Joined: 25 Jul 2005
Location: St. Pauls, Bristol, England
|Posted: Sat Mar 11, 2017 9:35 am Post subject: Covington & Burling: law firm of choice for organised cr
|Eric Holder, Wall Street Double Agent, Comes in From the Cold
Barack Obama's former top cop cashes in after six years of letting banks run wild
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Eric Holder has gone back to work for his old firm, the white-collar defense heavyweight Covington & Burling. The former attorney general decided against going for a judgeship, saying he's not ready for the ivory tower yet. "I want to be a player," he told the National Law Journal, one would have to say ominously.
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Holder will reassume his lucrative partnership (he made $2.5 million the last year he worked there) and take his seat in an office that reportedly – this is no joke – was kept empty for him in his absence.
The office thing might have been improper, but at this point, who cares? More at issue is the extraordinary run Holder just completed as one of history's great double agents. For six years, while brilliantly disguised as the attorney general of the United States, he was actually working deep undercover, DiCaprio in The Departed-style, as the best defense lawyer Wall Street ever had.
Holder denied there was anything weird about returning to one of Wall Street's favorite defense firms after six years of letting one banker after another skate on monstrous cases of fraud, tax evasion, market manipulation, money laundering, bribery and other offenses.
"Just because I'm at Covington doesn't mean I will abandon the public interest work," he told CNN. He added to the National Law Journal that a big part of the reason he was going back to private practice was because he wanted to give back to the community.
"The firm's emphasis on pro bono work and being engaged in the civic life of this country is consistent with my worldview that lawyers need to be socially active," he said.
Right. He's going back to Covington & Burling because of the firm's emphasis on pro bono work.
Here's a man who just spent six years handing out soft-touch settlements to practically every Too Big to Fail bank in the world. Now he returns to a firm that represents many of those same companies: Morgan Stanley, Wells Fargo, Chase, Bank of America and Citigroup, to name a few.
Collectively, the decisions he made while in office saved those firms a sum that is impossible to calculate with exactitude. But even going by the massive rises in share price observed after he handed out these deals, his service was certainly worth many billions of dollars to Wall Street.
Now he will presumably collect assloads of money from those very same bankers. It's one of the biggest quid pro quo deals in the history of government service. Congressman Billy Tauzin once took a $2 million-a-year job lobbying for the pharmaceutical industry just a few weeks after helping to pass the revolting Prescription Drug Benefit Bill, but what Holder just did makes Tauzin look like a guy who once took a couple of Redskins tickets.
In this light, telling reporters that you're going back to Covington & Burling to be "engaged in the civic life of this country" seems like a joke for us all to suck on, like announcing that he's going back to get a doctorate at the University of Blow Me.
Holder doesn't look it, but he was a revolutionary. He institutionalized a radical dualistic approach to criminal justice, essentially creating a system of indulgences wherein the world's richest companies paid cash for their sins and escaped the sterner punishments the law dictated.
Here are five pillars of the Holder revolution:
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One is that he failed to win a single conviction in court for any crimes related to the financial crisis. The only trial of any consequence brought by his Justice Department for crimes related to the crisis involved a pair of Bear Stearns nimrods named Ralph Cioffi and Matthew Tannin, who confided in each other via email that the subprime markets were "toast" but told their clients something very different to keep them invested.
After a jury acquitted both in early 2009, the Holder Justice Department turtled. Sources inside the DOJ told me over the years that both Holder and his deputy, fellow Covington & Burling alum Lanny Breuer, were obsessed with winning and refused to chance any case where they felt a jury might go sideways on them. Thus the Cioffi-Tannin case was the last financial crisis case they dared to bring into to a criminal courtroom – virtually every other case ended in settlements.
Two: Holder famously invented a concept called "collateral consequences," under which the state could pursue non-criminal alternatives for companies if they believed prosecuting them might result in too much "collateral" damage. Britain's HSBC bank, which admitted to massive money laundering violations, and the Swiss bank UBS, which was caught manipulating the Libor interest rate benchmark, were examples of firms that escaped vigorous prosecution because Holder and his lackeys were, ostensibly anyway, concerned about market-altering consequences.
Significantly, both banks were later caught up in even more serious scandals, leading to criticism that stiffer punishments the first time around might have prevented future damage. Holder's successor Loretta Lynch was even forced to rip up Holder's UBS deal for being insufficiently punitive. It's worth noting that Holder, before he became attorney general, represented UBS at Covington & Burling.
Holder's lenient policies were deployed at a time when fellow officials like Tim Geithner and Ben Bernanke were using bailout monies to merge troubled firms together and create even larger mega-companies. Chase and Wells Fargo, which swallowed up Washington Mutual and Wachovia in state-aided takeovers, were prototypes of the modern mega-bank. So when Holder wedded "collateral consequences" to these new Too Big to Fail mega-firms, he created Too Big to Jail. This is a huge part of his legacy, the creation of an unjailable class.
Three: Holder also pioneered the extrajudicial settlement, striking huge deals with companies in which judges did not sign off on the agreements. The arrangement prevented pesky judges like the irksome Jed Rakoff (who voided a pair of settlements he felt were inadequate) from protesting lenient justice.
This essentially institutionalized the backroom deal. Everything was done in secret, and there was no longer any opportunity for judges or anyone else to check the power of the executive branch to hand out financial indulgences.
The watchdog group Better Markets described the $13 billion Chase settlement, one of the biggest extrajudicial deals, as "an unprecedented settlement amount [that] cannot…immunize the DOJ from having to obtain independent judicial review of its otherwise unilateral, secret actions."
Four: There is a huge misconception, pushed equally by odd bedfellows in the financial community and Obama supporters, that Eric Holder didn't send anyone from Wall Street to jail because "no one broke any laws."
This preposterous meme grew out of something Barack Obama said on 60 Minutes. Here are the president's exact words:
"Some of the most damaging behavior on Wall Street — in some cases some of the least ethical behavior on Wall Street — wasn't illegal."
Obama, a brilliant lawyer and wordsmith, was not saying that all of the behavior leading to the crash was legal. He merely said that some of the worst behavior wasn't illegal. Which is true. Meaningless, but true.
Of course, some of the worst behavior was very illegal. This is confirmed in the fact that Holder extracted billions of dollars in settlement monies and even, in a few cases, obtained guilty pleas for crimes like fraud, manipulation, bribery, money laundering and tax evasion.
Anyone who even tries to claim that none of the banks actually did anything illegal should be directed to the HSBC settlement of December 2012. In this deferred prosecution agreement, Europe's largest bank paid $1.92 billion to settle their responsibility for violations of the Bank Secrecy Act and other laws.
This is from a description of HSBC's crimes by Holder's Justice Department:
"As a result of HSBC Bank USA's AML failures, at least $881 million in drug trafficking proceeds – including proceeds of drug trafficking by the Sinaloa Cartel in Mexico…were laundered through HSBC Bank USA."
You might remember the Sinaloa cartel for their ISIS-style, unforgettably upsetting torture videos. HSBC washed their cash. They even created special teller windows to make their deposits easier. This is admitted, not alleged.
But Holder went out of his way to let them keep their U.S. charter. He gave their executives a grand total of zero days in jail, zero dollars in individual fines.
To reiterate: HSBC laundered money for guys who chop peoples' heads off with chainsaws. So we can dispense with the "but no one broke any laws" thing.
When asked about this in testimony before the Senate, Holder told elected officials he was concerned harsher penalties against firms like HSBC would "have a negative impact on the national economy," and that this "has an inhibiting influence…on our ability to bring resolutions that I think would be more appropriate."
Compare this to what he just said after returning to Covington & Burling:
"I think that what we did in the department was, I always like to say, appropriately aggressive. There may be clients that, for whatever reason, will not decide to work with me..."
Oddly enough, Holder used that same phrase – "appropriately aggressive" – in his Senate testimony. In other words, the attorney general said he was "inhibited" from giving "appropriate" punishments just a few moments before claiming his punishments were appropriate. This is classic Clintonian politics, saying two things at the same time, neither of them true.
Five: Holder contributed countless subtle inventions to soften punishments. The most revolting in my view was allowing banks like Chase the courtesy of calling their settlements "remedial payments" instead of fines for wrongdoing.
This seemingly insignificant semantic tweak allowed the bank to call $7 billion of their settlement a business expense, which meant they could claim it as a tax deduction, which in turn meant that taxpayers like you and me paid a whopping $2.45 billion of Chase's penalty.
Some of the write-ups of these decisions emanating from the financial and legal press were hilarious. Law360.com, noting that the settlement language meant that 35 percent of the bank's regulatory burden would be shifted "onto the backs of taxpayers," pointed out, as if surprised, that the tax treatment "sparked debate" and that "some are even angry about it." Shocking!
Of course, none of us mortals can deduct so much as a speeding ticket, since we wouldn't want to use the tax code to encourage speeding. So why was it OK for the nation's top cop to make fraud or money laundering a tax-subsidized activity?
There were other tricks. Banks that committed multiple violations of the same offense were often allowed to settle or plead to just one count. And in many cases the fines were staggeringly low compared to the volume of crime – BNP-Paribas, for instance, paid $8.9 billion after laundering $30 billion, meaning they paid about 27 cents per dollar of violations.
Holder is a cynic of a type that's increasingly common in Washington. To follow his Justice Department was like watching an endless reel of The Good Wife – smart lawyers half-cleverly constructing one unseemly moral compromise after another, always justifying it to themselves in the end somehow in the name of keeping the ball rolling.
Holder doubtless seriously believed at first that in a time of financial crisis, he was doing the right thing in constructing new forms of justice for banks, where nobody but the shareholders actually had to pay for crime. You've heard of victimless crimes; Holder created the victimless punishment.
But in the end, it was pretty convenient, wasn't it, that "the right thing" also happened to be the strategy that preserved Democratic Party relationships with big-dollar donors, kept the client base at Holder's old firm nice and fat, made the influential rich immeasurably richer and allowed Eric Holder himself to crash-land into a giant pile of money upon resignation.
What a coincidence! In any civilized country, it'd be a scandal. In America, though, he's just another guy selling whatever he can to get by. It was just too bad that what Holder had to sell was the criminal justice system.
"The maintenance of secrets acts like a psychic poison which alienates the possessor from the community" Carl Jung
Last edited by TonyGosling on Sun Mar 12, 2017 7:40 am; edited 1 time in total
Joined: 25 Jul 2005
Location: St. Pauls, Bristol, England
|Posted: Sat Mar 11, 2017 10:17 am Post subject:
|Off Label Warning for Law Firm of Covington and Burling—Hazardous to Your Health!
Region: USA in the World
Much has been written about the revolving door between government service and the Washington, DC law firm of Covington and Burling. The recent return of former Attorney General Eric Holder to his previous position at Covington has sparked accusations and outrage among pundits.
Much of the focus of this outrage has been on Holder’s failure to prosecute Wall Street miscreants, who happen to be clients of Covington. The law firm’s client list includes Wells Fargo, Citigroup, Bank of America and J.P. Morgan Chase.
Slamming Holder as a “double agent for Wall Street,” Rolling Stone’s Matt Taibbi wrote:
“Holder denied there was anything weird about returning to one of Wall Street’s favorite defense firms after six years of letting one banker after another skate on monstrous cases of fraud, tax evasion, market manipulation, money laundering, bribery and other offenses.”
Eric Holder worked for the firm from 2001 up until 2009, when he was confirmed as Attorney General for the Obama administration. Prior to working for Covington, he had worked in the Public Integrity Division of the Justice Department from 1976-1988, at which point he accepted a position as a federal judge.
As of 2015, Covington and Burling was the largest law firm in DC, with offices in London, Beijing, Brussels, Los Angeles, New York, San Francisco, Seoul, Shanghai, Silicon Valley and, of course, Washington. According to the Vault’s 2012 citations, it is the most prestigious law firm to work for in DC, the #11 most prestigious law firm to work for in the United States and the #6 most selective law firm in the United States.
Covington has made The American Lawyer’s “A List” consecutively for the past three years. The firm also tied for #2 on the 2007 Schiltz 100, a ranking that inversely correlates profits per partner and firm prestige.
After resigning as Attorney General in 2015, Holder returned to Covington and Burling, which reportedly had kept his office unoccupied and awaiting his return during his stint as top lawman in the US government.
Holder is not the only former government official to find a nesting place at the firm. Lanny Breuer, former Assistant Attorney General for the Criminal Division of the US Department of Justice, returned to Covington in 2013 after leaving government employ. James Garland was Holder’s Deputy Chief of Staff before rejoining Covington in 2010. None other than Michael Chertoff, former head of the Department of Homeland Security under George W. Bush, maintains an office at Covington. The firm’s website boasts that its staff includes “a U.S. Attorney (EDNY), two Assistants to White House Counsel, eight AUSA’s (including one from Boston), two DOJ Civil Fraud Section Attorneys, and three DA’s.”
As it turns out, that’s a somewhat modest declaration. Opensecrets.org lists 107 attorneys who have been through the Covington/US government revolving door. Missing from that list is the name of John Bolton, a Covington lawyer from 1974 to 1981. Bolton served as Ambassador to the United Nations between August 2005 and December 2006.
It is telling that Bolton regarded the UN as essentially a tool of US interests. In a 1994 Global Structures Convocation hosted by the World Federalist Association (now Citizens for Global Solutions), he stated,
“ (…) there is no United Nations… there is an international community that occasionally can be led by the only real power left in the world, and that´s the United States, when it suits our interests, and when we can get others to go along.”
Matt Taibbi has called Covington and Burling “the shadow Justice Department.” In a recent interview on Democracy Now!, Taibi stated,
“It’s a secondary club. What happens when all these people have this congenial relationship, they end up making deals that are much more favorable to their clients than there would be otherwise.”
Writes Taibbi, “In any civilized country, it’d be a scandal. In America, though, he’s just another guy selling whatever he can to get by. It was just too bad that what Holder had to sell was the criminal justice system.”
The cozy relationship between government and the private sector via the big law firm reaches far beyond enabling the banksters. A close scrutiny of the firm’s impact on health related issues reveals a queasy interdependence which has resulted in adjudications that might raise the bar of alarm. In other words, Covington and Burling may be hazardous to your health.
Case in point would be the firm’s aggressive representation of the manufacturer of the anti- psychotic drug, Seroquel. The drug is a blockbuster, with over $5.8 billion in sales in 2011 alone. Hundreds of suits, filed in federal court, claimed that AstraZeneca failed to provide adequate warning that the drug caused diabetes. AstraZeneca ended up paying out about $520 million in settlements.
As pointed out here this is just a drop in the bucket for the pharmaceutical giant. The entry discusses the math involved in these lawsuit settlements vs the drug revenues and estimates that the total revenues for Seroquel have benefited AstraZeneca to the tune of “somewhere in the neighborhood of 30-50 billion dollars in total revenue….so, when you take away 2 billion (after factoring in the settlements and the price of legal counsel) from between 30 & 50 billion dollars in profitable sales; you can see clearly that corporate crime pays quite handsomely.”
Subsequently, Covington’s life sciences group helped AstraZeneca partner with Bristol-Myers Squibb in a $7 billion deal to buy a leading diabetes drug maker. You read that right. After paying out settlements for not warning the public that its drug causes diabetes, AZ bought a diabetes drug maker.
Covington lawyer Eric R. Sonnenschein defended Merck Pharmaceuticals at the International Trade Commission in a patent infringement matter involving Merck’s NuvaRing product. Nuvaring, which is a contraceptive device, was subsequently hit with over 1,700 lawsuits alleging that the drug caused embolisms and strokes, some of which were fatal. In early 2014, Merck reportedly agreed to settle the NuvaRing lawsuits for a total of $100 million.
In addition, Covington lawyers are defending pharmaceutical company Boehringer Ingelheim in over 5,000 claims alleging blood-thinning drug Pradax causes severe bleeding. According to Legal 500, Covington has “favorably” resolved the majority of claims.
Covington also represents Hoffman-LaRoche in the litigation surrounding claims that the acne medication Accutane has caused depression, birth defects, inflammatory bowel disease and suicide. After citing initial wins in this litigation, Hoffman-LaRoche was subsequently hit with thousands of Accutane cases, which have been consolidated in a New Jersey Court. Just this August, Roche won on appeal and had a $25 million dollar Accutane verdict overturned, adding to three other recent Accutane successes. Drugsanddevices blogspot offers this: “Congratulations to Covington and Burling, which we think has now won reversal of every adverse Accutane verdict in the New Jersey mass tort litigation.”
Roche pulled Accutane off the US market in 2009. However, Accutane is still sold in other countries. The drug is available in Canada and in the UK, marketed as Roaccutane. This past May, The Daily Mail reported twenty suicides in the past two years in Great Britain attributed to Roaccutane.
Covington is also defending Merck in the Fosamax litigations. Fosamax, which is prescribed as a treatment for osteoporosis, has been alleged to cause bone weakening, fracture and a debilitating condition known as “jaw death.”
In June of 2014, a New Jersey judge ordered that all Fosamax claims be dismissed. Many of these are being appealed at the US Court of Appeals, Third Circuit.
And just to drive the point home, did you notice who represented BP in that massive oil spill of 2010? The Deepwater Horizon spill killed 11 crew members and leaked millions of barrels of crude into the Gulf, causing an ongoing environmental crisis. BP’s four star legal team included lawyers from Covington.
And if that weren’t cozy enough, Eric Holder, during his pre-AG stint at Covington, represented Chiquita Brands when it was charged with engaging in transactions with terrorists for paying Colombian paramilitary groups $1.7 million from 1997 to 2004. In 2007, the banana company pleaded guilty to making payments to Colombian militias.
A federal appeals court subsequently dismissed thousands of claims by Colombians who claimed that they or their relatives were tortured or killed by the paramilitary groups.
President Obama must not have noticed the continuing impact of Covington on policy. Dated January of 2009, Obama’s White House website declares that “ …he closes the revolving door that allows government officials to move to and from private sector jobs in ways that give that sector undue influence over government.”
And you can take that to the bank!
Janet C. Phelan, investigative journalist and human rights defender that has traveled pretty extensively over the Asian region, an author of a tell-all book EXILE, exclusively for the online magazine “New Eastern Outlook”.
"The maintenance of secrets acts like a psychic poison which alienates the possessor from the community" Carl Jung