Background

On August 13, 2002, Judicial Watch filed a complaint against Deputy Attorney General Larry D. Thompson for alleged stock fraud, and for abuse of his official position as head of the Justice Department’s Corporate Crime Task Force. The complaint alleges that Thompson, while Chairman of the Providian Audit and Finance Committee, withheld information regarding the company’s deteriorating financial condition and adopted a fraudulent scheme to inflate Providian’s stock prices. The complaint also alleges Thompson abused his new position with the Justice Department to prevent action against Providian. During its investigation of Thompson in the Providian matter, Judicial Watch uncovered documents through the Freedom of Information Act that also prove a serious conflict of interest regarding Enron Corporation. Judicial Watch is demanding that Thompson recuse himself from the Justice Department’s Enron investigation. The Department of Justice, however, is attempting to skirt the law and allow Thompson to participate in the investigation.

Key Excerpts:

Memorandum from Mary Braden, Director of the Justice Department’s Departmental Ethics Office:

"In May 2001, the Deputy Attorney General left his former law firm, King & Spalding. During his tenure with the firm, he participated in two matters involving Arthur Anderson, which is the accounting firm responsible for auditing Enron Corporation and which will be part of the investigation of the circumstances leading to the failure of Enron and its aftermath."

"In advising the Deputy Attorney General, I referred him to the standard of conduct 5 CFR 2635.502… The standard generally requires an employee to disclose a potential conflict to the Department and seek a determination about disqualification in any matter in which the employee believes that a reasonable person may question his impartiality."

"I recommend that you determine… that the Department’s interest in the Deputy Attorney General’s participation… outweighs the possible concern that a reasonable person would question the integrity of the Department’s programs and operations."

Relevance

The law is clear on this matter. The Deputy Attorney General must recuse himself from the Enron investigation due to serious conflicts of interest, especially given Thompson’s alleged willingness to obstruct justice in the Providian case. The fact that the Director of the Departmental Ethics Office has chosen to overlook the Deputy Attorney General’s relationship to the corrupt Arthur Anderson Company is a further indication that the government is unable to police itself and its own affairs.