Meet Andersen's Nemesis at Justice


When Michael Chertoff arrived for his first year at Harvard Law School in 1975, he made a lasting impression. Brash, bright, and unintimidated by his new surroundings, "he just loved to argue," says classmate Scott Turow, author of Presumed Innocent and other legal thrillers. Even with the professors: "he would sit up straight in his chair and return the fire," the writer remembers. Turow was so impressed that he adapted many of Chertoff's exchanges for his first book, One L, a semifictional account of life as a first-year student at Harvard Law.

Anyone who read the book wouldn't be surprised by what has followed. After a meteoric rise through the ranks of prosecutors, Chertoff now heads the Criminal Div. at the Justice Dept. And the tenacity once directed at his law-school profs is now aimed at Arthur Andersen. It was Chertoff who opted to reject Andersen's efforts to negotiate a settlement and instead indict the firm on a felony obstruction of justice charge.

Those who know Chertoff say he likely won't be lured to the settlement table by the resignation of CEO Joseph F. Berardino, and former Federal Reserve Chairman Paul Volcker's attempt to broker a last-ditch deal to keep the accounting firm intact. On Mar. 29, Volcker detailed a rescue plan whereby Andersen's consulting business would be separated from its auditing business to eliminate possible conflicts of interest. So far, no word from Justice, but as one attorney who has worked with Chertoff puts it, "If there are shades of gray in a case, he calls it black and throws the book at you."

ANGRY EMPLOYEES. The 48-year-old Chertoff has shown precious little mercy in a career of prosecuting mobsters, stock scamsters, and local pols. He thinks reports of his toughness have been exaggerated. The way he sees it, "I've been more prone than people more junior than me to give the benefit of the doubt to the defendant, or potential defendant. [I'm] not looking to prosecute people for gray areas of conduct."

Although Chertoff won't discuss any pending case because of his position, his supporters contend that he had little choice but to indict Andersen, particularly in light of its public campaign to avoid an indictment. That put Chertoff in an "untenable position," says one former Justice Dept. prosecutor. A political appointee, Chertoff would be seen as bowing to political pressure if he overruled his career prosecutors under such circumstances and decided against an indictment, the ex-colleague contends.

Critics have a far less charitable opinion. Among those most hostile to Chertoff are Andersen employees, who feel they're being punished for actions they had nothing to do with. Also angry are Enron investors and creditors who saw their chance to recover as much as $700 million in a settlement with Andersen evaporate. "I think what they did is criminal," says one attorney who worked on the effort to recover the money. "Not Andersen -- I mean Justice."

TOUGH GUY. This isn't Chertoff's first controversial decision at the helm of the Criminal Div. Another example of coming down hard -- in some people's opinion, too hard -- was his decision to sign off on an earlier indictment of the "American Taliban," 20-year-old John Walker Lindh, on terrorism charges. Lindh was taken prisoner in Afghanistan and is now awaiting trial.

Chertoff certainly looks the part of the tough guy. Tall and gaunt with deep-set eyes, he can intimidate just with his gaze. But anyone who has endured his wrath knows the real agony is inflicted once he opens his mouth. During his highly publicized 1994 trial for stock fraud, electronics retailer "Crazy Eddie" Antar coined a special nickname for the relentless prosecutor -- "Count Chertoff." Adds former Chertoff colleague John Savarese: "He definitely can come down hard on people."

He certainly has displayed a talent for finding the spotlight. As a young lawyer, Chertoff was hand-picked in 1986 by then-U.S. Attorney in Manhattan Rudolph Giuliani to prosecute the biggest organized crime case in decades -- against "Fat Tony" Salerno and several other mobsters, in what would be dubbed the "Commission" case. The attention and convictions he garnered helped him land the job of U.S. Attorney for New Jersey when he was just 36.

ADVICE IGNORED. In addition to the Crazy Eddie case, he prosecuted Sol Wachtler, the chief judge of the highest court in New York State, for sending extortive letters to a lover in 1992, then threatening to kidnap her 14-year-old daughter. (The commission of the crimes fell under Chertoff's jurisdiction in New Jersey.)

Many in the legal system counseled Chertoff to be discrete with this case. "I was told that with a judge you should go quietly to him and say, 'Knock it off," he says. Chertoff ignored the advice -- as well as pleas from Wachtler that his behavior was the result of a mental breakdown. The judge was convicted and served 16 months in prison.

Making a mark is Chertoff's stock in trade. Through much of the Clinton Administration, the criminal division had no head. Most prosecutions were handled by individual U.S. Attorneys. Chertoff changed all that by centralizing his authority at Justice. He has handpicked a team of prosecutors who report directly to him.

"GO POUND SAND." This has led to a few clashes. Take Mary Jo White, a Clinton Administration holdover who was U.S. Attorney for Manhattan when terrorists attacked the World Trade Center on September 11. She argued that she should spearhead any prosecutions related to the attack. Her arguments made some sense -- after all, Ground Zero was in lower Manhattan, and her office had handled most of the previous terrorism cases, including the first bombing at the World Trade Center in 1993.

Chertoff would have none of it. "Mike told her to go pound sand," says Joseph diGenova, a former U.S. Attorney in Washington. "He was a gentleman about it, but that's basically what he said." White departed from Justice soon after.

Now, Chertoff faces a pivotal test. Andersen's fate hangs on many of his decisions going forward, as the accounting firm presses Justice to drop the charge. If that fails, Andersen wants a judge to adjudicate the case in an accelerated time frame. Chertoff's legions of supporters and detractors will be watching to see if the past really is prologue. By Dan Carney in Washington


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