When you are rich and in big trouble in America, the kind of trouble that could mean jail, millions in legal settlements and the kind of publicity that puts you 24-hours-a-day on talk radio, cable news and late night monologues–you call Louis L. Freeh.
Freeh, the former federal judge and the man whose rocky leadership of the FBI was part of the sound track of the presidency of William J. Clinton, has developed a very fine business in privatized justice.
Once hired, the former FBI director investigates you and produces a public relations-focused report with a generous narrative of your actions and packed with recommendations for you to follow in the future.
At the press conference, you express your contrition and the story is over.
The press gets its inside look at what happened and even if prosecutors still wanted to go after you, they have scale the great stone wall erected by Freeh and his report, which found mistakes, but nothing criminal.
Of course, you could hire Freeh for another reason. It could be that you need to pin a crime on someone. For that job, Freeh and his team of former federal prosecutors, FBI and Secret Service agents at Freeh International Group put together a private investigation and report, written to the jurisdiction’s specifications, that they tie in a bow and present to prosecutors.
There is nothing new about hiring a fixer.
But, what makes Freeh different is the magnitude of the scandals that he takes on and the millions of dollars at stake and the millions of dollars in fees.
One example is the scandal the Freeh Group launched into international headlines regarding Fédération Internationale de Football Association, soccer’s governing body and the owner of the World Cup, better known as FIFA.
Joseph “Sepp” Blatter, FIFI’s president was running for reelection against Mohammed Bin Hammam, a Qatari national and part of that country’s effort to be a force in international sports beyond its size.
Blatter hired Freeh to investigate corruption in FIFI and remarkably, Freeh issued a report accusing Bin Hammam of bribing FIFI officials. Bin Hammam was then banned from FIFI for life and Blatter was reelected without opposition.
On Wynn’s dime, Freeh investigated Okada’s business activities in the Philippines.
When the ink dried, Okada stood accused by Freeh of violating the Foreign Corrupt Practices Act. Wynn then took that report and used it to invoke a company rule allowing him to eject stockholders or directors who might be found unsuitable by regulators.
Okada was kicked off Wynn’s board, and forced to relinquish his 20 percent stake in Wynn at a 30 percent discount for a an $800 million loss.
Somehow, Freeh’s report found its way into the hands of the Securities and Exchange Commission and the FBI, so now Okada faces both criminal charges and civil charges in the United States.
Deepwater oil spill
In the aftermath of the April 20, 2010 Deepwater oil rig explosion and oil spill, BP, formally British Petroleum, agreed to unlimited damages.
With the exception for a $2.3 billion lid on the claims made by the seafood industry, the company agreed to pay out as long as there was a claim to pay out.
This open-ended agreement was accepted by Federal District Court Judge Carl J. Barbier, who subsequently hired Andrew Juneau, as the special master to approve the claims and run the process.
If the Deepwater spill was characterized by one thing, it was the daily gushing of oil live streamed from the ocean floor to every television in America. Now, imagine you are a BP executive watching your company’s cash gush out to funeral homes, shoe stores and hundreds of people and businesses whose only connection to the spill is the lawyer who got them to sign the claim.
Claims were paid out to fake restaurants, fake fishing operations and fake love, that is a Florida escort service. It was becoming absurd. BP took out full page ads deriding the claims process and sued to have Juneau removed as the chief of the Claims Administration Office.
Finally, after BP began to aggressively challenge claims, which created the mini-trials having a special master was supposed to avoid, Barbier hired Freeh to check things out.
In September, Freeh released his report. There were mistakes, there was fraud and there were members of Juneau’s staff literally working both ends of the claim provcess. But, in his report, Freeh cleared Barbier and pronounced Juneau to be an upright man setting an ethical tone from the top down.
Having saved Juneau’s job, Freeh International Group was then rewarded with a contract from Juneau and Barbier to process and validate claims. The FIG team now operates from an entire floor of a New Orleans office building with a $3 million fee—charged to the Deepwater setttlement, of course.
There is no better example of how Freeh monetized justice and gavels open and closed the court of public opinion than his dealing with Penn State’s and sexual molestation.
The Trustees of the Pennsylvania State University in an Oct. 28 meeting at the school’s University Park campus turned back an attempt to reopen Freeh’s investigation of the former Penn State coach Gerald A. “Jerry” Sandusky’s sexual abuse of minors scandal that rocked the school three years ago.
Many people would be surprised to learn that despite the public relations campaign in support of the report and the trustees handling of the scandal waged by Kekst & Company, the New York-based powerhouse, the trustees have not officially accepted Freeh’s report.
Given the opportunity Oct. 28, they only agreed to continue to look into the situation and to leave it be.
Trustee Albert T. Lord had proposed at the last meeting that a four-person panel, including himself, meet with Freeh and his team review its findings and methods.
Lord said he was especially incensed that the NCAA based its punishment of the college: “on a foundation of scant evidence, the report adds layers of conjecture and supposition to create a portrait of fault, complicity and malfeasance that could well be at odds with the truth…”
Instead of siding to with Lord, the trustees voted 17 yea to 8 nay to 1 abstention in favor of a rival resolution that stating that the trustees would keep the lid on the report produced by the man they hired to make the scandal go away.
Another flaw in the report was the handling of witness interviews, Lord said.
The Freeh report on Penn State cost $8 million and failed to interview significant principals. When President Graham Spanier offered to share with Freeh the findings of federal investigators, who had interviewed everyone, Freeh declined.
Although, Freeh said he interviewed 430 people, only a handful are actually named in the report. There is no discussion or acknowledgment of contradicting testimony.
Among the people Freeh did not investigate are: Sandusky himself and assistant football coach Mike McQueary, whose witness of Sandusky in the shower with a young boy is one of the key elements as the university’s culpability and failure to take action.
Freeh did not speak to Dr. Jonathan Dranov, a family friend of McQueary, who testified before the grand jury about his conversations with McQueary about what was witnessed in the showers, nor the victim, nor Tim Curley, the PSU athletic director, Gary Schultz, the school’s senior vice president for finance and business, or PSU attorney Wendell Courtney.
Spanier was contacted at the last minute for a perfunctory interview.
But, for his troubles, Spanier is now looking at criminal charges from the state’s attorney general based on the report that Freeh produced.
Spanier is suing Freeh for libel and defamation.
The family of former PSU football head coach Joseph V. Paterno is also suing the NCAA, which impugned Paterno, based largely on the Freeh report.
Richard L. “Dick” Thornburgh, a former U. S. Attorney General of the United States and former governor of Pennsylvania, was hired by the family to review the Freeh report.
Thornburgh said he found the Freeh report seriously flawed.
Pennsylvania state Judge John Leete in one of his rulings to the Paterno suit said he found that although the Freeh report was considered compelling evidence sufficient to justify sanctions against Penn State, there were serious flaws in the investigation and despite knowing that all the relevant facts were not even present.
It is interesting to note that even PSU trustees who voted not to review the Freeh report acknowledged that the investigate was incomplete. Their only answer to Lord’s complaints was that any new investigate would face challenges, too.
While the PSU trustees are happy customers. The tides may have shifted against Freeh.
When NFL Commissioner Roger Goodell hired a former FBI director to save his job and calm the waters roiled up by the NFL’s handling of Ray Rice’s wife battery, he called Robert S. Mueller III.
Now, it seems Mueller’s own firm, WilmerHale, is ending the Freeh ride.