The Wall Street Journal’s editors are understandably exercised over apparent prosecutorial shenanigans in a securities-fraud case out of my old office, the U.S. attorney’s office for the Southern District of New York (SDNY). Maybe “securities non-fraud case” would be the better description.
The editorial involves an investigation of David Ganek and his hedge fund, Level Global, based on an extravagant theory of insider trading — an envelope regularly pushed by the Justice Department. This was during the tenure of Preet Bharara, a former colleague of mine who threw something of a tantrum when he was removed by President Trump as the SDNY’s U.S. attorney — along with dozens of other district U.S. attorneys in what is a now normal transition, especially when a change of administrations also changes the party in power.
The Journal recounts that the press was tipped off before the raid of the firm, Ganek’s status as a suspect was publicized, and the consequent reputational damage destroyed the business — as all involved must have known would happen. Yet not only was Ganek never indicted; the one conviction that was obtained — against one of his underlings, in what sounds like a move “up the chain” effort to squeeze the underling into cooperating against Ganek — was overturned on appeal when the Second Circuit rejected the insider-trading theory.
Moreover, at a recent public appellate argument, a high-ranking SDNY lawyer accused Ganek of participating in a “scheme” to trade on “inside information.” That is the very allegation that the SDNY had shrunk from formally charging against Ganek. The Second Circuit panel is said to have upbraided the prosecutor, pointing out that there was no evidence in the record to support such an allegation. “That’s a statement made in the affidavit [that] is not true,” zinged Judge Reena Raggi.
Meanwhile, it emerged that there were inaccurate statements in the affidavit supporting the search warrant for the firm. Whether these resulted from honest mistakes or mendacity has not been determined. Potentially relevant to that question is the happenstance that the FBI supervisor has been cited for leaking grand-jury information in a separate insider-trading case. (Grand-jury information is secret by law, and its disclosure by a law-enforcement official could result in severe discipline, termination, and even prosecution.)
E-mails uncovered in that separate case yielded evidence of FBI leaking, including to the Journal. Perhaps inspired by what they’re convinced is a smear of Ganek by the SDNY, the editors undertake their own smear of Bharara. They assert that he knew about the leaks and must have done nothing about them because they continued. Of course, all prosecutors know when there are leaks from their cases — they just need to read the papers. Moreover, because investigative information is widely dispersed in the FBI and Justice Department, efforts to identify and discipline leakers are commonly unsuccessful; that doesn’t mean such efforts have not been made. Plainly, the Journal grasps this. Hence, the editors’ hedge, saying that “as far as we know” Bharara took no corrective action.
The pertinent question is not whether Bharara knew about corrupt practices but whether he was complicit in them. The editors darkly imply that this is the case (“there’s a pattern of troubling behavior and a problematic culture inside Mr. Bharara’s old shop”), but they don’t dare make this allegation outright because they haven’t got the goods. Indeed, the premise of the editorial is that this case needs to be investigated, not that misconduct has been proven.
Now, about that investigation. The Journal’s main point is a good one, and it is the same one our Kevin D. Williamson raises in his excellent but troubling recent article. As the Journal puts it, misconduct is encouraged “because there are so few consequences for prosecutorial abuse.” Borrowing from Ninth Circuit judge Alex Kozinski, the editors thunder, “Improper and abusive behavior by prosecutors has reached ‘epidemic proportions.’”
The Obama administration hardly invented this problem, but its politicized Justice Department exacerbated it and then some. Over the years, we have covered a great deal of this ground. For example:
‐Eric Holder was the first attorney general in history to be held in contempt of Congress, when he stonewalled committee probes of the Fast and Furious investigation. Fast and Furious itself was a scandal, involving the government’s reckless abuse of investigative powers for the purpose of fabricating an anti-gun narrative. Instead, its “gun walking” resulted in the killing of a federal agent, among other violent crimes.
‐Attorney General Holder made misleading representations about both Fast and Furious and the investigation of Fox News journalist James Rosen.
‐The IRS’s intimidation and abuse of President Obama’s political opponents, and the cover-up thereof, resulted in no charges and little apparent investigation.
‐There were politicized prosecutions against Dinesh D’Souza (an Obama critic whose minor campaign-finance infraction was treated as a major felony when more-serious violations are typically disposed of by administrative fine), and Nakoula Basseley Nakoula (the anti-Muslim video producer scapegoated by the Obama administration for the Benghazi massacre).
‐Recall the misrepresentations by Justice Department lawyers to a federal court in the litigation over Obama’s lawless immigration non-enforcement programs (DACA and DAPA) — lies the judge found to be “intentional, serious and material.”
‐Then there were the Justice Department’s outrageous misconduct and serial lies in a prosecution of New Orleans police, which a federal judge variously described as “bizarre,” “appalling,” and “grotesque” — conclusions upheld by the Fifth Circuit appeals court.
‐And, of course, the Clinton e-mails investigation, featuring: Justice Department collusion with Clinton-camp lawyers; inexplicable immunity deals; suspects who received immunity permitted to appear as lawyers for other suspects; no prosecutions despite significant evidence, several immunity grants, and patently misleading statements during FBI interviews; a furtive tarmac tête-à-tête between the attorney general and the main suspect’s husband (the former U.S. president who just happened to have launched the attorney general into public prominence, and who was positioned to influence whether the attorney general got to keep her job in an anticipated Hillary Clinton administration) just days before it was announced — surprise! — that there would be no indictment of Hillary Clinton; and startling public commentary by the FBI regarding an uncharged case that bore heavily on a presidential election.
I could go on, but you get the point. So . . . what is to be done?
As for the overall crisis (and it really is a crisis), I’m not entirely sure. I’ll have more to say over the weekend about Kevin’s column. It is another angle on a grave problem with which I’ve tried to grapple in the context of the ongoing controversy over potential abuse of the government’s intelligence-collection powers: Our legal and political systems’ mechanisms for ferreting out misconduct and holding officials accountable are broken. I’m not sure they can be repaired — they may have to be rethought. Without them, though, the government cannot be trusted, which has dangerous ramifications for national security and the rule of law.
Our legal and political systems’ mechanisms for ferreting out misconduct and holding officials accountable are broken. They may have to be rethought.
I’m more optimistic about the specific misconduct allegations raised by the Journal, although I think the editors have it wrong — or at least incomplete.
Ganek has sued the government, alleging misconduct and various damaging violations of his rights. The feds, to the Journal’s consternation, are “hiding behind the doctrine of prosecutorial immunity.” This doctrine protects prosecutors from liability for harm caused when they carry out their core (or “advocative”) functions. There are some exemptions, but the protection is sweeping and at least partially answers a question Kevin raises — why isn’t there more accountability? Answer: Because long ago the courts made a “lesser of two evils” judgment. Better to immunize a few bad actors, they reckoned, than to paralyze upright law enforcement with the dread of a suit over judgment calls.
If Judge Kozinski is right that prosecutorial misconduct is now rampant — I think “epidemic” overstates the case, but there’s enough to warrant worry — then it could be argued that the presumption of rectitude underlying the law’s broad grant of immunity to prosecutors needs revisiting.
That is what the Journal asks the Second Circuit to do: Find (or create) a loophole that allows Ganek’s suit to proceed. That is a dubious solution. Put aside the sound reasons for prosecutorial immunity (which remain sound even when raised by unsympathetic prosecutors). Litigation is a very unsatisfying avenue for seeking accountability. The point of a court case is to provide redress for an aggrieved person, not to answer every important policy question raised. The issues in litigation frequently diverge from the issues of societal or historical consequence, so the latter are not adequately addressed (if they are addressed at all). Plus, as the Journal’s own editorial shows (commenting on a different case, involving alleged FBI misconduct), the parties often settle with a confidentiality agreement that keeps the underlying facts hidden.
This, I would submit, is a case for congressional oversight of the Justice Department by way of public hearings. The oversight system broke down during the Obama years because the Justice Department contemptuously thumbed its nose at the Republican-controlled Congress. But now the Justice Department is under new management. I am not suggesting that the Trump DOJ should play politics like the Obama DOJ did. All it needs to do is cooperate with lawmakers, rather than stonewall them.
Prosecutorial immunity is insurance against liability in judicial proceedings, not accountability in congressional proceedings. It would not prevent a comprehensive public examination of Ganek’s allegations (and any similar such claims) on Capitol Hill. And while it would not make Ganek whole (I suspect that will never happen), it could inform Congress and the public for purposes of enacting better laws to prosecute — and thereby discourage — depressingly familiar forms of misconduct, such as leaking non-public investigative information. If there was wrongdoing, it could provide the basis for censure and congressional adjustments in the budgets of the culpable departments and agencies.
The courts can try to keep the justice system honest, but if things are broken they can be fixed only by the political branches. Time to start.
— Andrew C. McCarthy is a senior policy fellow at the National Review Institute and a contributing editor of National Review.