Tag: Harvey Silverglate

Was Goldman’s sleazy behavior really illegal?

Goldman Sachs founder Marcus Goldman

Keep an eye on the Securities and Exchange Commission’s case against Goldman Sachs. It’s hard to imagine a less sympathetic defendant than Goldman. That may be the problem, because evidence is already emerging to suggest regulators are concocting violations in order to punish sleazy but legal behavior.

In today’s New York Times, Binyamin Appelbaum offers a useful analysis of the SEC’s civil suit against Goldman, which stands accused of defrauding investors. The story quotes experts who point out that those investors were fully informed about what they were buying. The only thing investors didn’t know was that a hedge-fund manager named John Paulson helped pick what went into the investment vehicles and then bet they would lose money, to the great benefit, as it turned out, of Goldman’s shareholders. [Note: The previous sentence has been corrected since this item was first posted.]

Elsewhere in the Times, Andrew Ross Sorkin asks, “Why was Goldman, or any regulated bank, allowed to create and sell a product like the synthetic collateralized debt obligation at the center of this case?” The key word in that sentence may be “allowed.”

The Goldman case seems similar to one investigated recently by ProPublica and the NPR program “This American Life” involving Magnetar, a hedge fund that created collateralized debt obligations (CDOs) that it then bet against. Magnetar has been accused of deliberately making those CDOs as risky as possible and then shorting them, running up many tens of millions in profits when they failed. (Magnetar denied the accusation.)

According to the report, Magnetar’s dealings may have single-handedly extended the housing bubble for at least a year, making the subsequent crash much deeper than it otherwise would have been. Yet not only has there been no hint that there was anything illegal going on, but Magnetar itself is still in business.

(And by the way, if you haven’t heard the report, you should download the podcast. It is a rare model of clarity about an exceedingly murky subject. You will come away, as I did, actually knowing something about what CDOs are and why they were so harmful to the economy.)

Although the charges Goldman faces are civil rather than criminal, the story calls to mind my friend and occasional collaborator Harvey Silverglate’s book “Three Felonies a Day,” which details the expansive reach of federal prosecutors who use vague laws (“conspiracy” is a favorite) in order to punish people and corporations they have targeted.

The news media ought to follow Appelbaum’s lead and be on alert against getting spun by tales of wrongdoing at Goldman. The real outrage may prove to be not what’s illegal but what’s legal. Perhaps a better story is whether the massive financial-regulation bill now being considered by Congress would outlaw the sort of behavior that made Goldman and Magnetar clients even richer than they already were — while leaving the economy in ruins.

Photo via Wikimedia Commons.

Supreme Court to take up “honest services” law

The New York Times reports that the U.S. Supreme Court will take up the constitutionality of the “honest services” law, a vague federal statute that creates all kinds of opportunities for prosecutorial mischief.

Among other things, it is the root of one of the principal accusations against former Massachusetts House speaker Sal DiMasi, who faces federal charges stemming from favors he received from well-connected friends.

Abuse of the honest-services law is a major theme of friend of Media Nation Harvey Silverglate‘s book “Three Felonies a Day,” in which Silverglate argues that such laws are used to transform less-than-admirable conduct into federal crimes.

Or, as Supreme Court Justice Antonin Scalia puts it in the Times article, the law “invites abuse by headline-grabbing prosecutors in pursuit of local officials, state legislators and corporate CEOs who engage in any manner of unappealing or ethically questionable conduct.”

Fighting back against dubious prosecutions

In my latest for the Guardian, I examine friend of Media Nation Harvey Silverglate‘s new book, “Three Felonies a Day: How the Feds Target the Innocent.” And I point out that the themes Silverglate explores can be seen in some dubious prosecutions of recent vintage — including that of former Massachusetts House speaker Sal DiMasi, now fighting for the right to be represented by the lawyer of his choice.

Harvey Silverglate goes after the feds

Harvey Silverglate at the Harvard Book Store. (Click on photo for a larger image.)
Harvey Silverglate at the Harvard Book Store. (Click on photo for a larger image.)

Friend of Media Nation Harvey Silverglate packed the house at the Harvard Book Store in Cambridge last night at an event for his new book, “Three Felonies a Day: How the Feds Target the Innocent.”

The book is about what Silverglate describes as an increasing tendency by prosecutors to abuse their discretion by charging people with crimes they didn’t even know they’d committed. A noted civil-liberties lawyer, Silverglate described most of his clients as people “who committed the act but committed no crime.”

Since the mid-1980s, Silverglate said, the criminal-justice system has abandoned the ancient principle that there can’t be a crime without criminal intent. Referring to cases in which law enforcement has withheld important information, he said, “There’s something wrong with a system that knows there’s evidence of innocence and hides it.”

And he described prosecutors as “kidnappers and extortionists” for threatening targets with lengthy prison sentences and then demanding that they testify against others as the price of having those sentences reduced. Such testimony is notoriously unreliable, he said, quoting Harvard Law School professor Alan Dershowitz (who wrote the preface) as saying that such witnesses are taught not just to “sing,” but also to “compose.”

Harvey and I go back many years at the Boston Phoenix, where I had the privilege of editing his column, and where we later collaborated on several articles. Harvey also was the inspiration behind the Phoenix’s annual Muzzle Awards, which I’ve been cranking out, with his help, for 12 years.

Last night the Phoenix newspapers’ executive editor, Peter Kadzis, and the Boston Phoenix’s editor, Lance Gould, were both on hand, as was Harvey’s wife, the photographer Elsa Dorfman, whose work has appeared in the Phoenix. “Three Felonies” was edited by Catherine Tumber, a former Phoenix editor who’s now working on a book about the significance of small cities.

Kadzis interviews Silverglate about “Three Felonies” in this week’s Phoenix. Kadzis writes:

At this curious moment in history, Silverglate’s book might not shock either the left or the right. For some time now, the two opposing wings of the American centrist polity have been alarmed by the predatory nature of our national government. For those in the middle of the political spectrum, however, Silverglate’s book should be a bracing wake-up call. Liberty and freedom are being compromised, one prosecution at a time.

Indeed, it’s Silverglate’s advocacy for such notorious bad guys as the financier Michael Milken and the accounting firm Arthur Andersen that takes “Three Felonies” out of the realm of political polemics and transforms it into an important book.

Harvey Silverglate’s latest free-speech campaign

Boston Globe columnist Scot Lehigh writes about friend of Media Nation Harvey Silverglate‘s bid to be elected to Harvard’s Board of Overseers.

Silverglate, a celebrated civil-rights lawyer, and an ally, Philadelphia lawyer Robert Freedman, are pushing a free-speech, anti-PC agenda that would, among other things, bring ROTC back to the Harvard campus.

Best of luck to Silverglate, a staunch and principled defender of free speech.

How to avoid prosecuting Bush and Cheney

Prosecuting George W. Bush, Dick Cheney and others for torture-related war crimes would be madness, and President Obama clearly doesn’t want to do it. But torture is serious business. What should we do?

At ThePhoenix.com, civil-liberties lawyer Harvey Silverglate shows us the way out.

Finneran flashback

The Boston Globe today reports that Tom Finneran is seeking a pardon from President Bush, and that four former Massachusetts governors are supporting his bid. In 2005, Harvey Silverglate explained in the Boston Phoenix why Bush should grant Finneran’s request.

I’m not sure Finneran deserves to be pardoned for the lame talk show he hosts (now co-hosts) on WRKO Radio (AM 680). But the former Massachusetts House speaker is no criminal.

Anti-free speech round-up

The First Amendment is front and center in this morning’s Boston Globe. Three stories for your consideration:

1. Paranoia and the MBTA. Friend of Media Nation Harvey Silverglate argues that the court-ordered censorship of three MIT students is rooted in post-9/11 paranoia about security. The law is aimed at computer hacking that could put people in danger; now it’s being applied merely to writing about hacking, and not the sort that might endanger lives but, rather, would simply cost the T money. Silverglate concludes that “with the ghosts of 9/11 and ‘national security’ hovering, the students and the First Amendment didn’t stand a chance.” (Silverglate also blogs for the Boston Phoenix.)

2. Criminalizing symbolic speech. An Associated Press news brief reports that a Louisiana teenager has been sentenced to four months in prison for hanging nooses off the back of his truck and displaying them at a civil-rights rally on behalf of the Jena Six. Recently I challenged Peter Porcupine to find an example of a hate-crime law that criminalizes speech. Sadly, I think I’ve just found one. Take a look at this ABC News report on the case against the teenager, Jeremiah Munsen. There are complicating factors, and Munsen does appear to be quite the dirtball. But essentially Munsen is going to prison for his exercise of symbolic speech. “I wish we had a charge in Louisiana for aggravated ignorance,” a police officer is quoted as saying. Apparently that’s unnecessary; the federal hate-crimes statute will do quite nicely.

3. Teaching students they have no rights. In Knoxville, Tenn., a high-school student sued for the right to wear Confederate-flag clothing to school, a violation of the dress code. His case ended in a mistrial, according to the AP. The right of school districts to impose such codes is so well-established that this is scarcely worth a mention, except as a reminder that young people are raised and educated in an environment that’s devoid of constitutional protections. We shouldn’t be surprised that a majority of them grow up to oppose the constitutional rights of others, as you will see in the second entry here.

Yesterday Media Nation commenter Leslie wrote, “For us liberals to reflexively hide behind the free speech banner is too easy.” I hope these three examples show that it’s actually hard. Speech that we like needs no defense.

If you’re going to stand up for the First Amendment, you are invariably going to find yourself standing up for kids whose actions might make it easier for people to rip off the T, or for racist teenagers from Louisiana or Tennessee. So be it.

Torturing the law

Earlier this month, civil-liberties lawyer Harvey Silverglate had this to say on his blog at ThePhoenix.com about Attorney General Michael Mukasey’s testimony regarding waterboarding:

[A]cknowledging that the CIA’s torturers might have been acting in good faith — that they believed the lawyers when the lawyers told them certain highly coercive interrogation techniques were legal — hardly ends the inquiry. Why are these lawyers not being investigated in order to determine whether they wrote their legal opinions in good faith, or instead made up fanciful legal theories to appease the administration’s interest in taking the gloves off when it came to dealing with suspected terrorists?

And here we go, from today’s Washington Post:

An internal watchdog office at the Justice Department is investigating whether Bush administration lawyers violated professional standards by issuing legal opinions that authorized the CIA to use waterboarding and other harsh interrogation techniques, officials confirmed yesterday.

Mukasey had a good reputation coming in, but was craven in his confirmation hearings and has been overly cautious in his subsequent congressional appearances. It looks like we’re going to learn what he’s really made of.