Defense Bar Leaders Decry Collapse of DOJ’s White Collar Focus

A trio of veteran prosecutors-turned-Big Law partners blasted the state of the Justice Department’s independence and expertise at an opening panel of the American Bar Association’s annual white collar gathering in San Diego.

What’s going on at the Southern District of New York these days, a moderator asked, noting that the Manhattan US attorney’s office has always “marched to the beat of its own drum.”

“The drummers have all left the building, at least the ones who had their own tune to play,” replied Joanna Hendon, a former SDNY prosecutor who in 2018 represented President Donald Trump in litigation involving his longtime personal lawyer Michael Cohen.

The remarks from Hendon, now co-leader of the white collar team at Alston & Bird, exemplified a blunt shift in tone at a conference private lawyers traditionally flock to for client referrals and to hear DOJ officials announce corporate enforcement initiatives. DOJ, under Trump, has boycotted the event.

“The type and quality of white collar enforcement is vastly diminished. It just is,” Hendon said.

The Southern District of New York has lost its independence from Washington, Hendon said, noting thatenergetic line assistants have been redirected to Jeffrey Epstein document review at the White House’s behest. The FBI and other agencies who used to rush to SDNY and the neighboring Eastern District of New York to bring cutting edge corporate cases have been gutted, and current US Attorney Jay Clayton—whom she didn’t name—brings atypical priorities, Hendon added.

“We don’t have that kind of leadership now,” she said, drawing a contrast with past Manhattan top prosecutors who’d bring boundary-pushing securities cases that the defense bar would have to zealously defend against.

But the New York district wasn’t alone as the source of ire.

Baruch Weiss, a white collar partner at Arnold & Porter, and Charles Connolly, who co-heads Akin’s white collar practice, teed off on the dramatic shifts at the US attorneys’ offices in Washington and the Eastern District of Virginia, respectively.

Weiss commented on the surge in federal grand juries in DC rejecting indictments and said that for the first time in his career going back to the 1980s he’s contemplating advising clients to testify before a grand jury.

“Who ever knew that there was a grand jury practice on the side of the defense,” he said. “If you have the right case, if you have the right client, and you’re in the right jurisdiction, you no longer want to completely dismiss out of hand the notion that maybe, just maybe you want to ask for your client to be heard.”

Weiss also observed that the “less experienced, more politicized prosecutors” in Washington have led him to notice something “almost unprecedented” playing out in court.

“When you as defense attorneys go into the courtroom, you will find that some of the judges are actually looking to you, rather than to the prosecutor, to guide them through the case,” he said.

Meanwhile Connolly, a former financial crimes and public corruption chief in the Eastern District of Virginia, bemoaned a rudderless unit that used to be counted on by Main Justice to handle critical white collar cases.

EDVA was off to a promising start under Trump’s first pick to run the office, Erik Siebert, but the team has lacked focus after Siebert was pushed out along with many other senior prosecutors, Connolly said.

“Those experienced prosecutors who’d traditionally run the types of complicated white collar cases we’re all used to defending—they left,” he said. “That can affect ongoing investigations; it can also make it more difficult for new investigations to get started.”

When Connolly referred to Trump’s handpicked EDVA replacement Lindsey Halligan as a US attorney, Weiss interjected, “Alleged US attorney.”
Federal judges ruled that Halligan was unlawfully serving in the role. The audience laughed at his quip.

They weren’t as enthused about Weiss’ later joke that closed out the panel: “I think all of us should be considering developing other practices.”