FBI Nominee James Comey and Civil Liberties: The Dark Side

James Comey, who is widely said to have threatened resigning as Acting U.S. Attorney General rather than sign off on the Bush administration’s warrantless wiretapping, will reportedly soon be nominated to be the next Director of the FBI. Because of his 2004 stand-off over the anti-terrorist program, Comey is something of a hero to civil libertarians.

As it happens, the story of that confrontation has gotten a bit muddled.

As the Obama administration’s July 2009 Unclassified Report on the President’s Surveillance Program acknowledged, the threatened resignation “concerned certain of the Other Intelligence Activities that were different from the communication interception activities.” It is all very mysterious because the details remain classified. Nevertheless, Comey does seem to have been on the side of the civil-libertarian angels in the dispute—whatever it was about.

But before Comey went to Washington as Deputy Attorney General, he was U.S. Attorney for the Southern District of New York, and his civil liberties record in that role is much darker. Because the Southern District includes Wall Street, the U.S. Attorney there is generally considered the federal government’s chief prosecutor of so-called white-collar criminals. Comey’s tenure as head of the Southern District (from January 2002 to December 2003) was most notable for his prosecutions of Martha Stewart and Frank Quattrone—during the hysterical rich-hunt that followed the collapse of the Internet bubble. And even people with little sympathy for businessmen should be concerned about the conduct of those prosecutions, precisely because in the end they were not white-collar prosecutions. They were relentless attempts to nail people who had proven innocent after having been investigated for white-collar crimes.

MARTHA STEWART

Martha Stewart was initially investigated for insider trading in the stock of ImClone Systems. But when she was finally indicted in June 2003 on five criminal counts, none of them related to insider trading. Four counts involved false statements she had allegedly made while under investigation for insider trading. But the most serious of the criminal charges was the most outrageous. It accused Stewart of “securities fraud” in relation to her own company’s stock—a crime carrying a penalty of ten years in prison—simply because she had protested her innocence in the ImClone matter. Her protestation, Comey charged, had been an attempt to deceive investors and keep the price of her company’s stock up. Fortunately, the judge in Stewart’s trial threw out this ridiculous count before it went to the jury. Unfortunately, as civil-liberties lawyer Harvey Silverglate has written, because Comey’s attempted prosecution on this count was not slapped down by an appeals court, “the chilling effect this ploy will likely have on those under investigation in the future is incalculable.”

The other charges against Stewart were based on the allegation that she had lied to investigators who were looking for a crime that turned out not to exist. These supposedly false statements had not been made under oath, which would have been perjury. Stewart had simply responded to questions from federal agents in a manner that they believed untrue. In the end, Martha Stewart was convicted on the four remaining counts against her and served five months in prison as well as five months of house arrest. A 2006 SEC settlement prevented her from serving as a director of her company or as an executive for five years.

These were relentless attempts to nail people who had proven innocent.

Why go after Stewart? Comey declared: “This case is about lying. . . . Martha Stewart is being prosecuted not for who she is but for what she did.” Really? The media hysteria surrounding Stewart’s case—and the intense scrutiny of Comey’s dealings with her—had nothing to do with her being prosecuted even after she proved to be innocent of insider trading? The busiest U.S. Attorney in America always throws the weight of his office into securing jail time for innocent people who he believes may have told a falsehood to some federal agent? He never exercises prosecutorial discretion in such matters? If so, the prisons must be crammed with people doing time for nothing but fibbing.

Comey tried to justify his attempted destruction of Stewart’s life with this unhelpful analogy between federal agents and American citizens. “It’s a tragedy that could have been prevented if [she] had only done what parents have taught their children for eons. . . . that if you are in a tight spot, lying is not the way out.” But citizens are not children and federal investigators are not our parents. If prosecutors will not distinguish between a real attempt to cover-up crimes and a person’s natural impulse for self-preservation when suddenly confronted by incriminating but innocent circumstances, then people will simply treat all public investigators as enemies and say nothing to them. The republican vision of government, which holds that the state is the agent of the people and an institution deserving public assistance, will give way to the oppressed’s view that government officials should always and everywhere be met with silent, sullen resistance.

FRANK QUATTRONE

Comey’s case against Frank Quattrone was more egregious still. In late January 2003, the Wall Street Journal was tipped off about an e-mail sent by Frank Quattrone in December 2000 that endorsed a colleague’s recommendation to carry out the company’s document-retention policy before taking off for the holidays. Comey decided to construe that three-year-old bit of routine paperwork as an attempt to destroy documents that might have proved Quattrone’s investment banking practices to be riddled with illegal quid-pro-quos. Yet the documents had not been destroyed; investigators had seen them; and they showed that there was nothing illegal about Quattrone’s investment banking practices. Nevertheless, Comey went ahead and prosecuted Quattrone, calling his 22-word email a failed attempt to obstruct justice.

Comey construed a bit of routine paperwork as an attempt to destroy documents.

Quattrone was convicted, as virtually any high-tech investment banker would have been in the days after the Internet bubble burst. Indeed, the miracle was that his first trial ended with a hung jury. The U.S. Attorney’s Office, then headed by Comey’s successor, had to try him a second time to get the conviction it wanted.

But Quattrone refused to concede defeat. One by one, the legal flaws that had allowed Quattrone’s conviction were picked apart by his lawyers. The most obvious flaw in the trial was this: An apparently prejudiced judge had ruled that the jury could convict Quattrone of a crime without finding that he had had any criminal intent. That instruction was eventually overruled by the Second Circuit Court of Appeals, which also took the unusual step of removing the judge who had presided over Quattrone’s cases. And at that point, the government gave up. Apparently, prosecutors decided that they could not win a criminal conviction against Quattrone if they bore the awful burden of showing—before an impartial judge, no less—that Quattrone had actually had a criminal intent.

In August 2006, Frank Quattrone went free. He had paid a terrible cost in money spent and life forgone, not to mention the two years of agony he and his family had suffered because a hostile judge’s eighteen-month prison sentence hung over his head. But in the end he did go free. After laboring for twenty years to make real the high-tech visions of Silicon Valley, Frank Quattrone received his reward from a grateful nation: He was not sent to prison—but no thanks to James Comey.

We know from James Comey’s confrontation with the Bush White House that he has the integrity to stand up for what he believes is right. But before he takes over the federal government’s principal agency for criminal investigation and domestic counterintelligence, we should also know whether he has enough modesty to stand down when he or his organization has been proven wrong. Perhaps during the Senate’s confirmation hearings on Comey’s nomination, the Republican minority members of the Senate Judiciary Committee should invite Frank Quattrone and Martha Stewart to discuss that issue.

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