Category: Book Quotes of the Day

The 2010 Citizens United v. Federal Elections Commission case, in which the court ruled that corporations were allowed to spend unlimited amounts in elections, is perhaps the best known of the group of rulings that widened corporate rights and protections.

Like many prosecutors, Pelletier and Safwat believed that witness testimony makes white-collar cases. Documents are often technical and dry.

The head of the fraud section, Steven Tyrell, spoke up. The taxpayers now owned the majority of the company. An indictment of AIG might shut down the insurer, handing the new owners–American taxpayers–a massive hit.

Like Gresham’s law, where copper coins drive more valuable gold coins out of circulation, the agency’s focus on corporate accountability (an obsession shared by the Justice Department) drove out the good investigations of individuals.

Misrepresenting a bank’s liquidity is a time-honored tradition to stave off a run. The saying is that corporations die of cancer, but financial firms die of heart attacks.

A top assistant prosecutor at the Southern District of New York or Main Justice today makes around $150,000 a year. In 2016 the government scale topped out at $160,300. A top partner at a good firm can easily make $3 million to $4 million a year. In the meantime, the cost of living in the nation’s most coveted and powerful cities has skyrocketed. A prosecutor’s salary has become more difficult to live on, while in private practice a partner’s income has dramatically outpaced inflation.

During settlement negotiations, the prosecutors want to appear tough to the defense lawyers on the other side of the table. They want to dazzle them with their knowledge of legal precedent, mastery of details, and bargaining skills. But young prosecutors also want their adversaries to imagine them as future partners. They want to demonstrate that they are people of proportion.

Because sprawling corporation investigations are so complex and difficult, and because the defense is so robust and well funded, prosecutors fell in love with settlements. The prosecutorial saying “Big cases, big problems” has an addendum: “Little cases, little problems, and no cases, no problems.”

A symbiotic relationship developed between Big Law and the Department of Justice. The way government prosecuted corporate crime helped transform how private firms conducted their practice and their business. Big law firms in turn began to change how the government approached corporate investigations and prosecutions. The Department of Justice became a way station, a post-(law) doctorate course of study, a résumé builder for future partners at prestigious law firms.

The revolving door was not just a way for government employees to cash in. Both sides were changing the other–ultimately to the benefit of corporations. No one conceded, at least publicly, that the revolving door influenced the lawyers’ work in government.