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Sunday, September 12, 2010

Stench Becomes Overwhelming in U.S. Justice System

Chris Christie

We long have described Alabama as "Ground Zero" for Bush-era corruption in the U.S. justice system, with Mississippi a close second.

But we now know that the rot did not end when George W. Bush left office, and it certainly is not limited to the Deep South. In fact, recent reporting from Andrew Kreig of the Justice Integrity Project tells us that decay is present in two states--New Jersey and Minnesota--that we long have considered relatively progressive.

In New Jersey, the sleaze involves Republican Governor Chris Christie, who has become a darling in conservative circles for his "common-sense" ideas regarding fiscal issues.  In Minnesota, it involves governmental abuse of victims in a fraud case that would make Bernie Madoff proud.

David Broder, veteran columnist for The Washington Post, has touted Christie as a role model for conservatives hoping to be elected this fall. But Kreig's reporting raises this question: Has David Broder, at age 81, lost his ability to think critically?

Christie has become a national figure since being elected governor in January 2010. Before that, he was a Bush-appointed U.S. attorney. And Kreig says Christie's actions then, and his rhetoric now, do not add up:

Far from limiting government, Christie, right, wasted vast amounts of taxpayer funds to help himself and his cronies. Look no farther than his scheme as U.S. attorney to connive with Solomon Dwek, a big-time bank swindler and brothel operator, to crush political opponents with criminal charges timed to explode at the beginning of the 2009 Christie campaign.

It turns out that, at one point during his U.S. attorney reign, Christie was considered not sufficiently aggressive on political prosecutions. And that kind of thing could get you in trouble with the Bush administration:

During 2006, Christie was placed on a preliminary list of those slated for firing for insufficient political loyalty, according to subsequent testimony. His actions after that included:

* Pre-election subpoenas tarnishing New Jersey's Democratic Senate candidate Robert Menendez 61 days prior to election. The subpoenas never resulted in charges but prompted many headlines suggesting corruption by Menendez before he narrowly won reelection. Christie, not surprisingly, survived the political purge just after the election that cost eight of his peers nationally their jobs and sent a powerful message to all remaining prosecutors.

* No-bid contracts for tens of millions of dollars to prominent Republican former Justice Department officials to monitor settlement agreements with corporate criminal defendants. One contract valued at $28 million to $52 million went to former Republican U.S. Attorney Gen. John Ashcroft, below, Christie's former boss, to monitor a kick-back scheme by Zimmer Holdings to induce surgeons to use its medical devices. A similar no-bid deal went to former New Jersey U.S. Attorney Herbert Stern, Christie's mentor.

But that's not all:

Christie's biggest step in scoring points in his inner-party circles as a loyal apparatchik was a plan to empower bank swindler Dwek with federal funds to set up defendants in "Bid Rig III" (a code term devised by law enforcement) in a sting operation.

Earlier, Dwek bilked banks out of $50 million and ran a cruise ship brothel in the Caribbean, according to court testimony this year and last. Christie' DOJ filed criminal charges and worked out a deal for him to help create new cases. As part of this, the feds provided Dwek with funds to donate to local campaigns. He and his associates then gathered evidence that recipients were responding in a fashion that could prompt bribery and honest-services types of criminal charges.

Before leaving office in December 2008, Christie made sure that two of his loyalists--Ralph Marra and Michele Brown--were in key positions. What impact did that have?

The Loyal Christies in an Obama-led Justice Department orchestrated their July 2009 press conference to showcase one of the largest indictments in New Jersey history just as the 2009 election season was heating up.

Roughly half of the 44 suspects were local political figures, with the other suspects in such non-political crimes as money-laundering. All but one of the political suspects were Democrats, according to defense sources. His successor Marra worked with Dwek to grab headlines with one of the largest corruption cases in the state history.

Harper's columnist Scott Horton saw the case immediately as part of an ongoing nationwide scandal of Bush DOJ political prosecutions that he'd been tracking elsewhere. His column, "Manure for the Garden State" 13 months ago, argued that the prosecution was highly suspect.

The Minnesota case might be even more unsettling than the one in New Jersey. Before Bernie Madoff came along, the largest Ponzi scheme in U.S. history ($3.65 billion) involved a St. Cloud businessman named Thomas J. Petters. How are victims being treated in that case? Well, Douglas Kelley, who was Petters' defense attorney, has been named receiver and U.S. trustee. And Kelley was granted judicial immunity, limiting victim oversight of his decisions.

Fraud experts, Kreig reports, say they have never heard of a criminal-defense attorney being appointed receiver. Corporate turnaround expert William Procida originally was named receiver. But that changed:

Minnesota U.S. District Judge Ann Montgomery promptly replaced Procida as receiver in 2008. Instead, she selected the regional powerbroker Kelley, who days earlier been hired by Petters to defend his Petters companies from criminal charges. The judge gave Kelley immunity without requiring the kind of freedom from financial conflicts of interests courts normally require of actual judges.

Kelley then embarked on a series of controversial decisions--selling assets at fire-sale prices, vindicating from liability a key Petters employee who helped him, forfeiting $20 million to federal prosecutors, and spending some $30 million (at last count early this year) on fees for his firm and the other bankruptcy professionals he picked to administer the case.

The stench from a broken U.S. justice system is become overwhelming--and widespread. It's not just a "Southern thing" anymore. Does anyone in the Obama administration even notice?

1 comment:

Anonymous said...

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