A law-enforcement source with knowledge of the situation inside the Southern District of New York described a chaotic situation there following Attorney General William Barr’s Friday night announcement that U.S. Attorney Geoffrey Berman was resigning, followed an hour later by Berman replying that he had not resigned and would not leave.
The person said that prosecutors and office leaders had been blindsided by Barr’s announcement, and concerned about what this could mean for their cases going forward. There is not only confusion about who to follow—Barr or Berman—but also what happens to the many, many politically sensitive cases and investigations being handled by SDNY.
“This is one of those things where the amount of speculation outstrips the amount of knowledge by so much,” said the person. “It’s like dealing with defendants: ‘what’s the reason they did this?’ You’re trying to analyze it rationally and then you realize it’s not necessarily rational.”
“You literally have two popes. This is a schism,” the person continued.
“It’s one of those situations where you have a statute that for good reason is never used and never tested. There’s a court order on the docket in SDNY naming Berman the U.S. Attorney. I mean, they’re called orders for a reason. Until it’s removed from the docket, the court will enforce it.”
As The Daily Beast previously reported, the move also stunned officials and trial attorneys inside Main Justice, as the Department’s Washington, D.C. headquarters is known. Two individuals in the Department’s Civil Division confirmed to The Daily Beast that Berman had been offered and declined the chance to run the division, where assistant Attorney General Jody Hunt abruptly announced her departure earlier this week, but declined. Barr reportedly then asked for Berman’s resignation in a face-to-face meeting in New York and, when Berman didn’t offer it, Barr simply announced it, and that Trump would nominate SEC Chair Jay Clayton, who has no prosecutorial experience, as his replacement.
“Berman’s rich—they found a guy who doesn’t need anything from them,” said the person with knowledge of the situation inside SDNY. “Berman wouldn’t take that job? Sometimes the most integrity comes out of the unlikeliest of places. Who’d have thought that the son of a Jersey real estate developer who worked with Charlie Kushner, someone who never did a case of his own, would turn out to be the guy who holds the line?”
For nearly half of his time in office, Trump—who abruptly fired Berman’s predecessor, Preet Bharara, in 2017—has groused about SDNY personnel and the need for a house-cleaning, including sometimes by specifically calling out Berman by name. A source with direct knowledge of the matter told The Daily Beast that they were present at a dinner with the president last year when Trump briefly discussed Berman, calling him “corrupt.”
Berman’s statement announcing his intention to remain on the job, and suggesting that Barr and Trump lacked the power to remove him since he was finally placed there by a panel of federal judges after Trump failed to submit a nominee for senate advice and consent 120 days after he’d been placed there temporarily by then Attorney General Jeff Sessions. The judges’ order, still in effect, says that Berman’s term expires only when the senate approves the president’s nominee for the role.
Saturday morning, Senate Minority Leader Charles Schumer (D-N.Y.) said the attempt to oust Berman “reeks of potential corruption of the legal process” and called on Clayton to withdraw his name from consideration. Separately, Senate Judiciary Chair Lindsay Graham said that he would follow the blue slip tradition that gives New York’s Senators, Schumer and fellow Democrat Kirsten Gillibrand, an effective veto over Clayton or any other nominee Trump might offer.
Berman was at the SDNY’s lower Manhattan offices on Saturday morning, telling reporters “I’m just here to do my job.”
House Judiciary Committee Chairman Rep. Jerry Nadler (D-NY) announced Friday night that Berman was invited to testify in an oversight hearing next week. But according to two individuals with knowledge of the situation, there’s been no communication from Nadler to the rest of the committee about any such testimony. And, one of those sources said, there’s little indication on Nadler’s part that he will take more aggressive steps to get Barr in front of the committee for questioning. Barr was set to testify in front of the committee in March but that hearing was delayed because of the coronavirus pandemic. Since then, members have advocated that the committee make a renewed effort to question the attorney general in an open setting. But one individual said it’s unlikely Nadler will issue subpoenas for Barr because the chairman is constrained by members of the Democratic leadership.
Barr also broke with Justice’s usual procedures by announcing that District of New Jersey U.S. Attorney Craig Carpenito would cross the Hudson and serve as the acting SDNY U.S. Attorney “effective July 3,” rather than elevating a member of the current leadership to ensure the continuity of cases—a distressing sign given how many of the office’sthose cases involve associates of the president.
The person with knowledge of the situation pointed to two significant complications for the office’s work as those questions make their way through the courts.
First, what happens on July 3rd, when two people could say that they are the acting U.S. Attorney, since “every indictment has to get signed by the U.S. Attorney. Nobody knows what happens if there’s an ongoing fight about who that is.”
And second, that Justice Department guidelines require any election-related charges to be filed at least 90 days before the contest, meaning the start of August — a deadline that could be relevant to SDNY’s probes of Giuliani and the Trump 2016 inaugural committee, as well as its prosecution of the Turkish bank Halkbank. All of that is happening as the work of the courts system has been slowed considerably by the coronavirus, which one former federal prosecutor described as “a blessing for the subjects of the white collar criminal investigations.”
“Across Trump World, the push to oust Berman was cheered as one step in what loyalists hope will be a greater purge of the federal government.”
Many of SDNY’s investigations were already complicated by the coronavirus. The confusion surrounding Berman’s status—and the dueling deadlines—only adds to the possibility that the probes will be further stymied, a currently-serving federal prosecutor noted.
“What’s a shame is that, with grand juries operating on such a limited basis since March, so many critical investigations have been slow to advance. I can’t say whether Rudy or anyone else would have been indicted by now, but the slowdown in grand jury activity has been a blessing for the subjects of the white collar criminal investigations,” this prosecutor told The Daily Beast.
Across Trump World this weekend, the push to oust Berman was cheered as one small step in what many officials and conservative loyalists hope will be a greater purge of the federal government.
“In light of the Flynn and other abuses, all Mueller prosecutions and their progeny should be presumed compromised and should be frozen and audited. The lawless resistance by the US Attorney proves the point,” said Tom Fitton, who leads the right-leaning organization Judicial Watch and remains a favorite of the president’s on Twitter and on Fox shows.
—with additional reporting by Noah Shachtman, Spencer Ackerman, and Blake Montogomery
