The Ongoing Shame Of New York's Organized Legal Bar

September 09, 2024/ Francis Menton  @ Manhattan Contrarian

As many readers likely know, New York is the center of the legal profession in this country. New York City has a large community of major law firms that advise the business community both across the country and also internationally. This is the industry in which I had my own career prior to retiring from it in 2016. There are large numbers of distinguished practitioners who are highly sought out for every sort of legal problem. We have multiple well-known bar associations — notably the Association of the Bar of the City of New York (known as the City Bar) and the New York State Bar Association — once respected for their contributions to the betterment of the legal system and the rule of law.

All of which makes what follows nearly incomprehensible to me. In recent years the law enforcement and court systems of New York have become highly politicized in ways that are the antithesis of the rule of law. Yes, elements of politics inevitably creep into law enforcement, and complete purity from these influences is impossible. But what has happened in New York over the past decade and more goes far, far beyond anything I am aware of previously in this country. It should be job number one of the organized bar in New York to speak out against the politicization, and to push back against it.

And yet, as far as I can find, our organized bar has been completely silent.

I’m going to compile here a list of some of the recent improper uses of the legal system in New York by prosecutors and bureaucrats. Readers are likely familiar with some of this, particularly the parts relating to President Trump, but when put together in one place the list of these abuses truly shocks the conscience. And this is far from a complete list.

• Before they got the idea of using New York’s legal system to go after political adversaries, the New York prosecutors warmed up by bringing completely phony prosecutions against big banks and shaking them down for a few tens or hundreds of millions of dollars, or even billions of dollars, at a crack. Eliot Spitzer — first elected New York Attorney General in 1998 — got this game under way with prosecutions of the likes of Merrill Lynch and Citibank for the alleged “conflict of interest” of having both securities research and customer accounts at the same firm (universal practice in the securities industry since its founding). Spitzer collected $100+ million settlements from those institutions in the 2002/03 time frame.
• Spitzer’s successor Eric Schneiderman studied Spitzer’s playbook and then, in the aftermath of the 2008-09 financial crisis, applied it to essentially every bank on Wall Street. It turns out that none of the banks will take a big case to trial, so they are soft targets for shake-downs by ambitious prosecutors. This post of mine from May 2018 has a round-up of many of Schneiderman’s worst shake-downs: $500 million from Royal Bank of Scotland (supposedly for including loans in securitization portfolios the “did not conform to underwriting criteria”); $230 million from UBS for the same thing; $220 million from Deutsche Bank for allegedly “artificially manipulating LIBOR”; $670 million from Goldman Sachs for allegedly assuring investors that securities were “backed by sound mortgages”; and on and on. Over $4 billion in such shakedowns in total over the course of a few years, all directed to Schneiderman slush funds rather than returned to the supposedly wronged investors or to the taxpayers.
• After the spate of phony prosecutions of the big banks brought in huge returns with almost no push-back (aside from the Manhattan Contrarian), it was then a short step to prosecuting political adversaries. The archetype is the prosecution of ex-President Trump by New York County DA Alvin Bragg, allegedly for recording the settlement payments to Stormy Daniels in the wrong category on the books of the Trump Organization. Trump currently awaits sentencing on these charges. As the New York Post notes in an editorial today, last week the chief spokesperson of the U.S. Attorney’s Office for the Southern District of New York, one Nicholas Biase, was caught on tape correctly describing Bragg’s case against Trump as “nonsense” and a “perversion of justice.” When the recording of his remarks became public, rather than standing up for the obvious truth, the weasel Biase promptly “apologized.” So far, he still appears to have his job at the SDNY, but don’t expect that to last. Merrick Garland’s “Justice” Department does not put up with dissenters. In today’s Wall Street Journal, David Rifkind and Elizabeth Price Foley point out just one of the many major legal flaws in the Bragg prosecution, namely that his felony convictions turn on the federal election law that he has no jurisdiction to prosecute. (This legal flaw was previously pointed out at Manhattan Contrarian in a post on May 30, 2024.).
• Has the City Bar ever spoken out against the phony Trump prosecution? Actually, one of the guys who cooked up the case in the Manhattan DA’s office, one Carey Dunne, is an ex-President of the City Bar. Back in 2022, when it briefly looked like Bragg was going to decline to bring the case, Dunne was the first to protest.
• Then there is the civil case against Trump brought by New York Attorney General Letitia James. James also campaigned on a promise to get Trump. The supposed basis of the case is overvaluations of real estate assets on financial statements submitted to a bank by the Trump Organization to obtain loans. Somehow, with the target being Trump, it did not matter to this prosecution that the bank, Deutsche Bank, had its own unit to appraise real estate of borrowers, that the bank was re-paid in full, or that the bank never complained or said it had been damaged. Again, it is a case that would never have been brought against anyone but Trump, or for any reason other than to take out a political adversary.
• Nor are government attacks on political adversaries in New York limited to just Trump. Another one that recently reached the Supreme Court involved the persecution of the National Rifle Association by New York’s head regulator in the Department of Financial Services, then Maria Vullo. Vullo conducted a full-court-press regulatory onslaught to try to put the NRA out of business by coercing banks and insurers not to do business with it. As part of the campaign, Vullo threatened the banks and insurers with regulatory harassment on unrelated matters if they refused to go along with her demands. The NRA sued Vullo, and the Supreme Court ruled back in May that the dismissal of the lawsuit should be reversed and the case could proceed. Vullo’s conduct was so egregious that the Supreme Court’s opinion was unanimous, with the Court’s usually most reliably lock-step liberal, Sonia Sotomayor, writing the decision.
• As just one more example, there is the persecution of the VDARE Foundation by Letitia James. VDARE was an organization that advocated for more restrictive immigration policy. I use the past tense because, at this time, the organization appears to have been put out of business by an aggressive lawfare campaign from James. Ex-Director of VDARE, Peter Brimelow, describes it this way: “She has simply battered us to death by a massive and intrusive ‘investigation’ that bears no rational relationship to any conceivable offense. We estimate we’ve spent upwards of a million dollars on compliance, let alone hundreds of hours of work. . . . Letitia James is quite obviously aiming at suppressing our speech.” VDARE was a small organization that apparently did not have the resources (like the NRA) to fight back for years against James’s lawfare campaign.

As all this has been going on, I continue to check regularly at the websites of New York’s big bar associations to see if I can find a peep of push-back against the improper conduct of our state authorities. If these bar associations have one critical mission, this is it. But I have never found anything. Maybe some reader can find something I have missed. But I seriously doubt it.

People with whom I served for years on various professional committees and councils have gone on to top leadership roles of both the City Bar and State Bar. They seemed like nice people, and ethical people, but they have badly let us all down. Yes, if you step out of line and call out our state regulators and politicians for unethical conduct, you will be denounced by activists and political hacks for your unorthodoxy. That’s your job. You all make me sick.