Eric Holder Returns as Hero to Law Firm That Lobbies for Big Banks
By Lee Fang
@lhfang
Today at 11:29 AM
After failing to criminally prosecute any of the financial firms responsible
for the market collapse in 2008, former Attorney General Eric Holder is
returning to Covington & Burling, a corporate law firm known for serving
Wall Street clients.
The move completes one of the more troubling trips through the revolving
door for a cabinet secretary. Holder worked at Covington from 2001 right up
to being sworn in as attorney general in Feburary 2009. And Covington
literally kept an office empty for him, awaiting his return.
The Covington & Burling client list has included four of the largest banks,
including Bank of America, Citigroup, JPMorgan Chase and Wells Fargo.
Lobbying records show that Wells Fargo is still a client of Covington.
Covington recently represented Citigroup over a civil lawsuit relating to
the bank's role in Libor manipulation.
Covington was also deeply involved with a company known as MERS, which was
later responsible for falsifying mortgage documents on an industrial scale.
"Court records show that Covington, in the late 1990s, provided legal
opinion letters needed to create MERS on behalf of Fannie Mae, Freddie Mac,
Bank of America, JPMorgan Chase and several other large banks," according to
an investigation by Reuters.
The Department of Justice under Holder not only failed to pursue criminal
prosecutions of the banks responsible for the mortage meltdown, but in fact
de-prioritized investigations of mortgage fraud, making it the
"lowest-ranked criminal threat," according to an inspector general report.
For insiders, the Holder decision to return to Covington was never a
mystery. Timothy Hester, the chairman of Covington, told the National Law
Journal that Holder's return to the firm had been "a project" of his ever
since Holder left to the join the administration in 2009. When the firm
moved to a new building last year, it kept an 11th-story corner office
reserved for Holder.
James Garland, Holder's former deputy chief of staff, who rejoined Covington
in 2010, told the Law Journal that when Covington's partners gathered to
welcome Holder back four weeks ago, "He was so busy giving people hugs and
shaking hands."
As Covington prepared for Holder's return, the firm continued to represent
clients before the Department of Justice. For instance, Covington negotiated
with the department on behalf of GlaxoSmithKline for a plea agreement in
2010.
Holder's critics charge that he made a career out of institutionalizing "Too
Big to Prosecute" rules within the department. In 1999, as a deputy attorney
general, Holder authored a memo arguing that officials should consider the
"collateral consequences" when prosecuting corporate crimes. In 2012,
Holder's enforcement chief, Lanny Breuer, admitted during a speech to the
New York City Bar Association that the department may go easy on certain
corporate criminals if they believe prosecutions may disrupt financial
markets or cause layoffs. "In some cases, the health of an industry or the
markets are a real factor," Breuer said.
Rather than face accountability for their failures, the incentive structure
of modern Washington is designed to reward both men. Breuer left the
department in 2013 to rejoin Covington. Holder is set to become among the
highest-earning partners at the firm, with compensation in the seven or
eight figures.
(This post is from our blog: Unofficial Sources.)
Photo: Chip Somodevilla/Getty
Eric Holder Returns as Hero to Law Firm That Lobbies for Big Banks
By Lee Fang
@lhfang Today at 11:29 AM
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After failing to criminally prosecute any of the financial firms responsible
for the market collapse in 2008, former Attorney General Eric Holder is
returning to Covington & Burling, a corporate law firm known for serving
Wall Street clients.
The move completes one of the more troubling trips through the revolving
door for a cabinet secretary. Holder worked at Covington from 2001 right up
to being sworn in as attorney general in Feburary 2009. And Covington
literally kept an office empty for him, awaiting his return.
The Covington & Burling client list has included four of the largest banks,
including Bank of America, Citigroup, JPMorgan Chase and Wells Fargo.
Lobbying records show that Wells Fargo is still a client of Covington.
Covington recently represented Citigroup over a civil lawsuit relating to
the bank's role in Libor manipulation.
Covington was also deeply involved with a company known as MERS, which was
later responsible for falsifying mortgage documents on an industrial scale.
"Court records show that Covington, in the late 1990s, provided legal
opinion letters needed to create MERS on behalf of Fannie Mae, Freddie Mac,
Bank of America, JPMorgan Chase and several other large banks," according to
an investigation by Reuters.
The Department of Justice under Holder not only failed to pursue criminal
prosecutions of the banks responsible for the mortage meltdown, but in fact
de-prioritized investigations of mortgage fraud, making it the
"lowest-ranked criminal threat," according to an inspector general report.
For insiders, the Holder decision to return to Covington was never a
mystery. Timothy Hester, the chairman of Covington, told the National Law
Journal that Holder's return to the firm had been "a project" of his ever
since Holder left to the join the administration in 2009. When the firm
moved to a new building last year, it kept an 11th-story corner office
reserved for Holder.
James Garland, Holder's former deputy chief of staff, who rejoined Covington
in 2010, told the Law Journal that when Covington's partners gathered to
welcome Holder back four weeks ago, "He was so busy giving people hugs and
shaking hands."
As Covington prepared for Holder's return, the firm continued to represent
clients before the Department of Justice. For instance, Covington negotiated
with the department on behalf of GlaxoSmithKline for a plea agreement in
2010.
Holder's critics charge that he made a career out of institutionalizing "Too
Big to Prosecute" rules within the department. In 1999, as a deputy attorney
general, Holder authored a memo arguing that officials should consider the
"collateral consequences" when prosecuting corporate crimes. In 2012,
Holder's enforcement chief, Lanny Breuer, admitted during a speech to the
New York City Bar Association that the department may go easy on certain
corporate criminals if they believe prosecutions may disrupt financial
markets or cause layoffs. "In some cases, the health of an industry or the
markets are a real factor," Breuer said.
Rather than face accountability for their failures, the incentive structure
of modern Washington is designed to reward both men. Breuer left the
department in 2013 to rejoin Covington. Holder is set to become among the
highest-earning partners at the firm, with compensation in the seven or
eight figures.
(This post is from our blog: Unofficial Sources.)
Photo: Chip Somodevilla/Getty
