Marc Dreier: An Attorney's Worst Nightmare

Ohmygodyall, Have you read Dealbreaker’s summary of Marc Dreier’s interview with Vanity Fair? Priceless. And I’m sure his attorneys are basically calling out into the hallway to a group of paralegals, “Hey, just start shredding those Dreier files. We’re not going to need them anymore.”

Either Marc Dreier’s heart has grown three sizes, and now he wants to unburden himself – completely or that motherfucker is an idiot.

Maybe a little of both. But ohmygod, if I were on his payroll as counsel, I would so advise him do not do an interview with Vanity Fair in which you admit that you created a quote-unquote hedgefund. Are you hearin’ me, dawg?

I think the money quote is this one:

For months he brooded over the wreckage of his life. His epiphany, Dreier remembers, came in the summer of 2003, during a long walk he took on the beach near his vacation home, in Westhampton Beach, New York. He experienced a moment of clarity, he says, in which he saw the path he needed to take. It happened one day when he found himself staring at a palatial beachfront home. His own house was inland. He had always wanted one right on the beach.

The beach house, you see, was the key to feeling good again. Marc Dreier was upset because of 9/11 (no, seriously, read the interview) and because his wife left him so he felt like he was destined to be great and it was time to start being great.

So basically, with the beach house in mind, I guess you see now why envy is such a destructive force.

I quote Dealbreaker:

It’d be enough to send anyone to a place where the next logical thing to do would be impersonate hedge fund managers and stage fake conference calls! And honestly, not to insult anyone here, but do you know how easy it is to scam these hedgie guys? Like crazy easy. It almost seems like the crime would be to not scam them, if you think about it.

In his own words:

If he was to become a thief, Dreier reasoned, his target was obvious: hedge funds. It was 2004, and every dinner party he attended seemed to be thronged with young hedge-fund billionaires eager to throw around investment money. “I had to come up with some quote-unquote great idea for a hedge fund,” Dreier remembers. “I couldn’t sell anything tangible. It had to be a financial instrument at some level to sell to a hedge fund. So I came up with the idea of selling debt.”

That quote-unquote is killing me.

“I expect to spend most of the rest of my life in prison,” he tells me. “I hope I don’t die there. I’ve been blessed with good genes, you know.

So we haven’t seen the last of Marc Dreier.

UPDATED
The interview was complete with a photo shoot:

Bottom left is Blue Steele if I’ve ever seen it. The middle bottom is Magnum and the bottom right is Sexyface.

How Did You Arrive At That Number?

Some moron is suing Bank of America for – I quote – “1,784 Billion Trillion dollars.” Fun!

Historic Photos of Texas Oil

I recently read a wonderful, quirky picture book called Historic Photos of Texas Oil by Mike Cox. It is a collection of photos of the early oil boom in Texas, which may not sound fascinating but trust me, it is. There is something strangely effecting about the photos – the pictures of skinny workers having ice cream, the iconic pictures of Spindle Top spurting black gold into the air, tiny towns over run with oil rigs in every back yard.

All my life, I wanted to live somewhere ‘special’. People in Los Angeles, or Paris or New York know they are living somewhere kind of interesting; it is part of their culture. Living in Houston, the only interesting thing I ever saw was the Enron building. But after reading the book, I had a new appreciation for this silly little state. There is some romance here, maybe, if you look hard enough. I found myself thrilled by the old Texaco signs. I loved the pictures of trains carrying these huge barrels of oil across vast expanses of flat, empty land. They evoke inexplicable loneliness, which I suppose connects us to the loneliness of the workers who came from far away for a chance to work in the oil patch.

Others who got rich often did so quite accidentally, deciding to plunk a well down and see what happened. Most of the time, not much happened. But once in a while, the Texas hardpan earth was generous, and oil was found, and quickly monetized.

Being from Texas, I suppose it is easy to look out at the oil derricks and overlook the complexity of them. They become background. I remember once when I was very young (four or five, I suppose) my father was driving us from Corpus Christi to Houston. I remember thinking the oil derricks looked like dinosaurs. For some reason my father stopped on the side of the road, and I opened the back door and ran as fast as my tiny legs would carry me to the giant rusted “dinosaur”. My father chased me and caught me but not before I ran into the mud, losing my shoes, and hugged the dinosaur.

I just thought they were interesting. I wanted to see what they were all about.

After reading the book, I know.

Anyone who is interested in Texas history or the oil business should own this book. It gives context to both – and makes you feel pretty special for living in Texas.

FBI Destroys Evidence In Caylee Anthony Case

This YouTube video of a Florida newscast shows that the FBI destroyed critical evidence in the Casey Anthony murder case. A small heart sticker that was placed over little Caylee Anthony’s mouth was used for evidence in a search warrant that allowed police and FBI to search Casey Anthony’s arts-and-crafts closet for similar stickers. The original sticker was then destroyed by the FBI when a latent fingerprint examiner underwent the fingerprinting process on the tape where the sticker was affixed.

The FBI also failed to take photographs of the sticker.

While I believe that Casey Anthony is probably guilty of murdering her child, I also think the FBI and prosecutor’s offices should be held to the strictest possible standards. This kind of sloppiness is not unheard of either. In the past four years there were numerous reports of FBI computers being “misplaced” (a startling statistic shows that approximately 3-4 FBI computers get misplaced every month, 166 in the last 44 months). In recent months, FBI wiretaps used to eavesdrop on suspected criminals because of the bureau’s repeated failures to pay bills.

The FBI folks I know are generally good guys when you get to know them personally. But when they have the power of the United States government behind them, and they are trying to build a case these kinds of mistakes are downright terrifying.

Several Enron people told me that the FBI was much worse than the prosecutors because the FBI didn’t know what was important or not. And at least one agent told one witness to lie on the stand.

So there are problems, is what I am saying here.

I hope Casey Anthony gets a fair trial and then is put to death. But the “fair trial” part is the most important, in my opinion.

Cara v Wall Street Journal

Over the weekend, I commented on an article at the WSJ about shareholder lawsuits after one person fawned all over the dubious accomplishments of Bill Lerach who net $7 billion for Enron investors. (Lerach, by the way, is still in prison for his kickback scheme.) The response was incredible; the other commentators immediately attacked me for everything from “getting wet” for Jeff Skilling to my writing, to proclaiming that I should talk to Cliff Baxter’s widow about how innocent Enron and Ken Lay are. I pointed out that Mrs. Baxter testified for the defense during the Lay/Skilling trial – but I don’t expect anyone there to actually open their freaking ears and listen.

Incidentally, somebody there commented under the name “Observer”. I am 100% positive that is not the same Observer who comments here. Their opinions could not be more different.

I am commenting on this today because this is the kind of crazy outrage that is still free-floating among the general public some eight years after the collapse of the company. People who know nothing other than what they read in Conspiracy of Fools or Smartest Guys In The Room believe they have a handle on the whole truth of Enron. In the first place there is so much information that even someone like me, who researches this stuff for a living, can never acquire it all. Like Jeff Skilling, it is impossible to know everything that happened in every office, in every cubicle, every single day. Some things are going to get lost. But the truth, in my hands, will not. In the second place, somebody who is a casual observer and guzzles down whatever news they hear from Tom Brokaw is just going to be ignorant; I must face this fact. No amount of proof is going to sway them. All I can do is keep writing and hope those whose minds are not glued shut by the mainstream media will be willing to listen a little deeper.

The truth doesn’t need consensus. But it would be awfully nice if those who believe they own the truth about Enron would actually look into Enron.

Cara Ellison's Advice For The Men Who Work For Her

1. There’s nothing you can do behind your desk that can’t be more effectively accomplished with a beautiful, long-haired, chain-smoking woman lying naked next to you in bed.

2. Suits are cool, as long as you wear them without shoes or socks.

3. Bribery is an acceptable form of argument.

4. Never sign your tax returns. Have your wife do that.

5. Meat is not murder. Meet is murder.

Justice

When I was in law school, we had a field trip to the Supreme Court. I was stuck behind a column most of the time but a few times, I did glimpse the full court. What struck me was how utterly fallible they all looked. Human beings, just doing a job. And it made me think about the idea of their being such a thing as “objective justice” or even just plain rightness, and how easy it is to get it wrong.

It is a thought that continues to terrify me, those rare occasions I allow myself to think about it.

The Government's Enron Party

On September 12, 2006, a gala ceremony was held at Constitution Hall in Washington, DC. In attendance were, among many others, the a thirty-six person contingent of the Enron Task Force who were awarded the Attorney General’s Award for Exceptional Service (the highest Justice Department honor) for their work on the Enron cases. (Interestingly, John Kroger is omitted from the list of recipients. Perhaps his self-proclaimed important work of deciding to indict Ken Rice, Kevin Hannon, Rex Shelby, Joe Hirko, Scott Yeager, Kevin Howard and Michael Krautz is somehow under-appreciated by the government. How deliciously ironic.)

Consider this for a moment.

The President of the United States orders the formation of a task force whose raison d’être is to find and punish crime within a single company. This itself was unprecedented, and possibly unconstitutional. But who cares, it’s just a bunch of criminals. So the Task Force, armed with the infinite resources of the government, pursued thirty-six defendants out of a company of thousands. The thirty-six defendants had an average net worth of $7 million. Quite a lot of money, no doubt, but nothing at all compared to the government’s resources. The defendants hired attorneys, and the attorneys had staffs – paralegals, assistants – as well as costs such as travel, copying, and the costs of their own investigations. So no matter what, the cost of defending themselves was going to be steep. In one case, a man who was later acquitted took a job at a dry cleaners to make ends meet; this is an educated man, an accountant. But his defense cost him everything he had.

The financial strain was obvious – but the emotional strain was perhaps not as quickly identifiable. One person committed suicide. One person broke up with his girlfriend to focus entirely on his indictment. Several began drinking. Over time, the strain became even worse, and many defendants finally gave in and accepted plea deals to spare themselves the mental torture.

The government lawyers were permitted to tag out whenever they wanted, but there was no such thing for the defendants. The government could spend fortunes that even the wealthiest defendants could not even begin to compete with. The government could also threaten witnesses – and did. One unindicted co-conspirator was called every day by Andrew Weissman and told, “Tomorrow you’re going to be indicted. I wouldn’t advise speaking to Skilling’s and Lay’s attorneys.” One witness was called and told plainly that if they did not cooperate with the government, they would be indicted. One witness was interviewed so often that she finally threatened to plead the Fifth if they didn’t give her a break.

The defendants had no control over the witnesses this way. All they could do was ask to speak to the witness and if the witness said no, case closed [later legal arguments about witnesses "belonging" to either the government or defense not withstanding, they did seem in practice to belong to the government.] Defendants could not (and wouldn’t have anyway) threaten indictment. As private citizens they had no ability to coerce anyone into anything.

The government, on a mission to justify their existence, ran roughshod through Houston and Portland, indictments in hand, threats at the ready, immunizing their own witnesses but refusing to immunize defense witnesses, and largely were successful in getting what they wanted: recognition for “cracking down on white-collar crime.”

Forget the fact that any crime was demonstrably localized to a tiny group of people in LJM – a company that was not part of Enron; Enron was the victim of LJM’s shenanigans. There was no fraud at all anywhere in Broadband. The Nigerian Barge case is a shameful chapter of American jurisprudence, as is the Natwest Three case. Yet the government successfully brought indictments, plea deals, and prison time for those unlucky enough to be swept up in their pursuit for fame and a cushy high-paying job in the private sector.

The final scorecard does not reflect huge legal successes for the government. They received two jury convictions: Ken Lay and Jeff Skilling. Dr. Lay passed away and never served a second of prison time, so basically they got Jeff Skilling. Convictions against Kevin Howard and William Fuhs were tossed out. They did manage to finagle many plea deals, but even some of the plea deals were thrown out – Christopher Calger, for instance, pleaded guilty to something that wasn’t even a crime and David Duncan successfully withdrew his plea and the charges were dropped.

The government’s cases have been plagued by overturning, dropped charges, lots of probation and not very much prison time (the average prison sentence for an Enron defendant – excluding Jeff Skilling – is 2.5 years; if these were really bad guys, why are they going away for decades?) And yet on that September in 2006, the government awarded itself a prize for its outstanding achievement. Strange, since the Broadband case and the Nigerian Barge cases were still in full swing – it seems a little immodest to throw yourself a party before your mission is complete, but this is the government and they are not bound by normal rules of etiquette or law.

I wonder how much it cost us taxpayers to prosecute these men. Men like Jeff Skilling who gave away untold fortunes in acts of kindness the likes of which most of us can not imagine. Men like Joe Hirko, who was as normal and kind as your own father. Men like Scott Yeager, whose integrity has never been questioned. Men like Kevin Howard, who was known as an unassuming straight-shooter. Men like Gary Mulgrew and Giles Darby and David Bermingham, British citizens who loved America for its opportunity, until they ended up in prison for a deal that was by British law and United States law completely aboveboard. How much did it cost us? And how much did the ceremony in DC cost us, the one that venerated the prosecutors who pursued these men to the ends of the earth? How much did we spend on champagne for Kathy Ruemmler and Sean Berkowitz while Jeff Skilling struggles to pay his attorneys fees? How much did we spend for Ben Campbell and repugnant human beings like Cliff Stricklin to pursue the Broadband Three? Those “infinite resources” come from our pockets. We pay for our justice system – even when it is grotesquely wrong. But I think what bothers me so much is that after all these hundreds of millions of dollars spent on trying to put these men away, it wasn’t enough. They had to give themselves a party too, a party to celebrate and assure themselves they had done the right thing. A party that “honored their service”.

These people are terrifying. They stalk, pursue, lie, freeze, threaten, and manipulate witnesses that would give them their little victories. These are not honorable people. I certainly hope they are not representative of all DOJ employees. But something tells me that anytime the government is giving itself a party to celebrate the prosecution of any citizen – guilty or not – we have bigger problems than we realize. There is nothing to celebrate when a man is prosecuted. Even if he is guilty, even if it was the right thing to do. There is no need at all for the government to gloat and show its muscle that way. It’s just disgraceful. And when that man in prison is innocent, it is particularly disgraceful.

Ohmigod, Ohmigod! Sharks!

Somewhat befuddled that I am hearing about this from Dealbreaker, I am nevertheless happy as a monkey in a knife fight right now because – yall, seriously – the New York Aquarium is creating two massive, brand-spanking-new tanks for…

I can barely type. I quiver with pleasure.

… for MORE THAN 30 SHARKS!

Ohmigod ohmigod ohmigod. If there is anything I love almost as much an Enron executive under indictment, it’s a SHARK (under indictment).

So my pleasure is obvious.

EBS Clips

These are clips of Enron’s 2000 Analyst Conference. Some Jeff Skilling, lots of Ken Rice and Joe Hirko. The guy at the far right (camera right) is Scott McNealy, CEO of Sun. There are some distant shots around 3:40. In the front row, on the left (camera left) is a tall guy – that’s Scott Yeager. Scott Yeager answered one question at the end of the presentation and otherwise had no role at all in the conference.

Also notice at 4:37, Jeff Skilling says again that they are continuing to add on to the functionality of the BOS. He makes it clear that the BOS is not completed.