I was naive enough to think that the New York Times’ vendetta against former SIGTARP prosecutor Neil Barofsky was limited to bank propagandist Andrew Ross Sorkin and Administration mouthpiece Jackie Calmes, who penned a particularly ham-handed hit piece on Barofsky’s book Bailout.
But a new story by Ben Protess and Jessica Silver-Greenberg manages to lard a report on a new assignment that Barofsky looks set to land, that of serving as monitor to miscreant bank Credit Suisse, with as much snark and innuendo as possible. Fortunately, the effort at character assassination is so obvious as to backfire with anyone outside the circle of Barofsky antagonists. This is how the article begins:
Neil Barofsky was a government gadfly who made a career of needling, and at times pillorying, Wall Street and Washington over the 2008 bank bailouts.
This is a lot of snark packed into a single sentence. “Government gadfly” and “needling” paint Barofsky as a bureaucrat with little authority who made himself more prominent than he deserved to be by acting a nuisance. “Made a career” intimates that Barofsky relished the limelight and wanted more. In fact, Barofsky raised some important issues in his SIGTARP reports, which were generally well regarded, with the one that caused the most consternation being his probing of the New York Fed’s decision to pay out credit default swap contracts in full when it bailed out AIG. As Barofsky explained in Bailout, he felt it necessary to turn the media into an ally due to the limited resources of his team and the the Geithner Treasury’s clear message that they had no interest in having him do his job, and the petty and extreme efforts they made to undermine him.
The next paragraph in the article is less awful, but still tries to depict Barofsky as hungry for influence:
Now a partner at a private law firm, without access to power he once wielded as a federal prosecutor, he has managed to secure a familiar role: watchdog for one of the world’s biggest banks.
“Without access to power” creates the impression that that is something that Barofsky craves. Were that the case, he could have wound up in a more influential position if he were more willing to play by the Washington DC rules. Readers of Bailout no doubt recall the Mafia-esque scene at the outset in which Herb Allison tells Barofsky that he is hurting his career by taking his oversight job seriously, and insinuating that Barofsky would be taken care of if he were to back down.
In other words, the piece seeks at the outset to undermine recognition of Barofsky’s stature as an independent, tough-minded regulator, in the form of his imminent appointment by New York State Superintendent of Financial Services, Benjamin Lawsky, to the Credit Suisse assignment. The presumptive monitors, a team of Barofsky and his partner at Jenner & Block, Anthony Barkow, were selected in a competitive process from over 15 consulting and law firms. Yet the Times tries to imply that cronyism could have been at work in the choice, when Lawsky recused himself from the process:
Still, prosecutors and regulators have been criticized for steering monitor jobs to friends and former colleagues, creating the impression that the process enables an “old boys” network. In 2009, Congress held hearings about Chris Christie’s decision as United States attorney in New Jersey to award a monitor job worth as much as $52 million to John Ashcroft, the former attorney general who was once Mr. Christie’s boss.
Similar questions could arise from the selection of Mr. Barofsky to monitor Credit Suisse. Mr. Lawsky and Mr. Barofsky worked together as federal prosecutors in Manhattan and remain friends.
But to avoid the appearance of a conflict, Mr. Lawsky has recused himself from the selection of monitors, his spokesman said. Each time Mr. Lawsky orders a monitor as part of an enforcement action, his staff forms a five-person committee to choose from a list of applicants. Mr. Lawsky is later briefed on the committee’s decision, the spokesman said.In its selection of Mr. Barofsky, the committee appears to be sending a signal to Wall Street.
The article points out that Barofsky’s firm had an advantage by having sued Credit Suisse in the past, while many of the other contenders had represented the bank as some point. The story does discuss at some length how Lawsky is highly skeptical of bank-friendly monitors and fined Deloitte over a too-lienient report on Standard Chartered (a recidivist money launderer) and has also subpoenaed Promontory Financial Group and PricewaterhouseCoopers. Yet it manages to close with another dig at Barofsky:
But Mr. Barofsky is not above representing other corporate clients, including those who have tangled with Mr. Lawsky and other regulators. Mr. Barofsky is defending an online payday lender that one regulator accused of taking “money from consumers that those consumers did not owe.”
As reader Foppe summed up this disgraceful piece:
I would point out this article, in which two NYT Dealbook authors seem to derive enormous pleasure from analyzing the possibilities for conflicts of interest, corruption and nepotism in the bank monitor selection process that, in this particular case, has lead to the selection of Neil Barofsky as Credit Suisse bank monitor. You’d wish they were as driven in their reporting when they don’t (appear to) have an axe to grind.