Holder’s private law firm ‘a shadow Justice Department’

A while back, someone casually asked former Attorney General Eric Holder if he’d accept a Supreme Court nomination, were President Obama to offer him one. Holder demurred, saying he planned to pursue his private-sector work at his old law firm, Washington, D.C.-based Covington & Burling.

But more information is coming out about Covington & Burling that suggests the high-level firm isn’t your normal private-sector stable of attorneys.

Vice News posted a lengthy feature this week on the law firm’s para-governmental activities, going so far as to call Covington & Burling a “Shadow Justice Department” for its revolving-door ties to the Department of Justice, as well as its apparent role in making sure the government doesn’t go too hard on alleged white-collar criminals.

“[T]he latest data from the DOJ reveals that criminal prosecutions for white-collar crimes are at a 20-year low,” Vice reports. “This decline and the rapid circulation of personnel between Covington and the DOJ has raised questions about the Obama administration’s handling of the banking industry and the 2008 financial crisis.”

Vice goes further:

Under Obama, the DOJ decided not to pursue criminal charges against most of the executives and financial institutions behind the economic collapse, opting instead to impose hefty fines that were paid out by shareholders, not the employees or executives of the banks. In contrast, some 1,100 individuals faced criminal prosecution during the savings and loan crisis of the 1980s, and the heads of several major banks served jail time.

“I’m not accusing anyone of anything specific, but we’re looking at a gigantic built-in conflict of interest revolving in and out of the attorney general’s office,” Ted Kaufman, a former Delaware senator who went on to chair the Congressional Oversight Panel tasked with monitoring the $700 billion bailout of the financial industry during the crisis, told VICE News.

When lawyers shuffle back and forth between prosecuting and defending white-collar criminals, he said, it makes observers wonder “whether the laws are the same for everyone.”

The article cites an interesting infographic from the Public Accountability Initiative, a nonprofit government watchdog. It demonstrates an incredible amount of overlap between current and former DOJ officials and C&B personnel.

The “Shadow Justice Department” epithet is partly a reference to the firm’s de facto role as a training ground for future DOJ staffers, but it’s also an allusion to the cronyist protectionism Wall Street enjoys thanks to lax enforcement — much of which is (not) handled by former C&B lawyers at the DOJ.

There’s nothing illegal about working for the government and then working for a high-powered, well-connected D.C. law firm — or vice versa. But the relationships like those that exist between firms like C&B (and its clients) and DOJ personnel are suggestive of legal collusion.

“If you’re a large bank and you want to stay out of the crosshairs of the DOJ, who are you going to hire — someone who’s been in the private sector, or a DOJ guy?” asked “Clinton Cash” author Peter Schweizer in an interview with Vice. “You go with the DOJ guy.”

More to the point, the line between what’s allowed and what isn’t favors crony mutualism and favor swapping among those who continually transition between government and K Street lawyering.

“What’s shocking in Washington isn’t what’s illegal,” said Scweizer, “but the sort of stuff that’s legal.”

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