned either with his actual constituents or appearing that way, this is a giant pissing contest between men defending their turf.
Part of me wonders why most of these men have reacted so strongly. Christie, after all, must have close ties to Newark’s FBI officers from his time as US Attorney. That seems to be what this dig is about:
“His main objection seems to be that he wasn’t … brought in. But the fact is that he wasn’t governor. He was U.S. attorney. And I’m not aware of any major terror plots that he ever uncovered while he was U.S. attorney in New Jersey.”
(King forgets, of course, that the NYPD didn’t find any of the major terrorist attacks since 9/11–street vendors and the FBI did.)
Part of me wonders whether Kelly, channeling J. Edgar Hoover as he increasingly seems to be doing, has some dirt on King and Schumer to make cow them like this.
But the real sick part of my personality can’t help but visualize this ending in a giant wrestling match pitting King and Schumer against Christie and Booker. In fact, I’m even thinking of taking bets.
Sorry about the abundance of brain bleach posts this morning folks–it must be the weather.
The NYDN and NYPost continue their uncritical defense of the NYPD’s spying on residents of other cities. In response to continued outrage that NYPD’s officers profiled Newark’s and Paterson’s Muslim community, the New York fearmonger papers’ response is basically a taunt that New Jersey should be grateful the NYPD has invaded their state because New Jersey can’t prevent terrorism on its own.
What is the matter with New Jersey politicians that they are raising a stink because the NYPD keeps an eye out for terrorists on their turf?
Have Gov. Chris Christie and Newark Mayor Corey Booker forgotten that 746 residents of the Garden State were killed in the terrorist attacks of 9/11?
Have they forgotten that ringleader Mohammed Atta met with co-conspirators in Newark?
Have they forgotten that the van used in the 1993 World Trade Center bombing was rented in Jersey City?
(The NYDN, which claims to have read the profile reports on things like girls’ schools, seems to have missed that none of the profiling reports we’ve seen from the NYPD have targeted any of the kinds of NJ establishments the terrorists have used in the past.)
But as a MI resident, what I’m really amused by is the NYPD boosters’ claim that Newark is “overmatched” and “incapable.”
So why wouldn’tthe NYPD bring its unmatched skills to bear in Newark, whose overmatched police department is simply incapable of monitoring threats as they develop far out of sight?
I can remember only one police department in recent years which has been “overmatched.” And that’s the NYPD, when faced with the prospect of hosting a terrorist trial in Manhattan.
When DOJ first announced plans to try Khalid Sheikh Mohammed and the other 9/11 plotters in New York, Ray Kelly started making the same kind of complaints about not being consulted as New Jersey’s politicians are making now.
NYPD Commissioner Ray Kelly said the Justice Department did not consult the city officials before deciding to send Khalid Sheikh Mohammed and four others to New York City for trial.
“There was no consultation, no consultation with the police department. That decision was made. We were informed,” Kelly said Tuesday.
When asked if the NYPD should have been asked about security and other considerations in advance of sending the accused terrorist to the scene of the attack, Kelly said,” The fact is we weren’t asked. And we will make the best of a situation. We weren’t.”
At first Kelly said the NYPD would be up to the task. But then he started rolling out a plan to effectively militarize lower Manhattan and demanded first $90 million then $200 million to pay for his war zone. Ultimately, the DOJ gave up the plan for a civilian trial.
Because Ray Kelly wasn’t up to the task of hosting a terrorist trial, Khalid Sheikh Mohammed has had at least two years added to his life.
As Spencer reports, former Attorney General John Ashcroft just got named the-Company-formerly-known-as-Blackwater’s ethics chief.
The consortium in charge of restructuring the world’s most infamous private security firm just added a new chief in charge of keeping the company on the straight and narrow. Yes, John Ashcroft, the former attorney general, is now an “independent director” of Xe Services, formerly known as Blackwater.
Ashcroft will head Xe’s new “subcommittee on governance,” its backers announced early Wednesday in a statement, an entity designed to “maximize governance, compliance and accountability” and “promote the highest degrees of ethics and professionalism within the private security industry.”
And while Spencer catalogs many of the reasons this is absurd…
To some, Ashcroft will be forever known as the face of Bush-era counterterrorism, the official who vigorously defended the Patriot Act’s sweeping surveillance powers; told civil libertarians that their dissents “only aid terrorists“; and covered up the Spirit of Justice’s boob.
He misses one of Ashcroft’s key ethical highlights: how he benefited from close ties to his former subordinate Chris Christie when he won a tens of million dollar contract to monitor a medical device company after it signed a Deferred Prosecution Agreement with Christie.
Are federal prosecutors using corporate crime prosecutions to reward cronies?
That seems to be the case in New Jersey, where U.S. Attorney Christopher Christie appointed his ex-boss, former Attorney General John Ashcroft, to be the corporate monitor of a company involved in a $311 million deferred prosecution agreement (pdf) with Christie’s office. The company in question, Zimmer Holdings, along with several other medical equipment manufacturers, was accused of paying kickbacks to get doctors to use their artificial hip and knee reconstruction and replacement products.
Ashcroft’s consulting firm, the Ashcroft Group LLC, will earn between $29 million and $52 million (paid by Zimmer Holdings) to serve as a corporate watchdog for 18 months. It will oversee Zimmer Holdings, making sure it does not engage in misconduct and helping it adopt corporate reforms. As head of the Department of Justice, Ashcroft was Christie’s boss from 2002 to 2005. Christie also served on an advisory panel that consulted regularly with the Attorney General.
Effectively, DPAs under Christie were a means of privatizing justice; Christie even justified limiting fines by pointing to the huge contracting fees his former DOJ buddies would get for monitoring the deal.
And so it’s utterly appropriate that Ashcroft would head to the poster child for everything wrong with privatization to make sure it complies with some kind of ethics.
New Jersey Governor Chris Christie, in one of his first major acts in office, killed the NJ-NY Hudson River Tunnel Project that had already been agreed to and would have brought much needed transportation congestion relief as well as billions in long term Federal construction spending, and related job creation, for his state. Christie said New Jersey could not afford to participate. As a result of Christie’s breach of the agreement and withdrawal, the Federal government, via the FTA, formally noticed demand for losses and expenses in the amount of $271 million dollars that resulted.
Christie, of course, doesn’t want to honor the government’s loss claim any more than he does the tunnel agreement. So Christie has hired the ultra high dollar white shoe Washington DC power law firm Patton Boggs to fight the claim:
New Jersey Governor Chris Christie has hired a law firm to challenge a $271 million tab the federal government says the state owes for the canceled ARC rail tunnel. Christie says he’s approved the selection of the high-powered Washington, D.C. firm of Patton Boggs.
A Christie spokesman Michael Drewniak defended the hire, saying “We’re much better off using a firm like this than using our own in-house attorneys or attorneys general. Not to knock their expertise, but let’s face it, that’s what these attorneys [at Patton Boggs] do for a living.”
Drewniak said the firm would be charging $485 an hour. He wasn’t sure where the money to pay that rate would come from — only that it would be found. “There are always contingencies for every agency of government for conducting legal affairs,” he said. “Everybody has to budget money.”
Patton Boggs is listed by the Center for Responsive Politics, a non-profit group that tracks influence in Washington, as the nation’s top lobbyist over the last twelve years, with about $400 million in billings since 1998. Its clients include Walmart, several health-care related companies and local governments.
Only $485.00/hr. for a high powered firm like Patton Boggs, the kind of firm where senior level counsel regularly charge $800-$1,000 an hour, looks pretty reasonable on the surface doesn’t it? Looks like Christie actually negotiated a pretty fair deal on outside lawyers, if he is not going to use any of the hundreds of state attorneys he already has on the payroll, doesn’t it? Well, not so much.
$485 an hour for a firm like Patton Boggs means they are using “blended rate” on their RFP response. They put in an estimate that shows a small number of partner hours at $800+, and large number of low level associate and paralegal hours at much lower rates.
After they get the contract, there will be lots more partner hours billed than in the estimate. The final bill will be a multiple of the estimated bill in the RFP.
This is how big white shoe law firms, with huge and expensive overhead, compete with small firms who legitimately charge less than $500 an hour for partner time on governmental contracts. It is a scam that was invented so politicians can funnel lucrative steady contract money to big powerful supporters and the big firms can siphon money from government coffers.
In the old days, the government would set a maximum “government rate” per hour they were willing to pay, and the big firms would not touch the work. Mid sized and smaller law firms specializing in such work, manned by ex-prosecutors and other government lawyer types who still wanted to do “public good work” would open boutique firms that charged less than 1/2 the per hour rate for senior attorneys the big firms could and would get these assignments because the big firms wouldn’t take the government rate. These firms often consisted of attorneys with substantial federal agency or DOJ experience, wanting to actually do more than get rich, and gave the taxpayers a far better deal, and just as good, if not far better, results because the firm was not beholden to Washington DC masters and political and lobbying affiliations.
So, if past practice in such situations is prologue, Chris Christie’s contract with Patton Boggs is not only questionable because the State of New Jersey has plenty of capable attorneys already on its payroll, it is also far from the reasonable deal it is being pitched as.
DOJ’s Inspector General just released a report on whether or not US Attorneys were living it up on the government dime. It finds that five of the US Attorneys studied were the worst offenders for staying at luxury hotels and billing the government. And though it doesn’t refer to those US Attorneys by name, we know the one it calls the worst offender is Chris Christie, because one the trips discussed match the trips discussed when his exorbitant travel first focused attention on the issue of US Attorney travel.
Here’s how the report describes Christie:
In terms of the percentage of travel, U.S. Attorney C was the U.S. Attorney who most often exceeded the government rate without adequate justification. The U.S. Attorney provided insufficient, inaccurate, or no justification for 14 of 23 trips (61 percent) that exceeded the government rate. [my emphasis]
In particular, here’s a description of his travel to the Nine Zero hotel in Boston and the Four Seasons in DC.
For example, U.S. Attorney C traveled outside of his district to Boston, Massachusetts, for meetings with representatives of a defendant company at the Nine Zero Hotel. U.S. Attorney C stayed at the Nine Zero Hotel at a cost of $449 per night, which was more than double the government rate of $220 per night in Boston.16 U.S. Attorney C’s secretary told us that it was a “coincidence” that these meetings were at the same hotel where she had reserved a room for the U.S. Attorney.
In addition to his case-related travel, U.S. Attorney C also exceeded the government lodging rate when he traveled to Washington, D.C., to speak to an association. The U.S. Attorney stayed overnight at the Four Seasons Hotel, where he was scheduled to speak the following morning. The hotel rate at the Four Seasons was $475 per night, more than double the government rate of $233 per night. According to the justification memorandum, the U.S. Attorney stayed at the Four Seasons because his speech was scheduled at that hotel early in the morning.
16 U.S. Attorney C’s reimbursements for airport transportation costs were also noteworthy. For example, rather than take a taxi from the Boston airport to the Nine Zero Hotel in downtown Boston, a trip of approximately 4 miles, he prearranged a car service to and from the Boston airport to the hotel, which cost the government $236 round trip. In another example of excessive transportation costs, his car service from a London airport to his hotel in central London cost $562 round trip. [my emphasis]
Here is TPM’s description of the same trips.
On the high end, Christie spent nearly $500 in taxpayer money on a night’s stay in four star hotel in downtown Boston, claiming government rate rooms “weren’t available.” On the low end, Christie requested $109 for a night in Warsaw, IN. The majority of the trips for which Christie formally requested to spend more than the government allows fall somewhere in between those two examples.
The Boston trip came on Oct. 16, 2007. Christie stayed one night at the Nine Zero Hotel downtown, which touts its ranking as one of Travel And Leisure magazine’s 500 best hotels in the world. The room was $449 per night, which Christie asked the Justice Department to pay because, according to the memo he submitted to the department’s budget officer, “due to a high demand for rooms, the government rate is not available for my stay in Boston.”
On Nov. 17, 2004, Christie made a trip to D.C. and stayed at the Willard Intercontinental, arguably the city’s finest and most prestigious and unarguably among its most expensive. Again, he claimed it was the best deal he could find. “I was unable to locate lodging at the government rate,” he wrote in a memo dated Nov. 22. “The only available lodging was at a rate of $449.00 at the Willard hotel.”
On another trip to D.C. on Oct. 15, 2008, Christie again went over budget limits to stay at a tony spot — this time, the Four Seasons on Pennsylvania Ave. The explanation for the overage is redacted in the memo obtained by TPMDC. [my emphasis]
As Christie continues to call for austerity in New Jersey, it’s really worth pointing out what a big fan he is of billing taxpayers for his own luxury.
In a predictable move of arrogance and ignorance, Chris Christie asked Bruce Springsteen to perform at his inauguration.
Christopher J. Christie, the Republican governor-elect of New Jersey, has attended 122 Bruce Springsteen concerts and wanted nothing more than to have the Boss appear at his inauguration. Mr. Christie’s brother, Todd, a stock trader, sent a message through an intermediary to Jon Landau, Mr. Springsteen’s manager, saying that he would make a gift to a charity of the singer’s choosing if Mr. Springsteen performed.
But word came back that, while Mr. Springsteen had performed for the Democratic presidential candidates Barack Obama and John Kerry, “he doesn’t want to get involved in state politics,” Todd Christie said.
Turns out, though, Springsteen is willing to get involved in the kind of state politics that matter.
A BRIEF STATEMENT FROM BRUCE
Like many of you who live in New Jersey, I’ve been following the progress of the marriage-equality legislation currently being considered in Trenton. I’ve long believed in and have always spoken out for the rights of same sex couples and fully agree with Governor Corzine when he writes that, “The marriage-equality issue should be recognized for what it truly is — a civil rights issue that must be approved to assure that every citizen is treated equally under the law.” I couldn’t agree more with that statement and urge those who support equal treatment for our gay and lesbian brothers and sisters to let their voices be heard now.
May Santa bring coal to those who deserve it–and civil rights to all.
Update: To help Santa deliver civil rights to the same sex couples in New Jersey, click over to Garden State Equality and help make calls in advance of the vote on this.
A subpoena has been issued for Gov.-elect Chris Christie to appear next month at the federal trial of North Bergen Internet radio host and blogger Hal Turner.
Michael Orozco, Turner’s lawyer, said in an affadavit supporting the subpoena, that Christie, as the U.S. Attorney, knew that Turner was working with the FBI, Christie gave legal advice to the FBI Joint Terrorism Task Force regarding Turner, and issued a “Blanket Letter of Declination,” refusing to prosecute Turner.
For his part, Christie says he has yet to receive the subpoena, but that he might not be able to testify because it would expose internal deliberations.
Christie said it would be hard to testify because of the internal deliberations and other legal issues that go into the decision-making process.
“It’s very difficult for a U.S. Attorney to testify,” he said. “We’ll see what happens during the road.”
So does the fact that Christie is talking about “internal deliberations” support Turner’s contention that Christie declined to prosecute him, even while several other prosecutors were pursuing such a prosecution?
Wasting no time in paying off Ralph Marra for politicizing a bust of a bunch of Democrats this summer, Chris Christie has already indicated he will name Marra to be his Attorney General. (h/t Main Justice)
Knowledgeable Republican sources say that newly-elected Gov. Christopher Christie will name U.S. Attorney Ralph Marra as New Jersey’s new attorney general in January, after Christie is sworn in.
Any bets on which other AUSAs Christie will be bringing into state government as pay-off?