Preet Bharara, the U.S. Attorney for the Southern District of New York, stands in his downtown Manhattan office, Jan. 29, 2012.
For this week’s cover story, Preet Bharara, the U.S. Attorney for the Southern District of New York who has been making high-profile busts on Wall Street, gave TIME a rare and extensive on-the-record interview at his Manhattan offices on January 24. An edited version of that conversation follows.
When you arrived in this office in August 2009 and were looking at areas to prosecute, how did you decide to devote resources to Wall Street?
Prosecutors like me are responsive to bad things that are happening on Wall Street in the same way that a prosecutor would be responsive to a spate of violence happening in a neighborhood. You would bring resources to bear and try to be creative and aggressive in how you go after it and protect public safety.
And what did you see in the insider trading cases?
Between the burgeoning evidence of insider trading that we saw… in places on Wall Street and in Albany and everywhere else, it became clear to me and to the team that there was a creeping culture of corruption in our politics and also in Wall Street and in business generally, which is evidenced by the level of misconduct that we have found. We have brought 63 insider trading cases against individuals, convicted 56 of them, and at various junctures I have said because it’s true we still have a ways to go. Insider trading to us and to me is a clear violation of what the rules of the road are and are an affront to anyone who believes in the rule of law and anybody who believes in fairness of the markets. Significant officials at publicly traded companies are casually and cavalierly engaged in insider trading and there’s all sorts of other bad activity that they might be engaging in as well.
The kinds of insider trading cases that we have brought in recent times have not been the kind of classic cases that people read about from the old days where you have got the grandmother [taking] an opportunistic moment to trade on shares because her grandson was working at a company and got some inside information.
What we have been talking about here is something more troubling, more disturbing and more systemic. You have people who are developing stables of insiders at various companies and those people of course violating the trust the companies had in them, often times doing it through a cover of an expert networking firm.
So did you come in with priorities in August 2009?
The job of any prosecutor is not only to prosecute, I think, individuals against whom you have sufficient evidence to prove them guilty beyond a reasonable doubt, which is obviously our first priority. The second priority is you want to do it in a way that deters bad guys from engaging in the same conduct. So among other things we chose to emphasize certain kinds of work we do, like public corruption work, like the civil fraud work I’ve been talking about. Securities fraud generally and the insider trading in particular, should be an eminently deterable crime.
So there’s a symbolic target?
We tapped into a vein of quite substantial criminality and corruption on the part of, in many cases, really privileged and moneyed people who should have known better.
Is your expanded use of wiretapping and informants attributable to your experience prosecuting mafia cases?
We have not been shy about putting people with organized crime and terrorism and violent crime [prosecution] backgrounds in positions of leadership in our white collar prosecutions. And going back, something that I cannot take credit for, the chief of the securities unit when I came in was someone who had been chief of narcotics, where doing wiretaps is bread and butter. And in the same way I believe that there’s no reason why you can’t use appropriate street crime tactics to fight white collar crime. I endorse that wholeheartedly and defend that as vigorously as can be defended where appropriate.
Do you remember any cases during your time prosecuting organized crime where the wiretap was crucial?
When you have your traditional [La Cosa Nostra] and you’re trying to make a racketeering case that involves charges of extortion, which by definition include threats of violence, and you have a guy saying like you might see on The Sopranos, “I’m going to staple your eyeball,” except that there was a word that begins with “F” that preceded it, that’s pretty good evidence. And you get that all the time.
Why did you want to become a prosecutor?
I always wanted to do public service from the time I was in college, and before; and then I new I wanted to be a lawyer; and I knew the kinda lawyer I wanted to be was not the kind that sits in a conference room but the kind of lawyer who gets up in court and argues to juries and argues to the court in matters that have meaning; and I couldn’t think of any place that would be more true than criminal prosecution. And this office in particular had a reputation for excellence and prestige and camaraderie that’s hard not to want to come to.
What kind of high school student were you?
I was a nerdy kid. I did a lot of activities. My brother was the athlete, I was not. But I was the editor of the school paper. I was actually the editor of the satirical paper too. I was captain of the speech team. And I was in the school play, “Barefoot in the Park.” I played the stuffed shirt lawyer.
Tell me about the earliest part of your childhood.
I was born in Punjab in a town called Ferozepur.
Why did your father emigrate?
My dad is among the most principled people I know, and he didn’t like some of the ways business was done in India, including how corrupt parts of it were.
There is a dissatisfaction that more of the people who were responsible for the financial crisis and the near meltdown of the global economy have not been brought to account. And people have been critical of you, particularly and in general, for not having done more to hold them to account.
It’s a fair question that people ask. And I’ve said before, people have every right to want those who are responsible for bad things to be held to account. And people should know that the smartest and best career people in this office and in many other offices around the country, because I’m not responsible for everything, have and are spending time trying to find evidence that can be proved beyond a reasonable doubt of criminal conduct on the part of people who may have played a role in the financial crisis. And we’ll continue to do that.
Do you ever see yourself running for public office?
I don’t see it. What I like right now is this job… and I spend all my time in this job making sure that it is, completely apolitical. And there is a great purity in that, which I enjoy.
Do you ever think about making more money?
You know, [laughing] the thought occurs to me from time to time. As my wife once said, though she may regret this, “Better to have a happy husband, than a rich husband.” And I’m a public servant and it’s publicly known what my salary is, and that’s a lot more than a lot of people make. I would do this kind of job as long as I can. You can always make money in the future, but these opportunities don’t come along. Are you offering me a job [laughing]?
What is it about insider trading that is so damaging to the markets?
Casual and rampant and routine insider trading tells everybody at precisely the wrong time that everything is rigged and only people who have a billion dollars and have access to and are best friends with people who are on boards of directors of major companies, they’re the only ones who can make a true buck. And that I think is wrong, as most people do, and more importantly for our purposes completely and totally illegal.
What do you mean by “precisely the wrong time”?
It’s a time when people do not have faith that the game is fair. Part of the problem. I’m not saying this is the biggest problem in the world. There are a lot of problems at the moment. There’s a lack of confidence in government, there’s a lack of confidence in the markets, there’s a lack of confidence financial institutions and all of those are unfortunate and people who break the law in a way that exacerbates peoples’ lack of confidence in important American institutions are doing something that’s bad, in addition to illegal.
Why is it in your mandate to target things that are detrimental to society?
It’s not, it’s not, it’s not. And just so I’m clear, if you listen to the tape you’ll hear that I am clear on this. My mandate, and I say this when I speak, I am not a social scientist, I am not a social engineer, I am not a life coach, I am not a motivational speaker. I am none of those things. What I am is a prosecutor. And the people in my office are prosecutors and so they need to bring to bear their resources to prove people guilty of crimes beyond a reasonable doubt.
It also happens to be true that a good prosecutor and a good prosecutor’s office also thinks about prevention and also thinks about the betterment of the society around it. So in the same way that the violent crime prosecutors in my office make sure they get the murderer and the guy who possesses the gun, and the guy who sells the kilo of cocaine to the kid on the street, that’s within their clear mandate consistent with your question. At the same time we have some responsibility, it’s a little less clear, but some responsibility, to make sure that the neighborhood in which we’re bringing those prosecutions is safer.