The video of David Bermingham and Gary Mulgrew on Ungagged.net has unveiled a trove of details about their case, but what strikes me the most is how similar the case was to all the others. There was a coordinated strategy among the Enron Task Force with a singular goal to get Ken Lay and Jeff Skilling. As Gary Mulgrew says in the video, “we were just in their way.”
Some examples of what I mean by a strategy:
The allegations against Gary Mulgrew, David Bermingham and Giles Darby center around a personal transaction they did with Andy Fastow. They were accused of misleading their employer about the value of an asset. Bermingham states in the video, “the asset was worthless.” Even NatWest, the entity they were accused of defrauding, told the FSA that they were “content with the price.”
This reminds me of the Nigerian Barge deal, in which all the parties were content with the deal, and yet the government strived to criminalize it. Oddly, or perhaps not, both deals were worth $7 million.
In February 2002, the FSA (which is the British version of the American SEC) investigation concluded. None of the NatWest defendants heard anything more about the investigation until June when they discovered – by watching television – that they were the subjects of criminal complains. They had never spoken to anyone at the Department of Justice.
This is like the Broadband defendants. Rex Shelby answered his door one August evening to find two FBI agents standing there. As they came inside, he asked if he was being accused of something. They said no. Later, a friend stated that they had been at his place too, and they had said “Shelby’s fingerprints are all over this.” Shelby offered numerous times to speak to the prosecutors in order to explain the EBS technology and they flatly refused him. The DOJ in the EBS and NatWest cases had no interest whatsoever in speaking to the actual people they were accusing.
In the video, Gary Mulgrew’s describes a horrific strategy in which the DOJ simply manipulated his email, taking phrases from one document, pasting them into another document. He said in the video that while reading the doctored emails, he said to his brother, “I must have had a lobotomy. It seems to me, reading this, I did this. I stole this money.” His astonishment is clear. He says, “I didn’t think these people lied. I didn’t think these people manipulated. I didn’t think that they would cut and paste and do things. I grew up watching Law & Order, and I thought these were good guys… and instead what you get is this contorted load of rubbish.”
He also discusses an internal RBS report from early 2002 when the Financial Services Authority were investigating the transaction after the NatWest Three had come forward to them and self-reported. The DOJ deliberately restricted their document subpoena to pre-bankruptcy times, because they didn’t want to get hold of reports like that which would have completely undermined their case. They knew of its existence, though, because the FSA sent a huge pack of documents (which the NatWest defendants had given them) to the SEC, under a covering note which included a summary of the FSA’s conclusions, including the information that RBS had been asked to go back and look at everything again and had concluded that all procedures had been folllowed and that the price paid was fair.
This, sadly, is par for the course. Despite the fact that the entire world say “the Enron dataset”, numerous important emails were kept from the Broadband defendants until well after the first trial. Other documents, such as the new discovery in the James Brown case, are clearly exculpatory and were released only on March 10, 2010. The manipulation of email and documents is shameful, but when the DOJ has a case to make, nothing – not even civil rights – is sacred.
Mulgrew also said Caldwell gave a speech in which she said that all the people in Washington were urging an indictment. This sadly is almost word-for-word what John Kroger said. He was eager to be the first to get some “scalps on the board.” His book, Convictions, details the passion with which he was determined to convict Enron executives whether or not they were guilty.
One of the most troublesome things in the prosecutions was the way the government used anyone and everyone to get Ken Lay and Jeff Skilling.
The charging document alleged that the NatWest Three conspired with Andy Fastow and Michael Kopper. The Three were charged. Michael Kopper and Andy Fastow were not. The document was used to get Kopper and Fastow to talk since they had pled the Fifth. When Michael Kopper talked, Andy Fastow still refused. Then they indicted his wife.
The NatWest Three and the Nigerian Barge defendants were used to go after Andy Fastow. Andy Fastow, Ken Rice, Kevin Howard, and Kevin Hannon were used to go after Skilling and Lay, which is who they really wanted. The fact that thirty-six other people got trapped under the wheels did not matter one bit to the DOJ. Lea Fastow, for God’s sake, was a mother with two young kids. And John Kroger openly admits that not only would her “crime” usually not be punished, but she was being punished BECAUSE HER HUSBAND REFUSED TO TALK!
All the men they sent to prison under pernicious plea deals had children and wives and lives. David Bermingham had a three month old baby when he discovered he was subject to a criminal complaint in the USA.
And yet it didn’t matter.
None of the lives of these people mattered one bit to the DOJ. They were happy to separate a father from his infant son, or in the case of Ken Rice, his four children or in the case of Lea Fastow, her two young boys. It simply made no impact on them at all that they were deeply hurting innocent people. And these innocent people had no recourse.
I am so proud of both Gary Mulgrew and David Bermingham for speaking out. I think the big break-through in the way Enron is perceived by the majority will come when those who did plea deals start speaking out too, when they let it be known that they were manipulated and used by the DOJ for the stupid reason of putting Jeff Skilling and Dr. Lay behind bars.
So thank you, Gary and David, for being the first.