Trump’s Clash With Justice Department Sparks ‘You’re Fired’

March 13, 2017, 11:39 AM

By Tom Schoenberg, Bloomberg News

President Donald Trump’s abrupt firing of a prominent federal prosecutor in Manhattan reflects a bruising battle that’s building between the new administration and U.S. law enforcement agencies.

This week the president turned to overwhelming force.

Shortly after the election, Trump pledged to work with Senator Chuck Schumer, the top Democrat in the Senate, and talked about the good relationship the pair had. He even asked a former Schumer lawyer, Preet Bharara, to remain in his post as U.S. attorney for the Southern District of New York, one of the most influential — and independent — prosecutor offices and a key enforcer of Wall Street. Bharara was well regarded by Republicans and Democrats alike.

Since then, Trump has blasted Schumer, recently tweeting a 14-year-old picture of the New Yorker eating Krispy Kreme doughnuts with Russian President Vladimir Putin, and mocking the senator for “fake tears” over the White House’s immigration and travel policies. He also called for an investigation of the Obama administration’s Justice Department, alleging that the former president had bugged his phones at Trump Tower.

Hannity’s Suggestion

Attorney General Jeff Sessions, during an interview on Thursday on a conservative radio show, said he’d consider whether an outside special counsel was needed to look into the actions of the Justice Department under Obama’s attorneys general, Loretta Lynch and Eric Holder.

Later that same day, Fox News talk show host Sean Hannity suggested Trump purge the key Obama loyalists. He followed up Friday with a commentary: “Deep-state Obama holdovers embedded like barnacles in the federal bureaucracy are hell-bent on destroying President Trump. It’s time for the Trump administration to purge these saboteurs.”

On Friday, Sessions ordered 46 U.S. attorneys to submit letters of resignation and vacate their offices by midnight, though two were later allowed to remain in place. Bharara was among those asked to quit — and he refused.

“I did not resign,” Bharara tweeted Saturday. “Moments ago I was fired.”

Bharara was involved in a number of sensitive investigations including one involving Deutsche Bank AG, the largest known lender to Trump’s businesses, and one of 21st Century Fox Inc., the media conglomerate that is Hannity’s employer.

Bharara said in a statement, “one hallmark of justice is absolute independence, and that was my touchstone every day that I served.” He then noted that the office would be run in the interim by his former deputy, Joon Kim.

That striving for “absolute independence” occasionally frustrated Republicans and Democrats alike during Bharara’s seven-year run heading the office. At times, he clashed with Justice Department leaders in Washington for aggressively staking out high-profile investigations and then not communicating their progress.

“The Southern District of New York has a long tradition of independence and a long history of having independent-minded U.S. attorneys,” said John Walsh, a former U.S. attorney of Colorado now at Wilmer Cutler Pickering Hale & Dorr LLP in Denver. “Preet was very proud of that.”

In the criminal defense bar, speculation is already building for who will be nominated by Trump as a permanent replacement. Many suggest it will be Marc Mukasey, a lawyer at Greenberg Traurig LLP with close ties to former New York Mayor and sometime Trump adviser Rudy Giuliani, and whose father is former Attorney General Michael Mukasey.

Marc Mukasey declined to comment.


Rudy Giuliani spoke about Bharara in this video interview with Big Law Business from January, 2016

Asked to Stay

In November, Bharara said after meeting with Sessions and Trump that he’d been asked to stay on in the new administration and had agreed to do so. Saturday’s drama raises questions about whether or why the relationship changed, and will draw attention to the high-profile cases that Bharara’s office is handling.

It’s unclear what role, if any, Bharara’s team is playing in the multiple investigations of Russian influence in the 2016 presidential campaign, Russian contacts by Trump aides, and Michael Flynn’s actions leading up to and while serving as national security adviser. Many of the principals, though, were working in or based in New York.


On “Bloomberg Markets,” Bloomberg’s Winnie O’Kelley and Keri Geiger examine Bharara’s legacy and look at potential replacements for the position.

‘Elections Have Consequences’

John Conyers, ranking Democrat on the House Judiciary Committee, is asking the Justice Department to provide the committee a summary of any and all pending investigations involving members of the Trump administration, his transition and campaign teams, and the Trump Organization “so that we can understand the full implications of this weekend’s firings,” he said in an emailed statement.

Still, Senator John McCain, the Arizona Republican and sometime Trump critic, said there seemed nothing unusual about removing Bharara and other Obama holdovers.

“I don’t know what his promise was to Mr. Bharara. But I do know that other administrations have done the same thing, perhaps not in as abrupt a fashion,” McCain said Sunday on CNN’s “State of the Union.” “Elections have consequences.”

Bharara’s departure may mean some of the most prominent and difficult Justice Department investigations could be disrupted or delayed. They include inquiries into Deutsche Bank’s handling of “mirror trades” that helped Russian clients convert rubles into Western currency, a high-profile securities fraud case against Valeant Pharmaceuticals International Inc., and political corruption cases involving New York Mayor Bill de Blasio and aides to New York Governor Andrew Cuomo.

Fox Settlement Payments

Last year, charges from Bharara’s office led to the arrest of Reza Zarrab, a Turkish-Iranian gold dealer accused of moving money for Iran through his network of companies to circumvent sanctions controls. The arrest of Zarrab, considered an ally of Turkish President Recep Tayyip Erdogan, roiled relations between Turkey and the U.S. Zarrab has pleaded not guilty and is fighting the charges. His trial is scheduled for October.

Among the cases Bharara leaves behind is one investigating whether Fox should have disclosed to investors that it made secret settlement payments to female on-air hosts who had alleged sexual harassment.

Bharara, 49, who’s held his post since August 2009, had bipartisan praise for aggressively prosecuting corruption in the state capital of Albany. One of the reasons he initially may have been asked to stay was because of his pursuit of several political corruption cases of Democratic state officials.


Robert Mintz, a partner at McCarter and English, and Carrie Cohen, a partner at Morrison Foerster, discuss the firing of U.S. attorney Preet Bharara, along with 46 other U.S. attorneys, by the Trump administration on Bloomberg Radio’s “Bloomberg Law.”

Politically Charged

While incoming presidents, most notably Bill Clinton, have replaced U.S. attorneys before, the new purge comes in a politically charged atmosphere as Democrats call for a special counsel to look into the Trump camp’s relationships with Russia during the presidential campaign.

A representative for Bharara declined to comment on his refusal to resign and his firing. The White House referred calls to the Justice Department, which declined to comment beyond confirming that Bharara is no longer a U.S. attorney.

Ironically, Bharara made a name for himself in Washington as a key figure behind a Senate probe into the Bush administration’s firing of U.S. attorneys. At the time, Bharara was chief counsel to Schumer, who spearheaded the investigation.

Bharara deposed Justice Department staffers and arranged for others to testify. Former U.S. Attorney General Alberto Gonzales resigned in 2007 under pressure stemming from the investigation, which looked into alleged politicization of the firings and of the Justice Department in general.

Bharara opened a personal Twitter account this month, and on March 7 reflected on the Senate probe while offering a link to a video of the hearing.

“This Senate hearing on political interference @ DOJ was 10 yrs ago today,” he tweeted. “Is that me in the background? Boy I’ve aged.”

--With assistance from Christian Berthelsen and David Yong.

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