Another Rigged Prosecution? Prosecutors Withheld Potentially Exculpatory Evidence in the AIG Case.
http://www.wsj.com/articles/another-rigged-prosecution-1420504239
For years the federal government has been hiding potentially exculpatory evidence involving former AIG CEO Hank Greenberg . And now the feds won’t let him make it public.
That’s according to a bombshell legal memorandum that attorneys for Mr. Greenberg and former AIG executive Howard Smith filed on Monday. They’re asking a federal court in Connecticut to allow them to disclose the evidence that prosecutors still claim should be kept under seal. If Messrs. Greenberg and Smith aren’t able to let the sun shine on this abuse, tainted evidence could be used against them by New York Attorney General Eric Schneiderman in a civil trial due to begin next month.
A Schneiderman predecessor, Eliot Spitzer , began investigating Mr. Greenberg roughly a decade ago for an allegedly fraudulent reinsurance transaction between AIG and Gen Re. But attorneys for Messrs. Greenberg and Smith only learned of the potentially exculpatory evidence last fall as they prepared to go to trial.
The information the feds have been sitting on all these years relates to Richard Napier, a former executive at Gen Re who was the government’s star witness in a separate criminal case over the transaction. Mr. Greenberg was never charged, but a trial initially resulted in convictions in 2008 of one AIG employee and four Gen Re employees. Those convictions were vacated in 2011 by a federal appeals court because of errors by the trial judge, and the appellate judges also made clear what they thought of Mr. Napier’s testimony.
“Compelling inconsistencies suggest that Napier may well have testified falsely,” wrote Chief Judge Dennis Jacobs on behalf of a unanimous three-judge panel of the U.S. Court of Appeals for the Second Circuit. Among the reasons the appellate judges found his testimony “suspicious” was that Mr. Napier, who had struck a deal with prosecutors to avoid prison time, had changed his story on who had committed the alleged fraud. Also, for a key meeting he described in the construction of the alleged fraud, the government could present no evidence that the meeting took place.
“No doubt it is dangerous for prosecutors to ignore serious red flags that a witness is lying, and the government will doubtless approach Napier’s revised recollections with a more skeptical eye on remand,” wrote Judge Jacobs. But the Justice Department never re-tried the case, possibly because the feds realized their prosecution was even worse than it appeared to the judges who ordered a new trial. In essence Justice gave up on getting criminal convictions.
But New York Attorney General Schneiderman has continued to pursue a state civil lawsuit against Mr. Greenberg. He is doing so even after most of his case has collapsed and his chances of winning any damages have been quashed. His remaining motive seems to be the political one of saying someday that he finally nailed a great white whale like Mr. Greenberg. Like Captain Ahab, he seems to have lost all judgment on the issue.
Mr. Schneiderman’s office must know about problems with Mr. Napier’s testimony but, incredibly, attorneys for Messrs. Smith and Greenberg say the AG still plans on using a deposition from Mr. Napier as evidence against Mr. Greenberg. Mr. Schneiderman seems to be banking on the prosecutor-friendly judge in the case, Charles Ramos. But that’s all the more reason to get the withheld evidence out in the open.
In the Monday filing the attorneys for Messrs. Smith and Greenberg say that having reviewed the new evidence they have “identified materials that indeed confirm the Second Circuit’s conclusion that Mr. Napier ‘may well have testified falsely.’”
The Greenberg and Smith attorneys have asked Justice to let them make this evidence public, but Justice has refused. Perhaps the feds don’t want the embarrassment that is sure to result if it becomes clear that government lawyers failed to honor the Brady rule that requires them to turn over relevant evidence to the defense.
Prosecutorial abuses have become all too common, and this latest example is all the worse because it has gone on for so many years. The federal judge in Connecticut needs to confront the government on its prosecutorial tactics, and at a minimum she should let the sun shine on what prosecutors didn’t want anyone to see during the original criminal trial.
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