Floridians Beware − Horror Show − Games in Your Attorney General’s Office — Yves Smith article

by Ken Kappel on January 13, 2012

Yves Smith, at the No. 1 rated economic blog, Naked Capitalism, wrote the following piece. We believe and think that she is likely the most astute non-lawyer analyst regarding the rapidly evolving mortgage-based litigation front. In order to understand the depth of Yves’ prowess and intellectual capacity, pick up a copy of her book, “ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism,” available from her web site click here.

Her recent article is titled: “More on Corruption in the Florida Attorney General’s Office: Staff Intervenes to Help Lender Processing Services When it is the Target of a Fraud Investigation.” The link is live, or read it below. To the short article.”

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“As hedge fund manager David Einhorn (known best for his public skepticism of Lehman’s accounting) apparently says regarding situations that don’t pass the smell test, “No matter how bad you think it is, it’s worse.”

“Abigail Field’s post on how the Florida attorney general’s office befriends foreclosure fraudsters is an important, if nausea-inducing read. One of the striking sections that makes the extent of the corruption clear is a snippet toward the end. It show how the AG’s office acted to help Lender Processing Services do damage control, when it had LPS under investigation for foreclosure frauds.” [Emphasis Added.]

“Field points out that the investigation of LPS was launched under the previous AG, Bill McCollum, and is supposedly still active.”

“Field goes through the current AG Pam Bondi’s fraudster-favoring conduct, which is less surprising than it ought to be, since the AG’s Economic Crimes Division has a proud history of being more in bed with probable criminals than against them. Here Field relies on the report of a former seven year staffer in the AG’s office, attorney Andrew Spark, who wrote after Bondi took office about the long standing considerable obstacles to serving the public interest, such as the all too predictable revolving door (with former employees going to foreclosure mills). While Spark made it clear that he was not a supporter of the aggressive Clarkson/Edwards position (these were the two employees we wrote about yesterday who were fired under suspicious circumstances), he nevertheless presents damning evidence in the section of his letter titled “Powerful interests have influence.” Field refers to this letter in her discussion:” [Emphasis Added.]

“An example of precisely how the right attorney is able to assist their client with the Florida Attorney General’s Office involves the national negotiation over foreclosure fraud. Although the discussion of those negotiations typically centers on the bailed-out banks, Lender Processing Services is also involved. Indeed, [Michigan's] Republican Attorney General Bill Schuette issued criminal subpoenas to LPS. And in two emails obtained by Lisa Epstein in response to a public records request, LPS’s outside counsel Baker & McKenzie LLP asks the Florida AG’s office with help in minimizing the damage of the subpoenas to LPS and with persuading Michigan to switch its investigation from criminal to civil.” [Emphasis Added.]

Ken here. Back in the day we were attached to Baker & McKenzie’s NYC Securities Department with our independent incorporated legal expert document production entity. Oh yeah, we learned so much − but, in re the thrust of this article: If only we had known. <g>

“Though stunning in and of itself–it’s a new height of special influence when a company targeted for criminal investigation by one AG can call up the Florida AG and ask it to run interference–it’s far worse when you remember that at the time Baker & McKenzie made that request, LPS was under investigation by the FLORIDA AG’S OFFICE! The emails are part of a longer string available on Scrib’d here. If you look at the one on page 5, it’s clear Baker & McKenzie represent LPS. Then look at page 24, and then page 9.”

“On page 24 you find this email dated June 15th, written by Baker & McKenzie partner Joan E. Meyer:”

“Vicki–[Vicki Butler is Spark's former boss in the economic crimes division]“

“If you have a chance this afternoon, I’d like to catch up. We just received notification that the MI AG (Bill Schuette) announced the issuance of criminal subpoenas against LPS and Docx. [sic] When I called, the assigned investigator hadn’t even heard of the AG meeting with LPS. I know that Michigan was already committed to be an on-site attendee. Could I talk to you about this issue generally? These public announcements can deeply impact LPS’s business operations and stock price and seem unnecessary if the AGs who issue them have already agreed to a meeting. Wondering if there’s anything we can do.” [Emphasis Added.]

Ken here. Can’t ya just fix it right up?

“Meyer then gives her contact information and signs the email.”

“If you look at page 9, here’s what you read:”

“Vicki–”

“Sue Sanford from the Michigan AG’s Office is going to call you about the State AG meeting with LPS. She may ask about converting her investigation from criminal to civil. If you are comfortable, please encourage her to join the civil group. I would like to share information with her and get her up to date regarding the information we provided at the meeting but thus far cannot because of the criminal restrictions.” [Emphasis Added.]

“Thanks and Regards,”

“Joan”

“Again, these asks go beyond beyond the types of issues raised by Spark, because it is a request that the FL AG’s office assist a company that it is itself investigating persuade another AG’s office to go easy on it, and switch from a criminal to a civil investigation.” [Emphasis Added.]

“Now with this context, do you have ANY doubt as to what Richard Lawson meant when he told Clarkson and Edwards that he wanted them to handle their investigations “with great sensitivity”? The message was to at most go through the motions but not ruffle any feathers.”

“And it should come as no surprise that Spark left the Florida AG’s office shortly after sending his letter. Any seriousness about investigating bad conduct is a career limiting move in the Bondi regime.” [Emphasis Added.]

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