The Torricelli Leaks Jude Wanniski June 12, 2001

Memo To: Sen. Bob Torricelli [D-NJ]
From: Jude Wanniski
Re: Trial by Press

For several months now, the U.S. Attorney’s office has been leaking poisonous information about you and your campaign fund-raising activities to The New York Times. Hardly a week has gone by without a Times story about you taking illegal gifts from a Korean-American -- an expensive wristwatch and some suits -- purportedly in exchange for favors you did for him in the government. At this point, it is practically conventional wisdom that you will be indicted and perhaps forced to resign your Senate seat, giving New Jersey’s Republican governor the opportunity to name a GOP successor, which would throw the Senate back into Republican control. As a New Jersey Republican and a supporter of yours, I believe you are telling the truth, that you did nothing illegal, that you will weather this storm and that you will go on to win re-election next year.

It is disgraceful, I think, that the editors of the Times have allowed themselves to be used by the federal government in this fashion. This is exactly what happened to Michael Milken a decade ago, when the U.S. Attorney’s office leaked a series of poisonous lies to The Wall Street Journal about Michael Milken. Back then, the U.S. Attorney was Rudy Giuliani, now Mayor of New York City, who practically was elected on the strength of his successful prosecution of Milken. Long before I met Milken, I could see what was going on, that he was being set up by a collusion of the federal government and the nation’s most important financial newspaper. As I had been Associate Editor of the WSJournal in the 1970s, I could see that the paper’s news columns were violating established journalistic principles by running stories about Milken’s “suspicious behavior” without an identifiable source. It was water torture for Milken, who had done nothing wrong and really was incapable of committing felonious acts, as I discovered when I got to know him. I wrote extensively about the phony charges against him, but he had been so demonized by the Journal that he came to believe the federal government would continue to attack him and his family until it had its way and showed some result from its years of investigations.

Milken’s mistake was in not fighting to the bitter end in the courts. Giuliani offered to drop all charges against Milken’s younger brother Lowell, who also had done nothing wrong, in exchange for Milken pleading guilty to three technical violations of SEC regulations. These were ridiculous on their face, i.e., failing to file reports to the SEC on time, but they were “felonies,” as that is the way the legislation had been written. When stories appeared in the WSJ that the Justice Department was preparing another long list of charges against him, Milken could see that he had no choice. He could spend the rest of his life in the courts, given the power of the federal government to spend unlimited amounts of money and manpower to put him in prison. He threw in the towel, thinking he might get a short sentence and community service. The federal judge gave him 10 years in prison and fined him $1 billion. It was a cruel act of injustice, as the judge, who scarcely knew what Milken was all about, played to a public that had been persuaded by the press corps that he was an intrinsically evil man.

What happened was Giuliani caught a real Wall Street crook red-handed, Ivan Boesky, and Boesky saw a chance to get a sweetheart deal in a plea-bargain if he helped Giuliani get Milken. If Giuliani had not leaked the steady stream of poison to the Journal, through its “ace reporter,” James B. Stewart, but instead indicted him after quietly assembling a case against him, Giuliani would have been laughed out of court. As I demonstrated in a long defense of Milken that I had written solely for my clients, it was clear Giuliani had been snookered by Boesky, but by the time he realized it, he would have looked like a fool if he did not get Milken on something. Please note that just before President Bill Clinton left office, Giuliani publicly urged him to pardon Milken, but Clinton pardoned Marc Rich, who had fled prosecution and served no time in prison as Milken had, instead.

The point, Bob, is that the U.S. government appears to have invested so much in your guilt, with the help of The New York Times they may do anything to nail you to the cross. My advice is to avoid any plea bargains with these sharks and go all the way to a jury trial, if that’s what it takes. Once we get to the point where the federal government can routinely use the newspapers to convict men and women in the public’s mind in order to pave their way to conviction in court, there may be more thought given to what happened at Ruby Ridge and Waco. At the very least, we should ask the editors and publishers of our newspapers to reject the big stories they think they’re getting from Justice Department leaks.