Holder's Law Firm Has Questionable Ties to Mortgage Banks, D.C. Government and Obama Administration

Nevadans are probably wondering why their own Attorney General, Catherine Cortez Masto is prosecuting corrupt lenders for the fraudulent act of robo-signing, but U.S. Attorney General Eric Holder is not.

In fact, millions of Americans, particularly those who are being foreclosed upon are probably wondering the same thing since the Obama administration decided in October to forego criminal charges against Bank of America, JPMorgan, Chase, Citigroup, Wells Fargo and Ally Financial in exchange for a $25 billion civil settlement.

But new information reported by Reuters today implies that Holder and other top Justice Department officials may be restraining themselves because their former Washington, D.C. white-shoe employer, Covington & Burling, which represented many of the big banks getting a break.

U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department’s criminal division, were partners for years at a Washington law firm that represented a Who’s Who of big banks and other companies at the center of alleged foreclosure fraud, a Reuters inquiry shows.

The firm, Covington & Burling, is one of Washington’s biggest white shoe law firms. Law professors and other federal ethics experts said that federal conflict of interest rules required Holder and Breuer to recuse themselves from any Justice Department decisions relating to law firm clients they personally had done work for.

Holder has resisted calls for a criminal investigation since October 2010, when evidence of widespread “robo-signing” first surfaced. That involved mortgage servicer employees falsely signing and swearing to massive numbers of affidavits and other foreclosure documents that they had never read or checked for accuracy.

Covington has maintained a suspicious reputation within the District of Columbia for several years because of its close relationship with former Mayor Adrian Fenty, and his controversial appointment of a top Covington lawyer to the position of D.C. Attorney General.

Fenty served from 2007-2011, and in 2008, while still working at Covington, Holder filed an amicus brief in D.C. v. Heller on behalf of the District of Columbia to uphold the D.C. gun ban, which amounted to a total ban on all firearms.

The case was heard by the US Supreme Court in 2008, and Covington attorney Robert Long was retained by the District via Peter Nickles, another former Covington top lawyer who was appointed by Fenty in the wake of the forced resignation of then Attorney General Linda Singer.

Nickles fired constitutional scholar Alan Morrison so that he could retain Covington to assist with the case instead, and many critics considered the move to be unnecessary, and ultimately a fatal mistake. The Heller case was the first Second Amendment case argued before the U.S. Supreme Court, and in July 2008 the D.C. gun ban was struck down, and District residents were guaranteed the right to keep firearms already in common use within their homes for self defense.

Fenty came under fire several times for Nickles appointment as the District’s Attorney General since the former Covington lawyer was also acting counsel for the Mayor. Critics, particularly members of the judiciary committee of the D.C. Council felt that the appointment was a conflict of interest because Nickles positioning allowed him to shield the mayor from any potential D.C. criminal charges.

There was also suspicion as to why Fenty pressured Singer to resign without any concrete explanation.

Members of the D.C. Council’s Judiciary Committee authored letters of protest to the Mayor as well as ethics complaints about the conflicts of interest between Fenty and Nickles. Often times, the D.C. Council accused the pair of abusing their power, and they even implied that Fenty replaced Singer with Nickles to gain control of her ongoing investigation of a Bank of America check writing fraud case involving District employees.

Nickles finally filed a lawsuit against Bank of America in 2008 and several District employees pleaded guilty to conspiracy, but it is still unknown why Fenty and Nickles ordered Singer to halt her original investigation at the time that they did and why she was suddenly asked to leave.

About the time the Bank of America lawsuit was filed, Nickles implemented forced evening training sessions for government lawyers and prosecutors, all of which were orchestrated by Covington attorneys. The association between Covington and District of Columbia government was undeniable.

In 2009, columnist Michelle Malkin reported that although Holder was only getting paid $186,000 as Obama’s newly appointed attorney general Covington & Burling he left the firm with a large separation payment:

Holder returns to a more modest $186,000 salary as Obama’s attorney general. But parting has its perks, too. The Washington revolving door pays.

Covington & Burling will make a separation payment valued at between $1 million and $5 million, plus a repayment of up to $1 million from the firm’s capital account, plus a retirement plan of up to $500,000. His net worth: $5.7 million. Reflecting on his past eight years raking in the dough and watching him schmooze friends and clients from his “elegant new Manhattan offices,” an American Lawyer profile observed: “Life is good for private citizen Eric Holder, Jr.” President Obama and the missus, such outspoken detractors of climbing the corporate ladder and influence-peddling, were unavailable for comment.

The Reuters story also added that although many former Washington, D.C. lawyers transition from white shoe law firms back and forth between the public and private sector, “traffic between the Justice Department and Covington & Burling has been particularly heavy.”

In 2010, Holder’s deputy chief of staff, John Garland, returned to Covington, as did Steven Fagell, who was Breuer’s deputy chief of staff in the criminal division. The firm has on its web site a page listing its attorneys who are former federal government officials. Covington lists 22 from the Justice Department, and 12 from U.S. Attorneys offices, the Justice Department’s local federal prosecutors’ offices around the country.

Covington & Burling’s White Collar Defense & Investigations page also boasts, “Our white collar practice includes 30 partners, most of whom are former prosecutors and SEC enforcement attorneys who have held senior positions in United States Attorney’s Offices, the U.S. Department of Justice, the White House, the Securities and Exchange Commission, and other government agencies involved in white collar criminal and regulatory enforcement.”


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