Are AG Kroger's Hardball Tactics Over the Line?

Dan Petegorsky

This morning “friend of the blog” Jack Roberts has an op-ed in the Oregonian questioning Attorney General Kroger’s use of hardball prosecutorial tactics. While the first of Jack’s examples have been widely condemned, I found his last one a bit jarring: Kroger’s prosecution of Lea Fastow in working to convict her husband Andy Fastow, the mastermind of ENRON’s criminal enterprise.

Interrogating 9-year olds and threatening Energy Department staffers in the manner Jack describes is indeed disturbing. I’m not sure, though, that I share a similar sense of outrage at the strategy of the Fastow prosecutions and what they represent. Jack cites a quote (from Kroger’s book) where a colleague says, “Let's see how Fastow feels about going to trial when his children are in ... foster care," a gloating that leaves even Kroger feeling squeamish. But in the general scheme of things it’s hard to imagine a class of criminals whose prosecution and punishment over the last decade have been as lax as the super-wealthy financial crooks of whom Fastow is a very rare exception; while he went to jail, most haven’t even faced charges, despite the almost unimaginable scale of loss and devastation they’ve left in their wake.

You want suffering kids? Try watching Sunday’s 60 Minutes episode on the burgeoning ranks of children left homeless thanks to the wave of foreclosures that are the direct consequence of Wall Street’s reign of plunder. While the leading perpetrators continue to collect multi-million dollar bonuses, their financial fraud schemes have resulted in millions of families losing jobs, homes, life savings, etc. Don’t their kids count?

In respect to financial crimes state prosecutors have had to stand in for no-show Federal prosecutors and regulators – and if anything they’ve been too lenient. While AGs like Kroger took the lead in investigating the foreclosure fraud scandal, for example, recent release of draft settlement documents seems to indicate that the perpetrators may escape criminal prosecution entirely, and be forced to pay only minimal financial penalties.

Bottom line: Uphold strong ethical standards in prosecutorial behavior? Most definitely. But don’t for a second back away from aggressive prosecution of white-collar crime -- and that’s a game of hardball, not softball, that should be completely in line with Oregon values.

Update: The Oregonian has published this response to Roberts' op-ed from AG Kroger online.

By Dan Petegorsky
March 10, 2011

  • 11:16 a.m.
    Mar 10, '11
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    It's nice to see a AG anywhere doing anything about a oil or energy company's crimes.

    It's as though more than half the states AG is suing to repeal the Affordable Health Care Act. Not as though we have a problem in America that's not ideologically in line with the John Birch Society..

  •
    12:51 p.m.
    Mar 10, '11
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    Sheesh Jack - isn't it a little early to start bashing ahead of the 2012 elections? Planning another run for Guv?

    As a former school person who witnessed interview after interview of students in three different states - at no time would the word interrogate describe those interviews.

  •
    2:39 p.m.
    Mar 10, '11
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    Interviews can be lengthy depending on the age of the student.

  •
    3:42 p.m.
    Mar 10, '11
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    I posted this under Robert's column on OregonLive:

    I am very concerned about government breaches of civil liberties and abusive interrogation tactics. I am also very concerned about sexual abuse of children. Robert's column is not about the case [Camreta v. Greene] - it is about John Kroger. The relevance to the case is in Kroger's argument before the US Supreme Court on the question of interviewing the child without a warrant. As I noted above, the "U.S. government, 40 other states, and various law enforcement and child-advocacy groups, argue that requiring a warrant in such cases would undermine a proven method of investigating child abuse. This is what Kroger defended before the court. It is the majority position of those who work with the problem of sexual abuse throughout the nation, including Oregon.

    Robert's column appears to be part of a larger campaign to paint Kroger as an outsider. That approach was part of the unsuccessful campaign to defeat him for Attorney General. I do not doubt it would be part of future opposition to Kroger's reelection. Perhaps Jack is considering a run himself.


    • 3:54 p.m.
      Mar 10, '11
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      Yes, Tom,many government agencies want to be able to continue their current practice, but 18 amicus briefs have been filed by groups supporting the 9th Circuit's decision and opposing Kroger's position, including the NYU Law School Family Law Clinic, the Child Advocacy Clinic, the Legal Aid Society, the Children's Law Section of the State Bar of Michigan and the Battered Women's Resource Center.

      This obviously is a much more complex issue than I was able to fully address as one part of my 600-word column. But I don't think civil liberties issues should reduced to which party is accused of violating them, of is engaged in challenging the violation.

      •
        4:15 p.m.
        Mar 10, '11
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        So, given the divided views on the practice of interviewing minors without a warrant, how does Kroger's argument on Camreta v. Greene support your suggestion that he represents New York, not Oregon values? NYU Law School's position does not help your contention, by the way.

        •
          9:53 p.m.
          Mar 10, '11
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          Since one of my law degrees if from New York University, I hope you don't mind if I dissent from your opinion.

          The answer to your initial question is context.

          •
            11:56 a.m.
            Mar 11, '11
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            True, context is important. The context is the Kroger is guilty of AG'ing while Democratic (and going after corporate white collar criminals, i.e. the GOP power base).

            AGs stressing diversion programs for minor property crimes like stealing $20 committed by a meth head = "soft on crime" in GOP-speak.

            AGs going after white collar criminals who ripped all of us off to the tune of hundreds of millions = out-of-control bully in GOP-speak.

    •
      11:51 a.m.
      Mar 11, '11
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      QWell said. While Jack Roberts may not be considering a run for office, do not doubt for a second this is about talking out of both sides of the mouth from the right.

      If Kroger's office was not aggressively looking into potential child abuse cases, the right would be screaming Kroger was a bleeding-heart "soft on crime" liberal who is protecting perverts.

      Typical heads I win, tails you lose game the GOP always plays.

      •
        1:48 p.m.
        Mar 11, '11
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        Once again, Mitchell, you don't even try to understand what you're talking about. Kroger and the DOJ didn't investigate this claim of child abuse. The only reason the DOJ is in this at all is based on the complaint filed after the fact.

        Contrary to your world view, everything is not about Democrats and Republicans.

  •
    4:23 p.m.
    Mar 10, '11
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    Good op-ed Mr. R.

    Doesn't anyone see the link between AG Kroger supporting the right of Detectives to interrogate 9 year olds for two hours, AAG Riddell's apparent bullying and ethical violations, and AG Kroger's approach to law enforcement?

    Here is what I'm looking for:

    Will AAG Riddell be investigated and, if appropriate, disciplined by the AG's office. (Paging Dr. Kroger for a proctology). Or will AG Kroger "defer to the Oregon State Bar" for the inevitable investigation.

    and

    Will the AG agree that appropriate safeguards be imposed on any interrogation of minors when the parent has not given consent. By possibly proposing legislation that limits police powers in these situations and/or requires a professional third party to be in attendance representing the child. And possibly requiring video taping of these interviews.

    •
      11:44 a.m.
      Mar 12, '11
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      Robert's argument is so contrived that it avoidable to consider political motives. And, yes, many Democrats have not been good on civil liberties and due process.

      A child advocate present during such interviews would be a good idea, but this was not the question before the Supreme Court. As such, it has no relevance to Robert's characterization of Kroger, which was clearly unfounded.

      •
        4:54 p.m.
        Mar 12, '11
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        I was talking about Jack and his assertion that he is concerned about due process and the examples presented. I didn't make any characterizations about Kroger at all, my other comments were directed at the justice system in general.

        As for child advocates not being on point, I was agreeing with Kari and you might want to take that up with him since he mentioned it first.

        I'm truly sorry if I wandered too far afield and wasted your valuable time reading my post. Set up a paypal account and I'll refund the .02 ;)

  •
    7:58 p.m.
    Mar 11, '11
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    If you are a poor, under-employed and under-educated the tactics described in the op-ed piece are pretty much what you'd expect from the criminal justice system, down to the threat of having your kids land in foster care or TPRed. It seems less about Oregon values than that the targets in these cases were none of the above.


    • 7:23 a.m.
      Mar 12, '11
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      Ron - while you may be correct generally speaking, Andy Fastow was an ENRON corporate executive who went to jail for having engineered a financial fraud scheme that enriched himself and others to the tune of tens of millions of dollars.

      In other words, the Fastow prosecution a rare example of a white collar criminal who was brought to justice, in contrast to the vast majority who never serve time, while those committing crimes whose financial impact is a tiny, tiny fraction of that populate our prisons.


      • 9:55 a.m.
        Mar 12, '11
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        Dan, I understand you point that it is very hard to have sympathy for Enron defendents. But, if you read Kroger's book, he actually talks how his qualms in that case were partly calmed by remembering that he personally was never bothered by using these tactics against underworld criminals.

        That's the definition of a slippery slope. You did this in case A, so why not B. If B, then why not C. Pretty soon, your using it against everyone.

        The real question, in my mind, isn't whether you think the folks at Enron deserved this kind of treatment. The better question is who thinks you do.

        •
          11:44 a.m.
          Mar 12, '11
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          Fair enough, Jack - I haven't read Kroger's book. So let me ask you, then:

          If I recall from Kurt Eichenwald's and Bethany McLean's books on ENRON, Lea (and other members of Fastow's family?) were not just casual bystanders/beneficiaries of his crimes, but intimately involved: they acted willfully to set up/disguise the dummy entities he used to conceal suspect deals, hold assets and liabilities off ENRON's balance sheets, hide income from the IRS, etc.

          If that's the case, and his family was part and parcel of a criminal enterprise responsible for theft/fraud reaching to, what, hundreds of millions of dollars, where do you think the prosecutors' tactics crossed the line?

          In the end, as I recall, the Fastows were allowed to serve their time successively instead of concurrently, precisely so their children did not end up in set adrift. Am I mistaken about that? If not, then I'd hope that kind of consideration would be extended to less fortunate/well-off families.

          •
            12:35 p.m.
            Mar 12, '11
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            Let me quote from Kroger's book:

            "When Andrew Weissmann indicted Fastow in late 2000 . . . he did not charge Fastow's wife or the other minor participants in the scheme. Lea Fastow had knowingly signed the Fastow's fradulent joint tax returns, but it was clear the moving force behind the crime was her husband. Morevoer, tax evasion cases of this size are almost never chaged criminally. Instead, they are typically settled civilly by the IRS, with tax cheats paying back taxes plus a fine. . . .

            "Still, something about the idea of indicting Lea Fastow really troubled me. As Leslie and the other prosecutors talked, I suddenly recognized what it was--the kids. The Fastows had two small sons. If we indicted Andy and Lea, their kids faced the prospect of gowing up with both parents in jail. What we were proposing, in essence, was to take those two kids hostage, a very ugly exercise of brute government power. One of my fellow prosecutors made this clear at our meeting. He said, 'Let's see how Fastow feels about going to trial when his children are in f***ing foster care. . . .

            "I expected the press would go beserk. In fact, no one cared. Enron was such a symbol of evil we could probably have shipped Lea off to Guantanomo and no one would have objected. . . .

            "The Lea Fastow strategy worked precisely as Leslie hoped. Though it took months to work out, Andy Fastow pleaded guilty in January 2004 and agreed to cooperate against Jeff Skilling and Ken Law. In return we let his wife plead guilty to a misdemeanor, not a felony. We also agreed that she and Andy could serve their prison terms one at a time, so their kids would never be with a parent. Lea Fastow ultimately served one year in prison for tax evasion. She would never have been sentenced at all if her husband had seen the light earlier and agreed to help us before we had to indict her."

            Let me point out, Kroger was a marginal player in all this and had no decisionmaking authority. I cite it because his book is an excellent discussion of the moral issues involving these decisions.

            I'm just questioning whether he learned the right lessons from them.


            • 1:07 p.m.
              Mar 13, '11
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              The last quoted paragraph above says "so their kids would never be with a parent" when the context makes clear that it must say "so their kids would never be WITHOUT a parent." This must be a retyped passage and I'm sorry, but I'll wait until my copy of the book comes and I can read the original. It's on hold at the library. So far, to me Roberts' interpretation of the quoted passages makes no sense.

  •
    12:58 p.m.
    Mar 12, '11
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    Thanks for the quote, Jack. So what's the lesson in the ENRON case?

    I'm struck by this quote from Kroger: "What we were proposing, in essence, was to take those two kids hostage, a very ugly exercise of brute government power."

    OK - let's take that at face value. But what happens when, as is most often the case now, the very worst of white collar criminals (at I suspect you know that in mind that includes a good number of the CEOs, boards and executives of the 'too big to fail' banks) are not even prosecuted?

    To me, the current danger lies not in the overly zealous prosecution of white collar crime but the absence of prosecution or even effective enforcement. And the consequence of that inaction includes not just threatened but actual harm to millions of families. Call 'em sins of omission rather than commission.

    •
      1:21 p.m.
      Mar 12, '11
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      Boy do I agree with your position, Dan. So few white collar criminals see jail. We now have as the governor of Florida a man who should have had a life sentence. White collar crimes seem so much harder to get convictions and require much more political courage to prosecute. Bankers destroyed millions of lives, but get off not only free, but get to keep their millions while poor schmucks who steal hundreds of dollars get years in jail.


    • 3:11 p.m.
      Mar 12, '11
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      But are the white collar criminals you're complaining are being ignored within the jurisdiction of the Oregon Attorney General?

      My point in Kroger's case is that despite his squeamishness about the tactics used against Fastow he's now defending a 2-hour interrogation of a 9-year-old girl without a parent, lawyer, or any other advocate present.

      He's also authorizing the head of his Criminal Justice Division lying to witnesses and threatening them with criminal prosecution in an effort to get them to implicate their superior.

      The lesson Kroger seems to have learned from the tactics used against Fastow is that they worked. And if they worked against enron, where should you draw the line? And why draw a line at all?

      His statement that they could have sent Lea Fastow to Guantanamo and the public would have approved is chilling in light of recent events.

      •
        5:11 p.m.
        Mar 12, '11
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        Jack - while I think you're finding a sympathetic ear on 9-year old part, I also think you're really reaching on Fastow.

        To your question about jurisdiction, the AGs certainly have jurisdiction in some kinds of cases - as in the 50-state investigation I referred to above. And, as you can tell, at least part of my motivation in this post arose from concern that the settlement now contemplated appears to let the servicers and others in the securitization chain off the criminal hook.

        I haven’t seen where Kroger stands on this now; but Iowa AG Tom Miller, who is heading up the investigations as said a while back that “We will put people in jail,” later backed off from that position – though I believe that the Financial Crisis Inquiry Commission did refer some cases to the states.

  •
    5:14 p.m.
    Mar 12, '11
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    "My point in Kroger's case is that despite his squeamishness about the tactics used against Fastow he's now defending a 2-hour interrogation of a 9-year-old girl without a parent, lawyer, or any other advocate present."

    You know what, the more I read this sentence the less sense it makes. Let me parse it out: Despite Kroger's hesitance to pursue a little used prosecutorial tactic in one case, he is now currently defending a standard investigative procedure in another. The only thing in common with the two examples is Roberts presumption of Kroger's bad intent, which is thin gruel.

    If Roberts wishes to lead a crusade against prosecutorial injustice, let's start with repealing Prop 11, which allows prosecutors everyday leverage of the sort that he feels are antithetical to Oregon values.


  • 6:32 p.m.
    Mar 12, '11
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    Note: I see that the Oregonian now has an online response from AG Kroger.

  •
    7:17 a.m.
    Mar 13, '11
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    Jack didn't know jack.

    Jack wrote a guest column based on his personal beliefs, drew his own conclusions based on his own assumptions, added his own meaning, didn't collect the factual data and made unfounded allegations.

    Let's hope Jack can be more factually focused in the future.

    •
      7:32 a.m.
      Mar 13, '11
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      Not true, Paulie. Kroger's response asseerted that I made factual errors but didn't actually name one. He simply presented additional his own assertions and interpretations largely rebutting arguments I didn't make.

      In fact, the one clear factual discrepancy he asserted--that the "interview" of the 9-year-old only lasted one hour, not two--is clearly contradicted by the Ninth Circuir court's opinion.

      Partisanship is not proof, Paulie. You need to take your blinders off occasionally and look at reality.

      •
        11:39 p.m.
        Mar 13, '11
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        Maybe YOU need to look at reality, Mr. Roberts. After reading both columns, I learned that this "falsely accused" father you're defending has multiple child victims and is a registered sex offender.

        Jack Roberts said:

        Because, as with the 9-year-old badgered into wrongly accusing her father of sex abuse, these kind of coerced accusations rarely stand up in a fair and impartial legal proceeding.

        John Kroger said:

        The government contends, and the evidence shows, that the child's allegation of sex abuse by her father was not false, as Roberts claims, but true, and that she later recanted under pressure from her mother. All of these facts and supporting evidence are set forth in the record of the case. Roberts fails to note that as a result of the investigation the defendant was convicted of sexually abusing another young child and is now a registered sex offender.

        Yours is the most offensive and disturbing omission I've seen on either BlueOregon or in the Oregonian.

  •
    10:38 a.m.
    Mar 13, '11
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    The arrest was made in 2003, five years before AG Kroger was elected. The investigation was run by Deschutes County, not the Oregon Department of Justice.

    AG Kroger is protecting the right of potential child victims to be interviewed in school, without search warrants, when there is reasonable suspicion that the child is being abused - supported by 40 other states, the National District Attorneys Association, numerous child advocacy organizations and the Obama Justice Department, which appeared at John Kroger's side to help defend the Camreta case.

    Partisanship has nothing to do with my position.

    I acted as a witness to several interviews of students over 32 years. I watched when a 13 year old girl broke down because her mother was forcing her to have sex with men while she recorded the act.

    I listened to child after child in three seperate states report and report and report their abuse.

    If anyone who has experienced the heartbreak of these children, listened to their tales of being groomed, their fear of a parent or abuser, their confused love of the parent or abuser who is hurting them in such a terrible way and seen their tiny light of hope as they struggle to be rescued, you understand.

    I don't give a rip about political parties on this one. I've spent a long career defending the rights of children. Every child advocate out there is cheering for AG Kroger!

    •
      11:14 a.m.
      Mar 13, '11
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      I never claim Kroger, or the DOJ, had anything to do with the Greene investigation. All I said was that he started the week defending the investigation before the Supreme Court and ended the week being on the receiing end of accusations of overreaching in an investigation by his own office.

      You are absolutely wrong about every child advocate cheering for Kroger. The child advocacy community is divided on this issue. There are 18 amicus briefs filed representing 80 different groups on the other side of this.

      Everyone supports investigating child abuse but there are right and wrong ways to do it. That why this is before the Supreme Court.

      I understand that it is Kroger's job to represent the defendent's in this case. But I would have felt a lot better if he'd acknowledged concerns about the way this investigation was handled while arguing that something short of a warrant should be required.

      Instead, he offers as a defense that even though they had to drop the charges against this guy when the accusation against him was recanted, he's guilty anyway. That isn't something Hardy Myers would have done.

  •
    7:40 p.m.
    Mar 13, '11
    (Show?)

    Two additional updates relevant to the foreclosure fraud scandal:

    1) NYTimes financial reporter Gretchen Morgenson has a piece today highly critical of what she sees as a rushed settlement. Morgenson quotes unnamed sources as telling her re. the investigation that "no witnesses had been interviewed and that the coalition had sent out just one request for documents ­ and it has not yet been answered."

    2) Reuters and others are now reporting that the group Anonymous will be releasing internal documents from Bank of America tomorrow morning documenting fraud.


  • 12:39 p.m.
    Mar 14, '11
    (Show?)

    What most bothered me about JR's op-ed (besides leaving out key facts and painting an extremely misleading picture) is that it makes this big leap that since JR doesn't agree with Kroger, than Kroger is un-Oregon. I am a native Oregonian and this nativist argument makes my skin crawl.

    If you disagree with Kroger fine, but keep your disagreements to the facts (which, for JR, appears hard enough). Calling someone Un-American or Un-Oregon is not helpful and reeks of unsavory undertones.

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