Edward Ericson Jr. of Baltimore City Paper points us to a long, weird William D. Cohan blog piece at New York Times arguing for a pardon for ex-Goldman Sachs senior partner and convicted criminal Robert Freeman.
Cohan paints a portrait of a man wrongly persecuted by then-U.S. Attorney Rudy Giuliani in a “Wall Street Witch Hunt” in the 1980’s. Don’t believe it.
Going through all the over-aggressive tactics by Giuliani (kind of a redundancy, no?), Cohan really gets you believing this guy got railroaded. And then he drops this “oh yeah, well also” nearly twenty paragraphs in:
Then, Freeman recalls, he called Siegel, who was advising K.K.R. on the Beatrice deal. Freeman asked Siegel about any potential hiccups with it. Siegel asked Freeman the source of his information about the deal possibly being in trouble, and Freeman told him about his brief conversation with Bunny Lasker. That’s when Siegel uttered: “Your Bunny has a good nose.”
Freeman then sold more of the Beatrice stock before trading in it was halted because K.K.R. announced it was lowering the cash portion of its bid for Beatrice, driving the stock price down. Trading on these innuendoes and hunches, Freeman saved Goldman from losing $548,000 it otherwise would have lost. (And saved himself from losing $93,000.)
Sounds like a crime to me—exactly the kind of thing that everybody suspects goes on on Wall Street all the time, and which tilts the playing field toward those with the most money and the best connections. You think Joe the Schwab broker in Boca Raton could have got this Siegel character on the horn?
But Cohan continues to downplay Freeman’s admitted guilt:
he agreed to plead guilty to one count of mail fraud to make the matter go away.
I’m sorry, but that’s completely unconvincing. This was a well-connected Goldman (disclosure: the firm is an Audit funder) senior partner, who paid his million-dollar fine with a personal check,” as Ericson is good to point out, and who could have lawyered up with the finest white shoes in New York City. The guy was nailed—that’s why he plead guilty to mail fraud.
Cohan tries another nifty bit of misdirection by quoting the Times itself editorializing in 1990 that Giuliani’s behavior was “an excess that haunted his 1989 mayoral campaign.” That implies that Freeman wasn’t really guilty, but he was and the Times itself thought so. Here’s the very next sentence in the editorial Cohan selectively quotes:
But although Mr. Freeman was abused, he was also forced by the evidence to plead guilty to mail fraud in Federal Court.
Quite a bit different from “to make the matter go away.”
And then Cohan goes for the heart strings. Ericson:
Says Cohan, tears apparently streaming down his cheeks, Freeman still lives in the same house he had when he was arrested; he “plays golf when he can” and “never really worked again.”
Oh, and also, “He missed out on his chance for an even more senior position at Goldman Sachs and a windfall of hundreds of millions of dollars that other Goldman senior partners received when Goldman went public a decade ago.”
Man, a real sob story. Do make sure to read the comments, which are some of the best I’ve seen in a long time. Here’s a sample:
A two-hankie story, complete with violins. If someone is doing God’s work, the govt shouldn’t interfere.
By all means, Obama should compete with Clinton’s pardon of Marc Rich for the biggest embarrassment of his 1-term career. At least Clinton got a Library out of it.
It’d be nice to have a little less journalistic attention focused on absolving Goldman convicts and a little more on sniffing out the Cameron Todd Willinghams of the world.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.