Vanity Fair 2007: Postscript to The Ballad of Richard Jewell
Before American journalism trended downward into the celebrity-dreck cycle of today, and at a time before the Internet when newsrooms still debated facts and fairness, there was Richard Jewell, the security guard accused of the Atlanta Olympics bombing. In February 1997, Vanity Fair writer-at-large Marie Brenner explored how Jewell became the media’s prey, as the era of the 25-hour news cycle was dawning (“American Nightmare: The Ballad of Richard Jewell”).
On July 26, 1996, in Centennial Park, Jewell spotted a suspicious backpack and emptied out the immediate area. Minutes later, the package exploded, killing one person and wounding 111 others. Jewell was applauded for his deftness, but praise soon turned to torment when The Atlanta Journal-Constitution printed that Jewell was an F.B.I. suspect. Media mayhem ensued: CNN, NBC, and newspapers worldwide ran with the story, while throngs of reporters hovered around their target. Then, three months later, after Jewell, with the help of real-estate lawyer Watson Bryant, had endured a trial of public opinion, the F.B.I. cleared Jewell’s name by dropping its investigation of him—which is where Brenner’s article left us hanging. What happened next?
Wall Street Journal April 2013: Jon Corzine and Failure as Usual
It is not yet a crime to lose money, even lots of it.
By HOLMAN W. JENKINS, JR.
Two serious charges always seemed possible against Mr. Corzine in the failure of the commodities firm he headed: Misuse of segregated customers funds and fraudulent accounting for his bets on European debt—which he styled “repurchases to maturity.”
Neither charge features in Mr. Freeh‘s lawsuit, nor in the lengthy report Mr. Freeh issued earlier this month detailing the snafus, miscalculations and archaic processes behind the firm’s collapse. Mismanagement is not a crime, Mr. Freeh seems to concede, even when gussied up for legal purposes as “breach of fiduciary duty of care.”
It is perhaps time for the rest of us to accept that Mr. Corzine simply made a lousy CEO for a lousy, obsolescing, dial-up commodity brokerage. He was a one-trick pony who played his one trick, trying to trade MF back to short-term prosperity while he reshaped the firm.
Bloomberg April 2013: Okada Review Finds Wynn Resorts Probe ‘Deeply Flawed’
By Edvard Pettersson
An independent review commissioned by Kazuo Okada’s lawyers found that Wynn Resorts Ltd. (WYNN)’s investigation that cost the Japanese billionaire his 20 percent stake in the casino operator was “deeply flawed.”
The review by former Homeland Security Secretary Michael Chertoff found that Wynn Resorts’ independent investigation, conducted by former FBI Director Louis Freeh, was “structurally deficient, one-sided, and seemingly advocacy-driven,” Okada’s Universal Entertainment Corp. (6425) said today in a statement.
“This confirms what I have maintained since the day the Freeh report was issued and the Wynn Board moved to strip me of my stake in a company I helped found,” Okada said in the statement. “It’s obvious that the biased report was part of Steve Wynn’s campaign to eliminate me as a rival to his power within Wynn Resorts.”
NYT April 2013: Strategic Posturing Behind the Suit Against Corzine
BY STEVEN M. DAVIDOFF AND PETER J. HENNING
Louis J. Freeh, the bankruptcy trustee for the failed futures firm MF Global, filed a lawsuit aimed at pinning its collapse squarely on Jon S. Corzine, the former chief executive, and two of his top lieutenants. And unlike in many other suits, Mr. Freeh has not named other groups like a company’s directors.
The tale Mr. Freeh weaves in the complaint presents Mr. Corzine and the other defendants, Bradley I. Abelow, the former chief operating officer, and Henri J. Steenkamp, the former chief financial officer, as having failed to properly manage risk at MF Global while recklessly trading in European sovereign debt. It is a picture of a headlong rush into failure. Mr. Freeh asserts that the three defendants breached their fiduciary duties by allowing MF Global to take on excessive risks.
The core of the case is that the three men did not properly “develop the appropriate controls, procedures and systems needed to transform” MF Global into a full-service investment bank. Not only that, but Mr. Corzine took personal control of MF Global’s proprietary trading “without ensuring that the Company had sufficient controls and adequate liquidity to properly manage the risks inherent in such trading.”
Mr. Corzine’s representatives have vehemently denied the accusations, and question why Mr. Freeh is taking such actions while court-order mediation is still proceeding.
But regardless of the merits of the case, Mr. Freeh is clearly making a tactical move with his lawsuit. Among the questions that arise in any corporate failure is this important one: Where were the directors, who are ultimately responsible for oversight of the company? In Mr. Freeh’s version of events, it turns out they were quite active in approving the risk limits and other acts by Mr. Corzine. But they were not the primary wrongdoers in this tale, and are not named as defendants. This seems to be part of his legal strategy in this suit. He appears to feel he has a better chance at overcoming the legal hurdles to holding executives liable for business decisions than members of MF Global’s board.
Esquire November 2011: What’s Good for Louis Freeh in the Penn State Investigation
In 2005, Freeh wrote a book explaining how he, Louis Freeh, stood almost alone against all enemies, foreign and domestic. He absolved the FBI of involvement in the framing not only of Lee, whom Freeh still believed to be guilty of espionage, but of Richard Jewell, the innocent man fingered as a suspect in the 1996 Olympic Park bombing. He claimed that what happened to Lee was the New York Times‘s fault, and that the FBI went after Jewell for the sake of thoroughness. In that book, he also referred to former National Security aide Richard Clarke as a “second-tier” official. Here is that of which we can be sure: Whatever comes out of the Penn State investigation will be good for Louis Freeh. Whether it’s good for anyone else, I make no better than a 3-1 proposition
Time March 2001: It took 15 years to discover one of the most damaging cases of espionage in U.S. history By JOHANNA MCGEARY … As Freeh admitted frankly, “We don’t say, at this stage, that we have a system that can prevent this type of conduct.” Everyone who knows the dour-faced Hanssen professed astonishment that he could be one of the great spies of the age. What, we want to understand, makes a man betray, and how did he get away with it for so long? Here, from the 100-page affidavit filed by prosecutors and from Time’s own sources, is the story behind the alleged case against Hanssen. The Spy Who Loved Spying A good spy needs a good cover, and Hanssen had one of the best. He looked the quintessential suburban dad, devoted to his wife and six kids, working a government job to pay for a four-bedroom split-level house on a cul-de-sac in a modest Virginia neighborhood, Catholic school and college for the kids, and three aging cars. Neighbors often saw him walking through a neighborhood park at night, letting his dog romp, though he rarely stopped to chat. He piled the family into a van every Sunday for Mass at the same church FBI boss Louis Freeh attended.
Chicago Tribune May 2012: MF Global clients bash fat fees, seek quick wind-down
The legal team winding down MF Global’s bankruptcy estate, led by former FBI director Louis Freeh, estimates the fees charged by the team and other professionals have reached nearly $25 million since the bankruptcy was filed in October.
Now a customer group is planning to ask that the case be streamlined so that those professionals — especially Freeh — receive less and customers receive more.
On Friday, a coalition of former MF Global customers plans to argue in U.S. Bankruptcy Court in Manhattan that the Chapter 11 liquidation of the MF parent entity should be converted to a so-called Chapter 7, coalition leader James Koutoulas said on Wednesday.
In Chapter 11 cases, businesses or their court-appointed trustees try to restructure debt or sell assets to recover as much money as possible to pay off creditors, a process that can be drawn out. In Chapter 7, a trustee sells off assets as quickly as possible, with less involvement from professionals like lawyers, but sometimes at the expense of drawing top-shelf value.
Under bankruptcy law, administrative fees are paid ahead of other creditor claims, so Freeh’s mounting bills are siphoning money from creditors, said Koutoulas, a Chicago fund manager who had $55 million tied up in MF Global on behalf of his clients.