December 14, 2010

We’ve all seen the headlines : “Insider Trading ‘Rampant’ On Wall St.: US Attorney.” But how many of us stop to ask about the person who lurks behind that title, “US Attorney”?

Earlier, I mentioned that accusation —of “rampant” insider trading—in connection with a sweeping new prosecution that has been launched by the U.S. Attorney for the Southern Distrct of New York. He made the charge in a speech that he gave to the New York City Bar Association last October 20. Here is what he said:

"So, what is the scope of the insider trading problem at this moment? Unfortunately, from what I can see from my vantage point as the U.S. Attorney here, illegal insider trading is rampant and may even be on the rise. And the people who are cheating the system include bad actors not only at Wall Street firms, but also at Main Street companies."

But who is this “U.S. Attorney”?

For many years, I confess, I myself never asked such questions. Whoever the U.S. Attorney might be, he had evidently been chosen to represent the United States Government in serious legal matters, and my lingering respect for the U.S. Government led me to presume that the U.S. Attorney was a trustworthy legal official. He might be wrong, certainly, but in outlook and purpose he was presumably the regional representative of the whole Anglo-American legal tradition, from Magna Carta on down.

With the advent of the Obama administration, however, it has become increasingly clear that many law enforcement officials of the U.S. Government do not conceive themselves to be representatives of the Anglo-America legal tradition. Quite the contrary. They are nothing more than “the kids” of the post-Sixties era, grown up, but still despising our Enlightenment traditions just as their professors taught them to do, and now determined to revise our legal culture in accordance with postmodern standards. For that reason, it has become increasingly important to inquire, so far as one can, into the outlook of government legal officials, whether they are making theoretical declarations or bringing criminal cases. We must not allow them to substitute—rhetorically or legally—social justice for true justice, or egalitarianism for equality before the law.

"What former Manhattan U.S. Attorney Rudy Giuliani did to the Mob is what Preet Bharara will do to Wall Street."

-Ravi BatraSo who is this U.S. Attorney who is declaring insider-trading to be “rampant.” His name is Preetinder S. “Preet” Bharara, and he is a naturalized citizen, born in India. He grew up in New Jersey, then graduated from Harvard in 1990 and Columbia Law in 1993. Like Barack Obama (Columbia University, 1983; Harvard Law School, 1991), he is therefore a child of the postmodern education offered to Americans by the elite universities of 1980s. And what do we know of that education? Well, we know that it relentlessly pushed theories of oppression: men oppress women; whites oppress blacks; the West oppresses the Third World; but above all the wealthy oppress everybody else. Stanley Kurtz’s superb new book, Radical-in-Chief documents beyond peradventure that Barack Obama adopted that outlook and entered into Chicago’s socialist circles to fight against capitalism.

In the case of Preet Bharara, we know that after graduating from Columbia Law, he joined the campaign of the Left-most candidate around: Mark Green, who was running (successfully) to be the first “New York City Public Advocate.” Few may now recall just how far Left Mark Green was, but  suffice it that for 10 years he was an associate of Raph Nader and that The Nation praised him as being, "next to Nader himself, . . . the leading public interest lawyer of his generation."

But a brilliant young man like Preet Bharara was not going to tie himself to the small-time anti-capitalist jihads of Ralph Nader or Mark Green. No more was Barack Obama willing to tie himself to the small-time anti-capitalist jihads of Chicago’s ACORN types. That is one thing that David Brooks got right in his theory of bourgeois bohemians:  The elite anti-Enlightenment students of the post-Sixties were not content to live out their lives writing socialist screeds in Greenwich Village. They were determined to become the new Establishment, by  conducting a “long march” through the institutions.

In 2005, Bharara (above left) enlisted as chief counsel for the Senate Judiciary Committee staff of Senator Charles Schumer (D-NY), one of the most partisan politicians in the Senate. In that role, Bharara prompted his boss to begin an inquisition into the “political” firing of some U.S. Attorneys. It was, of course, a partisan move on the part of Bharara and Schumer, for reasons well explained by Andy McCarthy , himself a former prosecutor with the Southern District of New York. But it was a highly successful partisan move that Bharara was still trumpeting in his October 20 speech to the New York City Bar Association. And in August 2009, following the election of Barack Obama, Bharara had his reward: the U.S. Attorney’s post in Manhattan.

Under postmodernism, one is perfectly free to draw legal lines that make Wall Street and the Mob indistinguishable.

A few months later, New York City defense lawyer Ravi Batra was quoted as saying: "What former Manhattan U.S. Attorney Rudy Giuliani did to the Mob is what Preet Bharara will do to Wall Street." Very likely. And the reason is that Bharara apparently does not see much difference between Wall Streeters and the Mob. In his speech to the New York City Bar Association, Bharara raised “a question worthy of future discussion—whether the very paradigm of ‘white collar crime’ has outlived its usefulness.” Think of what that presumes and what it would mean.

The FBI describes white collar crimes as follows: “Those illegal acts which are characterized by deceit, concealment, or violation of trust and which are not dependent upon the application or threat of physical force or violence. Individuals and organizations commit these acts to obtain money, property, or services; to avoid the payment or loss of money or services; or to secure personal or business advantage.” By this understanding, white collar crimes are violations of the general social rules of trade, basically, the rules of honest exchange. As such, white collar crimes initially violate only property rights and are thus distinguished from crimes that directly inflict death, pain, fear, or loss of liberty.

Important consequences flow from that fact. For example, white collar crimes always raise the issue of caveat emptor and the possibility of the victim’s co-responsibility. Secondly, the economic motive and consequences of white collar crimes suggest that compensation and fines should be the principal method of punishment; prison mainly a back-up (as in the Madoff case, where the crime exceeds restitution). Most importantly, though, the relationship of white-collar crime to the fundamentals of trade should always raise the question of whether the act ought to be criminalized? If it is merely the violation of some malum prohibitum regulation or if it is more properly conceived of as a contract violation, then redress might better be pursued civilly.

These are not the kinds of considerations that one needs to raise for the crimes of the Mob. But under postmodernism, of course, where one draws conceptual lines—regarding responsibility, punishment, and criminality—is simply a matter of cultural preference. One is perfectly free to draw legal lines that make Wall Street and the Mob indistinguishable.

Bharara’s postmodern outlook was also reflected in a comment he made when describing insider trading. “Disturbingly,” he said, “many of the people who are going to such lengths to obtain inside information for a trading advantage are already among the most advantaged, privileged, and wealthy insiders in modern finance.” Notice that he does not say: “Puzzlingly, many of the people who are going to such lengths to obtain insider information for a trading advantage are already the most insightful, hard-working, and productive members of the financial community.” If he had pursued that line of thought, he might have asked himself whether it was likely that larceny would be “rampant” among such people. But no. There is no indication that he considers financiers to be productive people at all. His three adjectives—“advantaged,” “privileged,” and “wealthy”—come straight from the postmodern thesaurus. They describe equally a useless aristocrat of the ancien régime or an Indian maharajah or—in Bharara’s mind—an American capitalist. An oppressor is an oppressor is an oppressor.

So, the next time you read a headline that says “Crime ‘Rampant’ on Wall St.: US Attorney,” consider the source. It may mean nothing more than “Postmodernism ‘Rampant’ in US Attorney’s Office.”

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