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March 25, 2007
David Warsh, Proprietor


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When the Attorney General Was a Mensch

The resolution of Harvard’s Russia scandal last year sheds some light on the recent unpleasantness over the Bush administration’s decision to fire eight US attorneys. That successful prosecution of Harvard University, by an attorney appointed by President Bill Clinton, provides a textbook illustration of how the system is supposed work, to resist political pressure.

Donald K. Stern, the former US attorney in Boston who brought the action, described the institutional arrangement in an op-ed piece in The Boston Globe the other day. Stern served from 1993 until 2001; today he is a partner at the Bingham McCutcheon law firm.

“Yes, US attorneys are appointed by the president (and confirmed by the Senate) for a term, can be asked to resign or can be removed.  Yet this has rarely happened and certainly never to this extent in the middle of a president’s term.

“This is because the department generally respected the unique role the US attorneys play in their respective districts, serving as the chief federal law enforcement officer — serving as a representative of the federal government but able to set priorities for the law enforcement needs of their local communities.

“Moreover, the US attorneys have always enjoyed a special brand of independence, even within the Department of Justice.  This unique blend of independence and accountability provides some tension from time to time, but more often affords checks and balances on the enormous power held by federal prosecutors.”

Stern should know. He found himself at the center of a tug of war that began when investigators for the US Agency for International Development in 1997 shut down a Harvard advisory mission to Moscow after whistleblowers reported that the team leader, Andrei Shleifer, a professor of economics at the university, was aggressively seeking investment opportunities with his wife, his deputy and the deputy’s girlfriend.

Not only did the Harvard administration quickly dispute the charge that any impropriety had occurred. But Shleifer’s best friend, mentor and fellow Harvard economist, Lawrence Summers, was Deputy Secretary of the Treasury, soon to become Secretary, replacing Robert Rubin. He had oversight of all US economic policy in Russia.

Clearly Summers was in a difficult position. His man on the inside of Russian policy circles, his trusted friend, had been fired by USAID, a semi-independent agency within the State Department. Shleifer’s counterparts in the Russian government retaliated by severing relations with the rest of the American advisory group. Before long, Russian would be embroiled in a currency crisis that would threaten the global financial system; Summers would be lionized on the cover of Time magazine, along with Robert Rubin and Alan Greenspan, as “the Committee to Save the World.”

Summers later testified, “I came personally to the following judgments during the time when I was in the Government: that the project was of enormous value both to supporting the crucial US objective of encouraging privatization, encouraging market-oriented institutions, and to the US objective of establishing relationships of constructive helpfulness to figures within the Russian government who the US government had identified as democratic market-oriented reformers whose hand it wished to strengthen.

“That the termination of the project, that the termination of Shleifer and [deputy Jonathan] Hay’s role had compromised both those objectives by reducing a trusted source of advice supporting policies that were in the broad interest of the US government and rupturing to some limited extent the feelings of harmony between the US government and key officials in Russia.

“I had enough knowledge of Russian mores and Russian practices and Russian views from the conversations I had with [Anatoly] Chubais and [Dimitri] Vasiliev to be confident that the set of issues contained in the allegations were not issues that were consequential for them; and that they would have, in part, valued advisers more extensively if they were more involved in actual private-sector activities.”

Did Summers do anything to discourage a prosecution he clearly viewed as unwise and unjust?  Rumors have circulated for years that he made calls on USAID to abandon its investigation at an early stage. But when asked in his deposition whether he has engaged in conversations with anyone else in the government concerning the case, he recalled none outside the privacy of his office.

Aside from conversations with Treasury attorneys (which were privileged), he replied, “The only other present memory I have is of conversations  expressing some irritation about the time commitment and hassle associated with preparation for the discussion we had in my office, expressions of complaint on my part about all of this to members of my personal staff.”

What did his staff say in return?

“I think it’s probably the case that there’s a certain amount of interagency commentary that goes around in which one agency doesn’t always think the highest of other agencies, and there was probably a little commentary of that kind vis-ˆ-vis the Justice Department.  But there was no effort to engage in contentful conversation about it.”

That was pretty much the end of it. For three long years, lawyers for Shleifer and Harvard fenced with the office of the US Attorney in Boston, producing documents, giving depositions, even testifying before a grand jury — and seeking to persuade the government to drop the case.

In the end, no criminal charges were filed against Shleifer.  Instead, the government sought treble damages from Harvard. Government prosecutor Sara Miron Bloom, asm assistant US attorney in Boston, made no attempt to tie Summers to the case. Soon thereafter he was named president of Harvard, and unobtrusively protected Shleifer behind the scenes.  US District Court Judge Douglas Woodlock conducted a low-key trial.

Very little is known about whatever representations and back-channel communications took place among Harvard, the Justice Department and the US attorney’s office in Boston during  those three years, much less what went on in the government itself, among the Treasury, Justice and State departments (beyond simply staring daggers at one another, that is). The US attorney in Boston finally filed his suit near the end of September 2000 — barely a month before the presidential election. Stern and Bloom have maintained principle silence throughout.

What is known is that the attorney general in those days was Janet Reno. Whatever appeals were made to her, she declined to interfere. The suit went forward, resulting in a jury verdict against Harvard and a finding of fraud against Shleifer. 

Without that finding, the rise of Vladimir Putin and his high favorability ratings would be harder to comprehend. Commentators routinely note that among ordinary Russians, the sense of having been taken to the cleaners by the Americans is widespread. Then, too, ordinary Americans wouldn’t understand that the Russians’ grievance was genuine, if Stern and Reno hadn’t stood their ground.

Instead, citizens of both nations received a vivid illustration of the meaning of the rule of law — not even Harvard, for all its friends in high places, could break it with impunity. The first female Attorney General of the United States set a high standard, by which her successors will be judged.

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