As one of the longest-serving leaders of the U.S. Justice Department’s Criminal Division, Lanny Breuer has overseen some of the highest-profile cases in the country’s history. On March 1, after nearly four years at the helm, Breuer is planning to leave his post.
Breuer, the assistant attorney general of the Criminal Division, said in an interview on Jan. 29 that he hasn’t yet settled on his next steps. Talk of Breuer’s departure from one of DOJ’s most coveted slots has been ongoing in Washington legal circles for a couple of months now.
“I will miss my colleagues. There’s no job like it,” said Breuer, a former Covington & Burling white-collar defense partner in Washington. “I’m sure I will love the private practice again—or whatever it is in the private sector. But this is as great a job as you get.”
Attorney General Eric Holder Jr. said in a statement that Breuer has led one of the “most successful and aggressive” Criminal Divisions in the department’s history. Holder touted the nationwide fight against health care and financial fraud, among other areas, as highlights of Breuer’s leadership since early 2009.
“Throughout his tenure, Lanny has demonstrated an unwavering commitment to the mission of this Department and I want to thank him for his dedication and exceptional service,” Holder said in the statement.
Under Breuer, the department secured a record-setting $4 billion in fines and penalties from BP for its role in the Gulf of Mexico oil disaster—a deal a judge in New Orleans this week approved. Enforcement of anti-foreign bribery laws surged. Major banks turned over billions of dollars to the government through deferred prosecution agreements over violations of anti-money laundering provisions. In one recent case, in December, HSBC Holdings plc agreed to a record $1.25 billion forfeiture agreement with DOJ.
But HSBC and other banks weren’t indicted, Breuer’s critics have charged, creating the impression that the Criminal Division has given a pass to large financial institutions for flagrant criminal violations. On the financial fraud front, the PBS program Frontline recently questioned the lack of charges against top Wall Street executives for their roles in the financial crisis.
And Republican leaders on Capitol Hill have accused Breuer of leadership shortcomings amid the tumult over Operation Fast and Furious, the flawed gun trafficking sting along the southwest border. Representative Darrell Issa, R-Calif., chairman of the House Committee on Oversight and Government Reform, said last week Breuer’s resignation is “long overdue.”
“I think Washington can be a divisive town,” Breuer said. “I recognize that in a job like this you’re going to receive praise and you’re going to receive criticism. Sometimes you may get praise that you don’t deserve. Sometimes you may get criticism you don’t deserve.”
The controversy over Fast and Furious has persisted for more than two years. Republicans in Congress have clamored over whether DOJ officials intentionally misled congressional investigators who were looking into who knew what, and when, about the flawed gun program, which has been implicated in the death of a border patrol agent. In the sting, federal agents allowed firearms to flow into Mexico with the intent to build cases against the leaders of gun trafficking organizations.
Breuer said in the interview that “I didn’t know about the inappropriate tactics. I had no operational role whatsoever. I didn’t even look at the wiretaps. So, that’s clear.” Breuer said the department’s internal watchdog “exonerated” him. (The report said Breuer should have earlier disclosed his knowledge of a similar gun program, which began under a previous administration. Breuer has publicly acknowledged his regret.)
The dispute over Fast and Furious will continue after Breuer leaves. Issa’s committee sued DOJ in Washington’s federal trial court in August to try to squeeze information from the department; the suit seeks enforcement a congressional subpoena. Lawyers for both sides said on Jan. 29 that negotiations “are progressing sufficiently such that the parties believe that further talks may be fruitful.” A judge this week scheduled a hearing for April in Washington.
Breuer insisted that the Criminal Division has been aggressive in the fight against financial fraud. He heralded the successful trial prosecutions of R. Allen Stanford and Lee Farkas as examples of big-name defendants going to prison.
Stanford was sentenced last June to 110 years in prison for his role in one of the country’s largest investment fraud schemes—one in which $7 billion was bilked. A federal trial judge in Alexandria, Va., in June 2011 sentenced Farkas, the former chairman and owner of Taylor, Bean & Whitaker, to a 30-year prison term for a multibillion-dollar fraud scheme that contributed to the collapse of Colonial Bank.
In the face of criticism over the lack of cases brought against Wall Street executives, Breuer has argued that prosecutors have a duty not to bring cases that can’t be proved beyond a reasonable doubt. That’s the argument he’s made publicly. He repeated on the Frontline piece titled “The Untouchables.”
“These are hard cases,” Breuer said in the interview with Daily Report affiliate The National Law Journal. “Never once—not once in four years—have prosecutors come to me endorsing an indictment in one of those cases and I would have said, ‘No.’ Obviously, those cases have proven to be difficult.”
On the global front, Breuer trumpeted the ongoing pursuit of big banks over allegations concerning the manipulation of the London Interbank Offered Rate, or Libor. Criminal deals with two financial institutions—Barclays Bank and UBS AG—included $660 million in penalties.
Enforcement of the Foreign Corrupt Practices Act, the anti-bribery law that dates to 1977, reached new levels in recent years as prosecutors ramped up cases against individuals and secured some of the largest-ever deals with corporations. In November, Breuer was a co-signer, with SEC enforcement director Robert Khuzami, of a much-anticipated guide book addressing the scope of FCPA enforcement. (The SEC announced earlier this month that Khuzami is leaving the agency.)
“I really feel that in the area of corruption, we have changed the dialogue in a substantial way,” Breuer said in the interview. “It’s been our division at the forefront of that. I’m very proud of that.” He added: “By any measure the enforcement of the FCPA and our effort in fighting corruption domestically and internationally has been pretty extraordinary.”
Breuer took over the leadership of the Criminal Division at a time when one of the division’s units—the Public Integrity Section—was under intense criticism for the botched prosecution against the late Alaska Senator Ted Stevens.
Stevens was charged in Washington federal district court with false statements for failing to disclose certain information on financial disclosure forms. The case fell apart amid allegations of prosecutorial misconduct. Stevens’s attorneys at Williams & Connolly accused Public Integrity trial lawyers of hiding favorable evidence. (A special prosecutor’s report, published last March, concluded the government didn’t play fair.)
Breuer oversaw what he called a rebuilding of Public Integrity: new leadership under career prosecutor Jack Smith and a new focus on trial work. The section, Breuer maintains, has rebounded—securing 23 guilty verdicts in 28 trials between 2010 and 2012.
There was, of course, the government’s trial loss in the campaign finance prosecution in North Carolina of former Democratic presidential contender John Edwards. The jury in the Edwards case last May found him not guilty on one count; the panel deadlocked on other counts. After the mistrial, and amid much debate over whether charges should have been brought in the first place, DOJ abandoned the case.
“I think, as I’ve always said to you, I really feel I call them the way I see them,” Breuer said. “Edwards was a challenge, and a jury ultimately decided to hang. There was not anyone who felt that our prosecutors didn’t do an excellent job. They represented the United States admirably. Juries are going to do what they’re going to do.”
Breuer has never been a federal prosecutor, but he says the lack of that experience didn’t impair his ability to run the office—overseeing some 600 lawyers. Breuer’s legal career began in 1985 when he took a job as an assistant district attorney in Manhattan. He joined Covington in 1989, spending eight years there before jumping to the White House to serve as special counsel to President Bill Clinton.
In the interview, Breuer said he managed to “recruit real giants” to his front office and to the sections.
“I had people with varied skill sets—defense lawyers, prosecutors, federal prosecutors, people in violent crime, white collar crime, IP,” Breuer said. “I think we were able to join together in a very collaborative way.”
Breuer said he’s staying in Washington after leaving DOJ. A couple of former colleagues at Covington have expressed their interest in seeing him return to the firm.
“That’s better than the reverse,” Breuer said, laughing. “They have told me of their love. I really haven’t yet talked to anyone in any serious way,” Breuer said. (Covington has declined to comment about Breuer.)
Wherever he ends up, Breuer will be locked out, for a time, from working on some matters. But he said he hasn’t yet figured out the scope of those conflicts. “I think I will be recused, obviously, from matters whatever I do next,” Breuer said. “I don’t know what that is. I really, genuinely have no idea what that is at this point.”
In the meantime, Breuer said he might travel a bit and work on his golf game and “mediocre” tennis game.