Assistant Attorney General Lanny Breuer sat down with us last Friday for a wide-ranging discussion on the Criminal Division’s work. We touched on everything from the recent Foreign Corrupt Practices Act sting, to organized crime, to the department’s stock options backdating cases. Below is an edited transcript of the interview.
Main Justice: In the Galleon [insider trading] case there’s been a fight over the admissibility of the wiretaps, and in the FCPA sting, defense lawyers said they are going to argue entrapment. Do these give you cause for concern about using these kinds of tactics — the so-called narcotics-based approach — in white-collar cases?
MJ: The Organized Crime Council has recommended that the [organized crime] strike forces around the country pursue more international cases. How will that transition work, and what types of organizations will the strike forces be targeting?
Breuer: The whole notion is to take a hard, self-critical look at how we approach organized crime. There’s no question that today, in 2010, international organized crime poses an ever-increasing threat. And one would think, as a result of that, we ought to be addressing it. Now, not for a minute do I think that we in Washington ought to be dictating what a U.S. Attorney should do, but we should have an opportunity together to look at what are the options out there and what are the threats. So we have now the IOC-2 [International Organized Crime Intelligence and Operations Center], the fusion center. More than has ever happened before, we’re going to be able to collect and share information. No one is saying to ignore traditional organized crime, but I think there is a sense now more than ever before that we need to be focusing on international organized crime.
That’s what my own [Organized Crime and Racketeering Section] is doing. We’re taking a hard look within the Criminal Division. We may be reorganizing that section, combining it with our Gang Unit and making one very large violent crime section. We haven’t decided yet. It’s very important to get the input of the career lawyers, but we’re taking a look, and at the end of the day, we want to do what will result in the most efficient, effective use of our resources. And in doing that, I would suspect a natural conclusion will be that in years to come we will spend more time focusing on international organized crime. [See "Breuer Mulling Merger of Organized Crime and Gang Sections."]
MJ: In a recent story, we noted that the intelligence community [in its annual threat assessment] for the first time said organized crime groups are collaborating with the governments of Russia and other Eurasian states, and that it seemed to signal a more aggressive stance toward Russia. How is that going to be expressed, and how do you balance diplomatic and law enforcement concerns?
Breuer: What I feel as the AAG for the Criminal Division is that I have a responsibility to the Attorney General, to the administration, the American people to figure out how we can most effectively identify criminal threats for us to go after. It has nothing to do with any nation-state. I’m not at all interested in Russia, per se. But if we face organized crime threats in Russia, or whether we face organized crime threats in Germany, or wherever they are, we are going to identify them, and we are going to try to pursue as aggressively as we can strategies to bring the people who break the law to justice.
MJ: It was my understanding that DOJ was pushing the importance of pursuing Russian and Eurasian criminal groups. Has DOJ been leading the charge on this issue?
Breuer: I don’t want to say we’re “leading the charge.” We are partners with the State Department and everyone else. What I would say is to the degree that there are these issues out there we are pursuing them, and we’re going to keep pursuing them.
MJ: I want to switch to the Fraud Section. I had heard that you were close to hiring a deputy chief for securities fraud. I have a couple of names: [Senior Trial Attorney] Pat Stokes and [Assistant Chief] Kathleen McGovern.
Breuer: They’re both spectacular. My view is that we are going to nurture our talented people and find opportunities for our talented people. I couldn’t be more excited about our Fraud Section, what it’s accomplished in the past years and where it’s going. I think Denis McInerney is going to be a terrific [Fraud Section] chief. He is going to be looking to promote people and bring people from the outside, and there is going to be, frankly, a lot of opportunities for people to take on those positions in the coming months.
MJ: With the turnover in the section, do you foresee any management difficulties?
Breuer: Look, in any job in any place you see natural turnover. We have terrific applicants who are applying for these positions both from within and without. I think the Fraud Section has been a terrific section and, if anything, it’s only going to get stronger.
MJ: On the stock options backdating cases, you have the trial of [former KB Home CEO] Bruce Karatz coming up. I’d been told
that based on problems in some of the earlier cases, the Criminal Division had asked the U.S. Attorneys in California districts [where many of these cases are] to take a step back and reassess. Will the outcome of the Karatz case dictate how the department proceeds with the rest of these cases?
MJ: Do you ask permission before you bring a case in a U.S. Attorney’s district?
Breuer: We work together. I’ve never wanted to go to a party I wasn’t welcomed to. It’s worked out great. I think in my first 10 months on this job, I’ve built strong relationships with both the new U.S. Attorneys from the Obama administration and their predecessors. And I’m going to continue to do that.
MJ: I wanted to ask you about the Stevens case.
Breuer: I’ve heard of it.
Breuer: You better not downplay them.
MJ: Absolutely not. Do you think — I haven’t seen the prosecution numbers from the Public Integrity Section for 2009 — but do you worry that it has made prosecutors flinch? Will we see a drop-off in cases or a difference in the types of cases brought?
Breuer: I think you’ll find in our Public Integrity Section and our Fraud Section and our litigators throughout the Criminal Division are as active as they’ve ever been in history. You know, I’m not such a numbers person, because some of these cases are harder to bring, some cases take longer to bring. But if you walk down the halls of Public Integrity or the halls of Fraud or Child Exploitation, you will never see busier or more motivated lawyers.
Breuer: I won’t get into that one case, but just in general, I think it’s fair to say we have a very, very active partnership and an unprecedented level of cooperation with our foreign counterparts. We more have more active investigations where we are collaboratively working with our counterparts abroad. There are numerous active FCPA and other related cases, and those numbers are only going to grow.
MJ: Thanks so much for your time.
Breuer: I’m delighted to do it.