The whole thing took about three hours. Some time around five o'clock yesterday afternoon, the New Yorker magazine put up the latest piece by Ronan Farrow, this time detailing accusations of physical abuse of several women committed by Democrat New York Attorney General Eric Schneiderman. By 7:30 or so, Governor Andrew Cuomo had called on Schneiderman to resign. And by about 8, Schneiderman had announced he would quit. That was quick!
And good riddance! Frankly, I wish I had a stronger term than that to use. This guy was just about as bad as an Attorney General could be.
And that comment has nothing to do with the recent allegations of sexual misconduct. I haven't independently investigated those allegations, and have no knowledge of whether they are true or false. But Schneiderman's departure is an appropriate time to comment on his conduct of the high office that he held, which was reprehensible. Schneiderman took abuse of power and politicization of the office to whole new levels -- and that's saying a lot, given that one of his recent predecessors was Eliot Spitzer. In a post about a year ago titled "Good Riddance To Preet Bharara," commenting on the firing of New York's then federal prosecutor, I had this to say:
On a scale of 1 to 10, where 1 is "politicized, overreaching, and consumed with personal ambition" and 10 is "completely honest and independent," Eliot Spitzer was a 1 and Bharara about a 3.
On the same scale, Schneiderman would get about a negative 5.
Let's consider just a few examples. I'll start with one I am quite familiar with -- because in my current limited law practice, one of the main things I do is bring lawsuits against Schneiderman's office seeking public disclosures under New York's Freedom of Information Law. A main subject of our public records requests is Schneiderman's co-ordination with environmental activist groups of a politicized attack on fossil fuel companies, most notably Exxon Mobil, in the guise of a "criminal" investigation. Urged on by environmental activists, Schneiderman began his supposed criminal investigation of Exxon in November 2015. The theory of the investigation has shifted several times, but centers around the proposition that Exxon somehow has deceived its shareholders about the impacts of climate change on the company. In the New York courts, our lawsuits have had only limited success. But a recent decision from a Texas state court (Tarrant County District Court), in a lawsuit involving many of the same underlying facts brought by Exxon itself against several California municipalities engaged in similarly politicized activities, the Texas judge made some findings that give relevant factual background:
In January 2016, [Environmental activist attorney Matthew] Pawa engaged participants at the Rockefeller Family Fund offices in New York City to . . . solidify the "(g]oals of an Exxon campaign" that Mr. Pawa developed at the La Jolla conference [in California several years earlier]. According to a draft agenda for the meeting, the goals of this campaign included: (i) "(t]o establish in [the] public's mind that Exxon is a corrupt institution that has pushed humanity (and all creation) toward climate chaos and grave harm"; (ii) "[t]o delegitimize [ExxonMobil] as a political actor"; (iii) "(t]o drive divestment from Exxon"; and (iv) "(t]o force officials to disassociate themselves from Exxon, their money, and their historic opposition to climate progress, for example by refusing campaign donations, refusing to take meetings, calling for a price on carbon, etc."
According to the draft agenda, Mr. Pawa and the other participants aimed to chill and suppress ExxonMobil's speech through "legal actions & related campaigns," including "AGs" and "Tort(]" suits. The draft agenda notes that participants planned to use "AGs" and "Tort" suits to "get(] discovery" and "creat[e] scandal."
On March 29, 2016, New York Attorney General Eric Schneiderman, Massachusetts Attorney General Maura Healey, and other state attorneys general, calling themselves the "Green 20," held a press conference where they promoted regulating the speech of energy companies, including ExxonMobil, whom they perceived as an obstacle to enacting their preferred policy responses to climate change.
Two and a half years into Schneiderman's supposed "criminal" investigation, no charges have been brought; but very likely, that was never the point. Press conferences have been held publicly announcing the investigation and tarring the target. Subpoenas to Exxon and others have led to the production of hundreds of thousands if not millions of documents. I'll leave it to you to decide whether any of this has had an effect in "delegitimizing" Exxon in the political debate, as the conference agenda cited above indicates was the purpose. But I would hope that, whatever your view of the "climate change" issue, and whether or not you view Exxon's conduct as good or bad, you would not think that it is OK for an Attorney General, armed with the state's awesome power to enforce the criminal law, to use that power against private entities to suppress their free speech rights, particularly if there is no real underlying criminal conduct.
If you are hesitating in thinking that just maybe there might be something to Schneiderman's theory of a criminal conspiracy among fossil fuel companies to suppress information about climate change, you might be interested in the reaction of Judge William Alsup of the Northern District of California when that theory was presented to him by attorneys for the California municipalities at his March 21 "tutorial" on the science of climate change. From the transcript of that hearing:
So they [the oil companies] were on notice of what in IPCC said from that document, but it’s hard to say that they were secretly aware. By that point they knew. Everybody knew everything in the IPCC. So I don’t know. I think Mr. Boutrous [Chevron's lawyer at the hearing] makes a fair point.
Alsup is a Clinton appointee, and certainly no patsy for the oil companies.
For those interested in this issue and who might be in the New York area, my next appearance in court trying to pry documents out of Schneiderman's now-former office, will be at the New York Appellate Division, First Department, 27 Madison Avenue (at 25th Street) on Thursday May 17 at 2 PM. Open to the public!
Turning to another area where Schneiderman took politicization and abuse of power of his office to a whole new level, we have the subject of phony shake-down prosecutions of banks. Schneiderman's predecessor Spitzer was the guy who showed how to do it, weaponizing New York's abusive "Martin Act" to coerce a few hundred million bucks each out of the likes of Citibank and Merrill Lynch. But Spitzer was very small time compared to Schneiderman. And Schneiderman went way, way beyond Spitzer in using his shake-down prosecutions to collect fines and penalties in massive slush funds in the AG's office itself, that he could use to pass out to friends and supporters. I can't find a comprehensive list of Schneiderman's abusive prosecutions of financial institutions in one place, but a little googling provides many examples:
- Here's a March 2018 announcement of a settlement with Royal Bank of Scotland for some $500 million for supposedly including certain loans in securitization portfolios that "did not conform to underwriting criteria."
- A couple of weeks later, here's a $230 million settlement by UBS for essentially the same thing.
- In October 2017, it was $220 million from Deutsche Bank for supposedly "artificially manipulating LIBOR."
- Again in March 2018, it was $42 million from Bank of America for supposedly "masking" trading activity.
- This one is a 2016 settlement with Goldman Sachs that netted Schneiderman $670 million, allegedly for "falsely assuring investors that securities it sold were backed by sound mortgages."
You could go on with this for as long as you want. This March 2018 announcement gives the total of Schneiderman's collections from banks from matters involving the "financial crisis" as just under $4 billion. And this December 2016 piece in the Gotham Gazette details how Schneiderman has fought to keep the money from his settlements within his own control -- and out of the state's general funds -- so that he could pass out the money to his own cronies for his own political advantage. Example:
Schneiderman has . . . funded a series of long-ignored land banks: nonprofit organizations that acquire, rebuild, or demolish vacant, abandoned, or foreclosed properties. This investment came in the wake of a 27% increase in vacant and distressed properties between 2000 and 2010, according to the AG's office. Schneiderman initially allocated $12.5 million, and later another $33 million.
The chance the Schneiderman's friends and supporters aren't getting rich off these kinds of deals is about zero. Now, I haven't specifically investigated each of these Schneiderman settlements to evaluate where they rank on the scale of phoniness. But, as an example, ask yourself exactly why, if the mortgages in a securitized portfolio did not comply to the representations of the securitizer, the civil remedies available to the buyers would not be adequate? And why, if the wrong supposedly was misrepresentations to the investors who bought the securities, none of the money recovered goes to those investors? Instead, it goes to Schneiderman slush funds.
And then, of course, we have Eric Schneiderman as the public champion of the #MeToo movement. From the New York Times today:
Until Monday evening New York’s Attorney General Eric Schneiderman was a public champion of the #MeToo movement.
Naturally! In the category of ultimate hypocrisy, Schneiderman even introduced a bill calling for stiffer penalties for men who choked women. He must have been wondering for years when the hammer was going to fall on him. It finally has.