Lanny Breuer, one of the longest-serving leaders of the U.S. Justice Department’s criminal division, is returning to Covington & Burling to take on a newly created role as vice-chairman of the firm.
Breuer is joining his former firm on Thursday, after nearly four years as the assistant attorney general in charge of the Criminal Division. "As I said to my wife, this will be my third first day at the firm," Breuer said during an interview this week.
In the role of vice chair, Breuer will serve as a liaison for the firm, its clients and government officials. He’ll resume his former practice in white-collar criminal defense and civil litigation, representing both companies and individuals. "In that way, those are some things I did for the division," Breuer said. "I do think there will be a balance and I’ll have to figure it out."
Timothy Hester, chair of the firm’s management and executive committees, said the firm had for some time considered adding someone to work closely with him on building relationships with clients and recruiting attorneys.
"As we thought about the opportunity for getting Lanny back, I felt that one of the really exciting ideas here was that he could work very closely with me to help reach out to the world and to present the firm to clients and recruits alike," Hester said. "He showed at the Justice Department how good he was at this and I think it will help us significantly."
His new position will keep Breuer busy, since conflicts—based on his work at the Justice Department—could limit the matters at Covington he is allowed to handle. He is not barred from appearing or communicating with other agencies.
"I can’t work on anything that was before the Department of Justice [during my tenure]," Breuer said. "And I can’t physically appear before nor have contact with the department. If it’s a new matter, I can be overtly involved."
Looking back on his time at DOJ, Breuer said the highlights included the creation of the money-laundering and bank-secrecy unit; the billions of dollars in fines and penalties recovered from major banks and oil services companies; the Megaupload copyright case; and the extradition and prosecution of Mexican cartel leaders.
"I think the Criminal Division has never been greater," Breuer said. "And I think it is a fundamentally different place today than when it was four years ago." The division had become the "center of criminal law enforcement, both in prosecuting cases and in policy making."
While at DOJ, Breuer was not without critics. Congressional Republicans, for instance, hounded him over Operation Fast and Furious, the federal gun sting in which agents were accused of allowing firearms to cross unabated from the United States into Mexico. Other critics blasted Breuer over the lack of high-profile criminal prosecutions of Wall Street officials and major banks stemming from the financial collapse.
"It is clearly a problem if institutions are very large, but I think the Criminal Division proved that you can prosecute financial institutions," Breuer said during the interview. "I think it’s very important for the government and for regulators to hold both companies and individuals accountable. The division was doing that. That is why we had a record number of white-collar cases against individuals, and I think regulators need to do it."
Breuer said he was particularly proud of the $1.25 billion forfeiture agreement between HSBC Holdings PLC and the Justice Department. He also pointed to the London Interbank Offered Rate – LIBOR – scandal, for which DOJ has reached deals with Barclays Bank PLC, UBS A.G. and The Royal Bank of Scotland. Despite the victories, Breuer said that challenges persist when prosecuting big banks.
Since Breuer left for the DOJ in 2009, Covington has handled several high-profile white-collar matters. In 2011, the firm represented GlaxoSmithKline PLC in a $40.75 million settlement related to the manufacturing of drugs in the company’s Cidra, Puerto Rico, factory. That same year, Wells Fargo & Co. agreed to an $85 million settlement with the Federal Reserve Board for allegedly pushing qualified borrowers into subprime mortgage loans. The bank did not admit guilt.
"We have done extremely well as a firm in the white-collar practice in the time Lanny has been away, but we see his return as vaulting us to a new level in terms of sophistication of what we can bring to bear in support of client matters," Hester said.