Eric Holder, in SF, Talks Big Law, Obama and the Future of Fraud

Eric Holder, in SF, Talks Big Law, Obama and the Future of Fraud Jason Doiy Eric Holder, Covington & Burling

SAN FRANCISCO — It’s hard to pin down where former U.S. Attorney General Eric Holder stands on the encryption debate, but the answer might be on his wrist. On a recent West Coast swing to meet with clients in his renewed role as Covington & Burling partner, Holder was looking the Silicon Valley part in jeans, an open collar and an Apple watch. He sat down to speak with The Recorder about his return to Big Law, criminal justice reform, and DOJ’s increased focus on prosecuting individuals.

What brings you to town? It’s been a swing though California. Was in Los Angeles last night at a dinner and got an award from an organization called Bet Tzedek and am going to see clients here in San Francisco over the next two days.

What do client meetings look like right now for you? You can’t handle matters adverse to the DOJ for [two years after your exit], right? Well I mean you look for building relationships that are going to last long term, and the reality is that the vast majority of things I did in the past and that I think I’ll do in the future with respect to clients don’t necessarily involve the government. They can, but there are a whole other range of legal needs that clients have that don’t involve the government. Now to the extent that there are government issues, government problems, I can help with those. If there’s a perspective that a client wants to get about how the government operates, what they can expect with the Justice Department [and] other regulatory agencies, I can certainly help with that.

Is there an internal investigation component to it? Sure. It’s something that I did in my prior time with Covington and I would expect that that would be a big part of my practice.

You were last a Big Law partner in early 2009. A lot has changed in the world of big law firms since then. What are your observations about the changes in the business of law? That’s one of the reasons I decided to come back to Covington. The change, to me, isn’t as apparent there as it might be at other places. We have new physical space, so it’s a fundamentally different place. We went from tons and tons of wood around and now we have white marble and glass everywhere.

With one office left empty on the 11th floor anticipating your return to the firm, right? Yeah, but people have misinterpreted that as if that office was kept there for the entirety of my time as attorney general. Covington moved into that space, I guess about five or six months before I announced my resignation. To the extent that it was held, it was held for a few months rather than six years or seven years.

Why do you think that Covington hasn’t been as affected by some of the systemic changes in Big Law practice? A lot of it has to do with the culture of the place. Covington is different than the Covington I left in the sense that it has a greater international presence. We have offices now in Korea, China, Brussels, London. We’ve expanded domestically. When I left we only had an office in San Francisco. Now we have Los Angeles, Silicon Valley. The firm is bigger, but I think in terms of culture, the culture hasn’t changed significantly. It’s still a place that values collegiality. There are no things within Covington & Burling called an origination fee. A client comes to the firm, you are truly a client of the firm. You’re not Eric’s client. You’re not Margaret’s client. [Holder's former chief of staff, Margaret Richardson, is of counsel at the firm.] Everybody works on a case to the extent that you are needed. You don’t have fees broken down by what you did to bring a client into the firm. It really is a team approach that I think is better for clients. It keeps cost down. It makes us more efficient. That culture combined with the continued emphasis on pro bono work made me think that the reasons I liked Covington before still exist today.

Criminal justice reform, particularly in sentencing, seems like an issue that’s been close to your heart. Now that you’re a big firm partner and not attorney general, are there positions you can take and things you can advocate for that you couldn’t while you were in office? I served in the administration of a president whose worldview I share. So there was not necessarily a tension between the positions that the White House wanted Justice to take and where I was, just kind of on my own as an individual. On the other hand, now that I’ve left government I’m free to express personal opinions and express things that I could not do as attorney general. I was in Charleston, South Carolina, two weeks ago campaigning for Hillary Clinton after I endorsed her. That’s something I couldn’t have done as attorney general. I’m on Twitter now. And so I send out, much to the chagrin of Margaret and my other former law staff, I send out tweets. Not too often, but if something in the news evokes a reaction from me I can put it on Twitter in 140 characters or less.

The Yates memo has gotten a lot of attention from the enforcement community as well as folks on the defense side of the bar. What do you think it means for the defense side? It’s interesting. I’ve spoken with the deputy attorney general, Sally Yates, about it. As she points out, the process that led to the Yates memo was initiated by me before I left. She said, “To the extent that you have any concerns or criticism, you should understand that you’re the one that started this whole thing.” It seems to me that the effort is good in that it codifies an existing practice in the Justice Department. To have a policy which is generally known in the department in one place so that people have a tangible piece of paper to look at as they’re trying to [make decisions] in investigations and resolutions, that’s a good thing. The part about the memo that gives me some concern is the seeming … I’ve actually heard this from clients. Clients say they are concerned about one of the first points, if not the first point in the memo: that the failure to turn over information that will lead to holding individuals accountable will mean that corporations cannot get cooperation credit. I think there needs to be a little more flexibility dialed into that component.

The all or nothing provision? Yeah. I think you have to look at what efforts did the company go to in the same way we look at compliance programs in deciding whether you should get credit for good or bad compliance programs. I think that a little bit of flexibility there would be appropriate. And with my conversations with the people in the department, I don’t think that they are as inflexible as the language may suggest. So I think over the next few months how those words are interpreted and whether there’s more guidance that comes out, I would expect that you would see that.

The memo’s focus on individual prosecutions seems to address the criticism about the lack of individual prosecutions after the financial crisis? Is that critique of your tenure fair? Those criticisms are unfounded. If you look at the cases that we did bring, the civil resolutions that we did get were record-breaking amounts. $16 billion. $13 billion. Citibank. JPMorgan. The notion that somehow these aggressive assistant U.S. attorneys who are hired to make big cases and desire to make big cases either against individuals or corporate entities and that at the next level up U.S. attorneys in the Southern District of New York, Eastern District of New York and others around the country or that people in the Criminal Division of the Justice Department somehow decided that they weren’t going to bring charges against individuals for whatever reason is inconsistent with why these people joined the department. In many ways for an individual assistant U.S. attorney, bringing a case against a high-level official in the financial industry could be career-defining. The notion that they would turn away from bringing a case like that just runs counter from everything that animates the Justice Department. I was a trial lawyer for 12 years in the public integrity section. The notion that you could build a case against a substantial political figure, or in this case a substantial economic figure, that’s why you join the Justice Department: To hold the people who pull those levers accountable.

We brought numbers of cases against individuals. But the notion that somehow or another that we could have brought more or that we were not aggressive in trying to bring cases against individuals is simply inconsistent with the facts. I put together a group after the president gave us additional funds after the State of the Union in 2012 that met every 10 days to two weeks—people in Washington and other people on the phone and I chair the meeting. I would go to the people on the phone, a U.S. attorney every time, and I’d ask “Where are you with the corporate entity? Where are you with the individuals? If you’re not bringing individual cases, why not?” So this was something that I kept pushing that whole time. The fact that we didn’t bring the number of cases against individuals that some might have liked or that we didn’t bring cases against specific people is not due to lack of effort. It’s an easy thing to write, with all due respect, a newspaper article and say “You should have done this.” It’s a whole other thing to stand up in front of a jury or judge and have to prove beyond a reasonable doubt that the individual who is sitting in the defendant’s chair actually engaged in criminal activity.

Your list of aggressive U.S. attorney’s offices didn’t include the Northern District of California, which has a relatively sleepy reputation among the defense bar here. Is that a fair one? No. I don’t think that’s fair. I just stopped short. I would have said the U.S. attorney in North Carolina. I would have said Chicago. I would have talked about John Walsh in Denver. I would have talked about here in San Francisco, where we farmed out cases where there was a nexus of venue. With regard to those financial cases, there were cases in Los Angeles, San Francisco, Charlotte, Chicago, the New Yorks, New Jersey. So we picked our best U.S. attorneys who had the most experienced staff and assigned cases to them.

Where do you see this office fitting in in the national scheme of things? What sorts of things should they be taking the lead on? Certainly given their proximity to Silicon Valley, cases involving cybercrime. Cybersecurity. Cyberespionage. The protection of the homeland from cyberthreats, be they from state sponsored or increasingly and very worrisome some terrorist organization being behind them. Those are the sorts of things that I think the offices out here, given their proximity to the high-tech sector in this country, that they would take the lead and they would be among the leaders in those cases. New York has a great deal of expertise, I think Southern District and Eastern District of New York and New Jersey have a great deal of expertise in this area given their connections with the financial industry. I would think as a counterweight to the expertise that we’ve got on the East Coast that you would want to have a very competent group of lawyers in the Bay Area.

The encryption debate has been firing up between Silicon Valley on one side and Congress and the administration on the other. I’m curious where you stand personally? There are good issues that are raised on both sides. My hope would be that there would be an ability to reach a compromise. But I would not underestimate or dismiss that which industry has said. The notion of privacy in the 21st century is really important. It’s important that people have the ability to communicate with one another through an encrypted means. You also have to think that if a group’s not going to use iMessage or WhatsApp because there’s a backdoor, a way that government can access the communications, well there are other ways that they can try to disappear into the cyberether. TOR and other places you can go. I also wouldn’t underestimate the ability of the people I served proudly with at the Justice Department and the intelligence [agencies] to work through the issues that have come up as this issue has surfaced. I think ultimately there will be a resolution to this. But I don’t think the arguments are one-sided. That which you’ve heard Tim Cook talk about especially. I’m not dismissive of those concerns at all. The notion of people fighting for democracy in foreign nations being able to communicate with each other in a secure fashion, that’s not an insignificant thing and over the long term could be good for American interest. And if you build in backdoors, it’s a hard thing to think that you can restrict who can access those backdoors.

Is that an Apple watch you’re wearing, by chance? It is. It is.

So I guess you’ve made your decision where you stand as a consumer? I have a nice very traditional, very expensive watch that my wife gave to me, but I got this about two or three months after it came out and I’m so used to it now. I am just used to this. I never wear that traditional watch any more.

Was it a foregone conclusion that you’d be back at Covington? Yeah, I talked to a couple of other firms. After I made my decision to leave and I had that really extended period of time after I announced my intention and when I did leave, it gave me a lot of time to think about what I wanted to do next. I always hoped that the stars would line up and I would end up back at Covington.

Have you spoken with the president lately? Sure. I see him, not as frequently as I used to, but yeah I see him.

How often? Certainly around the holidays. Super Bowl, I’ll probably be up there next Sunday. Our wives are very close, so I speak to him directly and indirectly.

What sorts of things to you chat about? Oh, you know, the second term. But more than that the last year. Criminal justice issues are things that continue to animate the conversations that we have. We might start talking about what the kids are doing. He’s got one that’s applying to college. I’ve got one that’s applying to college. You know how much fun that is. Then it will devolve into something substantive. But a lot of it is about criminal justice reform. The recent thing that he announced on solitary confinement was something we had talked about previously. The desire to get a good bill passed through Congress is something we talk about.

You also talk about legacy stuff. You’re not only looking forward and what you can do to run through the tape this year, but you look back. Every once in a while it’s a little wistful. It doesn’t seem like that long ago that I was in Iowa [working as the chair of Obama's campaign.] The first time I went I remember being in, I think it was Washington, Iowa, and I went to this campaign event at a library and there were four people. There was me and there were four Iowans with their notepads asking serious questions. That was my first trip to Iowa. And I think back to then and to all the things that have happened to me as attorney general and to him as president. It’s been quite a ride.

Contact the reporter at rtodd@alm.com.

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