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July 7, 2010

At least tell him that he is a sacrificial lamb

Department of Justice LRegular readers of this blog are familiar with the technique that federal prosecutors used in the post-Enron era to score easy convictions against businesspeople.

Threaten to go Arthur Andersen on a company, offer to let the company off the hook under a deferred prosecution agreement in return for offering up an executive or two as sacrificial lambs to be prosecuted, and then bludgeon the individualís career, life and family into bits under the sledgehammer of the DOJís prosecutorial power.

Jamie Olis was arguably the first of those sacrificial lambs, and there were plenty in connection with the Enron-related prosecutions. Heck, the DOJ is even getting ready to tee up a re-trial of one such case this September.

But check out this example of DOJ brazenness that Ellen Podgor passes along. The DOJ enters into a deferred prosecution agreement with American Express and, as a part of the deal, has AE enter into a side-letter agreement that, absent the DOJís prior consent, prohibited AE executive Sergio Masvidal from obtaining employment with an AE unit or any company that bought the AE unit.

Given the DOJís heavy-handed approach in such matters, that part of the deferred prosecution agreement is not all that unusual. But one aspect of this particular deal was.

The DOJ didnít bother to disclose the side-letter to either Masvidal or the District Court that approved the deferred prosecution agreement.

Masvidal eventually found out about it when he was denied employment by the company that bought the AE unit. So, he sued the DOJ, which eventually led to the DOJís issuance of the letter below, which admits that the DOJ did not disclose the side-letter to the District Court on purpose and that the DOJís investigation ďdid not reveal any evidence that Mr. Masvidal had committed any criminal offenses or violated any banking regulations.Ē

Now, do you still have any doubts that the same bunch was capable of this and this?



DOJ's Clearing Letter in Sergio Masvidal Case

Posted by Tom at July 7, 2010 12:00 AM |


A secret side letter? Why, it's almost as if the DOJ were somehow *conspiring* against Mr. Masvidal. But surely that's not possible, because they're the good guys. Aren't they? My illusions are shattered.

The real question, though, is why I learn of these things on your site and never in the mainstream media. I suppose it follows the same principle as a newspaper printing a 12-point font correction on page 6 of section B, for a 24-point font "mistake" on page 1 of section A. (I'm ball-parking, here. I haven't subscribed to the Chronicle in years, and I can't even find corrections online. I wish I could say that I'm surprised.)

Posted by: Erin K. Rice Author Profile Page at July 7, 2010 6:42 AM

nice blog and nice posting.

Posted by: Sullolaw2009 Author Profile Page at July 8, 2010 5:32 AM

i think your totally right Sullolaw2009... it is a nice place for commenting

Posted by: Author Profile Page at December 28, 2010 4:36 PM

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