Martin Smith questioning Lanny Breuer in the "The Untouchables" on Frontline:
"You made a reference to losing sleep at night worrying about the possibility of larger financial consequences as a result of a lawsuit against one large financial institution. Is it really the job of a prosecutor to worry about anything other than simply pursuing justice?"
Lenny Breuer's reply: In a case like this, I think a responsible prosecutor should speak to regulators and experts first. Why? Because if I bring a case against institution A, and as a result of bringing that case there's some huge economic effect, a kind of ripple effect, so that counter-parties and other financial institutions, or other companies that had nothing to do with this, are then very badly affected, then that's a factor we should know about, understand, and consider in advance -- before we go ahead with the prosecution. (Note: Lanny Breuer was originally employed at a very prestigious Washington law firm and left his job at the Justice Department a week after this interview was broadcast, presumably to eventually go back to Wall Street's big bucks.)
But think about what Breuer is saying here. He's essentially telling us that some individuals are so systemically important that they can't be arrested and put in jail! Now consider the unspoken but implied corollary to that, which is that if some people are too systemically important to arrest, there are other people who can be safely be arrested. In other words, the assistant attorney general is dividing society into two classes: one that is arrestable, and another that is not arrestable -- which flies in the face of one of the sacred principles (equal justice under the law) on which this country was founded. Bottom line: there's really no good reason the Justice Department couldn't have indicted a number of individuals from some of these companies and put them on trial if the jury thought that was warranted.
Historically, we've always put bad guys on trial, no matter how big their corporate standing. Even under the Bush administration, if you go back just ten years, there was WorldCom, Enron, and Adelphia. We took the leading individuals of these companies and put them on trial to make an example out of them. And this is exactly what we're not doing now. But why not? Those three companies just mentioned were systemically important then. So why not do the same thing now?
More on Mary Jo White
As a law firm partner, Mary Jo White was pulling down $10-15 million a year at Debevoise and Plimpton, and she essentially received that money from a specific group of clients -- and now, at the SEC she is being put in charge of policing them, these very clients to which she had been beholden. This doesn't really comport with how aggressive a prosecutor must be. It compromises what her attitude towards the people she's supposed to be policing should be. (You'd much rather see a career civil servant doing her job. Or let someone like her do the job if there was a law forbidding her from going back into private practice at any of the firms on which she had ruled.)
Ms. White is too cozy with Wall Street. She has served as a director of the Nasdaq stock exchange and on its Executive, Audit and Policy Committee. And, as The W.S. Journal pointed out, she should face questions over her role as defense attorney for Bank of America's former head Kenneth Lewis in his civil trial.
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