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Law & Ardor

By MURALI KAMMA Email By MURALI KAMMA
December 2014
Law & Ardor

U.S. Attorney Preet Bharara hardly needs an introduction—just saying his name can evoke a variety of reactions: admiration, dismay, respect, fear, anger. Whether it’s financial fraud, terrorism, narcotics, Mafia, corruption, or other criminal activity, he’s had a string of victories over five years, including an astonishing 85-1 tally on Wall Street. Here, he talks about high-profile cases and controversies, among other matters.

As the U.S. Attorney for the Southern District of New York, Preet Bharara is in charge of two boroughs—Manhattan and the Bronx—and six neighboring counties. Just two and half years after he took office, when his score of successful prosecutions on Wall Street was 58-0, he made it to the cover of Time magazine—which later that year, including him in the Time100 list, noted how his ability to see the next “battleground” was what set him apart. Vanity Fair magazine, echoing that sentiment earlier this year, saw his winning streak on Wall Street as “still the stuff of legend.”

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When Khabar asked him about a yet-to-be-produced Showtime series called Billions, which will feature a Bharara-like prosecutor in the lead role, he laughed and said the only role he was interested in was “the nonfictional role of U.S. Attorney.”

An alumnus of Harvard College, from which he graduated magna cum laude, and Columbia Law School, where he was a member of its Law Review, Bharara—who’s been in private practice and was the chief counsel to Senator Chuck Schumer—has a keen sense of humor, which he enjoys sharing in public appearances, where his jokes typically end with a zinger. For example, while addressing a Wall Street-type gathering, he regretfully noted that he didn’t have enough subpoenas for all of them. As laughter ensued, Bharara said he was just kidding—only to add, after a momentary pause, “I do have enough!”

Bharara’s accomplishments away from the limelight include the creation of the Complex Frauds Unit and the Civil Frauds Unit, which to date has collected $500 million in settlements, and the revamped Terrorism and International Narcotics Unit.

 

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Conservative firebrand Dinesh D’Souza  (left) was one of Bharara’s targets for making illegal political contributions. D’Souza’s claim that it was retribution for his criticism of Obama didn’t prevent him from being sentenced.

 

But it’s the media exposure resulting from Wall Street-related prosecutions that made Bharara a celebrity and raised questions about his political ambitions (he has consistently denied that he has any). While Bharara savors rather than seeks out the spotlight, it’s also clear that he relishes tackling these high-visibility cases that brought him so much notice. Sticking with just South Asians, which means we’re leaving out people like the Madoffs, his office has prosecuted Rajat Gupta, Raj Rajaratnam, Anil Kumar, Rajiv Goel, Roomy Khan, and Matthew Martoma. Dinesh D’Souza was sentenced for making illegal political contributions, and South Asians like Faizal Shazad and Aafia Siddiqui were convicted on terrorism charges. It would be hard to argue that they all didn’t get what they deserved.

None of these cases, however, brought him as much attention in India, or even in the Indian-American community, as the one involving Devyani Khobragade, the Deputy Consul General who was arrested in New York over fraud charges and false statements involving the visa application and treatment of her housekeeper, Sangeeta Richard. Khobragade did return to India eventually, but her indictment—and the manner in which it happened—led to a tense, hard-to-believe diplomatic tug of war between the United States and India. The furor ended, fortunately, but the fascination remains. Bharara touches on this case and other topics in a wide-ranging interview with Khabar.

“I think I have the best job in the world.” —U.S. Attorney Preet Bharara

You’ve been called the Sheriff of Wall Street, Insider Trading Cop, Top Cop of Wall Street, and so on. But you’ve also tackled things like terrorism and narcotics. Are there any successes that stand out? What are you most proud of in your five years in office?
At any given moment we only have a handful of people working on insider trading cases, or a handful of people working on accounting fraud cases, or a handful of people working on terrorism cases, a handful of people working on gang cases… because we have a lot of things that we need to deal with here. I’d say that top of the list is national security and terrorism and making sure that we’re foiling any plots to do bad things to New York—which remains a target, perhaps the most important target for terrorists in the world—and also holding people accountable as we have been doing for the last few years, including Osama bin Laden’s son-in-law and a guy named Abu Hamza, who was extradited from the U.K. a short while ago. Sometimes there is an overemphasis by the media on some of the more sensational corporate insider trading cases. And as I also say, I can’t pick and choose among the various cases in the last five years; I love all my children equally.

You touched on terrorism. Some people argue that terrorists shouldn’t be treated like criminals and that open trials, which you support in New York, can actually raise the threat level for attacks because it gives them unwanted publicity. And there have been some folks like Khalid Sheikh Mohammed [alleged mastermind of the 9/11 attacks], who hasn’t been tried in 13 years because of that. Why do you take such a firm stance on having them tried in New York as opposed to military courts?
I don’t actually have any involvement in the decision about where, in what form, a terrorist or suspected terrorist gets tried, whether it’s a military commission or this court. I’m the U.S. Attorney, and I don’t make those decisions; that’s done at above my pay grade. What I do say is that the professional career folks at this office for a long time have a track record that shows that even the most despicable and fearsome terrorist can be tried and convicted in an open court, where you have rules that have been around for a long time, where the world can see people being held accountable. In the last few years alone, we have convicted Ahmed Ghailani, Suleiman Abu Ghaith [Bin Laden’s son-in-law], Ahmed Ferhani, Abu Hamza…I prefer just to point to the record that during the time that Khalid Sheikh Mohammed has not been tried in any form and is still awaiting trial, the folks in this office, working with the joint terrorism task force, have quietly shown that you can do these things—and that these eventualities that people suggest could happen have not come to pass.

Today, The New York Times [in a long investigative article on the front page] reports how lobbyists are trying to influence State Attorneys General. Also, recent polls show that there’s been an erosion of trust in government agencies. So I’m wondering if these factors have made your job more difficult as a federal prosecutor.
I don’t know if it’s made the job more difficult, but stories about corruption are important to us. Part of the reason that we take seriously the public corruption [Bharara’s office is also investigating New York’s Cuomo administration], the work that we do, is that we want to be in a position to help them resource that trust. The same is true when you’re talking about Wall Street. If people can be given a sense that the miscreants and the bad actors are being held accountable and are being removed from office, then I think people will have a greater sense of confidence that people are doing the jobs that they’re supposed to be doing. So it motivates us. [For] the line prosecutors and FBI agents and the cops who we work with day in and day out, the job is pretty difficult to begin with.

When Prime Minister Modi was in town, you joked that your invitation [to the event in New York] got lost in the mail. [Even the BJP government keeps its distance from Bharara.] But at the same time you filed papers in favor of diplomatic immunity for Modi. Some people were surprised given your stance on diplomatic immunity.
They shouldn’t be surprised. People are often surprised because they think that either I or the other career professionals in the office are motivated by something other than what the facts and law dictate. In one case, if you’re talking about the mid-level diplomat Devyani Khobragade, the facts and the law dictated that there was no diplomatic immunity. In a different case, there might be. Prime Minister Modi did have immunity as the head of state. And we filed those papers [in response to a suit against Modi in New York]. There’s actually no inconsistency because we don’t decide whether to take a position one way or another based on the mood of the day, or based on political whims, or based on who’s going to complain in another country, or based on what’s good for someone’s future. We base it on the facts and the law. It’s silly for people to think that one is against a certain community or against a certain position. It depends on what the law says.

Staying with Devyani Khobragade, which was such a polarizing incident, you mentioned how it affected your parents, who were distressed by what happened because of how it was perceived in India. Do you think maybe cultural or political differences and national pride played a role in how it was perceived in India?
I’m not a psychologist or a social scientist or a social commentator, so I don’t know. What I know is that we brought the case because the State Department asked us to bring the case, because the State Department investigated the case and thought that a crime had been committed; not the crime of the century, but a crime nonetheless. And the alleged victim was of Indian origin as was the alleged perpetrator. And we brought the case consistent with the law and the facts, like we always do. And sometimes people don’t like it when somebody in a particular community is arrested and they don’t know the law, they don’t know the facts. They cast aspersions on the motivations, and all you can do is keep your head down and do your job. At various times, people in the Russian community have complained, people in the Chinese-American community have complained, people in the African-American community have complained, people in the Latino community have complained, people on Wall Street have complained. After a certain point, every possible constituency has picked one case where they say someone is acting with bias or with bad motivation.

They may have their own theories or axe to grind.
Obviously. Look, people have their own agendas, right? I remember reading that the defendant’s father [Uttam Khobragade] claimed that he was going to run for office based on the incident. So, if you sensed political motivations anywhere, it’s clear where they existed.

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(Above) IFS officer Devyani Khobragade with her father, Uttam, a retired IAS officer. India’s furious reaction to Devyani’s arrest and indictment in New York didn’t sway Bharara, who says that the case was “consistent with the law and the facts.”

There were some people, especially in India, who argued that the diplomat of a sovereign nation had been humiliated, that the U.S. was arrogant and insensitive, that even Secretary of State Kerry expressed regret, and that she [Devyani] was indicted twice, not once. In retrospect, do you think it could have been handled differently?
You can disagree about cases and you can disagree about the law. What I don’t like and what’s unfortunate is when people question the motivations of the people making the decisions. And it’s not like I wake up in the morning and pick a random person and say, let’s go prosecute that person. That’s not how it works! It was a low level case that was investigated and put into motion by, again, career agents at the Department of State and career prosecutors in my office—and it was all ready to go and done before I even heard about it. And so, I think it would be helpful generally, so people have a better understanding about how the law works, that you focus on the facts of the case and the arguments and not cast aspersions on the motivations of the people who are public servants and acting in the way they think is in the best interests of their mission.

Right. Going back to Wall Street, in The New Yorker recently, you were quoted as saying that insider trading in the hedge fund industry became rampant because the thinking was, “The greatest consequence I will face is paying some fines.” Do you think the attitude is now changing given all the successes you’ve had, including [the conviction of Indian-American portfolio manager] Mathew Martoma, who was recently sentenced to nine years in prison?
It’s hard to tell with any precision, but anecdotally my sense is it has had an impact. It has deterred some people. And it has caused general counsels and heads of compliance and the CEOs and the boards of directors of various hedge funds and companies to tighten their controls and be better aware about who they hire and to take seriously accusations that are made within a firm. And that all is to good effect. You don’t extinguish a problem overnight and there are some problems you can never extinguish altogether. I don’t think we’re in danger of going out of business anytime soon, because you’re always going to find bad apples in various places. At the intersection of a lot of money and greed, you’re going to find people who are going to take advantage of it. The point is to do as much as we can to deter as many people as possible, and I think there’s been a change in culture at a lot of places—not every place—that I think is helpful. What’s important is that you have a sustained effort over time and don’t just have a big burst of activity and then go away…that’s true for a city that has a gang problem and it’s also true for a Wall Street firm that has a corruption problem.

Your score now is 85 to 1 on Wall Street. How do you feel about Rengan, who got away even though his brother [Raj Rajaratnam of the Galleon Group] was convicted?
I think that track record speaks for itself. You don’t win every case. If every prosecutor’s office in their entire history won every case that they brought, that means they’re not bringing probably enough tough and aggressive cases that we’re supposed to do. We only bring cases where we’re absolutely convinced of the guilt of the party. But we have the jury system and juries sometimes see the evidence differently. The fact of the one acquittal underscores even more how impressive the other convictions were and the track record is.

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Mathew Martoma, seen here with his wife, has been sentenced to nine years in prison for insider trading. According to Bharara, the problem on Wall Street became rampant because “the greatest consequence” for the perpetrators was “paying some fines.”

There are those who say that some folks seem to be too big to jail, just as some corporations are considered too big to fail. For instance, Martoma’s parents noted that Steven Cohen [Martoma’s boss and founder of SAC Capital Advisors, the hedge fund that got investigated] was going scot free. Again, was this because you didn’t have enough evidence to bring him to trial? Because there is a feeling that the big guys are getting away whereas the smaller guys are getting stiffed.
I hate to sound like a broken record, but the facts and law support bringing the case [against Martoma]. Anybody who knows me and knows the full track record knows that…I hope people appreciate that I continue in the tradition of this office, not being afraid of anybody no matter how big they are and how much money they have and how connected they are. You mentioned one person but there was another significantly powerful person, Raj Rajaratnam [who was convicted]. Nobody blinked, and when there was sufficient evidence, we had to charge him. And that’s true of every case we bring. We’re rightly known as the most independent prosecutor’s office in the country, and that’s traditionally been so. And that’s how we conduct ourselves.

What about other financial fraud—like mortgage fraud? Is it much harder to prosecute those cases, because we don’t see as much movement there as we see in insider trading? I’m wondering if it’s because evidence is lacking or because these cases are so complex that it’s harder to pursue them.
Case by case, we brought a lot of mortgage fraud cases. The Bernard Madoff case is our case. We tried his cohorts recently and it brought back, at this point, I think over 10 billion dollars in money that was lost to people through the Ponzi scheme. It depends on the case. In some cases you have wiretaps, in some cases you don’t. In some cases you have people who have made recorded conversations, in some cases you don’t. In some cases you have people who are going to cooperate against their former partners in crime, in some cases you don’t. It depends on what combination of things you have in a case which allows you to bring a charge or not bring a charge.

In your commencement speech at Harvard [Law School], you quoted this dialogue from a movie: “I am the guy who does his job; you must be the other guy.” Could you elaborate on why you think this is good advice for law students?
It’s not just that I think it’s advice for law students. I think it’s good advice for engineers, I think it’s good advice for politicians, I think it’s good advice for mathematicians. Over time you see a lot of people focusing on how to get ahead and a lot people focusing on what the angle is, how to get a promotion…they’re doing a lot of strategizing and lobbying. The point of that anecdote from that movie [The Departed] is, if you’re focused on doing the job that you have at hand that’s been assigned to you in the best way you possibly can, that’s your best path to success and your best path upwards, no matter how ambitious you are, because people notice the job that you do. And the future often—not always, but often—takes care of itself. I made an analogy to pitching a perfect game in baseball. Nobody who ever pitched a perfect game went to the mound that day hoping and expecting to pitch a perfect game. They concentrated on every pitch, and you string together all those moments and that’s what makes a perfect game or a good career.

You came to this country as an infant. Did you have a typical bicultural upbringing? What did your parents think when you wanted to become a lawyer?
Stereotypically, like a lot of [Indian] families, my father wanted me to be a doctor; he wanted my brother to be a doctor. We failed in that regard. But I think they’re finally fine with it. [Laughs]

I don’t know how true this is, but I saw a report saying that hate crimes have risen in recent years in the New York-New Jersey area against Middle Easterners and South Asians. What’s your assessment? Is your office doing anything about it?
Without speaking about any specific case, people appreciate that we have as our mandate civil rights enforcement also, whether we’re talking about a jail like Riker’s Island, where we’ve taken a number of actions, including making an inquiry about whether or not someone can enter the premises with a turban…like a Sikh who wears it for religious reason. Or a shooting that may not have been appropriate, as an excessive use of violence. We take all our obligations incredibly seriously because our job is to protect everyone and to enforce the law, not only against private citizens but also against law enforcement officials and corrections officials and people who are supervising those other individuals—that’s just as important a part of our job as everything else.

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Seeking Security, Online and Off

For law enforcement officials, in the age of the internet, the virtual world—as much as the real world—presents dangers. Beefing up our cyber security remains a top priority for Preet Bharara, who has written about the subject. But while cyber terrorism and cyber crimes are a worry, so is online intrusion and manipulation. In recent years, the work of WikiLeaks and people like Edward Snowden has led to heightened fears of large-scale, Big Brother-style surveillance and invasion of privacy by spy agencies and commercial entities. So is there a way to balance the sometimes contradictory concerns that ordinary citizens have these days?

“You can’t ignore either,” says Bharara. “All of life is a balance and that’s true in law enforcement also. In any society that’s governed by the rule of law or has attempted to be governed by the rule of law, a balance has to be struck between liberty and security or between privacy and security. And that’s just become a little bit more complicated and a little bit more difficult and all the more momentous in the cyber age. I think it’s good that people are constantly reevaluating where the proper balance should be struck.

“But the fact remains that there are people who want to crash planes into our buildings, who want to kill Americans, who want to destroy our infrastructure, who want to peddle poison to our children, who want to traffic in sex for young people, who want to do an untold number of horrible things to their fellow citizens. And some of them are going to use the cloak of anonymity that sometimes the internet can provide to accomplish those bad ends.”

So what’s the solution?

“As a general matter,” Bharara notes, “if there is court supervision and there is a proper policy for being able to get at those people, we should think right away to do that. We appreciate that people want to remain private, and there are good law-abiding citizens who want to take advantage of certain technologies because they don’t want anyone knowing about their business. That’s terrific and that’s what makes America special. But at the same time, if you don’t provide for an ability within the rule of law—and depending on the circumstances, with court supervision—to get at the bad guys who are going to take advantage of that cloak of anonymity, a lot of harm is going to be done to a lot of people.”



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