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Blog Post | February 21, 2019

NYT’s Whitewash of Revolving Door Figure, Robert Khuzami

Revolving Door

In this widely read article on President Trump and the Justice Department, the New York Times characterized the Deputy US Attorney for the Southern District of New York (SDNY), Robert Khuzami, in an entirely inaccurate manner. Not only was the characterization factually wrong, meriting a correction on its own, but it also gives readers unwarranted confidence in Khuzami’s independence. Indeed, Khuzami’s actual professional history merits serious scrutiny from the Times.

The February 19, 2019 article stated that, “The inquiry is run by Robert Khuzami, a career prosecutor who took over after Mr. Berman, whom Mr. Trump appointed, recused himself because of a routine conflict of interest.” (emphasis added)

The phrase “career prosecutor” conveys to a reader that Khuzami was a nonpolitical appointment who had spent the vast majority of his career in nonpolitical public service jobs prosecuting alleged criminals. Neither meaning is close to accurate, and the distance from truth actually elides the reason why Khuzami’s central role ought to stoke fear rather than generate calm.

As the SDNY press release announcing Khuzami’s hiring made clear, Khuzami was handpicked by Geoffrey Berman to serve as Deputy US Attorney on January 5, 2018.

Deputy US Attorney is not a line prosecutor position hired via civil service, as past New York Times coverage has established, but a position selected by then-Interim US Attorney Geoffrey Berman.

Berman himself was, quite atypically and perhaps without any precedent, interviewed personally by President Trump before being chosen for the SDNY position. That means that Trump personally scrutinized Berman’s loyalty before appointing him. Following that, Berman himself chose Khuzami to serve as his Deputy. Khuzami is in charge of any matter on which Berman is recused by virtue of having been chosen by Trump’s handpicked US Attorney for SDNY. Khuzami’s hiring process was thus the opposite of the apolitical hiring process deployed when a “career prosecutor” is hired by a US Attorney’s office.

Moreover, Khuzami was not a line prosecutor receiving an appointment by a political appointee of dubious independence. Indeed, past New York Times coverage had correctly noted in 2018 that Khuzami was actually a revolving door hire from “Big Law,” even as the paper failed to note that in 2019. Immediately preceding his current stint at SDNY Khuzami had “been a partner in the law firm of Kirkland & Ellis, based in its Washington office, since leaving the S.E.C. in 2013.”

Further, a subsequent New York Times article made clear that Khuzami was compensated in a manner entirely incompatible with a career prosecutor while at Kirkland. “Kirkland has been spending lavishly. It paid its former partner Robert Khuzami $11.1 million for his work at the firm from late 2016 to early 2018, according to the financial disclosures Mr. Khuzami filed when he became Deputy United States Attorney in Manhattan.”

Not only was Khuzami’s job of four and a half years as a highly paid Kirkland & Ellis law partner before joining the SDNY as the number two official incompatible with being a “career prosecutor,” much of his career has been in private practice, and most have not been as a line prosecutor. Khuzami has preceded each of his three post-clerkship stints in government with lucrative segments in private practice, making him an archetypal “revolving door figure” rather than the public-minded “career prosecutor” the Times wrongly claimed he was. As this Center for Responsive Politics’ summary demonstrates, Khuzami spent six years at Cadwalader, Wickersham & Taft and seven years at Deutsche Bank prior to his latest four years at Kirkland & Ellis.

The seven years at Deutsche Bank (2002–2009) are particularly concerning, seeing as the complex relationship between that troubled bank and President Trump remains very much in the news. For example, a day after the Times elided Khuzami’s time at Deutsche Bank, Bloomberg published a piece advancing our understanding of the fraught creditor-debtor relationship between Deutsche Bank and Trump.

Moreover, Deutsche Bank’s US business operations while Khuzami was their General Counsel for US operations are being scrutinized currently by the Federal Reserve.

“The Fed’s probe is in an early stage as it scrutinizes whether Deutsche Bank’s U.S. operations adequately monitored funds from an Estonian branch of Danske Bank A/S, according to two people briefed on the situation, who asked not to be named because the inquiry isn’t public. Danske, which used correspondent banks such as Deutsche Bank to move money abroad, has admitted that much of about $230 billion that flowed through the tiny Estonian outpost may have been dirty. […] Bloomberg reported in November that Deutsche Bank had been contacted by the Justice Department and was thought to have handled the bulk of the transactions under scrutiny. ” (emphasis added)

Deutsche Bank’s potential laundering is said to have begun in 2007, i.e., when Khuzami was in charge of the legal practice for the Deutsche Bank subsidiary implicated in this massive scheme. Furthermore, the money said to have been laundered by Deutsche Bank US is alleged to come from Russia and other former Soviet states. The possibility that Khuzami bears some personal culpability with respect to laundering Russian money represents a serious potential conflict of interest for someone involved in investigating both Trump, whose New York-based business career is being scrutinized for involvement in laundering Russian money, and Michael Cohen.

This seeming conflict of interest calls into serious question Khuzami’s independence with respect to the scrutiny of President Trump and is the exact type of conflict of interest an actual career prosecutor would be very unlikely to have.

Moreover, Deutsche Bank’s problematic ties to laundering money from Russia go well beyond the implications of investigators into Danske Bank; consider Deutsche Bank’s subsequently punished “mirror trading” which triggered both federal prosecutors and House Financial Services Committee Chairwoman Maxine Waters.

Indeed, Khuzami’s boss, Geoffrey Berman, and Deutsche Bank were also tied together for a long time. That Deutsche Bank has maintained such close relationships with both of the top two attorneys for the Southern District of New York is worrisome as federal law enforcement considers the scope of Deutsche Bank’s problematic behavior — the exact type of issue the SDNY is supposed to be particularly expert at prosecuting.

Furthermore, despite the expectation in the New York Times and elsewhere that interim US Attorney Berman would be subject to Senate confirmation, in fact, Berman was never nominated to nor confirmed by the US Senate. This odd circumstance, enabled by an unusual provision in the law I discussed in a piece in Slate, is itself a significant story. Yet the odd leadership structure at SDNY has received far too little attention from the New York Times, a publication whose headquarters is located within the SDNY and which is arguably the key outlet for covering the intersection between SDNY and the banking industry.

Calling Khuzami a “career prosecutor” is not only factually incorrect, it wrongly undermines interest in a real story that screams out for journalistic resources from the paper. The New York Times ought to figure out the implications of Deutsche Banks’ former lawyers running the SDNY without Senate confirmation rather than whitewash Robert Khuzami’s revolving door past.

Revolving Door

More articles by Jeff Hauser

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