The Prime Directive
by digby
Using the Justice Department to essentially rig the vote was an act of hubris that I think may have surprised even the most vocal critics of the Republican party. But this is thoroughly expected and not surprising in the least. Indeed, I would think it was the prime directive of the Bush DOJ:
Two years into a fraud investigation, veteran federal prosecutor David Maguire told colleagues he’d uncovered one of the biggest cases of his career.
Maguire described crimes “far worse” than those of Arthur Andersen, the accounting giant that collapsed in the wake of the Enron scandal. Among those in his sights: executives from a subsidiary of Berkshire Hathaway, the investment empire overseen by billionaire Warren Buffett.
In May 2006, he felt strongly enough about his case that he prepared a draft indictment accusing executives from a Virginia insurer, Reciprocal of America, of concocting a series of secret deals to hide its losses from regulators. Although he didn’t name anyone from Berkshire Hathaway’s subsidiary, he described the company as a participant in the scheme.
But Maguire never brought those charges.
Months after preparing the draft, he was removed as the lead prosecutor on the case and reassigned.
His replacement, a prosecutor who hadn’t been involved in the case until then, soon announced that the Berkshire Hathaway subsidiary, General Reinsurance, wouldn’t be indicted. By April of this year, the entire investigation, which the Justice Department once hailed as one of the largest insurance-fraud cases in the history of Virginia, had fizzled.
Guess why?
Internal documents that McClatchy Newspapers obtained show that Justice Department lawyers in Washington had become locked in an intense debate with Maguire over the case until he was removed from it.
The documents, together with court records and interviews, provide a rare look inside a corporate fraud case and the Justice Department’s deliberations on whether to pursue an indictment.
Five years after Enron collapsed and tough measures aimed at white-collar crime were enacted, federal officials struggled with questions of corporate accountability:
Who should be held responsible when fraud leads to a company’s demise? How far should federal prosecutors go in pursuing corporate suspects?
In the Reciprocal of America case, the fallout was clear. More than 80,000 lawyers, doctors and hospitals in 30 states lost their malpractice coverage. As they couldn’t expect new insurers to cover them for past cases, some who were sued have claimed losses of hundreds of millions of dollars.
As doctors and lawyers faced bankruptcy, the victims of malpractice feared they’d never get their due.
Even so, prosecutors had to be certain that their evidence of wider wrongdoing justified the financial damage that an indictment could cause to General Reinsurance.
After the Enron scandal provoked an aggressive Justice Department crackdown on corporate fraud, federal courts made it clear that the department had overstepped its authority in several high-profile cases. The pendulum appeared to be swinging back in favor of corporations.
I’ll bet you are shocked.
Read the whole thing. It’s a doozy and I expect it’s far from the only case. Keep in mind that of all the things the Bush administration has failed at doing, the one great success story has been servicing their corporate masters and ripping off the taxpayers. It’s what they do and they do it well.
* And by the way, this is another one of those great McClatchey stories that makes you realize just how little real investigative work comes out of the big papers (certain fine reporters excepted, of course.)
H/T to BB
.