June 19, 2018

In IG Michael Horowitz’s report on the Hillary email investigation, he says, “We determined that [conclusions] were based on the prosecutors’ assessment of the facts, the law, and past department practice.”  Never mind for now about the law and the facts, which we absolutely know were skirted; Horowitz, sadly, appears to be spot-on when he says this train wreck of an investigation was in line with past department practice.  Andrew C. McCarthy at NATIONAL REVIEW has revisited a case from 2011 which shows alarming tactical similarity with the FBI’s conduct in 2016 and the Mueller team's now.  And the official who led the investigation wasn’t punished --- he was promoted.


The agent in question was David Chaves, now retired, who in 2011 was working hard to make an insider trading case against some high-profile people --- not as high-profile as the 2016 candidates for President of the United States, to be sure, but people who would certainly rate as notches in his belt:  investor Carl Icahn, pro golfer Phil Mickelson and sports gambler Billy Walters.  Investigators thought they saw some suspicious stock trading surrounding Icahn’s $10.2 billion bid on Clorox Co., and that motivated lead investigator Chaves to aggressively use a grand jury to target Icahn’s friend Walters, even obtaining court orders to monitor his phone calls –- a strategy normally reserved for big-time felons in conspiracy cases.  But after two years of investigating, they turned up nothing.


Typically a case like this one would be closed after a couple of unfruitful years.  Yet Chaves doubled down, with a campaign of strategic leaks to reporters from The New York Times and Wall Street Journal.  Never mind that leaks concerning grand jury testimony and sealed wiretap information were just as illegal then as they are today.  McCarthy says details of the probe were released “expansively” to the press:  names of targets, specific stock trades, investigative techniques they were using and might use in coming days.


With “journalists” (I have to add the quotation marks here), he took a quid pro quo approach that exchanged leaks of government information for whatever they could tell him in return, turning the reporters, in effect, into sources for the government.


One thing McCarthy explains that I hadn’t thought of is how media leaks are used on people under phone surveillance to “tickle the wire.”  They bait the targets by making information public that might get their phones humming, perhaps revealing associations, “pecking order” in a conspiracy, or consciousness of guilt.  Agents are not supposed to use lawless leaks to the media for this purpose, but that didn’t stop Chaves.


He started his media blitz in May of 2014, with major stories about how Icahn, Mickelson and Walters were being scrutinized by the federal government for a scheme revolving around Icahn’s investments in Clorox.  According to McCarthy, they had scant evidence and not even a theory of how this was done.  The Times even admitted after running the story that it had been misled by its law-enforcement source and that the FBI had had no evidence that Mickelson had traded Clorox while Icahn was preparing to bid for the company.  No Clorox case was ever brought, but the investigation continued anyway, with attention shifting to another company called Dean Foods.


Read McCarthy’s piece to see how the investigation finally concluded and, more importantly, how the strategic leaking done by the FBI was dealt with by the New York field office:  initial alarm by top officials, then a circle-the-wagons at the FBI and essentially no corrective action.


At the end of 2014, Chaves was PROMOTED, becoming the head of all white-collar investigations at the New York FBI.


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This case certainly isn’t the only example of monitoring phones, illegally leaking to “tickle the wires,” and destroying reputations to bring down bigger fish.  (In fact, McCarthy cites another one in his article.)  On the contrary –- judging from the Paul Manafort case and the reputation of FBI attack dogs such as Andrew Weissmann, it seems more and more to be standard operating procedure in law enforcement.  And it’s a far cry from what the judicial process should look like in a free society.


So when IG Horowitz concludes that the FBI in 2016 was following “past department practice,” that observation, to those in the know, could just as easily be read as a condemnation.  To my mind, it should be.


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  • Susan Dyar

    06/19/2018 09:16 AM

    I remember Phil Mickelson’s name being thrown around for insider trading. Glad McCarthy is putting the spotlight on this. Last Saturday nite, Judge Jeanine had the best line I’ve heard, when she said Comey, McCabe, Page and Strock were determined to drag that Crook across the finish line. That summed it up.