Cuomo Pushes Back Hard Against Bharara From Behind The Scenes

US Attorney for the Southern District Preet Bharara warned Governor Andrew M. Cuomo to stop tampering with potential witnesses in his Moreland Commission investigation a couple of weeks ago, but that hasn't stopped Cuomo from meddling in the matter.

After the Bharara warning, Cuomo said the U.S. Attorney had made it clear that “on going public dialogue is not helpful to his investigation,” and the governor would “have no additional comment on the matter.”

But neither the Bharara warning to stop meddling with witnesses nor Cuomo's assertion that he would make no more public statements about the Moreland investigation are keeping Cuomo and his camp from manipulating and finagling things behind the scenes.

To wit, take a look at the events of the last three days.

On Thursday we got Charlie Rangel, a politician with some links to Cuomo (and ethics issues of his own) attacking Bharara in public statements:

Gov. Andrew Cuomo at least has Congressman Charles Rangel in his corner.

Mr. Rangel, who secured Mr. Cuomo’s endorsement during his most recent re-election bid, offered a defense of Mr. Cuomo’s handling of an anti-corruption commission he created, even questioning the validity of a federal investigation now aimed at the governor.

“I know that most of the attacks are coming from the New York Post,” Mr. Rangel told Observer today, claiming the right-leaning tabloid (and not the New York Times, which ran a front page story about Mr. Cuomo’s Moreland Commission) was fermenting the controversy. “We have a commission where the commissioners said that no one interfered with them and we have the New York Post saying they don’t believe them.”

“The fact is, no prosecutor should be critical of anybody until the case goes before the grand jury. That’s our system of government and I’d really hope he’d have a thorough investigation of the whole thing. That’s the only way fair-minded people should look at issues like that,” Mr. Rangel continued, speaking of U.S. Attorney Preet Bharara. “There’s certain people who make the accusations just to make a headline in the newspaper.”

OK, doesn't take a genius to see Cuomo's fingerprints on this attack - Rangel, who struggled for endorsements in his re-election bid, is paying back Cuomo, who did endorse him (albeit late) in the cycle.

And the line of attack is a pattern we're going to see going forward - Preet's an out-of-control cowboy looking to fatten his press clippings scrapbook (“There’s certain people who make the accusations just to make a headline in the newspaper.”)

The Wall Street Journal, a newspaper that often serves as an unofficial public relations outfit for Andrew Cuomo and the Cuomo administration, published an article last night that continues this line of attack:

Manhattan U.S. Attorney Preet Bharara has charted a confrontational and independent course in his investigation of New York Gov. Andrew Cuomo's disbanding of an anticorruption commission, former prosecutors and political observers said.

Mr. Bharara has launched a broad inquiry, including publicly criticizing the governor's dissolution of the commission and using tough prosecutorial tactics, all without seeking approval from the Justice Department in Washington, according to people familiar with the matter.

Prosecutors customarily inform the department of matters of national importance, current and former federal officials say, though the Manhattan U.S. attorney's office, arguably the most powerful of the 93 nationwide, is given more free rein.

George J. Terwilliger, a top Justice official in the Ronald Reagan and George H.W. Bush administrations, and now a partner at Morgan Lewis & Bockius LLP, said prosecutors tread on dangerous terrain when cases spill into public view. "The normal way federal prosecutors operate is they shut up until they put up," he said, speaking generally and not about Mr. Bharara.

Here we see a doubling down on the line of attack that Preet's a cowboy acting on his own - the WSJ report says he has launched a "broad inquiry" (i.e., a "fishing expedition"), taken the extraordinary measure of publicly criticizing one of the potential targets in the investigation (i.e., he should "shut up until he puts up") and hasn't had the Obama White House or Department of Justice sign off on his investigation ("all without seeking approval from the Justice Department in Washington.")

The Journal writer gets some off-the-record attacks from "former federal prosecutors" to back up this line of attack - Bharara's an out-of-control cowboy out on his own:

A key staffer in congressional investigations of the George W. Bush administration's firings of U.S. attorneys, Mr. Bharara has steered an independent path since he was nominated by President Barack Obama in 2009. But his approach to the Cuomo administration investigation has been unusually confrontational, former prosecutors say.

Mr. Bharara's tactics have included criticizing Mr. Cuomo during a radio interview in April for agreeing to disband the commission in exchange for lawmakers passing the ethics-overhaul bill that he sought. Mr. Cuomo has defended the deal.

Mr. Bharara also issued preservation notices to state lawmakers and to the governor's office, instructing them to retain all records and documents related to the Moreland Commission. Generally, former federal prosecutors said, U.S. attorneys simply issue subpoenas.

He took what former prosecutors called a rare step when he sent letters to Mr. Cuomo's office and the commission, saying the administration's contact with commissioners could represent witness tampering or obstruction of justice. Prosecutors generally don't give warning that actions could constitute crimes in the midst of continuing investigations.

There we see the pattern in the line of attack again:

Bharara's taken an "independent path" that is "unusually confrontational" - issuing preservation notices instead of subpoenas, going on the radio to criticize the shutting down of the Moreland Commission, sending warning to Cuomo's office and the commission over potential tampering and obstruction instead of just issuing indictments.

The former federal prosecutors are all off-the-record, of course, but with Cuomo's having been the state attorney general, it's not much of a stretch to see his fingerprints are behind these off-the-record attacks on Bharara as well.

The WSJ writer than picks up Rangel line of attack, that Bharara's investigation is all political, just Preet looking to advance his own career:

Mr. Bharara is employing these tactics as he grapples with Mr. Cuomo, a former state attorney general whose own investigations damaged former Gov. Eliot Spitzer's standing. Until now, Mr. Cuomo had been building a record as a corruption fighter.

Federal prosecutors in the New York City area have a history of using the U.S. attorney's office to launch political careers, including Rudy Giuliani in Manhattan and Chris Christie in New Jersey. Mr. Bharara has publicly denied having any political ambitions, though his investigations of insider trading have earned him national attention.

We do get a friend of Bharara's to back him up at the end of the WSJ piece:

Mr. Bharara's supporters said his prosecutions are apolitical. 

"Preet doesn't care about his win-loss record," said Viet Dinh, an assistant attorney general in the George W. Bush administration and close friend of Mr. Bharara. "What he really cares about are what the facts are and the integrity of his investigation."

But the overall gist of the article is, Bharara's an out-of-control cowboy conducting a criminal investigation for his own political ends and acting in ways that other federal prosecutors who aren't out-of-control would act.

The day before, the same WSJ writer co-wrote a piece that questioned what Bharara really had in this investigation:

Mr. Bharara's probe into the actions of the Cuomo administration with respect to interfering with the commission, dissolving it and the aftermath of that decision is now a top focus of prosecutors, according to people familiar with the probe.

While it is unclear whether he could make a criminal case on that front, Mr. Bharara views the enterprise as a victory even if it doesn't ultimately lead to charges against anyone in the administration, according to a person briefed on the investigation. If his office brings one case that the Moreland Commission failed to refer for prosecution, the investigation will be worth it, the person said.

This article seemed to suggest, as much of the conventional wisdom around the investigation has, that Bharara will not be able to bring any criminal charges against Cuomo or anybody else in the Cuomo administration for witness tampering, obstruction of justice or conspiracy to cover-up crimes, but will have to settle for maybe bringing a couple more cases against lawmakers.

Again, the thrust of the attack - Bharara is out-of-line, out-of-control, and fishing for something he's never going to get.

Bharara may have warned Cuomo to stay out of the Moreland matter, but that hasn't stopped Cuomo and his camp from trying to engineer the narrative of the investigation from behind the scenes.

Seems pretty clear to me that Cuomo is working very, very hard to undercut Bharara and damage both the federal prosecutor himself and the investigation he is conducting with both the public and the media.

It remains to be seen if that kind of attack will work as Bharara continues his investigation and the grand jury he has convened continues to hear testimony and evidence.

But what we don't need to wait to see is Cuomo's desperate maneuvering to try and save himself - if you're watching closely, that's all over the news these past three days.

Questions For The DOJ and FBI In The Bloomberg Spying Scandal

From a comment in an earlier post:

Were any civil laws broken with the unauthorized surveillance?

Did this activity violate any wiretap laws?

Were any criminal laws violated?

Was the information gathered for the use of insider traders?

How long has this unauthorized surveillance taken place?

Who knew about this surveillance using the Bloomberg monitors?

Is their a culture of illegal snooping taken place at Bloomberg ?

What other unauthorized surveillance capabilities does Bloomberg news have at its disposal?

Have any records or documents been destroyed?

Is Bloomberg like Murdoch unfit to manage a major corporation?

Were any financial losses incurred by those who were spied upon?

And from another commenter:

Federal Wiretap Laws prohibit the interception of voice, wire or electronic communications. There are criminal penalties for wiretapping that is not authorized by a court order. It seems that the Bloomberg employee surveillance falls within the purview of Federal wiretap laws since the Bloomberg employees were engaged in the unauthorized interception of electronic/wire data and communications.

More clients are asking questions about what Bloomberg reporters were doing:

With new concerns emerging about practices at its news division, Bloomberg L.P., the sprawling financial services company founded by Michael R. Bloomberg, scrambled to shield its lucrative terminal business and appease nervous customers.

The report on Friday that a Bloomberg reporter had used the company's financial data terminals to monitor a Goldman Sachs partner's logon activity has set off a ripple effect of inquiries from other worried subscribers, including JPMorgan Chase, Deutsche Bank, the Federal Reserve, Treasury Department and the European Central Bank.

The revelations now stretch back to 2011, when UBS complained after a Bloomberg Television host alluded on air to his monitoring of the London-based rogue UBS trader Kweku Adoboli's terminal logon information to confirm his employment status at the bank. Then, last summer, executives at JPMorgan Chase questioned Bloomberg reporters' techniques after they were among the first to report on the trader Bruno Iksil, nicknamed the London Whale. ''I'm unaware of any record of a complaint from either bank on this issue,'' said Ty Trippet, a Bloomberg spokesman. The fallout continued on Monday. Bloomberg has now received roughly 20 inquiries about whether reporting practices violated the company's policies about getting access to subscriber information, including one from Bank of America. The bank also contacted Bloomberg to raise questions about the security of its employees' private information, people briefed on the matter said.

CNBC reports Bloomberg may have some legal problems over this:

The company also began to discuss possible legal ramifications. While people close to the company doubted that clients would threaten legal action, Bloomberg hired outside lawyers on Friday to steer it through the crisis. The lawyers, according to the people close to the company, have assured Bloomberg that there is no basis for a lawsuit, since the subscribers did not suffer any damages and the information obtained was more trivial than confidential. An early analysis conducted by Bloomberg further suggested that reporters rarely, if ever, published stories based solely on information gleaned from the terminals.

The people close to the company also noted that Bloomberg's sales agreement with subscribers disclosed that company employees had access to certain private information. While the agreement did not specify that Bloomberg News reporters were among those with access, the journalists are technically employees of Bloomberg L.P.

But some bank executives said the snooping could have violated a common confidentiality clause in their contracts with Bloomberg. In the clause, Bloomberg promises to keep large swaths of information ''in confidence,'' meaning that it won't be shared with ''third parties.''

One Wall Street executive, who asked not to be named because of a firm policy prohibiting employees from speaking to the media, said his company was involved in a sensitive situation last year and he now wondered if reporters were monitoring his activities.

''Looking to see who is in or not is sleazy but hardly earthshaking,'' he said. ''But if they knew what stocks I was clicking on and what yields I was looking at, that is spying.'' (Bloomberg officials have repeatedly said the functions used by reporters did not provide information on specific trades or securities.)

Another top Wall Street executive, who also asked not to be named, said although he did not know if his firm would take action, he planned to raise this issue with his board. ''I don't like it when something happens that hasn't occurred to me, and this had not occurred to me,'' he said. ''I feel violated.''

Of course the Obama DOJ may not be able to investigate the Bloomberg spying allegations because they are too busy spying on journalists themselves, as the Associated Press alleges.

NY Post Dragged Into News Corp. Bribery Scandal, Murdoch Faces FCPA Case Against Him

The NY Times published a piece about News Corporation and Rupert Murdoch yesterday that said, essentially, Murdoch and his company had their mojo back, the hacking scandal was behind them and the company was out to buy new properties.

That was yesterday.

This was today:

The new round of criminal charges brought in the UK against former senior News International editors has once raised again the prospect that Rupert Murdoch's New York-based parent company may be prosecuted under US anti-bribery laws, and complicates the rehabilitation of his son James as a possible successor to lead the global media empire.

The charges brought against Rebekah Brooks, who ran Murdoch's newspaper holdings in Britain, Andy Coulson, former editor of the now defunct News of the World, and two other former News International employees exposes the parent News Corporation to possible action under the Foreign Corrupt Practices Act. The FCPA exists to prosecute US-domiciled companies for acts of bribery and corruption that they might commit abroad.

An official of the British ministry of defence, Bettina Jordan Barber, also faces trial for allegedly receiving £100,000 from Murdoch's tabloid newspapers for information that led to a series of published stories. The allegation that money passed hands clearly falls within the legal remit of the FCPA.

Mike Koehler, professor of law at Southern Illinois school of law and author of the blog fcaprofessor.com, said the charges "would be hard for the Department of Justice and the Securities and Exchange Commission to ignore. We have been hearing allegations for a year and a half now, now we clearly have charges against high ranking officials at a foreign subsidiary," he said.

The new charges, and the allegation of bribery of a military official, come as a setback for News Corporation at a very sensitive time for the company. The media giant is preparing to split itself in two, separating the TV and broadcasting arm from the scandal-hit newspaper and publishing division.

The developments also bring to a crashing halt the recent perception in America that News Corporation had begun to recover its confidence after months on the defensive as a result of the phone-hacking scandal.

...

 The new charges will increase pressure on the company. Koehler said US authorities would be looking to see how high up the chain of command the bribery scandal reached. "The question will be what did James know and when did he know it," he said. Ultimately he predicted News Corp would reach a settlement with the Justice Department rather than go to trial, but he said that News Corp faced some uncomfortable investigations in the coming months.

The FCPA has two main components, one that relates to the bribing of foreign officials and another that relates to books and record keeping. It is often the latter that causes companies the biggest headaches. Characterising a bribe as "miscellaneous expense" is a serious offence.

"This latest news is an escalation of the FCPA case," said Koehler. But he said he expected the case could still take some years to be resolved.

 In addition to that FCPA problem for Murdoch, the Daily Beast's Peter Jukes alleges News Corporation employees may have either bribed a U.S. military officials or known that News International employees in Britain had bribed said officials and used the information obtained through the illegal payments in the NY Post:

Did News Corp. Illegally Purchase Saddam Hussein Photos from U.S. Officials? 

Dozens of employees have already been arrested for allegedly paying off British officials—and sources now tell Peter Jukes that U.S. agents may also be implicated, as questions arise over how they scored controversial photos of Saddam Hussein.

 While the scandal that shuttered Britain’s best-selling tabloid, News of the World, has gone quiet ahead of next year’s phone-hacking trials, Britain’s parallel investigation into what has been described as a “culture of illegal payments” to public officials at sister daily The Sun has shifted into high gear. And this week Scotland Yard handed over several new files from its investigations into the alleged bribery to public prosecutors in the U.K., for a decision over whether to press formal charges against some of the 54 individuals arrested so far in the controversy.

The allegations that News Corp., which owns The Sun, made illegal payments to British defense personnel, police officers, and health workers in exchange for confidential information sparked widespread public outcry, which triggered investigations by the U.S. Department of Justice, Federal Bureau of Investigation, and Securities and Exchange Commission in the summer of 2011. Under the U.S. Foreign Corrupt Practices Act, American-owned companies who suborn foreign officials can incur large fines and possible prison sentences for senior executives. These investigations typically take two years to complete.

But The Daily Beast has learned that The Sun may have made another potentially corrupt payment, to a U.S. official on American soil.

On Friday, May 20, 2005, two Murdoch-owned tabloids, The Sun and the New York Post, ran front-page pictures of Saddam Hussein in his underwear, and inside the papers, more photos of the former Iraqi leader in U.S. captivity. According to Fox News, the Multinational Forces spokeswoman in Baghdad said the images could have been taken between January and April 2004, “based on the background of the photos and appearance of him.” Given the context of the Abu Ghraib revelations and ongoing, violent insurgency in Iraq at the time, multiple sources reported that President George W. Bush was upset about the leak. “There will be a thorough investigation into this instance,” deputy White House spokesman Trent Duffy told The New York Times, “[The president] wants to get to the bottom of it immediately.”

No investigation has ever found the source of the leaked pictures, but buried in the contemporary reports is a glaring admission. The Sun’s then-managing editor, Graham Dudman, told the Associated Press that his newspaper paid “a small sum” for the photos. Dudman would not elaborate “except to say it was more than 500 British pounds, which is about $900.”

Sources close to the story have told The Daily Beast that the payment was significantly greater, and was made to a U.S. official on American soil. Meanwhile, Scotland Yard detectives arrested Dudman in January of this year on suspicion of making corrupt payments involving British officials. He has yet to be charged with any criminal offense in the U.K.

(Incidentally, in 2005, Dudman said in a statement, “The Sun obtained [the Hussein] pictures by professional journalistic methods, and by any standards this is an extraordinary scoop as shown by the way it has been followed in the world’s media.”)

In 2004 former News of the World editor and current CNN host Piers Morgan was sacked from the U.K.’s Daily Mirror publishing fake photos of British soldiers abusing Iraqis. Given this history of hoaxes, The Sun would have been very cautious about accepting the Hussein photos in 2005. Expertise in both photographic manipulation and the physical details of Iraqi life would have been required to authenticate the pictures before they were procured. If the procurement and verification of the photos happened on American soil by a News International contact from the U.K., their movements may have been recorded by U.S. immigration. Any financial transaction would also most likely have left an audit trail.

The Sun’s editor in 2005, Rebekah Brooks, appeared to be oblivious to the illegality of paying public officials for stories when she appeared before a House of Commons Select committee a couple of years before. However, in his verbal evidence to the Leveson Inquiry into press ethics, Rupert Murdoch, chair, CEO and head of corporate governance for News Corp., told Lord Justice Leveson under oath in May (PDF), “I believe that paying police officers for information is wrong.”

The problem for Murdoch and the board of News Corp. may be that these pictures were published on both sides of the Atlantic on the same day, perhaps suggesting some kind of advance co-operation between the American parent company and the British News International subsidiary. If there is any evidence that there was prior knowledge by senior executives of payment for the pictures, this could bring the possibility of a U.S. investigation and charges with stiff penalties for illegal payments to public officials.

Last year, New Corp. set up a Management and Standards Committee, tasked with assisting British police with uncovering evidence of corrupt payments. The MSC holds a vast database of internal News International emails and communications, and answers to former U.S. assistant attorney general and News Corp. board member Viet Dinh. It is not known whether any requests for information have been made to the MSC regarding The Sun’s activities in May 2005, when the Hussein pictures were published.

Neither representatives from the FBI nor News Corp. responded to The Daily Beast’s requests for comment on the fresh revelations at the time of publication.

 Yesterday's NY Times story absolving Murdoch and News Corp from any more consequences related to the hacking/bribery scandal seems to have come too early.

I know the Obama administration wants nothing to do with a FCPA case against Murdoch and News Corporation, but as more and more information becomes public about the scandal and the criminal activities of N.I. bribing government officials in Britain, they may have no choice.

And now with the Peter Jukes story dragging the NY Post into the mess, we may yet see some Posties frogmarched into custody.