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Harsh Prosecution for the Little People and the Big Guys Skate

The US Department of Injustice

by DAVE LINDORFF

The US Department of “Justice” has a distinctly nuanced concept of that term, taking a tough, no-holds-barred stance when it comes to individuals — especially little people without much power or influence — and trying at all costs to avoid prosecution when it comes to the powerful, and to big corporations — especially big financial corporations. That schizoid approach to prosecution is personified in the recent actions–and inaction–of the DOJ’s man in Manhattan, US Attorney for the Southern District of New York Preet Bharara.

You remember Preet. He’s the guy who came down so hard on a deputy consul general of the Indian Consulate in New York who was accused by his office of “human trafficking.” Specifically, 39-year-old Devyani Khobragade stands accused of lying to US visa officials in New Delhi when she applied for a visa to bring an Indian maid to the US to work in her home, allegedly claiming to them that she would be paying the woman some $4500 a month, when the maid, who left the job, claimed she was paid just $573 monthly. The US prosecutor (himself a naturalized citizen and native of India who grew up in the US) had Khobragade arrested as she dropped her two children off at school, brought her to the federal lock-up in Manhattan, where she claims she was strip searched and cavity searched several times, and finally released her on $250,000 bond, to face felony charges that could potentially result in 10 years’ jail time. (Khobragade has denied the charges and claims that the maid in question was extorting her family.)

Explaining his tough approach to the case, Bharara has stated that Khobragade’s treatment under arrest was not harsh, and that she was simply subjected to “routine procedures of the US Marshal’s Service” for persons being placed in detention following arrest. In fact, he claimed she had been extended “special courtesies” such as being allowed to make multiple phone calls to assure that her children would be cared for in her absence, and being offered coffee by her arresting officers. Bharara also defended his department’s tough approach in this case saying that human trafficking is a serious crime and that “Foreign nationals brought to the United States to serve as domestic workers are entitled to the same protections against exploitation as those afforded to United States citizens.” He went on to declare that the alleged lying to visa officials and the alleged “exploitation of an individual” were something that “will not be tolerated.”

Some might immediately point out that exploitation of low-paid American workers is rampant — including in Bharara’s jurisdiction of New York–and that the Justice Department largely ignores it. (US workers routinely are defrauded out of overtime, get paid below minimum wage, are denied unemployment benefits they are owed, are forced to work in dangerous conditions, and are abused on the job and the “Justice” Department does nothing.) But even putting that huge hypocrisy aside, there’s the matter of Jamie Dimon and JPMorgan Chase.

This past week, Preet Bharara also announced that his office had reached an agreement with the nation’s largest “too-big-to-fail” bank on a fine and penalties of $2.5 billion for violating the Bank Secrecy Act. Specifically, JPMorganChase was accused of turning a blind eye to the record-breaking pyramid scheme of Wall Street scammer extraordinaire Bernie Madoff, who bilked clients out of a staggering $65 billion over two decades, largely working through one account he had at JPMorganChase.

Now, you’d think that for a crime that large and egregious, someone — and ideally it would be bank head Jamie Dimon — ought to have been frog-marched in cuffs out of JPMorganChase headquarters, and then brought down to the same lock-up Bharara had Khobragade taken to, there to be similarly given the “routine” treatment of strip searches and cavity searches that she got. (After all, Dimon became the bank’s president and chief operating officer back in July 2004, later becoming chairman and CEO too, and over that period the bank concedes there had been plenty of internal warnings about Madoff, who was essentially using the bank to execute his massive fraud.)

Nope. Didn’t happen.

In fact, while the the US Attorney’s Office claims Bharara and his prosecution team technically “filed” criminal charges against the bank (though not against any bank officials), when they met in a “congenial” setting with Dimon and his attorneys, it was agreed that there would be no criminal prosecution at all. Instead, the bank agrees to a fine of $1.7 million plus a payment of $350 million to the Comptroller of the Currency as well as some $500 million in compensation to victims, and said it would accept a “deferred prosecution agreement,” giving the bank two years to “overhaul its controls against money laundering.” After that time, all is to be forgotten, and the charges will be dropped. Under this sweetheart agreement, the bank did not have to plead guilty to anything as part of this deal, but was allowed instead to “stipulate to the facts of the case.” This is even though JPMorganChase admitted that its own office in the UK, in 2008, sent a detailed warning explaining to senior managers that Madoff’s whole operation appeared to be a scam. (Wouldn’t you get a deal like that after an arrest for pot possession or for DWI!)

Bharara insisted, at a press conference announcing the settlement and the agreement to drop any criminal prosecution against the bank, that it was a good deal. He went to great lengths to insist that the bank’s failure was “institutional,” implying that it would not be appropriate to prosecute individuals. He refused to comment on the suitability of Dimon to continue running the bank, though his office could easily have insisted on Dimon’s departure as part of any non-prosecution settlement. He also several times repeated that there were “concerns” about possible “collateral consequences” of a criminal prosecution. At one point, when questioned by a reporter, he explained that those “consequences” might include “employees being laid off, the bank failing, or shareholders losing money.” Of course, JPMorganChase failing would merely mean that the institution would be broken up, with the pieces being taken over by other institutions under supervision of the Office of Comptroller. Lost jobs? What about all the jobs lost because of Madoff’s scams? And as for shareholders, aren’t they the owners of the bank, who are supposed to be insisting that it is well run and acting in accordance with the law, not to mention looking out for fraud? If they weren’t doing that, then they deserve to lose money!

What’s really going on, though Bharara struggled mightily to avoid having to admit it, is that if you’re big enough and powerful enough, you don’t get criminally prosecuted by the DOJ.

Remember that phrase “Equal justice under the law”? It’s engraved on the front facade of the US Supreme Court an is supposed to be a fundamental American principle. Apparently it’s just a slogan though. If you’re the nation’s largest bank, or the boss of that bank, it doesn’t apply to you. Just ask US Attorney for the Southern District of New York Preet Bharara.

Maybe we should just change the name of Bharara’s parent agency to US Department of Injustice. At least that would be honest.

Dave Lindorff is a founding member of ThisCantBeHappening!, an online newspaper collective, and is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press).