CORPORATE CRIME REPORTER
Debevoise’s Berger Case Raises the Question – Are
Young
Prosecutors Auditioning for Big Law Firms?
20 Corporate Crime Reporter 40(1), October 19, 2006
An article in the Wall Street Journal this morning is going to trouble
more than Paul Berger and Mary Jo White – both partners at Debevoise &
Plimpton in New York.
The article, written by Judith Burns, reports that lawyers for the Securities and Exchange Commission (SEC) have been ordered by Congressional investigators to search their email files for messages about Berger, a former SEC enforcement attorney.
According to the article, Congressional investigators are looking at claims that the SEC gave favorable treatment to Wall Street investment banking executive John Mack during an insider probe of Pequot Capital Management, Inc.
Debevoise’s Mary Jo White, representing Morgan Stanley’s board of directors, conducted an investigation of Mack before he was named chairman and CEO of Morgan Stanley in June 2005.
If there were a blood pressure monitor at Debevoise & Plimpton, you could imagine the gauge shooting upward as Paul Berger and Mary Jo White read the following line in the article:
“SEC enforcement lawyers have been ordered to produce email references to Mr. Berger and employment, seen as a sign of concerns Mr. Berger might have been hired by Debevoise in exchange for favorable treatment of Mr. Mack, according to individuals familiar with the matter.”
And who exactly is concerned that Berger might have been hired in exchange for favorable treatment?
The article doesn’t say.
In fact, the article goes on to report that one of the “individuals familiar with the matter” said the implication of a quid pro quo is “ludicrous.”
So, it must have been another “individual familiar with the matter?”
Whether Berger is in real hot water, or whether Democrats on the Hill are just blowing smoke – and if they are blowing smoke, Berger has been unjustly maligned by the nation’s dominant business daily – the article raises an issue that has been percolating for years.
The preferred career trajectory of a young white collar defense attorney is fairly straightforward – graduate from a top notch law school, clerk for a federal judge, work at the U.S. Attorney’s office, preferably in Manhattan, or at the SEC’s enforcement division, for a number of years bringing cases against major American corporations and executives, and then go to work for one of the major corporate law firms defending the culprits – for a lifetime of financial security.
Thus, there are very few lifers at key enforcement positions the Department of Justice and the SEC.
Ask 100 former prosecutors whether politics ever entered into a charging decision against a major corporation or corporate executive, and 100 former prosecutors will tell you – absolutely never.
But young prosecutors and enforcement officials routinely face off against some of the highest paid legal talent in the world.
And if a young prosecutor decides to insist that a major American corporation plead guilty to a crime instead of entering into a deferred or non-prosecution agreement, is that young prosecutor sending a signal to the big corporate law firms across the table that he or she is unwilling to play the game the way it’s supposed to be played?
Or if a young SEC enforcement attorney makes a discretionary judgement to bring a charge against a heavy hitting Wall Street investment banker where the case could be decided either way, is that young enforcement attorney sending a signal to the big corporate law firms across the table that he or she is unwilling to play the game the way it's supposed to be played?
Yes.
And yes.
And it’s a prescription for a derailed career.
And life-long employment at the Department of Justice.
Or at the SEC.
Corporate
Crime Reporter
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